Upper Tribunal reinstates appeal from defendant who insists he has no connection to unlicensed HMO

The Upper Tribunal (Lands Chamber) has overturned a decision of the First-Tier Tribunal (Property Chamber) in a “very weak” case brought by the London Borough of Newham.

Siraj Deane challenged the refusal of the First-tier Tribunal (FTT) to reinstate his appeal against a penalty of £7,500 imposed on him by Newham after his appeal had been struck out for failure to comply with the FTT's procedural directions.

The penalty was imposed under Section 249A, Housing Act 2004 after Mr Deane was accused of the offence under section 72of having control of or managing an unlicensed house in multiple occupation.

Mr Deane's defence was that he neither owns nor manages the property and that Newham’s claim that he did resulted from an error by a property agent.   

Although he had an interest in a different nearby property Newham established that Mr Deane was not the registered proprietor of the property in question. Nor was any connection identified between him and the property in official records. 

He submitted evidence that he was not connected with the property but the council still imposed a financial penalty on Mr Deane as managing agent and a separate financial penalty on the registered proprietor.

Martin Rodger KC, deputy chamber president, noted in his ruling Mr Deane again denied being the managing agent but Newham “despite these representations and apparently without carrying out any further investigation decided to proceed with the financial penalty and served a final notice on Mr Deane imposing a penalty of £7,500 on 25 November 2022”. 

Mr Deane was directed by the FTT to submit his bundle of documents in response to the council's case by 20 October 2023, but failed to and on 11 December Newham asked the FTT to strike out the appeal.

On 15 December that year his appeal was struck out but on the same day Mr Deane emailed the FTT with the documents he wished to rely on but this arrived 20 hours after the deadline.

It held a hearing on 18 December and said Mr Deane had been unable to give any adequate explanation for  “the abject failure to comply with the directions”. 

The FTT did not accept Mr Deane's explanation that a colleague was to blame and refused to reinstate his appeal.

Mr Rodger said: “It is a feature of the FTT's decision in this case that it left in place a finding by the council that Mr Deane had committed a criminal offence, without that conclusion ever having been subjected to judicial scrutiny. It also left him subject to a significant financial penalty for that offence.“

He said the question for the Upper Chamber was whether the FTT applied the law correctly when it refused to reinstate Mr Deane's appeal. 

There were two respects in which the FTT clearly misdirected itself in law, and a third in which its appreciation of the circumstances of the case was incomplete, Mr Rodger found.

He said the FTT referred to the Civil Procedure Rules but not to its own rules, and misdirected itself in relying on the tribunal's decision in Haziri “without looking beyond the bare proposition that the merits of a dispute are not generally relevant to case management decisions”. 

Mr Rodger said that where the prosecution case is so weak that it is bound to fail, “justice demands that the innocent party should be entitled to rely on that fact in support of an application for relief against procedural sanctions”. 

The FTT decided its initial hearing could not proceed because of late service of documents, but did not ask itself whether the evidence relied on by Newham provided a basis on which it could properly be concluded Mr Deane had committed a criminal offence

Surveying the evidence advanced by Newham, Mr Rodger said: “Even without evidence from Mr Deane himself, the council's case was therefore very weak. 

“It had drawn its conclusions after the most cursory investigation and had presented them to the FTT in a form which was part incomplete and part illegible.”

He also criticised the FTT’s assessment of the seriousness and consequences of the breach for having “ignored the material which had already been filed by Mr Deane a year earlier and paid no regard to the weakness of the council's case”. 

The FTT required Mr Deane to file a PDF appeal bundle but already had the notice of appeal and the documents which accompanied it in electronic form. 

“To strike out the appeal for failure to supply them again would be to require compliance for its own sake and would cross the line into impermissible harshness,” Mr Rodger said. 

Mark Smulian