[2025] UKUT 2 (LC)

The Council did not ask for permission to appeal against the decision to amend the FTT’s reasons. Had it done so I would have set aside those parts of the second decision which added the additional reasoning. But as there is no ground of appeal challenging its inclusion, it is necessary to consider whether the FTT’s alternative reason provides justification for its decision to reduce the financial penalty.

One difficulty with the FTT’s additional reasoning is that it is expressed in two different ways. In its second decision the FTT said this:

“In our judgment, if we erred in our construction of the policy, then the construction urged by the Council would be too rigid, so that the same result would be reached but by this different route.”

That appears to be a determination that the policy itself is too rigid. But, in the same decision, when it granted permission to appeal the FTT phrased the ground of appeal (for which permission had not been requested), in the following terms:

“whether, if the First-tier Tribunal erred in its construction of the policy as aforesaid, nonetheless the Tribunal reached the right conclusion on the basis that applying the policy in such a manner was “too rigid”, …”

That suggests that the FTT was concerned that the application of the policy in this case was too rigid.

In its fourth decision, in which it refused to review its third decision, the FTT said that it “could perhaps have expressed itself better in explaining that it was the application of the policy which was too rigid”. That reflects the ground of appeal which it had formulated but is different from the way it had originally expressed its reasoning. The original formulation focussed on the policy being too rigid, while the reframing in the ground of appeal and in the fourth decision focussed on the application of the policy.

The shortest answer to either way of putting this point is that it was not one which the parties asked the FTT to decide, or on which it heard argument, or for which it provided reasons in any of its decisions. That is a sufficient basis on which to set the FTT’s alternative justification for its original decision aside.

A second answer is that the FTT’s assessment of the policy, or its application in this case, was based on its flawed interpretation of the process of assessment which the policy requires. The FTT assumed that the decision maker was required to begin at the bottom of the relevant band and could not go below it other than in exceptional circumstances. That was thought to be too rigid a policy, or its application too rigid in this case, because it did not allow for mitigation to be taken into consideration. I have already explained why I consider that was not a proper interpretation of the policy as a whole. In my judgment the policy requires the decision maker, ordinarily, to determine a penalty within a range from £15,000 to £19,999, taking into account all relevant considerations, including mitigation. It is true that, in the absence of exceptional circumstances, the penalty will not fall below £15,000, but that is because the Council assesses this sort of licensing offence as serious and as meriting significant punishment when committed by a property professional or substantial landlord. That broad policy assessment is not one with which the FTT can properly interfere, nor did it purport to in this case in what seems to have been its preferred version of the “too rigid” complaint.

The policy refers to the need for enforcement action to be proportional to the risks presented by the offence and draws attention to the possibility that exceptional circumstances may justify a penalty outside the usual band. In a case involving exceptional mitigation the policy would therefore permit a penalty lower than £15,000 for a property professional or £5,000 for a small landlord. The FTT considered that there was “very good mitigation” in this case which justified a penalty lower than £15,000. It did not consider whether that mitigation was sufficient to make the circumstances of the offence exceptional, thereby allowing the lower penalty to be imposed within the constraints of the policy. There no doubt will be cases, rare perhaps, in which the decision maker considers that exceptional mitigation justifies that conclusion.

The FTT’s additional reasoning does not support its conclusion and I allow the appeal on the second ground.