[2023] UKUT 292 (LC)

27 Fore Street was constructed in the 19^th century and comprises a basement coal cellar, ground floor commercial premises and three flats arranged on the first, second and attic floors. Access to the ground floor commercial unit is from the front of the building and a separate entrance at the side serves the flats on the upper floors. A single, straight flight of stairs leads from a small ground floor hallway to a wider first floor landing; the front doors of each of the flats open onto the first floor landing. A separate set of steps, behind a fire door, leads from the ground floor down to the cellar.

The building is fitted with an integrated fire alarm system with smoke detectors in each flat and in the common parts all linked to a single control panel. If a fire was detected in any part of the building the occupiers of the flats should all be alerted.

The appellant has owned the freehold of the building since the 1990s and it was responsible for converting the residential upper floors into self-contained accommodation. Mr Thompson explained that the integrated alarm system pre-dated the conversion works and had been inherited by the appellant.

In about 2001, after the conversion works, the three flats were let by the appellant on long leases for terms of 125 years. I have only seen extracts from one of those leases, but I assume they are all in the same form. The lease obliges the leaseholder to keep the flat itself in good repair and to pay a service charge to the appellant, which is responsible for repairs to the structure and exterior and the common parts (the service charge appears only to cover the cost of work to the fire alarm in the common parts). The appellant has a right of entry to inspect the state of repair of the flat, and a right to give two months’ notice requiring the leaseholder to undertake any necessary works of repair to the flat and, in the event of non-compliance, to enter the flat on giving two months’ notice and carry out repairs at the leaseholder’s expense.

One of the Council’s housing officers first inspected the building in March 2021 following a complaint from the leaseholder of the top flat about the time it was taking the appellant to remedy a leaking roof. Thereafter there was informal consultation between officers and Mr Thompson, but on 20 August 2021 the Council served an improvement notice on the appellant requiring it to carry out work to address three separate hazards which had been identified. Those hazards were fire and falls on stairs (both category 1 hazards) and damp and mould growth caused by water penetration (a category 2 hazard).

The description of the fire hazard in the notice identified five issues. Some were minor (signage on a meter cupboard door, and a query about a test certificate) but others were more significant. The doors to individual flats were not sufficiently fire resistant. A fault was showing on the control panel indicating that the fire alarm in Flat 2 was not working. The escape route through the common parts was not kept clear as there were items stored on the route which might hinder escape. Photographs taken during the inspection show a number of items on the ground floor, namely, a small cabinet placed at the foot of the stairs, a tall, narrow shelf unit used for post, a plank of wood, and what may be a bicycle. No hazards were identified as being present on the stairs themselves.

The second hazard identified was the risk of falls on the stairs leading from the ground floor to the cellar. Items were found to have been stored at the top of those stairs which obstructed access for anyone wishing to read the gas meter or use the cellar for storage. The stairs themselves were unlit and had no handrail.

A single improvement notice was served by the Council covering all of the hazards it had identified. In relation to the category 1 fire hazard, it required that a suitably qualified engineer be engaged to identify and remedy the fault shown on the fire control board in zone 2 (Flat 2) and that the escape route be cleared and not used for storage. In relation to the “falls on stairs” hazard, which was also assessed as category 1, the notice specified that the cellar stairs must be cleared of all items, and new lighting and a handrail must be installed.

The Council also prepared and served a statement of its reasons for serving the improvement notice. That statement did not explain why it had been decided to serve one notice on the appellant, rather than separate notices on the appellant and the leaseholders in respect of different remedial actions. Nor did any of the Council’s officers who prepared witness statements and gave evidence to the FTT, including in a detailed statement of 56 paragraphs by the officer principally concerned and statements by two of her colleagues, explain why the notice had been served on the appellant alone. The inference I draw from the statement of reasons and from the evidence as a whole is that no specific consideration was given by the Council to the question of who ought to take the action specified in the notice, but that it was simply assumed that the appellant was that person.

The improvement notice served on 20 August required that the specified works should be begun by 23 September and completed within 2 months of that date. On 20 September Mr Thompson wrote to the authority acknowledging receipt of the notice and stating that the works would be done within the next 2 months. The appellant did not lodge an appeal against the notice.

When housing officers returned to inspect the premises on 7 December, they found that most items of work had not been completed. There was no indication that anything had been done to remedy the defective fire alarm in Flat 2 and the escape route was still obstructed by the same items in the same places. Some work to address the risk of falls on the cellar stairs had been undertaken by the installation of a handrail and a new motion sensor light but the light appeared not to be working; items were still stored at the top of the cellar stairs.

On 6 May 2022 the Council gave the appellant notice of its intention to issue a financial penalty and on 20 October 2022, after a further inspection of the premises and consideration of representations made by Mr Thompson, a final notice was served imposing a penalty of £10,000. The Council’s final inspection shortly before service of the final notice had shown that further matters had been attended to, but there were still obstructions at the top of the cellar stairs and in the hallway, and the control panel was still showing that Flat 2 was disconnected from the alarm system. These modest improvements were not enough to change the Council’s assessment of the appropriate penalty.

That assessment was made by applying the Council’s points based policy on financial penalties. In this case points were imposed for the seriousness of the offence (18 points), the appellant’s degree of culpability, which was regarded as “reckless” (18 points), its track record, which attracted a further 10 points because this was a first offence, and for “harm caused to tenants” for which a further 10 points were awarded. The total score assessed by the Council’s officers was 53 which attracted a penalty of £10,000 under the policy.