Upper Tribunal ruling explores adequacy of reasons for serving landlord civil penalty notices

Saturday, February 10th, 2024 - By Tara O'Leary, Cornerstone Barristers

The Upper Tribunal has provided guidance and advice on the vexed question of how local authorities should comply with their duty to provide reasons when issuing civil penalty notices (“CPNs”) that allege the commission of housing offences [Welwyn Hatfield Borough Council v Wang [2024] UKUT 24 (LC)].

Under s.249A of the Housing Act 2004 local housing authorities (“LHAs”) are empowered to issue CPNs – which may impose fines of up to £30,000 – as an alternative to prosecuting landlords and property agents for offences relating to HMO, selective and additional licensing. The Act requires that before doing so, LHAs must serve a Notice of Intent which sets out “the reasons for proposing to impose the financial penalty”: para. 3(b), Schedule 13A.

Debate on Compliance with the Duty to Give Reasons

There has been much debate about precisely how LHAs should comply with that duty, what level of detail is required, and what consequences flow from providing inadequate reasons.

Waltham Forest LBC v Younis [2019] UKUT 362 (LC) confirmed that a Notice of Intent may be valid even though the reasons were provided in a separate but attached document, such as a witness statement.

Maharaj v Liverpool City Council [2022] UKUT 140 (LC) warned that the process of serving CPNs must be treated with the same level of seriousness as a criminal prosecution, and suggested a high level of detail was required to ensure reasons were valid.

The Deputy President has now confirmed that the crucial yardstick against which the adequacy of reasons shall be measured is whether the notice equips the recipient with sufficient information to enable them to respond to the allegations against them [74].

However, there is no minimum standard that applies automatically. Rather, how precise or detailed the contents of a notice must be depends on all the circumstances of the case. Crucially, that includes the knowledge and information available to the particular recipient [75], applying Mannai Investment Co Ltd v Eagle Star Life Assurance Co [1997] AC 749.

Determining the Adequacy of Reasons

In every case it will be necessary for a Tribunal considering the adequacy of reasons to look at the background and to assess whether the allegations were sufficiently clear to the individual recipient in that case. Some mistakes and errors will be obvious to the recipient and will not cause any confusion. In those cases, notices should not be treated as a nullity [76].

In cases where difficulties arise because the reasons given are ambiguous or vague, the Tribunal should consider other evidence and information available to the recipient which would have informed their reading of the notice [80, 85]. In Mrs Wang’s case, the Notices of Intent were vague but Welwyn Hatfield had previously sent her a Schedule of Works and numerous photographs detailing the breaches of HMO Management Regulations which were alleged within the CPNs. Thus the reasons in the Notices of Intent were not defective, even though they did not expressly refer to the Schedule. Mrs Wang had promptly arranged works to address those breaches, and knew that the Council wanted to interview her about them. It could not be suggested that she had forgotten about the Schedule or was unaware of the allegations against her [82-84].

Further, the Deputy President rejected the suggestion that valid reasons must include an explanation of why the LHA has decided to issue a CPN instead of taking some other form of enforcement action, such as an informal warning [86].

Implications for LHAs, Landlords, and Legal Representatives

He also held that the manner in which the First Tier Tribunal had dealt with this issue was unfair. In her grounds of appeal, Mrs Wang had not raised any complaints about the reasons in the notices. The FTT raised the matter as a preliminary issue of its own initiative with no prior warning. If it was not minded to grant Welwyn Hatfield an adjournment, it should have allowed an opportunity to provide written submissions before making a decision to quash the CPNs. Its failure to do so meant the FTT had been unaware of the relevant legal authorities and principles when deciding to quash the CPNs [67].

This decision should be carefully considered by all LHAs issuing CPNs for housing offences; by landlords and agents who receive notices and their legal representatives; and by First Tier Tribunal panels tasked with determining appeals against CPNs.

Read the judgment here.

The author of this blog, Tara O’Leary, from Cornerstone Barristers represented the local authority in this case. She can be contacted be email at teamdaryl@cornerstonebarristers.com or call 020 7421 1809.

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