Jersey Unreported Judgments

ROYAL COURT

(Samedi Division)

3 April 1998

Before: Sir Philip Bailhache, Bailiff, and Jurats

Potter and de Veulle

AG

-v-

Kevin James O’Neill

1 count of contravening Article 14(1)(d) of the Housing (Jersey) Law 1949, by being party to a device, plan or scheme for an arrangement to occupy property, which was inconsistent with a condition attaching to a Housing Committee consent to the purchase of the property by Bell Properties Limited, restricting occupation to persons of a category specified in Regulation 1(1)(a) to (h) of the Housing (General Provisions) (Jersey) Regulations, 1970, as amended, in that the accused did not fall within any of the said categories.

Age:31

Plea:Facts admitted

Details of Offence:

Bell Properties Limited purchased "La Chalet", La Chasse, St Helier and converted it into five self-contained town houses. On the 22 September 1998 a revised consent was issued by the Committee which required that the material property must be occupied by persons specified in Regulation 1 (1) (a) to (h) of the 1970 Regulations, such occupancy to be as their sole or principal residence. Neither the defendant nor his wife had Housing qualifications. In July 1995, the defendant sought legal advice which clearly informed him of the requirements he must fulfil i.e. as lodger of a qualified tenant, to avoid falling foul of the Law. The defendant purchased shares for £135,000 in July 1995. He induced a 19 year old Jersey born employee to enter into a sham lease whereby the defendant and his wife purported to lease the house to the employee who in turn would allow the defendant and his family to live there as lodgers. An exempted transaction form was filed on 25 August, 1995 declaring that a lease as above had been entered into on 23 August 1995, with rental at £200 per week. Defendant and wife signed the declaration. From the statements of the employee it was clear that there had never been any intention by the employee to take up occupation and the defendant knew that he was occupying illegally. Offence came to light when the employee sought to buy a property with his family and filed a Housing form in October 1997. The defendant then induced the employee to sign a second sham lease and told him what to say if he was questioned. After an initial interview when he supported the defendants version of the tenant lodger relationship, the employee made a statement setting out his involvement and the fact that he had told the defendant before he signed the first lease that he had no intention of moving in. In a 2½ year period the employee had only spent a matter of days at the property. At his interview the defendant declined to answer many questions and although he admitted that the employee had not been resident all the time, he lied saying that he considered himself the lodger of the employee.

Details of Mitigation:

Counsel tried to suggest that mens rea was only formed several months after the signing of the first lease. He admitted that even if he had followed the legal advice he would still have been sailing "fairly close to the wind". Defendant had wife, 2½ year old child, and his wife was expecting their second child in a months time. He admitted, as adduced by the Crown, that the property had been sold that week for £210,000, thus making a £75,000 profit. The temptation to stay in pleasant accommodation was to great. It was said that the profit from the sale of the shares could have been made without illegal occupancy and was therefore not relevant to sentencing. Defendant sought a fine of £3,000 with time to pay.

Previous Convictions: Nothing relevant

Conclusions:

£5,000 fine or 3 months imprisonment in default of payment, with £250 costs 

Sentence and Observations of Court:

£20,000 fine or 6 months imprisonment in default of payment.

Court commented "This is as flagrant a breach of the Housing Law as has come before this Court in recent years". Two serious issues: firstly, defendant concocted a scheme which persisted for over two years, as a result of which a local family was deprived of a three bedroom house which is precisely the type of dwelling that is in short supply. Secondly, the defendant induced a 19 year old employee to enter into two sham leases. No hesitation whatsoever that the conclusions of the Crown are too low. Observed that the sham rental was £200 per week or £10,000 per year reflecting market rental. Fine reflected this lost rental. Lack of co-operation with the investigating authorities. "We wish to send out a clear message that flagrant breaches of the Housing Law will not be tolerated by this Court".  

Mrs S Sharpe, Crown Advocate

Advocate PM Livingstone for the accused 

 JUDGMENT

THE BAILIFF: This was, in the judgment of this Court, as flagrant a breach of the Housing Law as any which has come before this Court in recent years.

The defendant purchased a flat, having obtained legal advice as to what his obligations would be in relation to the letting to a tenant and occupation by him as a lodger. Having taken that advice, he had decided quite deliberately, within weeks of its receipt, to ignore it.

The gravamen of this case appears to the Court to be twofold: firstly, the defendant concocted a scheme which persisted for over two years, as a result of which a local family was deprived of the use of a three bedroom house, which is the type of dwelling accommodation of which - we can take judicial notice, - there is a short supply.

Secondly, the defendant induced a 19 year old employee, Mr Jenkins, to enter into bogus leases of this accommodation, not just once but twice. On the second occasion the defendant was actually under investigation by the housing department in connection with the housing law, and he furthermore suggested to Mr Jenkins what he should say if he was asked by the investigating officer about these fictitious arrangements.

The defendant has now sold the flat for £210,000 and has thus made a profit of £75,000 over the original purchase price. We accept the submission of defence counsel that this capital profit is not relevant to the penalty which the Court should impose for the breach of the law.

The Court has had some difficulty in determining what is the proper level of penalty. The precedents placed before us do not, it seems to us, greatly assist on the facts of this case. We have however unhesitatingly decided that the conclusions of the Crown are too low. We have noted that the rent falsely declared as having been paid was £200 per week, or £10,000 per annum, and we assume that that figure approximates to the market rent of this flat. In mitigation the defendant has admitted the offence, although the level of his co-operation with the investigating authority was not particularly high. Apart however from this offence the defendant is of good character and is an industrious and successful family man with a wife and child to support.

We wish however to send out a clear message that flagrant breaches of the housing law will not be tolerated by this Court. The defendant is accordingly fined £20,000 or in default 6 months imprisonment, and he will have two weeks in which to pay that fine.

Authorities

AG-v-McIntosh (24 April 1990) Jersey Unreported

AG-v-Arthur & Ors (14 November 1989) Jersey Unreported

AG-v-Hoggan & Ors (7 April 1989) Jersey Unreported