[2025] UKUT 97 (LC)

Manaquel was granted permission by the FTT to appeal on three grounds, but each was simply a different way of contending that the FTT wrongly applied the law in finding that Lambeth’s conduct was not unreasonable. Neither Mr Isaac KC nor Mr Ham stuck at all closely to the original division in their oral submissions and I will adopt the same approach.

Mr Isaac KC explained that the unreasonable behaviour which Manaquel alleged was Lambeth’s decision to defend and to continue to defend the appeal against the “patently flawed” improvement notice it had served. He submitted that while the FTT had directed itself correctly on the test for determining whether conduct had been unreasonable, it did not apply that test to its own findings. The only conclusion which the FTT could have reached, was that in seeking to uphold an obviously defective notice, having an unrealistic approach to Manaquel, failing to adduce evidence, not disclosing inspection reports which it was obliged to keep, and then asking for an adjournment at the end of the final hearing, Lambeth acted unreasonably.

Mr Isaac KC drew attention to paragraph 69 of the FTT’s decision, which I have quoted in full at [16] above, and which he said was of particular relevance to his argument. That paragraph is not a promising start, as it is perhaps the clearest example of the FTT applying the wrong legal test. For the reasons given by the Court of Appeal in Hussain, the works Manaquel had carried out since receiving the improvement notice were irrelevant to the questions the FTT had to determine. In any event, to the extent that those works remedied some of the defects identified in the notice they either tended to justify the service of the notice, or (if the works undertaken were different from those Lambeth had prescribed) they could have formed the basis of an application by Manaquel to vary the notice. In either case, they could not be the basis for legitimate criticism of Lambeth. Nor, contrary to the FTT’s view, was Lambeth in difficulty in evidencing the current condition of the Estate or demonstrating the current position concerning the excess cold hazard, because there was no onus on it to do either.

The particular findings of the FTT on which Mr Isaac relied, and which he said led to only one possible conclusion, began with its criticism of the content of the notice. I would say immediately that the FTT was entitled to form the view that the notice was “not nearly specific enough”; nevertheless, the only example it gave of that deficiency related to a single paragraph in the schedule of remedial action, concerning the replacement of windows. The whole schedule contained 23 separate actions, and the work unrelated to the windows which was required in the plant room, substations, network and flats comprised more than two thirds of the total. That work had been specified by Lambeth’s heating consultant, Mr James Gallimore, who is a Chartered Building Services Engineer, and the FTT did not suggest that it was imprecise or deficient. In his evidence Manaquel’s own heating engineer, Mr Brian Kane, identified works in the schedule which had already been completed, and acknowledged that two pumps still needed to be replaced, and that insulation should be improved and other works undertaken. The thrust of Mr Kane’s evidence, so far as the FTT recorded it, seems to have been that money spent on those matters now would be wasted as they would have to be re-done as part of the major works envisaged if planning permission was granted (a proposition which the FTT rejected as a ground of appeal against the notice).

I also have my doubts that the way in which the notice dealt with the requirement to replace windows was as flawed as the FTT was persuaded to accept. The action on which the FTT focussed was intended to address the excess cold hazard and required Manaquel to instal replica galvanised steel, double glazed Crittall windows, to match the existing windows as closely as possible. The location of the works was identified in the schedule of works simply as “flats within Dorchester Court” but the description of the deficiencies giving rise to the hazard made it clear that the concern was not for the windows in every flat (“The windows to most flats are single glazed and the frames are corroded”). The notice ought to have been read as a whole. Had it been it would have been understood by any practical person to require that in those flats where the windows were single-glazed, new double-glazed units should be installed. There would be no difficulty in identifying which of the existing windows were single glazed and ought therefore to be replaced. Had a practical person been in any doubt about whether any particular window needed to be replaced they would have seen that the schedule of action also required that a programme of works be prepared and provided to Lambeth and that the window replacement was to be approved by its conservation team in advance. Because a failure of compliance could lead to criminal sanctions, the FTT gave greater weight to the importance of precision than to a common sense reading of the document. I do not question the importance of clarity in the drafting of improvement notices, but in my judgment the absence from the notice of a list of flats with single glazed windows did not make it unclear.

The FTT formed the view, at paragraph 25 of the Costs Decision, that because of the serious flaws in the notice it should have been clear to Lambeth that it was unlikely to be upheld. That was a tenable conclusion so far as the requirement to replace windows was concerned, and the FTT was entitled to reach it (although it is not the only possible conclusion and it is not the one I would have reached). But an absence of precision is not a legitimate criticism of the remainder of the notice, which provided sufficient detail of the problems with the heating and hot water system to enable them to be addressed by Manaquel’s contractors. The flaws in the notice to which the FTT referred may have justified the removal of the requirement to replace the windows, but they provided no answer to the remainder of the work and did not justify quashing the notice in its entirety.

In the same paragraph of the Costs Decision, the FTT also said that it should have been obvious to Lambeth that the FTT had insufficient information from it (Lambeth) to be in a position to order a satisfactory variation of the notice and that Lambeth could not reasonably expect the FTT simply to adjourn the proceedings to enable it “to try to produce a more credible improvement notice”. Nor could Lambeth “realistically have expected Manaquel to save the Improvement Notice itself.” These findings were relied on by Mr Isaac KC but once again they demonstrate that the FTT was being invited to consider legally irrelevant matters. Neither Manaquel nor Lambeth had asked for a variation of the notice as part of their case, and the suggestion that one might be required stemmed in part from Lambeth’s failure to identify which windows should be replaced and in part from the absence of a current specification of the work which remained to be done after Manaquel had partially complied with the notice. Having taken the view that the failure to specify which windows were to be replaced was a serious flaw, the appropriate course for the FTT would have been to vary the notice by removing that requirement. But the suggestion that the notice might need to be varied at Lambeth’s initiative to replace the original schedule of works with a schedule reflecting only those works which remained to be carried out was misconceived. It was not for Lambeth or the FTT to produce a revised notice, it was for Manaquel to request a variation and to identify the respects in which it considered one was justified. It might have wished to have the notice varied to omit works which it considered were not required, or to substitute different works which it had undertaken instead of the specified works, but it did neither. It was wholly unnecessary for the notice to be varied simply to remove works which had already been undertaken.

In paragraph 26 of the Costs Decision, on which Mr Isaac KC also relied, the FTT referred to steps which it would have expected Lambeth to take in the circumstances of the appeal. One of those was to undertake a reinspection of the Estate nearer to the hearing date. Given that the condition of the Estate at the hearing date was not relevant to the validity of a notice served two years earlier, there was no compelling reason for a further inspection.

A more legitimate criticism of Lambeth’s conduct of the proceedings which the FTT also identified concerned its preservation and provision of relevant documents. Regulation 5 of the HHSRS Regulations requires a local housing authority to keep an accurate record of the state and condition of premises in respect of which an inspection had been undertaken for the purpose of Part 1 of the 2004 Act. That record is distinct from the calculation of the seriousness of any hazard which has been found to exist which is required by regulation 6. I was told that the FTT had issued directions requiring Lambeth to provide Manaquel with copies of the record of inspection which preceded the improvement notice, but that Lambeth had been unable to comply. It had produced its hazard scoring calculations for the excess cold and excess heat hazards but not for the hot surfaces and materials hazard. I was told that after the service of the notice Ms Ward had moved to work for a different authority and that the record she had made could not now be found. That explanation is not mentioned by the FTT, and it was entitled to regard Lambeth’s record keeping as deficient. The main impact of Lambeth’s failure to disclose a record of inspections seems to have been that whatever contemporaneous written record there might have been in relation to windows was not available by the time of the hearing.

In its substantive decision the FTT stated that Ms Ward had identified a considerable number of deficiencies at the Estate and that photographs taken at the time of her inspections were provided to it. Those photographs have not been shown to me and the FTT did not say if it had considered whether they were a sufficient record (as they might have been). Ms Ward acknowledged during her evidence that there was no detailed record of the problems identified in relation to windows in any specific flat, nor was she able to say which flats already had double glazing. She had, she said, taken a sensible and proportionate approach to the windows as there were so many of them. The FTT did not agree that that was a satisfactory approach, and it was entitled to take that view.

The FTT also noted in its substantive decision that the hazard scoring calculation for the hot surfaces and materials hazard had not been produced, nor had Lambeth explained why its conclusions should be relied on without those calculations. The first part of that sentence is an aspect of Lambeth’s poor record keeping of which the FTT was justly critical, but the second part is more puzzling. It was for Manaquel to show why the decision to issue the notice was wrong, rather than for Lambeth to prove that its concerns had been justified and could be relied upon. Paragraph 74 of the decision suggests the FTT did not approach the appeal on that basis. Had it done so, it would have seen that the details of the missing calculations for the hot surfaces and materials hazard were not significant. Manaquel did not rely on any assessment of its own to demonstrate that the hot surfaces and materials hazard did not exist. Its case on that issue was recorded by the FTT in paragraph 27 of its decision. The problem of “excessively hot water temperature within flats” was not disputed and Manaquel accepted that it “potentially constitutes a hazard”, but the issue had been addressed by its heating contractors adjusting the temperature control set point for each block downwards.

The other aspect of this hazard described in the notice was that scalding water caused the radiators in flats to be excessively hot. Manaquel’s case on that complaint was that the radiators to which it applied had not been identified, and that in any event the issue had been addressed by the adjustment and repair of the weather compensating control system. The absence of Lambeth’s hazard scoring calculation for hot surfaces and materials was therefore of little importance because the existence of the hazard was not challenged. As for the points Manaquel did make, the complaint that radiators had not been identified was a bad point as far as this hazard was concerned, as the specification of work in the notice did not include any work to the radiators (thermostatic control valves were required elsewhere in the schedule to address the excess heat hazard, but they were not specified as a remedy for the hot surfaces hazard). The fact that works had been done after the improvement notice was served, whether they were the works specified in the notice or different works, was irrelevant to the question which the FTT had to determine.

The FTT described Lambeth’s conduct of the proceedings as “incompetent” (at paragraph 30 of the Costs Decision, reproduced at [23] above). That description was its summary of the whole body of criticism it had directed against Lambeth in both decisions. For the reasons I have explained, many of those criticisms were unjustified. The lack of precision in the improvement notice and the failure to keep records of the inspection were legitimate complaints so far as the windows were concerned, but they did not undermine the notice so far as it related to the other hazards or the actions required to address them and did not justify quashing the notice in its entirety. Lambeth’s inability to produce the hazard score calculation for the hot surfaces and materials hazards justified the complaint that its record keeping was incompetent, but it did not cast doubt on the proposition that the supply of scalding water represented a hazard which required to be remediated. Lambeth’s failure to arrange for a recent inspection and the absence of evidence enabling the FTT to vary the notice were not legitimate complaints and did not reflect badly on the notice. It was not fanciful to suggest that Manaquel might propose variations to the notice, since that is what the statutory scheme envisages. Finally, Lambeth’s suggestion, through Mr Ham, that the hearing be adjourned to enable additional evidence to be prepared showing the current condition of the building was a reflection of the shared misconception about the proper subject matter of the appeal. Manaquel’s case was founded on that misconception and while it ought not to have been acquiesced in by Lambeth, it did not justify singling the authority out for criticism.

Yet, despite the FTT’s highly unfavourable assessment of Lambeth’s conduct of the proceedings, it still acquitted the authority of having acted unreasonably. Mr Isaac KC submitted that the FTT’s assessment was demonstrably flawed. Even if, in the light of Hussain,it should have adopted a different approach, and even if its failure to do so meant that some of its criticisms of Lambeth were misdirected, he submitted that its decision should be set aside. The focus of that submission was paragraph 30 of the Costs Decision, most of which I have already quoted, at [23] above. In it the FTT provided its assessment of Ms Ward, Lambeth’s main witness. It concluded that “although she was unable to defend the improvement notice or the decision to contest the appeal to the tribunal’s satisfaction”, she was an experienced professional who took her responsibilities seriously. The paragraph continues:

“And whether it was due to an element of ‘tunnel vision’ or to a misguided belief that the improvement notice could sensibly be varied on the information available or due to some other factor or a combination of factors, our view is that the Respondent’s approach in relation to these proceedings was incompetent but that the Respondent did not act unreasonably in the sense envisaged by the first stage of the Willow Court test.”

Mr Isaac KC made three criticisms of this key paragraph. First, it took account only of the conduct of Ms Ward; secondly, its assessment of her conduct was subjective rather than objective; and, thirdly, it failed to identify a reasonable explanation for Lambeth’s conduct.

I remind myself at this stage that although identifying unreasonable conduct involves the application of an objective standard, it is, as Coulson LJ put it in Lea, “an evaluative decision” and I should therefore allow the FTT “considerable latitude” before concluding that its decision cannot stand. Approaching Mr Isaac KC submission in that spirit, I reject his first and second criticisms. Ms Ward was Lambeth’s main witness, and the person responsible for the original inspections and for preparing the improvement notice; there was no suggestion that she had the conduct of the proceedings themselves. Because of her role it was relevant that she was a conscientious professional who was doing her best, because that assessment underpinned the conclusion that Lambeth’s conduct in serving the notice and pursuing it was not vexatious, abusive, frivolous or designed to harass. It is possible that the FTT was also treating Ms Ward’s conduct as a proxy for Lambeth’s because of her position, but I do not think that it lost sight of the fact that it was Lambeth’s conduct which it had to assess. That is apparent from the statement that “the respondent’s approach in relation to these proceedings was incompetent”. It did not suggest that Ms Ward’s conduct was incompetent; she was not responsible for the preparation of the appeal, nor was there any evidence that she was responsible for Lambeth’s poor record keeping. She was responsible for drafting the notice and to that extent she contributed to the conduct which the FTT regarded as incompetent, although I respectfully disagree with its assessment of the notice and do not consider the way its was drawn up by Ms Ward calls her competence into question.

There is more force in Mr Isaac’s third criticism of the FTT, and his complaint that it made the same mistake as in Lea when it failed to identify an explanation for Lambeth’s conduct. It listed several possible explanations: tunnel vision, a misguided belief that the notice could sensibly be varied, or some other factor or combination of factors. The FTT began the paragraph by asking the right question: it was “still left with the question of whether there is a reasonable explanation for the respondent’s conduct in this case”. But that question remained unanswered by the end of the paragraph. Of the possible answers suggested by the FTT, “tunnel vision” might point towards unreasonable conduct, but it is not clear what the FTT meant by that expression. Did it mean that Lambeth was fixated on obtaining a favourable outcome to the appeal, or that it had failed to notice the current condition of the Estate? The former would support a finding that Lambeth’s conduct had been unreasonable, but the latter would have been a perfectly proper approach. The suggestion of a misguided belief that the notice could be varied was speculation, but it also betrays the FTT’s misunderstanding of the question it should have been focussing on; it was not misguided for Lambeth to think, if it did, that the notice could be varied, if Manaquel requested it. The reference to some other combination of factors demonstrates that the FTT did not reach any conclusion on the decisive question it posed for itself.

Nor did the FTT refer in its decision to the explanation provided by Lambeth in its response to the costs application for its failure to prepare an updated assessment of the condition of the Estate. That explanation was that Manaquel had served its evidence of the work it had carried out only shortly before the hearing (Mr Kane’s original witness statement of 10 January 2022 was updated by a further statement served on 18 September 2023, two weeks before the hearing). The FTT was mistaken in focussing on the condition of the Estate at the time of the hearing but given the importance it attributed to the lack of evidence about it, it ought to have addressed the explanation provided by Lambeth.

I therefore agree with Mr Isaac that the FTT’s decision was flawed. It was flawed not only because the FTT was persuaded by Mr Isaac himself of the importance of matters which, on a proper analysis, were irrelevant, but also because it failed to answer its own question whether the conduct about which there were legitimate grounds of complaint was open to some reasonable explanation. The first flaw pervades the decision and undermines many of the criticisms on which the application for costs was originally based, but it does not cast doubt on the FTT’s conclusion that Lambeth’s conduct was not unreasonable. But the second flaw vitiates that conclusion because the FTT did not consider, in relation to each of the faults it found with Lambeth’s conduct, whether there was a reasonable explanation. It simply asserted, without proper explanation, that its conduct of the proceedings was not unreasonable.