Tribunal dismisses appeal over HMO license

OUTCOME: Dismissed

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case Reference : LON/00AY/HML/2020/0023 FVHREMOTE Property : 41 [ADDRESS] [POSTCODE] Appellant : [redacted]

: In person Respondents : [redacted]

: [COUNSEL] of Counsel Type of [NAME]

Tribunal Members : Appeal in respect of an HMO licence - Section 64 & Part 3 of Schedule 5 to the Housing Act 2004

Judge [NAME] of Video Hearing : 18 May 2021 Date of Decision : 20 May 2021

DECISION

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Decision

1. The appeal dated 31 January 2021 and made by the above-named applicant in respect of a House in Multiple Occupation (HMO) licence pursuant to Sections 64, 71 and Part 3 of Schedule 5 to the Housing Act 2004 is dismissed.

Introduction

2. This is an appeal by the applicant against the grsnting of an HMO Licence by the Local Housing Authority, namely the respondent. The basis of the appeal is that the licence has been granted to a tenant ([APPELLANT]) who the applicant alleges has been responsible for Anti-Social behaviour. The applicant says the Council was aware of this and further that the tenancy determined on 5th December 2020, but notwithstanding this an HMO licence has been granted for a period of one year expiring on 1 September 2021, i.e., in roughly three and a half months time.

3. The Tribunal by Judge Dutton had issued Directions dated 2 February 2021 that included the following: - The issues that the Tribunal will need to consider when deciding whether to confirm, vary or reverse the decision of the [NAME] include: a. Has the [NAME] gone through the necessary steps prior to the granting of the HMO licence? b. Should a licence have been granted without allegedly consulting the applicant and on the allegations set out in the [NAME]? The Hearing 1. The appeal was set down for hearing on 18 May 2021. This has been a remote hearing which has been consented to by the parties. The form of remote hearing was coded as FVHREMOTE - use for a hearing that is held entirely on the MoJ Full Video Hearing Platform with all participants joining from outside the court. A face-to-face hearing was not held because it was not possible due to the Covid 19 pandemic restrictions and regulations and because all issues could be determined in a remote hearing. The documents that were referred to are in a bundle of many pages, the contents of which we have recorded and which were accessible by all the parties 2. In the context of the Covid 19 pandemic and the government social distancing requirements the Tribunal did not consider that an inspection was possible. However, the Tribunal was able to access the detailed and extensive paperwork in the trial bundle that informed

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their determination including photographic evidence of the property. In these circumstances it would not have been proportionate to make an inspection given the current circumstances and the quite specific issues in dispute.

3. The Tribunal had before it an electronic bundle of papers prepared by the applicant and the respondent in the form of PDF files. These contained copies of documentation and title copies and photographs of the property as well as copy correspondence.

4. Relevant legislation is set out in the appendix to this decision. The Tribunal noted that in 2017 the applicant granted a three year letting agreement to [APPELLANT] from 5 December 2017 expiring on 5 December 2020. TLK’s agreement was subject to sub-tenancies of [NAME] in actual occupation of the property. The Tribunal was advised that when the respondents inspected the property prior to the [NAME] of the licence there were ten occupants living at the property. Clearly the circumstances that prevailed at that time meant that a mandatory HMO licence was something the local authority was obliged to consider. The applicant is in dispute with TLK as he says they have not given up possession and that he also has a money claim against that company. There are proceedings on going in that regard in the County Court. The Appeal

5. The applicant advanced the appeal because he says “I oppose the granting of A Licence of a House in Multiple Occupancy granted in direct contravention to the Housing Act 2004 without consultation with me, the [NAME], or anyone affected by the [NAME]'s persistent Anti Social Behaviour throughout the tenancy that has now expired.” 6. In his evidence the applicant produced photos of evidence of anti social behaviour including the dumping of soiled mattresses in the front garden of the property. He asserted that complaints and been made to the Local Authority about this anti-social behaviour. It was his case that in failing to consult with him as the owner or with the [NAME] they were all unaware of the [NAME] or granting of the licence in question and by doing so [NAME] denied the parties an opportunity to object. Ultimately the applicant was of the view that “The Council is encouraging an [NAME] to enjoy a licence beyond the time that the tenancy agreement has expired. “ 7. In reply the respondent says that they the circumstances that prevailed at the time of the [NAME] of the licence were such that an HMO existed and that it should be subject to a mandatory licence. Furthermore, they asserted that they took all reasonable steps to inform the relevant parties of their intention to issue the HMO licence. The respondent also

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said that it had only received one anonymous complaint about the problems at the property. Decision and Reasons

8. The Tribunal has decided to dismiss the appeal for the following reasons.

9. The Tribunal needs to consider the two relevant issues (1). Has the respondent gone through the necessary steps prior to the granting of the HMO licence? (2) Should a licence have been granted without allegedly consulting the applicant and on the allegations set out in the [NAME]? 10. Dealing with the necessary steps the Tribunal needed to be satisfied that the respondent took all necessary steps to inform the applicant of the licence proposal. The respondent produced copy documentation confirming that they did indeed write to the applicant to inform him of their intentions. They also produced a copy of the envelope used for this correspondence. In cross examination the applicant confirmed that the envelope had been addressed to him at his address but he said he had not received it. He did confirm that other letters had been received at the same address.

11. Additionally, the applicant said that neither neighbours nor the sub- tenants in the property had received anything from the respondent. In reply the respondent said they were not required to inform neighbours and [NAME] under the terms of the Housing Act and referred to Schedule 5 paragraph 13 to confirm this. This part of the Act requires notice to be given to “relevant persons”. The Schedule defines a “relevant person”, in relation to a licence and means any person (other than a person excluded) (a)who, to the knowledge of the local housing authority concerned, is (i)a person having an estate or interest in the HMO or Part 3 house in question, or (ii)a person managing or having control of that HMO or (b)on whom any restriction or obligation is or is to be imposed by the licence in accordance with section 67(5) or 90(6). The persons excluded by this sub-paragraph are (a)the applicant for the licence and (if different) the licence holder, and (b)any tenant under a lease with an unexpired term of 3 years or less.

12. Consequently, it was apparent to the Tribunal that the effect of the Act was to confirm the respondent’s assertion i.e. that they were not required to advise neighbours and were not required to advise the sub- tenants as they were on leases with terms of 3 years or less.

13. In the light of the evidence before it the Tribunal was satisfied that the respondent had taken all reasonable steps to advise the applicant of their intentions regarding the licence and the Tribunal is therefore satisfied that the respondent had gone through the necessary steps prior to the granting of the HMO licence.

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14. As a result, the Tribunal is satisfied that a licence should have been granted and that appropriate steps were taken to allow the applicant time to respond. In issuing an HMO licence for the Property, the Council is fulfilling its statutory duty under section 61 of the Housing Act 2004, (this section covers the requirement for HMOs to be licensed).

15. Finally, the Tribunal did note that in its evidence the respondent confirmed that “We have made clear repeatedly that as soon as the Appellant gains possession of the Property, the Council will revoke the licence as the current licence holder will no longer be in control of the Property.” [NAME] for costs 16. Counsel for the respondent confirmed that an [NAME] for costs will be considered by the respondent once this decision was issued and therefore there was nothing for the Tribunal to consider in regard to costs at the time of the hearing. If a cost [NAME] is made it must be filed and served within 21 days of the receipt of this decision 17. Rights of appeal are set out in the annex to this decision.

Name: Judge Professor Robert Abbey Date: 20 May 2021

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Annex Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013, the tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber),then a written [NAME] for permission must be made to the First-tier Tribunal at the regional office which has been dealing with the case. The [NAME] for permission to appeal must arrive at the regional office within 28 days after the tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28 day time limit; the tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking. If the tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).

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Appendix Housing Act 2004 64Grant or refusal of licence (1)Where an [NAME] in respect of an HMO is made to the local housing authority under section 63, the authority must either— (a)grant a licence in accordance with subsection (2), or (b)refuse to grant a licence. (2)If the authority are satisfied as to the matters mentioned in subsection (3), they may grant a licence either— (a)to the applicant, or (b)to some other person, if both he and the applicant agree. (3)The matters are— (a)that the house is reasonably suitable for occupation by not more than the maximum number of households or persons mentioned in subsection (4) or that it can be made so suitable by the imposition of conditions under section 67; (aa)that no banning order under section 16 of the Housing and Planning Act 2016 is in force against a person who— (i)owns an estate or interest in the house or part of it, and (ii)is a lessor or licensor of the house or part; (b)that the proposed licence holder— (i)is a fit and proper person to be the licence holder, and (ii)is, out of all the persons reasonably available to be the licence holder in respect of the house, the most appropriate person to be the licence holder; (c)that the proposed manager of the house is either— (i)the person having control of the house, or (ii)a person who is an agent or employee of the person having control of the house; (d)that the proposed manager of the house is a fit and proper person to be the manager of the house; and (e)that the proposed management arrangements for the house are otherwise satisfactory.

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(4)The maximum number of households or persons referred to in subsection (3)(a) is— (a)the maximum number specified in the [NAME], or (b)some other maximum number decided by the authority. (5)Sections 65 and 66 apply for the purposes of this section. 71Procedural requirements and appeals against licence decisions Schedule 5 (which deals with procedural requirements relating to the grant, refusal, variation or revocation of licences and with appeals against licence decisions) has effect for the purposes of this Part. SCHEDULE 5 Part 3 Appeals against licence decisions Right to appeal against refusal or grant of licence 31(1)The applicant or any relevant person may appeal to the appropriate tribunal against a decision by the local housing authority on an [NAME] for a licence— (a)to refuse to grant the licence, or (b)to grant the licence. (2)An appeal under sub-paragraph (1)(b) may, in particular, relate to any of the terms of the licence

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FIRST-TIER TRIBUNAL [NAME] (RESIDENTIAL PROPERTY) Case reference : LON/00AY/HML/2020/0023 FVHREMOTE Property : 41 [ADDRESS] [POSTCODE] Applicant : [redacted] : In person Respondent : [redacted] : [COUNSEL] of Counsel Type of [NAME] : Appeal in respect of an HMO licence - Section 64 & Part 3 of Schedule 5 to the Housing Act 2004 – Rule 13 costs [NAME]

Tribunal members : Judge Professor Robert Abbey Video Based Hearing date : 18 May 2021 Date of Costs Decision : 22 June 2021

[NAME] for costs

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1. An [NAME] was made by the Respondent under Rule 13 of the Tribunal Rules, (The Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 S.I. 2013 No. 1169 (L. 8)), in respect of the Respondent’s legal costs. The Tribunal subsequently received a schedule of costs totalling £600. This is the amount listed by the Respondent and consists of Counsel’s fees. The details of the provisions of Rule 13 are set out in the appendix to this Decision and rights of appeal made available to parties to this dispute are set out in an Annex.

2. Before a costs decision can be made, the Tribunal needs to be satisfied that there has been unreasonableness. At a second stage it is essential for the Tribunal to consider whether, in the light of unreasonable conduct (if the Tribunal has found it to have been demonstrated), it ought to make an order for costs or not. It is only if it decides that it should make an order that a third stage is reached when the question is what the terms of that order should be.

3. The Respondent filed with the Tribunal the Respondent’s written costs [NAME] dated 10 June 2021 and comments/observations thereon were requested of the Applicant and these were forthcoming on the 14 June 2021.

4. It now falls to me to consider the costs [NAME] in the light of the written submissions before the Tribunal. I do this but in the context of the circumstances of the original decision and also in the light of Upper Tribunal decision affecting costs applications.

DECISION 1. This Tribunal’s powers to order a party to pay costs may only be exercised where a party has acted “unreasonably”. Taking into account the guidance in that regard given by HH Judge Huskinson in [COMPANY] v Belmont Hall & [ADDRESS], [COMPANY] v Brickman LRX/130/2007, LRA/85/2008, (where he followed the definition of unreasonableness in Ridehalgh v Horsefield [1994] Ch 205 CA), the Tribunal was not satisfied that there had been unreasonable conduct so as to prompt a possible order for costs.

2. The Tribunal was also mindful of a fairly recent decision in the case of [ADDRESS] Company (1985) [COMPANY] v [NAME] [2016] UKUT 0290 (LC) which is a detailed survey and review of the question of costs in a case of this type. At paragraph 24 of the decision the Upper Tribunal could see no reason to depart from the views expressed in Ridehalgh. Therefore, following the views expressed in this case at a first stage the Tribunal needs to be satisfied that there has been unreasonableness.

3 3. At a second stage it is essential for the Tribunal to consider whether, in the light of any unreasonable conduct it has found to have been demonstrated, it ought to make an order for costs or not; it is only if it decides that it should make an order that a third stage is reached when the question is what the terms of that order should be.

4. In Ridehalgh it was said that “"Unreasonable" also means what it has been understood to mean in this context for at least half a century. The expression aptly describes conduct which is vexatious, designed to harass the other side rather than advance the resolution of the case, and it makes no difference that the conduct is the product of excessive zeal and not improper motive. But conduct cannot be described as unreasonable simply because it leads in the event to an unsuccessful result or because other more cautious legal representatives would have acted differently”. 5. [ADDRESS] decision is of paramount importance in deciding what conduct might be unreasonable. I have mentioned the approach of the Upper Tribunal in this decision but I think it appropriate to quote the relevant section of the decision in full: - “An assessment of whether behaviour is unreasonable requires a value judgment on which views might differ but the standard of behaviour expected of parties in tribunal proceedings ought not to be set at an unrealistic level…..“Unreasonable” conduct includes conduct which is vexatious, and designed to harass the other side rather than advance the resolution of the case. It is not enough that the conduct leads in the event to an unsuccessful outcome. The test may be expressed in different ways. Would a reasonable person in the position of the party have conducted themselves in the manner complained of? Or Sir [NAME] “acid test”: is there a reasonable explanation for the conduct complained of?” 6. In relation to unrepresented parties the Upper Tribunal noted that: “In the context of rule 13(1)(b) we consider that the fact that a party acts without legal advice is relevant at the first stage of the inquiry. When considering objectively whether a party has acted reasonably or not, the question is whether a reasonable person in the circumstances in which the party in question found themselves would have acted in the way in which that party acted. In [NAME] that assessment it would be wrong, we consider, to assume a greater degree of legal knowledge or familiarity with the procedures of the tribunal and the conduct of proceedings before it, than is in fact possessed by the party whose conduct is under consideration. The behaviour of an unrepresented party with no legal knowledge should be judged by the standards of a reasonable person who does not have legal advice. The crucial question is always whether, in all the circumstances of the case, the party has acted unreasonably in the conduct of the proceedings.

4 We also consider that the fact a party who has behaved unreasonably does not have the benefit of legal advice may be relevant, though to a lesser extent, at the second and third stages, when considering whether an order for costs should be made and what form that order should take. When exercising the discretion conferred by rule 13(1)(b) the tribunal should have regard to all of the relevant facts known to it, including any mitigating circumstances, but without either “excessive indulgence” or allowing the absence of representation to become an excuse for unreasonable conduct.” 7. In [NAME] v [COMPANY] [2020] UKUT 241 (LC) the Upper Tribunal clarified the decision in [ADDRESS] as follows: “in [ADDRESS] the Tribunal suggested an approach to decision [NAME] in claims under rule 13(1)(b) which encouraged tribunals to work through a logical sequence of steps, it does not follow that a tribunal will be in error if it does not do so. The only "test" is laid down by the rule itself, namely that the FTT may make an order if is satisfied that a person has acted unreasonably in bringing, defending or conducting proceedings. The rule requires that there must first have been unreasonable conduct before the discretion to make an order for costs is engaged, and that the relevant tribunal must then exercise that discretion. Whether the discretion has been properly exercised, and adequately explained, is to be determined on an appeal by asking whether everything has been taken into account which ought to have been, and nothing which ought not, and whether the tribunal has explained its reasons and dealt with the main issues in such a way that its conclusion can be understood, rather than by considering whether the [ADDRESS] framework has been adhered to. That framework is an aid, not a straightjacket.” [emphasis added]

8. It seems to Tribunal that therefore the bar to unreasonableness is set quite high in that what amounts to unreasonableness must be quite significant and of serious consequence. This being so the Tribunal must now consider the conduct of the parties in this dispute given the nature of the judicial guidance outlined above.

9. The respondents say there are two important features that they say demonstrate the Respondents unreasonableness in both his bringing and conduct of these proceedings.

10. Firstly, [NAME] say that the [NAME] pursuit of these proceedings was driven by his animus towards his tenant (the [NAME], [APPELLANT]) and his unconnected legal difficulties with them. This the Council say is evidenced and neatly summarised at paragraph 6 of the judgement which quotes the [NAME] view thus: “The Council is encouraging an [NAME] to enjoy a licence beyond the time that the tenancy agreement has expired.” On several occasions before and

5 during these proceedings, the Respondents say they explained at length to the Appellant that the difficulties he had with the [NAME] and the separate litigation he was/is pursuing with them were not properly matters the Respondent (or Tribunal) could have regard to in its decision [NAME] and that should the latter be resolved in his favour that would result in the Licence falling away and his appeal rendered otiose. Yet despite these explanations and reassurances the Appellant persisted with his pursuit of this appeal.

11. Secondly, the respondents say that at the time the Appellant made his [NAME] he indicated that he was content to have the matter determined on the papers. Had that been the case the respondent’s costs of these proceedings would they say have been [COMPANY]. [NAME] say they wrote to the Appellant on 10th May 2021 to remind him of this including a snip of his declaration on the [NAME]. Despite this they say the Appellant still elected for a remote hearing of this matter.

12. On the other hand, the applicant responded by saying “Any reasonable homeowner would make an [NAME] to appeal in the circumstances. The people who are suffering the most from the ongoing conduct of the [NAME] are their [NAME]. The council not having managed to check/improve their plight, it says, due to the pandemic, probably albeit inadvertently saving the Respondent money. The Appellant asking the [NAME] their view on the hearing type was giving them a voice in the interests of justice. Therefore, the Appellant has not been unreasonable seeking the Tribunal's determination and invites the Tribunal to reject the [NAME]' [NAME] for costs.” 13. It is apparent from the above exchange that there were serious differences that existed between the parties and that this plainly necessitated careful review by the parties involved in the appeal. This was evidenced by the documentation issued by the applicant and by his detailed work throughout. Whilst this could be seen as zealous, it seemed to the Tribunal that the applicant’s conduct in this regard cannot be considered vexatious such that it could give rise to a successful Rule 13 [NAME].

14. Taking into account all that the parties have said about the case and the actions of the parties involved, the Tribunal cannot find evidence to match the high bar of unreasonable conduct set out above. The Tribunal was therefore not satisfied that stage one of the process had been fulfilled in that it had not found there has been unreasonableness for the purposes of a costs decision under Rule 13 on the part of the applicant. The conduct may have been mistaken but it was not vexatious or such that following the legal tests the tribunal might consider such conduct unreasonable. As was said above in relation to a legal definition of what might be unreasonable it makes no difference that the conduct is the product of excessive zeal as may well have been the driving force in the appeal.

6 15. In the circumstances the Tribunal determines that there be no order for costs payable by the Applicant pursuant to Rule 13 of The Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 S.I. 2013 No. 1169 (L. 8).

Name: Judge Professor Robert Abbey Date: 21 June 2021

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The Tribunal Procedure (First-tier Tribunal) ([NAME]) Rules 2013 S.I. 2013 No. 1169 (L. 8)

Orders for costs, reimbursement of fees and interest on costs 13. (1) The Tribunal may make an order in respect of costs only— (a) under section 29(4) of the 2007 Act (wasted costs) and the costs incurred in applying for such costs; (b) if a person has acted unreasonably in bringing, defending or conducting proceedings in— (i) an agricultural land and drainage case, (ii) a residential property case, or (iii) a leasehold case; or (c) in a land registration case. (2) The Tribunal may make an order requiring a party to reimburse to any other party the whole or part of the amount of any fee paid by the other party which has not been remitted by the Lord Chancellor. (3) The Tribunal may make an order under this rule on an [NAME] or on its own initiative. (4) A person [NAME] an [NAME] for an order for costs— (a) must, unless the [NAME] is made orally at a hearing, send or deliver an [NAME] to the Tribunal and to the person against whom the order is sought to be made; and (b) may send or deliver together with the [NAME] a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal. (5) An [NAME] for an order for costs may be made at any time during the proceedings but must be made within 28 days after the date on which the Tribunal sends— (a) a decision notice recording the decision which finally disposes of all issues in the proceedings; or (b) notice of consent to a withdrawal under rule 22 (withdrawal) which ends the proceedings. (6) The Tribunal may not make an order for costs against a person (the “[NAME]”) without first giving that person an opportunity to make representations. (7) The amount of costs to be paid under an order under this rule may be determined by— (a) summary assessment by the Tribunal; (b) agreement of a specified sum by the [NAME] and the person entitled to receive the costs (the “[NAME]”); (c) detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by the [NAME] by the Tribunal or, if it so directs, on an [NAME] to a county court; and such assessment is to be on the standard basis or, if specified in the costs order, on the indemnity basis. (8) The Civil Procedure Rules 1998(a), section 74 (interest on judgment debts, etc) of the County Courts Act 1984(b) and the County Court (Interest on

8 Judgment Debts) Order 1991(c) shall apply, with necessary modifications, to a detailed assessment carried out under paragraph (7)(c) as if the proceedings in the Tribunal had been proceedings in a court to which the Civil Procedure Rules 1998 apply. (9) The Tribunal may order an amount to be paid on account before the costs or expenses are assessed.

9 ANNEX - RIGHTS OF APPEAL

1. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber) then a written [NAME] for permission must be made to the First-tier Tribunal at the Regional office which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the Regional office within 28 days after the Tribunal sends written reasons for the decision to the [NAME].

3. If the [NAME] is not made within the 28 day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28 day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed despite not being within the time limit.

4. The [NAME] for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal, and state the result the party [NAME] the [NAME] is seeking.