Court of Appeal rejects challenge over refusal by district judge to dismiss prosecution over HMOs used to house asylum seekers

A district judge’s decision in a case over licensing of houses in multiple occupation (HMO) used for asylum seekers must stand despite a legal error, the High Court has found.

Lord Justice Warby and Mr Justice Dove decided Clearsprings Ready Homes was responsible for the homes concerned being licensed.

The case concerned the regulation of accommodation which the Home Office uses for asylum seekers.

In order to provide the accommodation required by its contract with the Home Office the claimant, Clearsprings, entered into leases in respect of properties which were then used as HMOs. These included leases with freeholders of residential property in the administrative area of Swindon Borough Council.

These properties were then commissioned for use under the contract, including the obtaining of licenses for their use as HMOs from the council. Service users commenced occupation of the properties as HMOs and officers of the council inspected them.

The council officers alleged 27 breaches of the Management of Houses in Multiple Occupation (England) Regulations 2006.

Clearsprings applied to Swindon Magistrates' Court for the charges to be dismissed the ground that it was not a ‘manager’ for the purposes of the regulations.

The district judge concerned though concluded this should be refused, and Clearspirngs issued judicial review proceedings to quash her decision.

Clearspirngs argued the direct judge’s conclusions were erroneous and she should not have concluded that Clearspirngs was required to have an HMO licence as the licensing requirement under the Housing Act 2004 applies to properties not persons.

Secondly, it argued the district judge was wrong to conclude that if a literal interpretation of the Act’s section 263(3) was taken then no HMO accommodation for persons seeking asylum could ever obtain a licence, on the basis that no manager could be proposed as they could not meet the definition of a ‘person managing’; and no licence could be granted because without a manager the local authority could not be satisfied that the arrangements required by section 64(3) were in place.

Clearspirngs said this was wrong as section 64(3)(c) said the proposed manager of the house includes either the person having control of the house or that person's agent or employee.

There would therefore always be someone - the freeholder for instance - who fulfils the requirement of being a person having control of the house.

Warby LJ and Dove J said the district judge had erred as the provisions of section 64(3)(c) made it possible for a ‘person having control’ of premises to obtain an HMO licence for premises, and so arrangements which do not include rent from the person in occupation - as in the case of asylum seekers - to come within the scope of the HMO licensing regime.

They said: “The district judge's conclusion…that ‘the HMO legislation in the Housing Act is wholly ineffective in relation to [service user] accommodation’ is not one which can be sustained, and it does not provide a basis for embarking on a reconstruction of section 263(3) of the 2004 Act.”

Swindon Council sought to sustain the district judge's conclusion by submitting that as a matter of custom and practice Clearsprings was operating as the manager of the premises, and therefore should be brought within the definition of ‘person managing’ and that Clearsprings’ submissions “were, in effect, an illegitimate attempt to take advantage of clumsy drafting".

The judges said: “The difficulty with these submissions is that they are neither founded on any patent defect in section 263(3), nor any impracticality or absurdity in this element of the legislation.

“When the legislative regime is read as a whole it is clear that there is a complete and coherent regime for the licensing of HMOs in the light of the breadth of the qualifying criteria contained in section 263(1) and (3). The need for a licence applies across premises on the basis of capturing both ‘persons managing’ and ‘person having control’. The coverage of the scheme…is full.”

They added: “The literal reading of section 263 as a whole does not give rise to any impracticality or absurdity which could justify the kind of intervention contemplated by the district judge and advocated by the council.”

Although the district judge's conclusions could not stand, being reached on the basis of an error of law, the court had to consider under section 31(2A) of the Senior Courts Act 1981, whether the outcome would have been substantially different if the error had not been made.

The judges said: “It appears that when the council required the licence applications to be made by the claimant rather than the freehold owners of the properties the claimant chose to describe itself as being solely in control of the HMO premises and to accept that it would be managing the HMO itself.

“It does not require a great deal of imagination to conceive that if this was the claimant's understanding of the extent of its involvement in the running and supervision of the HMO that there was the potential for it to be liable if the requirements of the Management Regulations were not met.

“Whilst it must be noted that the claimant has left open the question of whether on the facts it was a ‘person having control’, these observations provide some context from the circumstances of this case as to whether there could be considered to be fair warning of potential liability notwithstanding the literal reading of regulation 2(c) of the Management Regulations.”

This meant the district judge's overall conclusion that Clearsprings’ application to dismiss should be rejected was correct.

“The outcome of the application would not have been substantially different if the error of law she committed not occurred, because there are other good reasons for supporting her refusal to dismiss the prosecution,” Warby LJ and Dove J said.

Mark Smulian