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Factual and procedural background
Factual and procedural background
The local authority imposed a penalty of £20,000 for a breach of regulation 3 of the Client Money Protection Schemes for Property Agents (Requirement to Belong to a Scheme etc.) Regulations 2019 (S.I. 2019/386) for failure to be a member of an approved or designated client money protection scheme. The amount of the penalty imposed was £10,000 less than the maximum £30,000 permitted by regulation 6. The local authority also imposed a penalty for a breach of section 83(6) of the Consumer Rights Act 2015 for failure to display or publish, with the list of fees (required by subsection (2) to be displayed), a statement that indicates that the agent is a member of a client money protection scheme, and gives the name of the scheme. The Notice of Intent had said that the penalty would be £5,000. In the event, the penalty was £4,000 (page 551). It was reduced apparently, as Mr Ham accepted, in view of the mitigating factor that the information was being displayed by the time the officer came to “vary” the penalty (page 581, subparagraph (v) and page 583).
The appellant appealed to the First-tier Tribunal.
The First-tier Tribunal found that regulation 3 had been breached, regulation 4 had been breached, section 83(6) had been breached and that the respondent had gathered evidence as required by the guidance (paragraphs 15 to 20). The First-tier Tribunal went on to find that it was “satisfied that it was reasonable for the Respondent to impose FPs in these circumstances” (paragraph 21). The First-tier Tribunal considered “whether the amount of the FPs was unreasonable in all the circumstances” (paragraph 23). It found that “it was not unreasonable for the Respondent to impose FPs of £20,000 and £4,000 in the circumstances” (paragraph 24).
The First-tier Tribunal said at paragraph 43—
“43. I must consider as there are two FPs whether the total FP is just and proportionate to the breaches. I find that the total FPs are just and proportionate to the seriousness of the breaches.”.
In relation to the financial impact of the penalties, the First-tier Tribunal said—
“47. In relation to the financial impact of the FPs on the Appellant’s business the FPs must be proportionate to the Appellant’s means and must take into account the impact of the FPs on the business.
The Appellant submitted that it has a large deficit in the profit and loss account but has provided no financial information to support this assertion despite having advice from a firm of Chartered Certified Accountants. Mr Shanthakumar stated in response to the Respondent’s submission that no information had been provided: “We can provide this as the company has a large deficit in their profit and loss account, as it stands.” Despite Mr Shanthakumar asserting that this information could be provided the Appellant chose not to provide any financial information.
Without any financial information I have been unable to consider whether the FPs are disproportionate to the turnover or scale of the business or would be likely to put the Appellant out of business. I have considered whether I should adjourn to enable the Appellant to produce this evidence. I have decided that it is not proportionate to do so. The Appellant has been given ample opportunity to produce financial information and has chosen not to do so despite having advice from a firm of Chartered Certified Accountants.
In the circumstances it is appropriate, fair and just to proceed to determine the appeal on the basis of the evidence available.
On the basis of the information available I find that the FPs were not disproportionate to the turnover or scale of the business and would not put the Appellant out of business.”.
The First-tier Tribunal dismissed the appeal.
The First-tier Tribunal refused permission to appeal to the Upper Tribunal. The appellant made an in-time application to the Upper Tribunal for permission to appeal to that tribunal.
Upper Tribunal Judge Jacobs refused permission on the papers. The appellant sought an oral reconsideration hearing, which was held by video on 24 March 2025.