Strict liability for operators of unlicensed HMOs
A Divisional Court delivered judgment today in the joined cases of R (Mohamed) v Waltham Forest LBC, Secretary of State for Housing, Communities and Local Government (HCLG) intervening and R (Mohamed) v Wimbledon Magistrates’ Court, Waltham Forest LBC et al, Secretary of State for HCLG intervening  EWHC 1083 (Admin).
In a landmark ruling, the Court clarified that the offence of managing or having control of an unlicensed house in multiple occupation (HMO), contrary to s.72(1) of the Housing Act 2004 (the 2004 Act), is a strict liability offence, which does not require proof of a defendant’s mens rea. Further, informations stating the bare elements of the offence satisfied statutory requirements and enabled the Magistrates’ Court to discharge its obligations when issuing summonses.
Husband and wife, Lahrie Mohamed and Shehara Lahrie (the Claimants), are the owners of property and directors of property companies operating in the London Borough of Waltham Forest.
In 2015 and 2016, the London Borough Council discovered that various of their properties were occupied as HMOs, within the meaning of section 254 of the 2004 Act, and required a licence under the mandatory licensing provisions of Part 2 of the 2004 Act. Neither Mr Mohamed nor Ms Lahrie applied to license them under Part 2, however.
Accordingly, on 6 January 2017, the Council laid informations against them in the Magistrates’ Court alleging offences under s.72(1) of the 2004 Act. The informations comprised a schedule of offences, varied in each case to state the date of the offence and the address in respect of which it was allegedly committed. Each such date fell within 6 months of the day on which the Council laid the informations, but not within 6 months of the day on which it first discovered the offences. For example, in respect of one such property at 24 Eastfield Road, E17 the information alleged that:
“On 7 July 2016 you did manage or have control of the property at 24 Eastfield Road, London E17 3BA which was required to be licensed under Part 2 of the Housing Act 2004 but which was not so licensed CONTRARY TO section 72(1) of the Housing Act 2004.“
The Magistrates’ Legal Team Manager issued summonses in the same form as the informations.
In June 2017, the Claimants brought a claim for a judicial review of the court’s decision to issue the summonses, claiming that the proceedings were a nullity because (a) the Council had failed to provide, and the court had not had, enough information to enable the Legal Team Manager lawfully to discharge the court’s obligations when issuing the summonses, as described in R v West London Stipendiary Magistrate, ex parte Klahn  1 WLR 933 (Klahn) at 935H to 936D, (b) the offence under s.72(1) of the 2004 Act was not a continuing offence but, for the purpose of s.127(1) of the Magistrates’ Court Act 1980 (the 1980 Act), was committed as soon as the elements of the offence were satisfied and (c) the proceedings were therefore time-barred, such that the court had no jurisdiction to entertain them. The Administrative Court refused permission for that claim as it had not been made promptly.
In the meantime, having discovered that one of the properties remained occupied as an unlicensed HMO, the Council invited Mr Mohamed to an interview under caution. In response the Claimants brought a second claim (the 2017 claim), this time for a judicial review of the Council’s decision to interview Mr Mohamed. They claimed that the Council had been wrong to treat the section 72(1) offence as one of strict liability and to treat Mr Mohamed accordingly. The Court did not determine their application for permission to proceed with that claim until 2019 (below).
Meanwhile in 2018, the Claimants applied to the Magistrates’ Court to treat the proceedings as a nullity, for the same reasons as those advanced before the Administrative Court in 2017 (above). In January 2019, District Judge Sweet dismissed that application, finding that (a) the informations laid by the Council provided the Legal Team Manager with sufficient information to issue the summonses lawfully, (b) even if they had not, applying Nash v Birmingham Crown Court  EWHC 338 (Admin) (Nash) at , the Council had provided the Claimants with sufficient information about the alleged offences in good time to enable them to meet the case against them, (c) the offence under s.72(1) of the 2004 Act was a continuing offence, committed on each day on which an HMO which required a licence under Part 2 of the 2004 Act was not so licensed, and (d) the proceedings were not, therefore, time-barred or a nullity.
In response, the Claimants brought a third claim (the 2019 claim), this time for a judicial review of District Judge Sweet’s decision. Supperstone J granted permission for both the 2017 and 2019 claim and directed that they be heard by a Divisional Court.
At the hearing of the claims, in light of the Divisional Court’s decision in Luton BC v Altavon Luton Ltd  EWHC 2415 (Admin),  HLR 4 (Luton Altavon), the Claimants conceded that s.72(1) of the 2004 Act created a continuing offence, as the District Judge had held. They continued to argue, however, that (a) the Council had not provided the court with, and the Legal Team Manager had not had enough, information to enable the Magistrates’ Court lawfully to discharge its obligations when issuing the summonses, (b) the offence created by s.72(1) was not one of strict liability, but required proof of mens rea, in particular that the Claimants knew they had control of or were managing HMOs which required a licence, and (c) for the purpose of s.127(1) of the 1980 Act, time had begun to run when the elements of the s.72(1) offences were first satisfied, such that the proceedings before the Magistrates’ Court were time-barred.
Delivering the judgment of the Court, Dingemans LJ dismissed both claims.
He and Laing J found at [24, 27-28] that the informations laid by the Council complied with the requirements of s.1 of the 1980 Act, Rule 100(1) of the Magistrates’ Court Rules 1981 and Rules 7.2 and 7.3 of the Criminal Procedure Rules 2015, and that the Council’s informations had provided the court’s Legal Team Manager with sufficient information to issue summonses in January 2017, in accordance with Klahn. Further, even if they had not done so, and the court had issued the summonses irregularly, the proceedings would not have been a nullity. Applying Nash, the Court would not have struck them down unless the Claimants had not been, or could not have been, provided with sufficient information in good time to enable them to meet the case against them. In the instant case, they had.
Further still, at [40-48], the Council had been right to treat the offence created by s.72(1) of the 2004 Act as one of strict liability. The offence did not require proof of mens rea nor, more particularly, that the Claimants knew they had control of or were managing properties that were occupied as HMOs and required a licence. Such matters might be relevant to any “reasonable excuse” defence advanced under s.72(5) of the 2004 Act, but were not an element of the offence created by the 2004 Act. In this respect, the Court held, its decision was consistent with recent decisions of the Divisional Court in Thanet v Grant  EWHC 4290 (Admin) and IR Management Services v Salford CC  UKUT 81.
Lastly, at , as the offence under s.72(1) was a continuing offence, committed on each day on which a licensable HMO was not so licensed, an information laid before the Magistrates’ Court would not be time-barred under s.127(1) of the 1980 Act, provided it alleged an offence committed on a date falling within 6 months of the day on which the information was laid.
Local housing authorities (LHAs) will no doubt welcome today’s decision. Those prosecuting offences under s.72(1), or imposing financial penalties under s.249A of the 2004 Act, would undoubtedly have had difficulty proving a defendant’s state of mind at the time of this offence – a burden that, by enacting a statutory defence of “reasonable excuse” under s.72(5) of the 2004 Act, Parliament surely intended to shift to the defendant, in line with dicta in Sweet v Parsley  1 AC 132 (at 150B-C and 157D-E) and Thanet DC v Grant  EWHC 4290 (Admin) (at ). Today’s decision ensures that that burden rests squarely with the defendant, where the defence of “reasonable excuse” is available. By doing so, it preserves the efficacy of the offence, the licensing regime it enforces and the broader objectives of the 2004 Act.
LHAs will no doubt also be grateful for affirmation that the informations laid by the Council in this matter were sufficient to meet the requirements of the Criminal Procedure Rules, and to enable the court to discharge its obligations when issuing summonses in accordance with Klahn. Reiteration of the Court’s decision in Nash – a helpful fall-back in cases of procedural irregularity – will similarly be welcome. It is not uncommon for LHAs to lay informations in the form used by the Council in this case. It is equally common practice for courts to issue summonses accordingly. A finding that they had been inadequate and irregular would surely have increased the burden on already-stretched LHAs and – subject to Nash – called into question the regularity of historic and current prosecutions.