Farook Owadally & Anor v Planology Ltd & Ors.

At an interlocutory stage, an illegality defence should not be determined mechanistically where the claim involves strict-liability offences and raises fact-sensitive questions of knowledge, statutory purpose, public policy and proportionality. The Patel framework remains relevant even where the claim follows a criminal conviction and engages the narrower consistency principle. A claimant may have a realistic prospect of showing that they lacked full knowledge of the facts making the conduct unlawful. Even where part of a claim may ultimately be barred, the court may allow the whole claim and defence to proceed to trial to avoid an interlocutory mini-trial. Abuse of process requires a close, merits-based analysis. Rejected evidence or credibility findings in criminal proceedings do not, without more, make a later negligence claim abusive, particularly where the negligence issues were neither determined nor considered in the criminal proceedings.

The claimants had acquired and attempted to develop a listed residential property. They were convicted of offences under the Planning (Listed Buildings and Conservation Areas) Act 1990 concerning unauthorised works. Some convictions were quashed on appeal and others upheld.

They subsequently brought professional negligence proceedings against their planning consultant, solicitors and structural engineer, alleging that negligent advice caused their losses, including criminal fines and related costs. The County Court refused applications by Planology Ltd and Bell Buttrum Ltd to strike out the claim or obtain summary judgment. The appeals concerned illegality and abuse of process.

1. Appeals dismissed. The County Court judge was entitled to refuse strike-out and summary judgment applications and to allow the negligence claim and illegality defence to proceed to trial.
2. Abuse of process was not established. The negligence claim was not a collateral attack on the criminal convictions or a relitigation of the facts constituting the offences. The professional negligence issues, including duty, breach and causation, had not been determined or considered in the criminal proceedings. Criminal findings on credibility and matters outside the constituent elements of the offences were not automatically conclusive in later civil proceedings.
3. The illegality defence and abuse analysis were distinct, although related. The pleaded claim included losses potentially engaging both the narrower principle concerning direct penal consequences and the wider public-policy principle concerning losses flowing from criminal conduct.
4. The authorities required a careful and contextual application of the principles in Gray, Apotex, Patel and Henderson. Strict-liability offences raised special issues. The court might need to determine whether the claimant was privy to the facts making the conduct unlawful, including knowledge of the listed status, the works, the need for authorisation and the absence of consent. That inquiry was binary and distinct from a general proportionality assessment.
5. The statutory purpose of imposing strict liability, other public-policy considerations and the proportionality of withholding an otherwise sound civil claim remained relevant. There was no automatic rule that the narrower principle excluded all exceptions in strict-liability cases. Osman left room for argument concerning recovery of a criminal fine where negligent professional advice had contributed to the offence.
6. The claimants had a realistic, non-fanciful prospect of establishing incomplete knowledge of the facts making the works unlawful. The application of the illegality doctrine to the full factual matrix was sufficiently fact-sensitive and evaluative to make trial appropriate. The County Court judge could also permit the whole claim to proceed rather than carve out potentially barred aspects at an interlocutory stage.

• High Court (King’s Bench Division): appeals by Planology Ltd and Bell Buttrum Ltd against the County Court order dated 21 January 2022 dismissed.
• County Court (Mayor’s and City of London): HHJ Hellman refused strike-out and summary judgment applications concerning illegality and abuse of process.