[2023] UKUT 139 (LC)

This is not a difficult issue. The FTT did not doubt that it had power to increase a penalty just as it has power to reduce it. That is uncontrovertibly true. As Mr Calzavara points out, if the local housing authority imposed a penalty on a landlord on the basis that he or she owned and was renting out, say, 15 properties, and the FTT found as a fact in the appeal that he or she owned only one, then it is implausible to suggest that the FTT should or could do anything other than to start from the local authority’s policy and determine the penalty on the basis that only one property was owned Such a penalty would no doubt be substantially lower. Conversely, in a hypothetical case where the local authority proceeded on the basis that one property was owned but the FTT found as a fact that 15 properties were owned then the FTT would determine the penalty on the basis of that finding of fact.

In either case, the principles set out in Waltham Forest LBC vMarshall would apply. The FTT must start from the local housing authority’s policy, and it would be for the landlord to persuade it to depart from that policy. If the FTT was considering a departure, it must ask itself whether the objectives of the policy would be achieved if it departed from the policy, bearing in mind that one of the reasons for having the policy is to ensure consistency between offenders. Those principles are relevant in all cases, whether the end result is a lower or higher penalty.

Mr Calzavara asks the Tribunal to go further. He argues that the FTT “was required to apply the Council’s policy”, and that “It is plain that a proper application of the policy required that the starting penalty be increased to £15,000” (my emphasis). It is important to appreciate that although the FTT starts from the policy and must have good reasons for departing from it, it is not bound by the policy and it is not possible definitively to state or list the circumstances in which, as the Tribunal put it in Waltham Forest v Marshall, the FTT can and should depart from the policy.

In Leicester City Council v Morjaria [2023] UKUT 129 (LC) the Tribunal (the Deputy President) said at paragraph 54:

“In Sutton v Norwich City Council [2021] EWCA Civ 20, at [13]-[14] the Court of Appeal endorsed guidance given by this Tribunal (Judge Cooke) in Marshall v Waltham Forest LBC [2020] 1 WLR 3187, at [54] and [62], which explained that the FTT should start from the policy of the local housing authority and consider whether the objects of the policy will be met if it is not followed, but that if, having afforded the policy considerable weight, the FTT disagreed with the authority’s conclusions it is entitled to vary the penalty indicated by the policy.”

Morjaria itself is an example of a case where it was right to depart from the local housing authority’s policy. The FTT in the present case took the view that there were good reasons for doing so, and ground 2 calls for an assessment of whether the FTT was entitled to do so for those reasons.

So the answer to the first issue is yes, as the FTT itself accepted, the FTT does have the power to increase the penalty imposed by a local housing authority on the basis of further information provided by the appellant during the hearing. That is not to say that it was bound to do so.

The second issue calls for an examination of the decision taken by the FTT in this case. Had the appeal proceeded as the appellant and the Tribunal expected no doubt Mr Calzavara and Mr Arfan Rahman would have made submissions as to whether this was a case where it was right for the FTT to depart from the appellant’s policy.

But the appeal did not proceed as expected.

At the hearing of the appeal on 8 June 2023 the respondent was represented by Mr Arfan Rahman, who represented him at the FTT. With Mr Arfan Rahman was a gentleman whom he introduced as the respondent, Mr Adil Rahman. Mr Calzavara expressed concern that this gentleman was not the person who attended the FTT, who was understood by all who were present at that hearing to be Mr Adil Rahman, and who was cross-examined by Calazavara on the basis that he was Mr Adil Rahman and was the author of the application to the FTT.

Mr Arfan Rahman agreed, and said that the gentleman who was with him at the FTT video hearing was not his brother, Mr Adil Rahman, but his father, Mr Khalil Rahman. He said that neither he nor his father had been asked to identify themselves. His father had not been sworn and was not asked to confirm that the signature on the form of application to the FTT was his. He said he did not know why he had not said to the FTT that his father was not Mr Adil Rahman.

That was certainly most surprising news. It is clear on reading the FTT’s decision that the FTT thought the gentleman with Mr Arfan Rahman was the person appealing the civil penalty, referred to in the FTT’s judgment as “the Appellant” and who the FTT stated in its decision was present (see paragraph 7 above).

Neither the respondent himself nor Mr Arfan Rahman queried the terms of the FTT’s description of the proceedings or of the evidence before it after receiving the FTT’s decision. And the respondent’s grounds of objection to the appeal did not state that the person who gave evidence in the FTT was not Mr Adil Rahman.

It is not possible for this Tribunal to make findings of fact as to who attended the FTT or as to whether the gentleman who gave evidence there or the gentleman in court at the hearing of the appeal is Mr Adil Rahman, the respondent to the appeal and the person upon whom the civil penalty is imposed. Nor is it appropriate for the Tribunal to make any finding as to whether the respondent, Mr Arfan Rahman or Mr Khalil Rahman or any of them have behaved improperly. Equally, it is impossible to determine ground 2 of the appeal because it appears that the evidence given to the FTT may not have been given by Mr Adil Rahman.

Instead, I set aside the FTT’s decision as to the level of the penalty (only) on the basis that it now appears that it was made under a misapprehension as to the identity of the person who gave evidence to the FTT relevant to the level of the financial penalty. The matter is remitted to the FTT for a fresh determination of the level of the penalty to be imposed; the FTT’s finding that it was satisfied beyond reasonable doubt that an offence had been committed remains in place. The order that accompanies this decision requires Mr Arfan Rahman, Mr Adil Rahman and Mr Khalil Rahman each to provide a witness statement to the FTT setting out the addresses of the properties they own and exhibiting the registers of title to those properties (or copies of the deeds if title is unregistered) and requiring each of them to attend the re-hearing taking with them photographic identification.

Technically the appeal succeeds, in the sense that the FTT’s decision is set aside but it is important to note that the decision is set aside for reasons unrelated to the grounds of appeal.

At the conclusion of the hearing on 8 June Mr Calzavara made an application for an order that the respondent pay to the appellant costs of the FTT hearing on 9 August 2022, under rule 13(1) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) 2013, and Mr Arfan Rahman argued against the making of such an order on the basis that neither he nor his father had done anything wrong and that his father had told the truth throughout. I have asked for further submissions on that application and will determine it after receipt of those submissions.