[2024] UKUT 24 (LC)

This appeal is about compliance with statutory procedures and the consequences of non-compliance. In the twentieth century courts and tribunals would often classify procedural steps as either mandatory or directory and would treat a failure to follow a mandatory step as fatal to the validity of subsequent proceedings, whereas neglecting to follow a directory step would not have that consequence. Since the decision of the Court of Appeal in R v Home Sec., Ex p Jeyeanthan [2000] 1 WLR 354, the modern approach to compliance with procedures laid down by statute and the effect of non-compliance on the validity of subsequent proceedings is quite different. It was summarised by Males LJ in Director of Public Prosecutions v McFarlane [2020] 1 Cr. App. R. 4, at [25], as follows:

“That approach is, broadly speaking, that the effect of procedural defects does not depend upon whether the requirements in question should be classified as mandatory or directory but on what Parliament intended to be the consequences of non-compliance. Parliament should not be taken to have intended that the consequences of non-compliance will be to render the proceedings a nullity, except in clear cases, and, in particular, should not be taken to have so intended when that would defeat the purpose of the legislation in question and when the non-compliance has caused no injustice to the defendant.”

These principles are of wide application: Jeyeanthan was an immigration case while McFarlane concerned the procedure under section 29, Criminal Justice Act 2003 for instituting criminal proceedings. For more than twenty years the same approach has been adopted in civil and public law proceedings where the consequences of procedural defects have had to be considered.

In Newbold v Coal Authority [2014] 1 WLR 1288, an appeal from a decision of this Tribunal in a mining subsidence compensation case, the Jeyeanthan approach was applied by the Court of Appeal to a notice of claim. Sir Stanley Burton explained, at [70], how a court or tribunal should distinguish between statutory or contractual requirements which require strict compliance as a condition of validity, and requirements which may be satisfied by what he referred to as “adequate compliance” or where even non-compliance may not be fatal.In each case it is a question of interpretation of the relevant requirement:

“In all such cases, it is necessary to consider the words of the statute or contract, in the light of its subject matter, the background, the purpose of the requirement, if that is known or determined, and the actual or possible effect of non-compliance on the parties. We assume that Parliament in the case of legislation, and the parties in thecase of a contractual requirement, would have intended a sensible, and in the case of a contract, commercial result.”

In Waltham Forest LBC v Younis [2019] UKUT 362 (LC) (a decision of my own) the same approach was applied by the Tribunal when it considered the sufficiency of an initial notice given by a local housing authority under section 249A, 2004 Act informing a landlord of its intention to impose a financial penalty on him because he had breached conditions in a licence he held under Part 3 of the Act (an offence contrary to section 95, 2004 Act). The authority was satisfied that the premises in question were being used as a gambling den and for the sale of alcohol and take-away food and that, contrary to a condition in his licence, the landlord had failed to take adequate steps to control that anti-social behaviour. After months of correspondence about the problem, and after the authority had obtained a closure order from the magistrates’ court, it served a notice of intent on the landlord in which it said that he had committed an offence by failing to comply with the relevant condition, contrary to section 95. No further details of the offence were given in the notice of intent, but copies of witness statements prepared by Council officers for use in the closure order application were served with the notice and these described the conduct complained of in considerable detail. Nor did either the notice of intent or the witness statements identify which of the various steps listed in the licence condition the landlord was said to have failed to take.

The FTT allowed the landlord’s appeal against the financial penalty. It held that the notice of intent had been invalid because it did not specify which part of the condition was being relied on nor did it state the date on which the offence was said to have been committed. The authority appealed to this Tribunal, which allowed the appeal and held that the notice of intent had been valid; if the notice had been invalid, the Tribunal said it would nevertheless have upheld the financial penalty.

The Tribunal first considered the purpose of a notice of intent within the statutory scheme, at [50]:

“It was not suggested by Mr Underwood that it would be sufficient for an authority to state baldly that it was satisfied that a person’s conduct amounted to a particular offence, without providing any further information. The purpose of setting out the authority’s reasons is so that the recipient of the notice of intent can respond to it with representations, which must then be taken into account by the authority. The notice must therefore provide a sufficient account of the authority’s reasons for proposing a financial penalty to enable the recipient to understand what conduct or omission is being said to amount to the offence which has been identified.”

The approach taken by the authority of annexing lengthy witness statements to the notice was described as “far from ideal” and “poor technique” but it did not render the notice invalid, as the Tribunal explained at [52].

“Mr Stancliffe submitted that it was not permissible to set out reasons in separate documents, but in the absence of a prescribed form there is no reason why paragraph 3(b) should be interpreted in such a restrictive way. What is required is that the authority’s reasons be set out sufficiently clearly so that they can be understood, and it is sufficient if that is done in more than one document. In this case the witness statements are properly treated as forming part of the notice because they accompanied it and were referred to in the authority’s explanatory letter as providing details of the offence.”

The Tribunal was satisfied that the notice of intent provided the required information and that it was valid. It nevertheless went on to consider a second ground of appeal in which the authority argued that even if the notice of intent had failed to provide the required information, that would not have invalidated the whole of the procedure. The authority relied on Nash v Birmingham Crown Court [2005] EWHC 338 as demonstrating that even in a criminal prosecution for a regulatory offence, an information described by the Divisional Court as “wide and vague and insufficient for the purpose of a summons … did not render the proceedings a nullity or any resulting conviction unsafe, provided that the requisite information was given to the appellant in good time for her to be able fairly to meet the case against her.” The Tribunal accepted that the same principle should apply to a financial penalty imposed under section 249A, 2004 Act, and rejected the landlord’s submission that, in a notice of intent, a failure to include proper particulars of its reasons for proposing the penalty would always be fatal. The Tribunal’s reasoning, at [73]-[74], was as follows:

“73.

The purpose of a notice of intent is to inform the recipient of the reasons why the authority is contemplating the imposition of a financial penalty. The notice also performs the important function of limiting the scope of the subsequent procedure. But the notice of intent does not represent the last word on any issue. Not only does the recipient of the notice have the opportunity to respond to it, but the authority also has the obligation to think again before making a final decision. Once that decision has been conveyed in a final notice, the recipient has the right to appeal to the FTT, where they may rely on matters which were not known to the authority.

74.

Those characteristics of the statutory scheme suggest that the reasons given in a notice of intent should be clear enough to enable the recipient to respond, but they also suggest that if those reasons are unclear or ambiguous, Parliament would not have intended that the notice of intent should invariably be treated as a nullity. The seriousness of the offences for which civil penalties can be imposed, the relative shortness of the time available to a local authority to take action, and the availability of a right of appeal on the merits before an independent tribunal, are all features of the statutory scheme which militate against the adoption of an excessively technical approach to procedural compliance.

In Younis the Tribunal did not say that a defective notice of intent could always be relied on or that it would never be appropriate for the FTT to treat it as a nullity, requiring that any penalty imposed in reliance on it be discharged. As the Divisional Court had ruled in Nash, the question in each case will be whether “the requisite information was given to the appellant in good time for her to be able fairly to meet the case against her”. A good illustration is provided by the next case in which the Tribunal had to consider the consequences of a defective notice of intent, Maharaj v Liverpool City Council [2022] UKUT 140 (LC).

In Maharaj the Tribunal (HHJ Hodge KC) considered the extent to which particulars were required to be given in a notice of intent. Both parties were represented by counsel, but the Tribunal was not referred to its earlier decision in Younis. It has been suggested in this appeal that the approach to procedural compliance taken in Maharaj is inconsistent with the approach taken in Younis. On consideration, however, it is apparent that there is no such inconsistency.

Maharaj concerned financial penalties imposed for breaches of a local housing authority’s selective licensing scheme. One condition required the licence holder to provide a gas safety certificate to the authority annually, and another required that he carry out inspections of the property every six months. Two notices of intent were served on the landlord by the authority, the first alleging a breach of the gas safety certificate condition and the second a breach of the inspection condition. The first suggested breach was that the landlord has failed to provide an annual certificate in response to a request made by the authority in June 2019; the second was that records of inspections had not been supplied when requested, again in June 2019. Final notices relying on the same breaches were later issued and the landlord appealed to the FTT unsuccessfully. He then appealed to this Tribunal.

The FTT had been satisfied that the landlord had committed a breach of the gas safety certificate condition, but it emerged when it was asked for permission to appeal that the breach it found was not the breach alleged in the notice of intent; the breach it found established by the evidence was that the landlord had not supplied a certificate for the year to July 2018 (a year earlier than had been suggested in the notice of intent). It nevertheless directed itself that it was not bound by the statement of reasons in the notice of intent or the final notice and was entitled to confirm the penalty if it was satisfied that there had been a breach, even if not the one described in the notices.

The Tribunal allowed the landlord’s appeal. It held that the FTT had not been entitled to find an offence proven which was different from the offence described in the notice of intent. Contrary to the argument presented by the authority, the statement of reasons in the notice of intent was not simply “a factual background to the offence” but was required to provide “particulars of the offence”.

In my judgment any differences in emphasis in the Tribunal’s two decisions is the result of the different facts and submissions with which it had to deal. There is nothing in Maharaj which is inconsistent with my decision in Younis. Thus, I agree with the Tribunal’s explanation of the purpose of the notices and what they should contain, at [17]:

“By paragraph 3(a) of Schedule 13A, the notice of intent must set out “the reasons for proposing to impose the financial penalty”. Those reasons must be sufficiently clearly and accurately expressed to enable the recipient landlord to exercise the right conferred by paragraph 4 to “make written representations to the local housing authority about the proposal to impose a financial penalty”, thereby enabling it to decide whether to impose a financial penalty on the landlord and, if so, the amount of such penalty (as required by paragraph 5). Similarly, by paragraph 8(b) of schedule 13A, the final notice must set out “the reasons for imposing the penalty”. These too must be sufficiently clearly and accurately expressed to enable the recipient landlord to decide whether to exercise the right of appeal to the FTT conferred by paragraph 10 against the decision to impose the penalty or the amount of that penalty. In the Tribunal’s judgment, those reasons must be directly referable to the condition of the licence in relation to which it is said that there has been a failure to comply on the part of the landlord; and those reasons must identify clearly, and accurately, the particular respects in which it is said that there has been non-compliance on the landlord’s part.”

I also agree with the Tribunal’s reminder to local housing authorities of the seriousness of their responsibilities, at [18]:

“Local housing authorities must bear firmly in mind that the imposition of a financial penalty is an alternative to a criminal prosecution; and it must be treated with the same level of seriousness and transparency.”

In Maharaj the Tribunal was not asked to consider whether the notice of intent could be salvaged, notwithstanding its deficiencies. No submissions were made that a defective notice of intent could be relied on to support a financial penalty and the Tribunal was not referred either to Younis or to the Jeyanthean line of authorities. There are at least two reasons why such an argument would have been bound to fail in Maharaj, which may explain why it was not relied on.

The first is that the notice of intent was specific about the offence which was being alleged and the facts which were to be relied on to make out the offence (although, in the event, the case put to the landlord in cross examination was based on different facts). In other words, Maharaj did not concern an incomplete or ambiguous statement of reasons; it concerned allegations which were not then supported by evidence, and a penalty imposed for an offence which was not the offence described in the relevant notices.

The second, and perhaps more fundamental reason why it could not have been suggested on appeal in Maharaj that a benign approach to the defective notice of intent might allow the penalty to be upheld, is that the offence which the FTT found to have been committed was based on facts of which the authority had knowledge more than six months before it served the notice of intent. In other words, the only offence the landlord was found by the FTT to have committed was time barred when the notice of intent was served (see Maharaj, at [18]). No argument based on the approach to procedural defects illustrated by Jeyeanthan could have saved the proceedings in those circumstances.

Having set the scene for the issues in this appeal, I can now return to the facts.