Housing – Civil penalties – Selective licensing – Policy of respondent local housing authority to resolve issues informally before resorting to enforcement action – Appellant landlord residing abroad – Property managed by agent – Appellant unaware of need for licensing – Respondent imposing penalty – Appellant appealing – Whether penalty consistent with respondent’s policy – Appeal allowed
The appellant owned a property in Ilford which was rented out. She lived in Canada. In July 2017, the flat became subject to a selective licensing scheme introduced by the respondent local housing authority under Part 3 of the Housing Act 2004. The appellant was unaware of the designation and the requirement to license the property. From May 2018, the property was managed on the appellant’s behalf by independent agents who were also unaware of the licensing requirements.
In June 2018, the respondent discovered that the property was tenanted and wrote a letter, addressed to the appellant at the flat, informing her of the selective licensing scheme and her statutory obligation to obtain a licence. A few months later, the respondent’s officers visited the property and left calling cards which came to the attention of the agent. The agent then notified the appellant of the need to obtain a licence.
In 2019, the respondent served a final notice on the appellant confirming that it was issuing a financial penalty of £2,500 for the offence of having control of or managing a house which was required to be licensed but was not so licensed, contrary to section 95 of the 2004 Act. The level of the penalty was determined by applying the respondent’s financial penalty matrix.
The appellant appealed against the penalty. She did not deny the offence but argued that, applying the respondent’s enforcement policy, she should have been issued with a warning instead of a fine. In particular, the policy indicated that its officers would always try to deal with matters informally in the first instance, which included the giving of verbal or written warnings.
The First-tier Tribunal (FTT) dismissed the appeal and upheld the financial penalty. The appellant appealed.
Held: The appeal was allowed.
(1) It was not the task of the FTT in these appeals to consider whether the respondent’s decision was justified or reasonable; rather, it was required to decide for itself whether a financial penalty should be imposed at all and, if so, how much the penalty should be. The starting point was the local authority’s policy, and proper consideration had to be given to arguments that it should depart from it. It was the appellant who had the burden of persuading it to do so. In considering reasons for doing so, it had to look at the objectives of the policy and ask itself whether those objectives would be met if the policy was not followed. The tribunal had to afford considerable weight to the local authority’s decision but might vary it if it disagreed with the local authority’s conclusion: Waltham Forest London Borough Council v Marshall [2020] UKUT 35 (LC); Sutton v Norwich City Council [2021] EWCA Civ 20; [2021] PLSCS 7 applied.
(2) The fundamental objection to the FTT’s treatment of the policy issue was that it did not address its mind clearly to the question whether a penalty should be imposed at all. The FTT ought to have addressed its mind to the respondent’s policy on informal resolution and to whether it applied in this case. The FTT did not address the substance of the policy issue but began by considering the amount of the penalty, rather than the prior question of whether there should be a penalty at all, and having reached that prior question only at the end of its decision, it dismissed it on grounds which did not examine the policy or consider its application. In doing so, the FTT failed to deal with a significant part of the appellant’s case; it also omitted to consider a material factor and thus its evaluation of the case and its exercise of its discretion were flawed. Therefore, the FTT’s decision to uphold the penalty had to be set aside. It was no answer to those omissions for the respondent now to say that the imposition of the penalty was nevertheless appropriate. That was a question for the FTT to address, and it did not do so. Accordingly, the decision to uphold the penalty had to be set aside: Tizero v Redbridge London Borough Council (LON/00BC/HNA/2019/0041) considered.
(3) Where the Upper Tribunal (UT) set aside a decision of the FTT it was empowered by section 12(2)(b) of the Tribunals, Courts and Enforcement Act 2007 either to remit the case to the FTT for reconsideration, or to remake the decision. In considering whether a financial penalty was appropriate, it was important first to bear in mind the overall purpose of the civil penalty regime. The publication Civil Penalties under the Housing and Planning Act 2016 – Guidance for Local Authorities encouraged local authorities to develop and document their own policies and listed the factors which should be taken into account in determining what penalty was appropriate. Those were the factors reflected in the respondent’s financial penalty matrix. The respondent had considered that a financial penalty was justified, but the focus of the panel was on the appellant’s failure to respond to warnings of which she was unaware. The UT did not give that failure the weight which it appeared to have been given by the officers.
(4) In considering whether informal action was appropriate, the first matter to which the policy directed attention was whether the act or omission was serious enough to warrant formal action. There was no doubt that a failure to license a house which was required to be licensed was not a technical or minor infringement. The UT accepted the reasons given by the respondent’s housing officer for treating the offence in this case as one of moderate seriousness, because unlicensed tenancies could not be monitored by the respondent as intended by the scheme. But whether in a specific case an offence of moderate seriousness was serious enough to warrant formal action depended on all the circumstances of that offence.
The objective of the financial penalty regime, as explained in the guidance, to support good landlords who provided decent, well-maintained homes and crack down on a small number of rogue or criminal landlords knowingly letting out unsafe and substandard accommodation, was not advanced by the imposition of a financial penalty in the present case.
The appellant appeared in person; Dean Underwood (instructed by Redbridge London Borough Council) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Ekweozoh v Redbridge London Borough Council