[2024] UKUT 313 (LC)

The appellant said she had two defences of reasonable excuse. One was that having been told in December 2020 that she was unlikely to get an HMO licence she took steps to regularise the position by serving notice to quit on her tenants.

I think it is fair to say that the point being argued is that the appellant did all she could. The difficulty is that she did not make a very good job of it; the notices to quit that she served on her tenants were not in the correct form and were therefore invalid (as the FTT found, and the appellant has not argued otherwise). And she took no steps to enforce the notices; the aftermath of the pandemic she may have faced difficulty in doing so, but at any rate she took no steps towards enforcement. Importantly, once her application for an HMO licence was refused in March 2021 she did not apply for a temporary exemption notice from the licensing requirement pending the tenants’ compliance with the notice to quit, under section 62 of the Housing Act 2004, which would have been the correct thing to do. I do not accept that the taking of these wholly ineffective steps to regularise the position can amount to a defence of reasonable excuse, although I agree it should have been considered as a mitigating factor.

The other defence argued by the appellant is that she was misled by the information given on the local housing authority’s website into thinking that she did not require a licence. There is no mention of this in her witness statement in the FTT but the grounds of appeal say this:

“In the Appellants dealing with Newham Council they kept referring her to their website for what HMO is and how to go about applying for a licence. The website defined HMO as comprising more than 3 separate household. HMO is a property that is occupied by three or more unrelated individual household who share facilities such as kitchen or bathroom, or do not have exclusive occupation of the whole property.”

The FTT in its refusal of permission to appeal revealed that this point had been raised at the hearing, although nothing was said about it in its decision:

“8.

The Respondent' Grounds of Appeal allege at paragraph 2 that Newham Council's website "defined HMO as comprising more than 3 Separate house hold. HMO is a property that is occupied by three or more unrelated individual household who share facilities such as kitchen or bathroom, or do not have exclusive occupation of the whole property."

9.

At the hearing and in considering this appeal, [the judge] checked the Newham Council website which states:

Apply for an additional licence if you operate a house in multiple occupation that is shared by three to four tenants living in two or more households.

10.

This was put to the Respondent at the hearing. No evidence was provided at the hearing or ½rith [sic] the appeal in support of the Respondent's allegation. It is also inherently unlikely that Newham would put advice on its website which contradicted the designation for Additional Licensing which was clearly not limited to 3 or more households.”

It is not generally a good idea for a tribunal to seek out evidence for itself. If the FTT felt that it needed to see additional evidence about what the website said at the date of the hearing it should have invited the parties to provide it, perhaps to agree it, and that could have been achieved during a short adjournment during the day of the hearing. As it is, the appeal now turns on information sought out by the FTT itself, without the parties being able to check that the FTT looked at the right part of the website and recorded correctly what it read.

The appeal turns on that information because, inherently unlikely or not, the advice on the website as recorded by the FTT did contradict the designation for additional licensing, although the FTT did not spot the problem: a property falls within the additional licensing designation if it has 3 or more occupiers, not tenants, in two or more households (see paragraph 15 above). Significantly, if Ms Olumide and her son left in June 2021 then from that point onwards the property had two tenants (Mr Onuoha and Ms Nwagwugwu – Mr Onuoha’s daughter was not a tenant), not three, and a landlord looking at the website would conclude that the property did not need a licence.

It appears from what the FTT said in its refusal of permission to appeal that the appellant gave evidence at the hearing that she had been misled by what she read on the website. What she said is not known, because the FTT did not record it - although there may be some echo of what was said about it at the FTT’s paragraph 11, set out at paragraph 20 above. I understand from Mr McGowan that a transcript of the hearing was requested, but was said by the FTT not to be available. It is also known that the appellant’s representative did not argue that the appellant had a reasonable excuse on the basis of what was said on the website (because the FTT said that the appellant did not claim to have a defence of reasonable excuse) - but that is unsurprising if her representative like the FTT did not notice that the website was incorrect.

For the respondent Mr McGowan makes two important points. The first is that the appellant was obviously not relying on this misinformation when she applied for an HMO licence in August 2020. I accept that; but if – as Mrs Delbourgo suggested – she relied upon the website in summer 2021, and if as she said in her witness statement Ms Olumide left in June 2021, the appellant would certainly have been misled by the website into believing she did not need a licence. As Ms Delbourgo said, that would explain why she took no further steps to regularise the position: she checked the website and could see that with only two tenants she did not need a licence (or so Mrs Delbourgo argued; what the appellant said she did is not known because the FTT did not record the evidence). Mr McGowan agreed that if that is what happened then then she would have “a compelling reasonable excuse to answer”a defence of reasonable excuse from the point when Ms Olumide left.

Second, Mr McGowan says that even if the appellant did look at the website in June 2021, she has alleged a different misunderstanding; she said the website indicated that three households had to be present for the additional licensing requirement to bite. In other words she alleged a misunderstanding about households, not a misunderstanding about tenure.

I am unimpressed by that point. The hearing before the FTT took place in July 2023, two years after the appellant is said to have looked at the website. Two years on she may have misremembered the wording, while recalling correctly that she thought she did not need a licence because she had only two of whatever-it-was, not three. As we saw from the FTT’s decision itself (FTT’s paragraph 12, quoted at paragraph 20 above) it is not difficult to get the requirements muddled.

Again: the Tribunal is hampered because it does not know what the appellant’s evidence was. At the very least the FTT’s decision has to be set aside because it does not explain why, having asserted at the hearing that she had been misled by the website, the appellant did not have the defence of reasonable excuse from the point when Ms Olumide left. In addition, the FTT made an error of law in reading the local housing authority’s website as a correct explanation of the legal position when it was not. It may be, depending upon what the appellant’s evidence was, that the FTT also failed to take into account relevant evidence which would have demonstrated that the appellant had the defence of reasonable excuse from when Ms Olumide left.

It is not possible for the Tribunal to substitute its own decision on this point, first because the FTT neglected to make a finding of fact about when Ms Olumide left (see paragraph 21 above) and second because it is not known what the appellant’s evidence was about the website, and in particular about when she looked at it and what effect that had upon her actions.