Housing – Civil penalty – Improvement notice – Reasonable excuse – Respondent local authority issuing appellant with improvement notice for property – First-tier Tribunal imposing financial penalty for failure to comply with notice – Appellant appealing – Whether appellant having defence of reasonable excuse – Appeal allowed
The appellant owned 58 Ollier Avenue, Manchester (the property), and let it to tenants; it was not a house in multiple occupation and was not required to be licensed by the local housing authority.
In March 2019, the tenant complained to the respondent local authority about disrepair. The respondent checked its council tax records and HM Land Registry and sent correspondence to the appellant at her home address and at the property which included notification of the complaints, an improvement notice, a notice of intent of a proposed financial penalty of £22,500 for failure to comply with the improvement notice and a final notice of the penalty.
The appellant appealed against the financial penalty. The First-tier Tribunal found that an offence under section 30 of the Housing Act 2004 had been committed, because there had been a failure to comply with the improvement notice which was validly served on the appellant. The fact that she did not know about it, because of her own failure to update her address for service at the Land Registry and her address for council tax purposes for the property, could not amount to a reasonable excuse pursuant to section 30(5) of the Housing Act 2004.
The First-tier Tribunal imposed a penalty of £15,000; it followed the respondent’s policy for the calculation of penalties but regarded the appellant’s culpability as medium rather than high. The appellant appealed on the ground that she had the defence of reasonable excuse to the offence.
Held: The appeal was allowed.
(1) Paragraph 10 of schedule 13A to the 2004 Act provided for appeal to the FTT against the decision to impose a civil penalty and the amount of that penalty. The appeal was a rehearing and the FTT was to make its own decision whether to impose a penalty and the amount of the penalty. In making that decision the FTT had to give special regard to the local housing authority’s enforcement policy and would normally follow it. However, it was not bound by that policy and might depart from that policy if it gave reasons for doing so: Waltham London Borough Council v Marshall [2020] UKUT 35 (LC) considered.
Section 233 of the Local Government Act 1972 provided that any notice, order or other document required or authorised by or under any enactment to be given to or served on any person by or on behalf of a local authority might be given to or served by delivering it to them, by leaving it at their proper address or by sending it by post to them at that address.
As a general rule, unless there was a statutory requirement to the contrary, where a person (in this case the local planning authority) wished to serve notice relating to a particular property on the owner of that property, and title to that property was registered at HM Land Registry, that person’s obligation to make reasonable enquiries went no further than to search the proprietorship register to ascertain the address of the registered proprietor. It was the responsibility of the registered proprietor to keep his address up to date. The respondent in the present case used the address for service recorded at the Land Registry for the property, and therefore the notices were correctly served: Oldham Metropolitan Borough Council v Tanna [2017] EWCA Civ 50; [2017] EGLR 17 applied.
(2) The question then arose whether the appellant could show, to the civil standard of proof, that she had the defence of reasonable excuse. The respondent submitted that the appellant’s failure to update her address with the Land Registry could not provide a reasonable excuse. To allow that as a reasonable excuse would be to rob the legislation of its purpose, because all that a landlord would need to do to avoid liability for disrepair, or indeed other offences, would be to avoid updating his or her address at the Land Registry.
However, local housing authorities and tribunals had to be able to distinguish between landlords deliberately evading service and those who had simply failed to update their address details; and on the evidence accepted by the FTT it was clear that the appellant fell into the latter category. The FTT accepted that she did not deliberately avoid receiving the improvement notice. She had been registered all along for council tax at her home address and she was easy to find once the respondent tried to do so for the purposes of enforcement. To find her guilty of a criminal offence in those circumstances seemed exceptionally harsh.
(3) Some requirements of the law were well known, simple and straightforward, but others were much less so. It would be a matter of judgment for the FTT in each case whether it was objectively reasonable for the particular taxpayer, in the circumstances of the case, to have been ignorant of the requirement in question, and for how long.
In the present case, the respondent served the improvement notice correctly on the appellant; it did all that was required of it. But the notice did not come to her notice and the tribunal was not persuaded that service of the improvement notice amounted to deemed knowledge of its contents. A party did not have a cause of action arising from his or her wrongdoing. But this case was not about having a cause of action, it was about having a defence to a criminal offence carrying a heavy penalty.
(4) It was unrealistic to regard the failure to update one’s address for service at the Land Registry as wrongdoing. The FTT described it as “negligent” (in the context of its consideration of the landlord’s conduct in the context of the amount of the penalty); but that was an overstatement. It was an error, but a very technical one that most people would have no idea they could commit: IR Management Ltd v Salford City Council [2020] UKUT 81 (LC); [2020] PLSCS 47 and Marigold and others v Wells [2023] UKUT 33 (LC); [2023] PLSCS 31 considered.
The FTT was wrong and irrational to find that the appellant did not have the defence of reasonable excuse. Accordingly, the FTT’s decision would be set aside. No offence had been committed by the appellant and no financial penalty was payable.
Mikhail Charles (instructed by Northwest Solicitors Ltd of Manchester) appeared for the appellant; Paul Whatley (instructed by Manchester City Council) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Tabassam v Manchester City Council
