Case No. UKUT-241-(LC)

[2018] HLR 8 (“Gaskin No.1”)Y1 v Secretary of State for the Home Department (unrep) (13.11.13)R (Begum) v SIAC [2021] UKSC 7; [2021] AC 765Clark v Manchester City Council [2015] UKUT 129 (LC)Hastings Borough Council v Turner [2021] UKUT 258 (LC)Sheffield City Council v Hussain [2020] UKUT 292 (LC)Herefordshire Council v Rhode [2016] UKUT 39 (LC) Marshall v Waltham Forest LBC [2020] UKUT 35 (LC)R (Gaskin) v Richmond-upon-Thames LBC [2018] EWHC 1996 (Admin); [2019] PTSR 567 (“Gaskin No.2”)Vodafone 2 v Revenue and Customs Commissioners [2009] EWCA Civ 446; [2010] Ch 77 at [37])INTRODUCTION1.In this appeal, the London Borough of Waltham Forest (“the Council”) appeals against a decision of the First-tier Tribunal (Property Chamber) (“the FTT”) dated 16 August 2021 (“the Decision”). The Decision relates to applications made by, among others, FHCO Limited (“FHCO”) to the Council for licences under Part 3 of the Housing Act 2004 (“the 2004 Act”) in relation to 158 Blackhorse Road, London E17 6RH and the revocation by the Council of such a licence previously granted to Farina Hussain in relation to 44 Westbury Road, London E17 6RH. 2.FHCO and Ms Hussain were the appellants in the FTT against the refusal of its applications for a Part 3 licence and the revocation of her Part 3 licence respectively. The FTT allowed the appeals of FHCO and Ms Hussain against the determination by the Council, by which it had refused to grant FHCO licences and revoked Ms Hussain’s licence.3.Before the FTT, there had also been appeals by Mrs Nasim Hussain (the mother of Ms Hussain) and Luxcool Limited against the Council’s refusal to grant them licences relating to other properties, but those appeals were unsuccessful and, save on one matter raised by way of cross-appeal, they have not sought to pursue their appeals further.4.The issues before the FTT in FHCO’s and Ms Hussain’s appeals were whether FHCO and Ms Hussain were fit and proper persons to be licence holders, pursuant to s.88(3)(a)(i) of the 2004 Act. 5.The Act confers the original decision-making power on such questions on the local housing authority, in this case the Council, and it provides for the applicant, licence holder or any relevant person to be able to appeal its decision. Any such appeal is specified by the Act to be by way of a re-hearing, and the FTT is given power to confirm, reverse or vary the decision of the local housing authority.6.The Council concluded that FHCO (of which Ms Hussain was the sole director at the time) and Ms Hussain herself were not fit and proper persons to be licence holders. This was because of their association with persons who had committed offences involving fraud or dishonesty, namely Ms Hussain’s mother and father. Mrs Nasim Hussain and her husband, Tariq Hussain, had been convicted of offences of dishonesty relating to the licensing under Part 2 or Part 3 of the Act of many properties owned or controlled by them in the same part of Greater London. 7.The Council concluded on the evidence it had that Ms Hussain had been closely involved in the family property rental business and was tainted by the unlawful conduct of her parents, such that she was not a fit and proper person, and neither therefore was the limited company that she owned and controlled.8.The FTT heard evidence about these matters over a hearing lasting 2 days. It reached a different conclusion so far as FHCO and Ms Hussain were concerned, namely that they were fit and proper persons to be licence holders, and therefore it allowed their appeals. As a result, the FTT reversed the Council’s decision and directed that FHCO should be granted licences for a 3 year period running from 30 August 2021 and that Ms Hussain’s licence should be “reinstated”.9.With the permission of the FTT, the Council appeals against those parts of the Decision on 3 grounds, and further seeks permission from this Tribunal to pursue a fourth ground of appeal.10.On 21 January 2022, the Deputy President of this Tribunal granted all four Respondents permission to cross-appeal on a discrete question of law arising from the facts, namely whether under the Provision of Services Regulations 2009 (“the Services Regulations”) licences were deemed to have been granted to Mrs Nasim Hussain, FHCO and Luxcool Limited because the Council did not make a decision on their applications for licences within a reasonable time. The Respondents contend that if their applications for licences were deemed to have been granted they cannot later have been refused by the Council, and so the purported refusals were of no legal effect.THE GROUNDS OF APPEAL11.The 4 grounds of the Council’s appeal are:“1.The FTT misdirected itself by seeking to assess whether FHCO was a fit and proper person as at the date of the appeal hearing rather than at the date of the decisions under appeal, and by failing to take into account the Council’s findings about FHCO’s fitness as at that relevant date.2.The FTT wrongly held that the Council had no power to pose questions directed to eliciting FHCO’s absence of assets, reserves or employees.3.The FTT erred in allowing Farina [Hussain]’s appeal, reversing the Council’s decision to revoke her licence, and “reinstating” her licence.4.The FTT misdirected itself as to the evidence about Farina [Hussain], and therefore wrongly concluded that both she and FHCO were fit and proper persons to be licence holders.”12.The ground of cross-appeal by the Respondents is that the FTT erred in its interpretation of the Services Regulations by holding that licences could not be deemed to have been granted in circumstances where the Council had not complied with its obligation under the Services Regulations to fix in advance and identify a period of time within which it would determine licence applications.GROUNDS 1 AND 413.It is convenient to address together and first the first ground of appeal (for which the Council has permission) and the fourth ground (for which it has not). There is acknowledged on both sides to be some interplay between them. Having heard the argument, I consider that permission to appeal should be granted on the fourth ground, since it passes the test of being reasonably arguable, and I will address the argument on its merits.Background facts14.The relevant facts can be quite shortly stated.15.In 2015 and 2016, Mrs Nasim Hussain submitted licence applications under Part 2 and Part 3 of the 2004 Act for many properties. These made false statements about gas appliances. Licences were granted pursuant to the 2015 applications but not pursuant to the 2016 applications. 16.On 28 September 2016, Mrs Nasim Hussain was interviewed by the Council under caution, in the presence of Ms Hussain, in relation to misleading statements made in the 2016 licence applications. Ms Hussain was quite vocal at the interview in seeking to prevent her mother being questioned about any of the 2015 applications, but did not intervene when her mother explained that she did not know the answers to questions because her family did everything, and that the Council should instead ask her husband, son and daughter (Ms Hussain), who ran the business.17.On 19 January 2017 Ms Hussain submitted a licence application under Part 3 of the 2004 Act in respect of 44 Westbury Road. A licence was granted on 16 February 2017 that would expire on 31 March 2020. 18.Following this interview, there were further interviews under caution of Mrs Nasim Hussain, Mr Tariq Hussain, Mr Wahab Hussain (Ms Hussain’s brother) and Ms Hussain, each of whom gave “no comment” responses to almost all questions, including questions about what was stated in the licence application forms. Ms Hussain answered the question about where she lived by giving the address of the family home in Chigwell. 19.At that time, Mrs Nasim Hussain, Mr Tariq Hussain and Mr Wahab Hussain signed prepared statements, but Ms Hussain did not. Each of Mrs Nasim Hussain, Mr Tariq Hussain and Mr Wahab Hussain stated that they were not involved with the preparation and submission of licence application forms to the Council.20.However, on 12 May 2017, Mrs Nasim Hussain pleaded guilty to four offences of knowingly or recklessly supplying false information to the Council in connection with the licence applications made in 2016, and she was fined £40,000.21.Applications for Part 3 licences were made by FHCO on 6 February 2018. At the time (and when the licences were later refused), Ms Hussain was the sole director and shareholder and the company had no assets, turnover, capital reserves or employees.22.On 29 June 2018, Tariq Hussain pleaded guilty to four offences of fraudulently backdating gas safety certificates and was fined £1,000.23.On 4 October 2018, the Council gave notice to FHCO and Ms Hussain of its intention to refuse to grant and to revoke licences, allowing a period for the recipients to make submissions. Ms Hussain made representations in response but on 5 November 2018 the Council wrote to her stating that her parents were not fit and proper persons, in view of their convictions, and that her close association with them meant that she could not be regarded as a fit and proper person either. 24.The Council’s formal decision was made and communicated on 23 November 2018. The reasons for the decision were given as the convictions of Mrs Nasim Hussain and Mr Tariq Hussain. Similar decision letters were issued to Mrs Nasim Hussain and Luxcool Ltd.25.The Respondents lodged their appeals at the FTT on 20 December 2018. 26.In July and August 2019, Mrs Nasim Hussain was convicted of three further offences of failing to comply with licence conditions in respect of installation and maintenance of smoke alarms.The FTT Decision27.The FTT heard the appeal on 24 and 25 May 2021 and published the Decision on 16 August 2021. It heard evidence from Ms Hussain, Mr Wahab Hussain, Ms Tina Mitchell, who by that time had become a second director of FHCO, and Mr David Beach, an environmental health officer and director of enforcement for the Council. It did not hear evidence from Mrs Nasim Hussain or Mr Tariq Hussain.28.In its decision, the FTT first disposed of Mrs Nasim Hussain’s appeals and then turned to Ms Hussain’s appeal against the revocation of her licence in respect of 44 Westbury Road. It noted the Council’s case that the property business was a family business, of which Ms Hussain was part, and that it was likely that she was a party to the false declarations in the applications and involved in an attempt to cover up wrongdoing. It noted the Council’s reliance on Ms Hussain’s stance in the interview of her mother; her mother’s prepared statement; and Ms Hussain’s failure to respond to questions about FHCO raised in a letter dated 20 February 2019 (“the 13 questions”), despite an initial indication from her solicitors that she was willing to provide evidence of being a fit and proper person.29.The FTT then summarised the evidence given by Ms Hussain and Mr Wahab Hussain as to their not being involved in managing their mother’s properties, except that in Ms Hussain’s case, as a trainee accountant, she acted as her bookkeeper, and that it was Mr Tariq Hussain who dealt with the management of the business. Ms Hussain is recorded as explaining that she was advised by her solicitors not to answer the 13 questions because they were intrusive and irrelevant and not the usual questions asked when a licence application was made.30.The FTT noted that the Council’s decision was founded on Ms Hussain’s sharing culpability for the provision of false information, her playing a vital role in the family business and being probably party to the false declarations and central to an attempt to cover them up. It then stated that “the evidence does not support those assertions”, pointing out that there was no evidence of any wrongdoing by Ms Hussain and that the evidence did not support Mr Beach’s assertions of close involvement in wrongdoing. Although it was likely that Mrs Nasim Hussain needed help in completing the application forms, the FTT accepted the evidence of Ms Hussain and Mr Wahab Hussain that this was probably provided by Mr Tariq Hussain.31.The FTT concluded that Ms Hussain’s conduct during her mother’s first interview was not, properly analysed, such as to create an inference adverse to her about her role in her parents’ business, and that her own “no comment” interview was explained by her solicitor’s advice not to answer questions. The FTT did not accept that Mrs Nasim Hussain’s unfitness to be a licence holder was directly relevant to Ms Hussain’s fitness, absent any impropriety established against Ms Hussain herself. If the failure to answer any of the 13 questions about FHCO, on advice, might be some evidence relating to FHCO’s fitness, it was not in relation to Ms Hussain personally. In relation to her management of her flat at 44 Westbury Road, there was nothing unsatisfactory about her performance of her role. Ms Hussain had, by the time of the hearing, almost qualified as an accountant and was, on the basis of what the FTT saw of her, “an intelligent and responsible individual”.32.The FTT expressed its conclusion as follows:“We do not agree that her mother’s unfitness to be a licence holder is directly relevant to her own fitness to be a licence holder. The Council’s conclusion that Farina was a vital part of the family business and that she was likely to have been involved in giving the false gas safety declarations is not, in our view, supported by the evidence. On the evidence before us, we determine that she is a fit and proper person to hold a licence.”33.Turning to FHCO’s appeal, the FTT noted that in the decision letters no reasons specific to FHCO were identified by the Council as to why it was not a fit and proper person and it reminded itself of FHCO’s separate legal personality. It noted that only one of two directors was said to be tainted by association with Mr and Mrs Hussain. The FTT held that FHCO was a fit and proper person since it had not contravened any duty or committed any offence and neither had either of its two directors. FHCO was a member of the National Residential Landlords Association and the Property Redress Scheme. It noted Ms Mitchell’s relative lack of experience as a director but did not consider that that cast doubt on FHCO’s fitness.34.As for the failure by FHCO to answer any of the 13 questions, the FTT considered that the information sought went beyond what, under The Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006, as amended (“the 2006 Regulations”), a local housing authority was entitled to require as a condition of making an application for a Part 2 or Part 3 licence. By analogy with the case of R (Gaskin) v Richmond-upon-Thames LBC [2018] HLR 8 (“Gaskin No.1”), the FTT held that the 13 questions had wrongly been “the imposition of a condition precedent to the acceptance of an application” and not a request for voluntary further information, and for that reason – and because Ms Hussain had not answered on the basis of legal advice not to do so – the failure to answer was not relevant to the issue of FHCO’s suitability to be a licence holder.