[2025] UKUT 234 (LC)

Mrs John holds a long lease of a one-bedroom flat, Flat 12 Churchbank, 1 Teresa Mews, London E17. It has been let to Mr Shaun Lintern since 2015. Rent for the property was paid into a joint account; Mr and Mrs John regarded it as belonging to them both. On 1 April 2015 the appellant made a selective licensing designation in respect of the area where the property sits, with the designation to continue until March 2020. On 30 November 2016 Mr John applied for a licence for the property, describing himself as owner. The licence was granted on 4 January 2017 to expire in March 2020.

On 1 May 2020, the appellant redesignated the relevant area as a selective licensing area.. The evidence given for the appellant in the FTT by its officers was that in February 2021 they reminded Mr John by email that the property required a licence. An officer visited the property on 21 September 2022 and met Mr Lintern. An officer telephoned Mr John in September 2022 by way of further reminder, and followed that up by email and text. In November 2022 Mr John telephoned the appellant and said he was going to apply for a licence, and the appellant’s officer followed that up by email. On 21 November 2022 the appellant sent to Mr John a notice under s.235 of the 2004 Act, which enables it to require a person to produce documents to be provided; the notice asked for gas and electrical certificates, rent receipts and the tenancy agreement; there is no evidence that those documents have or have not been provided, but there is no tenancy agreement in the appeal bundle. On 1 December 2022 Mr and Mrs John commenced but did not submit a licence application in which they were both listed as leaseholders. On 17 February 2023 the appellant sent to them a Notice of Intention to impose penalties of £7,000 on Mr John and £5,000 on Mrs John. On 4 March 2023 Mrs John submitted an application for a licence. On 6 March Mr John made representations in respect of the proposed penalties. The penalties were imposed on 29 November 2023 reduced from the figures referred to above to £5,600 and £4,000 because an application for a licence had been made.

Mr and Mrs John appealed to the FTT. They claimed to have had a defence to the section 95(1) offence; subject to that, they challenged the amount of the penalties and also the fact that two separate penalties had been imposed. They said that they had not received emails from the appellant. They provided medical evidence in relation to their son which showed that he had been seriously ill in 2022 and said that that had distracted them from the need to licence the property.

The FTT agreed with the local housing authority that Mrs John as the owner of the flat was, pursuant to section 263 of the 2004 Act, a person managing the property and that Mr John - who undertook “most of the responsibilities associated with the letting” - was a person in control of the property, and there was no challenge to that in the FTT. The FTT rejected the defence of reasonable excuse, and found that both had committed the offence under section 95(1) of the 2004 Act. It stated, correctly, that the local housing authority had the power to impose a penalty on both of them (Shorr v London Borough of Camden [2024] UKUT 202 (LC)).

Turning to the amount of the financial penalty, the FTT directed itself as to the approach it should take to the appellant’s enforcement policy by reference to Waltham Forest LBC v Marshall. It observed that the policy stated that the appellant would impose a penalty above or below the relevant band “only in exceptional circumstances”, and noted the existence of automatic discounts (paragraph 8 above). It noted that in the present case the appellant had taken the bottom of band 2 as the starting point (£5,000), and then increased the penalty to £7,000 in the case of Mr John because of the aggravating feature that he was aware of the licensing process having held a previous licence. The appellant was not aware of any mitigating factors. Both penalties were reduced by 20% because by the time the Final Notice was served an application had been made for a licence.

The FTT said:

“72.

The Tribunal considers it appropriate to vary the financial penalties imposed by the Council, to reflect severity of the offence, the respective culpability of the two appellants, the lack of harm to the tenant, that punishing one appellant is effectively punishing both.

73.

Given that both the Council and the tenant treated Mr John as primarily responsible for the Property the Tribunal finds that there should have been a distinction made in the level of basic penalty imposed on each of the appellants.

74.

The Tribunal adopts the Council’s starting point of a moderate offence Band 2 for Mr John of £5,000. It finds that the aggravating factor of failing to ascertain that the property needed a new selective licence is mitigated by Mr John applying for a licence once he appreciated that it was required. It also finds that the ill-health of the appellants’ son is a mitigating factor as to the delay in applying for the new selective licence.

75.

The Tribunal finds the appropriate financial penalty for Mr John to be £4,000.

76.In the event that Mr John pays the penalty within 28 days of this decision it should be subject to the automatic 20% discount offered by the Council where the offender pays the penalty within a specified time period.

77.

The Tribunal finds that the Council did not sufficiently consider the different level of culpability of Mrs John, given that she had little or no involvement in the actual management of the Property. it notes that in Shorr no penalty was awarded against Mr Shorr by the Upper Tribunal. In paragraph 73 Deputy President Martin Rodger KC said,

‘ I do not consider that any financial penalty is appropriate in Mr Shorr’s case. He did not enter into any contractual relationship with Ms Ro’s tenants and he was not their landlord. He therefore owed them no contractual obligations and it was not unreasonable for him to leave management entirely to his wife.’

In that case Mr Shorr was a joint registered proprietor of the property and had a joint bank account with Ms Ro.

In this case Mrs John was the sole registered proprietor of the Property but the tenant viewed Mr John as his landlord and the person with the contractual obligations. From the evidence before the Tribunal it finds that Mr John was entirely responsible for the day-to-day management of the Property. The Tribunal therefore finds that it is not appropriate to award a financial penalty against Mrs John.”

The appellant appeals on four grounds, with permission from this Tribunal. The first three relate to Mr John and the fourth to Mrs John