Jersey Unreported Judgments

2002/78

ROYAL COURT

(Samedi Division)

 

12^th April 2001

 

 

The Attorney General

-v-

June Elizabeth Irwin (née Rabet)

 

1 count of:

Contravening Article 2 (1) of the Lodging Houses (Registration) (Jersey) Law 1962, as amended, by keeping an unregistered lodging house.

 

 

Age:     50

 

Plea:    Facts admitted.

 

Details of Offence:

Defendant purchased hotel in 1990 with assistance of a large mortgage.  Ten years later, the hotel was in financial difficulties and bankers imposed strict trading restraints which eventually led to it being offered for sale to a major property developer.  Defendant decided not to register the hotel with Tourism for the season of 2001 in view of the developer's intention to demolish the hotel and build residential units.  Then a series of delays in negotiations, partially caused by refusals by the Planning and Environment Committee to developer's applications.  Meanwhile, the mortgage had to be paid.  Defendant decided to take in lodgers and made enquiries with Housing about registration.  Told it was necessary to apply for change of use.  High building costs necessary to meet criteria set down by Housing for change of use to lodging house.  In January, 2001, defendant had ten 'sleepers' on the premises.  Warned that this was five in excess of the permitted limit and in breach of Law.  Defendant continued to anticipate a sale.  Decided to ignore advice and took in further lodgers, culminating in 30 lodgers (25 in excess of that permitted) on day of inspector's visit on 21^st, September, 2001.  Total excess profit made during the material period was £22,340.00

 

Details of Mitigation:

Defendant's affidavit of means showed her to be in dire financial straits.  She had been fully co-operative with the investigating officer and had frankly admitted that she had taken in lodgers to try and keep the bank at bay.  The deal which had been entered into with the developer had anticipated six units of accommodation and a sale price of £1,000,040.00.  The application to Planning was rejected and new plans were submitted for five units with a reduced sale price pf £840,000.00.  This was then reduced to four units and a sale price of £700,000.00.  The defendant's liabilities were well over £600,000.00.  The cut-off date for the agreement to be effective was coincidentally the day of sentencing.  The defendant therefore had to start to look again for a purchaser but had also to reimburse the developer interest payments it had been paying to her bank in respect of her mortgage.  It seemed likely, therefore, that even if the event of a sale, after meeting her liabilities, the defendant was going to be penniless, without a home and without a job.  Her husband had suffered a nervous breakdown caused by the financial difficulties.

 

Previous Convictions:

 

None.

 

Conclusions:

 

The Crown would normally seek to remove excess profits of £22,340.00 and then impose a penalty plus costs.  The defendant's affidavit of means rendered this unrealistic.  It therefore moved for a relatively nominal fine of £2,000 with £250 costs and six months' imprisonment in default.  The fine and costs to be paid out of the net proceeds of sale of the hotel.  If the indebtedness outweighed the proceeds of sale, the defendant was not to serve the default sentence without returning the matter to the Court.

 

Sentence and Observations of Court:

 

A very unusual situation.  Planning permission seemed to take far, far too long and had largely contributed to defendant's impecuniosity.  In the circumstances, Court concurred with the Crown's conclusions which would otherwise have been extremely modest or indeed too low.  £2,000 to be paid not later than 14 days after the sale of the hotel.  One month prison sentence in default.  In the event that the sale proceeds were insufficient, the defendant must apply to the Court for review.  Costs of £250 payable at the same time as the fine.

 

Mrs S Sharpe, Crown Advocate.

Advocate C J Dorey for the Defendant.

 

 

 

JUDGMENT

 

 

THE DEPUTY BAILIFF:

1.        This defendant used her former hotel as a lodging house for some 7 months, despite having been warned that she was not entitled to do so.  She took in between 5 and 25 more lodgers than she was allowed under the law.

2.        Such behaviour would normally attract a substantial fine intended not only to remove any profit made during that time, but also to reflect an additional penalty for breaking the law.  However, we are satisfied that this is a very unusual situation.  The financial position of the defendant is, and has at all relevant times been dire.  She has accumulated losses in running the hotel. 

3.        In August, 2000, she arranged a sale to a developer who wished to convert the property into residential accommodation.  At that stage it was hoped that planning permission could be received for 6 units.  The sale agreement was conditional on receipt of planning permission and the price varied according to the number of units.  By November, 2000, the Planning and Environment Committee had said no to six units.  The developer then apparently applied for five units.  The position today is that planning consent has still not been obtained for any particular number of units.  We are informed that the Planning and Environment Committee now say that they would be willing to grant consent to only four units, which has, of course, affected the possible sale price.  Even this will take, we are told, a further three to four months before any permission will be finalised.

4.        We emphasise that we do not know the full facts.  We are relying only on that which we have been told by the defendant's advocate and it was the developer, not the defendant, who had responsibility for obtaining planning permission.  Nevertheless, on the face of it, it has to be said that the period of two years which will have elapsed between the sale agreement and any eventual planning permission on the current time table, seems far, far too long for a matter such as this.  The delay has undoubtedly exacerbated the financial difficulties of the defendant.  Indeed, it is no longer clear that she will necessarily clear all liabilities when the sale eventually goes through.

5.        In the circumstances, we are willing to grant the conclusions of the Crown which would otherwise be extremely modest and indeed too low.  We therefore impose a fine of £2,000.  That sum is to be paid not later than 14 days after the sale of the hotel.  There is a prison sentence of one month in default, and we give liberty to the defendant to apply to the Court in respect of that default sentence, in the event of the sale proceeds not being sufficient to pay the fine.  We also order costs of £250 which will be payable at the same time as the fine.

Authorities

Lodging Houses (Registration) (Jersey) Law 1962, as amended: Article 2.

A.G.-v-Allan (5^th March, 1999) Jersey Unreported.

A.G.-v-Evans (3^rd November, 1995) Jersey Unreported.

A.G.-v-McKenzie (19^th November, 1993) Jersey Unreported.

A.G.-v-Ribeiro (19^th January 2001) Jersey Unreported; [2001/19]

A.G.-v-Muren & Peters (16^th August, 2000) Jersey Unreported; [2000/166]; [2000] JLR N.61.