By Tara O'Leary
This article discusses some of the implications of the COVID-19 emergency for licensing litigation and summarises several important decisions which have emerged during a very productive period at the courts and tribunals.
Licensing litigation under coronavirus
The arrival of COVID-19 in the UK marked the beginning of a strange and challenging period for all persons concerned with the regulation of the private housing sector, whether as landlords trying to comply with regulatory requirements, tenants living in unsatisfactory housing conditions, or local authorities seeking to enforce their additional and selective licensing schemes.
Local authorities will have had regard to the non-statutory guidance on enforcing standards in the PRS under COVID-19, published on 28 March 2020. It contains various (non-binding) suggestions for how to approach inspection and enforcement under lockdown.
The Guidance also includes salient reminders that local authorities' mandatory duties remain in force: to take two examples, addressing Category 1 hazards and determining applications for licenses within a reasonable period. All parties should be aware that the usual statutory limitation periods continue to run: if alleged offences are no longer ongoing, for example, this includes the six-month period within which local authorities may lay summons to commence prosecution at the Magistrates' Court, or alternatively issue a notice of intent prior to serving a civil penalty notice.
There is however no national hiatus on enforcement action: individual local authorities have responded differently, so persons managing or controlling licensable properties are best advised to check the position within their district.
For example, Waltham Forest LBC's new selective and additional licensing schemes took effect as scheduled on 1 May 2020. Coventry City Council indicated that it expects compliance with its new whole-borough additional licencing scheme which took effect on 4 May 2020, but will accept property certificates at a later date in recognition these may not be obtainable during lockdown.
In contrast, Newcastle City Council announced publicly that whilst its new designations took effect on 6 April 2020, the compliance period has been extended until 6 July 2020 and no enforcement action will be taken before this date.
In due course, the courts and tribunals may be required to consider whether and to what extent the practical and logistical challenges of lockdown may amount to a 'reasonable excuse' defence, e.g. for offences such as failure to licence or comply with improvement notices.
Unfortunately, since the commencement of lockdown the pace of licensing appeals and prosecutions has inevitably slowed. The First-Tier Tribunal (Property Chamber) adjourned the majority of its hearings until at least June 2020, and there will be no further property inspections for at least six months. However, the Tribunal's Guidance for Users During COVID-19 alludes repeatedly to the possibility of dealing with cases on the papers without a hearing, and it is possible that – in appropriate cases – this will become more common in the coming months.
Other jurisdictions are continuing to operate during the pandemic. The Upper Tribunal (Lands Chamber) is endeavouring to deal with appeals on the papers in the first instance, but telephone or video hearings are available as a fallback: see updated guidance of 1 May 2020. A Practice Direction on Video/Audio Hearings at the tribunals took effect on 2 April 2020. The Administrative Court has also continued to hear some appeals remotely during lockdown.
Finally, whilst the Magistrates' and Crown Courts have adjourned most trials and appeals, the Magistrates' Court and County Court maintain 'priority lists' of particular applications which continue to be listed urgently. This may assist local authorities seeking to address pressing public health issues which cannot await the end of lockdown. 'Priority lists' include applications for anti-social behaviour injunctions, closure orders and "civil applications relating to public health legislation".
In my view, the latter category may include applications under the Coronavirus Act 2020, but also – where relevant and suitably urgent – the Public Health Acts, Environmental Protection Act 1990 and Anti-social Behaviour, Crime and Policing Act 2014.
The 'priority lists' and guidance for all jurisdictions are regularly updated, and can be accessed here.
Recent case law
The bygone days before lockdown may now feel like a distant memory, but the previous six months had been a notably busy period in the courts. Numerous decisions from the Upper Tribunal ('UT') and Divisional Court provided much-needed guidance and clarity on several important issues. In particular, the UT has given considerable attention to civil penalties under s.249A of the 2004 Act, now used by a growing number of local authorities as an alternative to criminal prosecution for offences committed under additional and selective licensing schemes. These decisions provide a rich source of guidance for future enforcement and appeals.
It is fair to say that the UT has endorsed a pragmatic approach to civil appeals: recognising the importance of effective enforcement mechanisms for local authorities, unimpressed by arid technical challenges, and rejecting the suggestion often put forward by appellants that special deference or leniency should be shown them due to the quasi-criminal nature of this jurisdiction.
The headline point from each case is highlighted in bold, for convenience.
Waltham Forest LBC v Marshall  UKUT 35 (LC) (UT Judge Elizabeth Cooke, 31 January 2020) clarifies the correct approach to be taken by the FTT on appeals against civil penalty notices under s.249A. It concerned two penalties for failing to licence under a selective licencing scheme. In particular: (i) the FTT may not entertain any challenge to a local authority's enforcement policy, but must usually enforce and apply it; (ii) it must afford the local authority's decision on the penalty "special" and "considerable" weight; (iii) the appellant bears the burden of persuading the FTT to depart from the policy or the local authority's decision.
Cornerstone's Dean Underwood, Riccardo Calzavara and I acted for Waltham Forest in its successful appeals (see our summary of the case).
In Waltham Forest LBC v Younis  UKUT 0362 (LC) (21 November 2019) the Deputy President considered (a) the adequacy of reasons which must be given within a notice of intention to impose a civil penalty, explaining why that action is being taken, and (b) the consequences of any failure to give adequate reasons.
The decision confirms that:
- Brief reasons are acceptable, and reasons can be incorporated within separate documents such as attached witness statements.
- Furthermore, even if reasons are defective it will not usually justify invalidating the notice, particularly where there has been no prejudice to the appellant.
Cornerstone's Ashley Underwood QC acted for the successful local authority.
In my view, Younis will also be relevant to the adequacy of reasons given within final notices. However, perhaps of even wider relevance are the Deputy President's comments  that the mere fact that appeals against civil penalties import the criminal standard of proof does not justify a departure from the normal principles which ordinarily apply to civil appeals.
UT Judge Elizabeth Cooke made similar comments in AA Homes v Croydon LBC  UKUT B1 (LC) (26 September 2019) at , also a case of failing to licence. The appellants wished to raise new grounds of appeal and admit additional evidence at the UT which was not before the FTT. It was held that the usual civil principles apply, per Ladd v Marshall, rejecting any comparison to prosecution on the basis that defendants tried at the Magistrates' Court would have an automatic right to re-hearing in the Crown Court with no restriction on the admission of new evidence. Judge Cooke re-applied these principles in Salva v Singh-Potiwal  UKUT 0307 (LC) (15 Oct. 2019).
Appeals to the FTT under s.249A must be brought within 28 days of service of the final notice. The UT has now confirmed that the FTT has an unfettered discretion to extend the time to appeal, using its case management powers: Pearson v Bradford MDC  UKUT 0291 (LC) (UT Judge Elizabeth Cooke, 23 September 2019).
In Haziri v LB Havering  UKUT 330 (LC) (24 October 2019), the Deputy President provided guidance on how that discretion should be exercised. We now know that the Denton/Mitchell rules on relief from sanction apply; the FTT should not consider the underlying merits of the appeal; and time should not be extended lightly. Even short delays may be deemed "significant".
Sutton v Norwich CC  UKUT 90 (LC) (20 March 2020, Deputy President) is a mammoth decision concerning an office building converted into serviced apartments, many of which were let on conventional tenancies whilst others were used for short-term stays. The freeholder failed to comply with several improvement notices and HMO regulations, and was served with civil penalty notices. Amongst other grounds, the UT approved fines totalling £174,000 and held:
- The building was a licensable HMO despite some units being used for short lets.
- There is nothing defective or invalid about a local authority serving a series of separate improvement notices rather than a single notice covering all identified hazards.
- Notices of intent and final notices may be validly served by email, even if the recipient failed or refused to open the message.
- The Deputy President adopted Judge Elizabeth Cooke's decision in Marshall (above).
Two decisions have provided clarification on the defence of reasonable excuse, which is available for many of the housing offences which are liable to civil penalties. In I R Management Services Ltd v Salford CC  UKUT 0081 (LC) (19 March 2020) the Deputy President confirmed that the burden of proof rests upon the appellant – on the balance of probabilities – to show that they had a reasonable excuse. Sutton (above) also confirmed that the appellants' lack of knowledge that their building was an HMO and was licensable did not give them a reasonable excuse for failing to licence it, even though they had relied on professional advice to that effect.
This aspect of the decision in Sutton was reached independently of, but is consistent with, the recent decision of the Divisional Court in R (Mohamed) v Waltham Forest LBC  EWHC 1083 (Admin) (Dingemans LJ and Elisabeth Laing J, 7 May 2020), which settled three important points of dispute:
- The offence of failing to licence an HMO under s.72(1) of the 2004 Act is a strict liability offence, with no need for proof of the landlord's or manager's mens rea or knowledge of licensing requirements.
- The s.72(1) offence is also a continuing offence: prosecution may validly commence within six months of any date on which an offence was committed (not the date on which the offence first 'crystallised' or the local authority first had knowledge of it); and
- Magistrates' Court informations merely stating the bare elements of the offence are sufficient to satisfy statutory requirements (achieving the same result as Younis).
Cornerstone's Ashley Underwood QC and Dean Underwood acted successfully for the local authority in this case. Their summary of the case is here.
Turning away from civil penalties, in Berg v Burnley BC  UKUT 0091 (LC) (18 March 2020) Judge Elizabeth Cooke held local authorities may impose a condition on a selective licence which mandates the landlord and/or their agent to attend a property management training course.
Finally, a reminder that the UT has held – for now – that local authorities may consider evidence of conduct underlying spent convictions, or even evidence of the spent convictions themselves, when applying the "fit and proper person" test: Hussain & Others v Waltham Forest LBC  UKUT 0339 (LC) (the President and Judge Siobhan McGrath, 5 November 2019). This decision is of great relevance to (a) decisions to apply for or to revoke selective or additional licences, and (b) when considering character and criminal history for the purposes of prosecutions and civil penalties, amongst other situations.
Cornerstone's James Findlay QC and Riccardo Calzavara acted successfully for Waltham Forest (summary here). The unsuccessful appellants have now been granted permission by the Court of Appeal, with a hearing anticipated in autumn 2020.