Wilson v Campbell (HOUSING – RENT REPAYMENT ORDER) (2019) UKUT 363 (LC)

In which the Upper Tribunal gives the First Tier Tribunal a thorough ticking off over its decision on a rent repayment order application.

Ms Wilson had rented a room in a house from Mr Gareth Campbell between 31 March 2017 until 31 July 2018. In November 2018 Ms W applied for a rent repayment order on the basis that the property was an HMO that should have been licensed and wasn’t.

There was no dispute that the property should have been licensed as an HMO and wasn’t during that period. Mr Campbell accepted a caution in August 2018 and the property was licensed in October 2018. Yet the FTT made an RRO in the amount of £1, following what appears to have been a decision on the papers.

Ms W’s evidence was

that she did not know when she moved in that the property was an unlicensed HMO. She had concerns throughout her occupation about safety and the condition of appliances. Eventually in February 2018 she and her fellow tenants raised all their concerns with the respondent on the house WhatsApp group chat. His response was to give them all notice to quit in early June. After meeting with the Newcastle City Council he retracted the notices; the appellant moved out at the end of July.

The landlord’s submissions were, well, that it wasn’t his fault and basically to blame the tenant for knowing that he should have had a licence:

The respondent in his submission to the FTT said that he had been unaware of the need for a licence, but that the appellant informed him in November 2017 that an HMO licence was required. He said that he “began working with the council” to regularise the situation in March 2018 and that due to his readiness to carry out works and his remorse he was issued with a caution rather than being prosecuted. As to the notices to quit, he sent these when he became aware of the need for a licence, because he wanted to regularise the position and to sell the property. He supplied brief written statements from two tenants who said that they had been content with the standard of the property and with the respondent’s conduct as landlord, and did not intend to apply for rent repayment orders. He supplied details of his outgoings in relation to the property and stated that he had had to borrow money in order to comply with HMO requirements.

The respondent pointed out that the appellant was a Senior Environmental Health Technician for Newcastle City Council; he said that she must have been aware of the need for a licence, and that fact that there was no licence, when she moved in. Yet she asked for a friend to be able to rent a room when one became vacant. He said that she “made an informed decision to continue residing in a property that she was aware was unlicensed with the sole intention of being able to apply for a rent repayment order.”

The FTT, somewhat incredibly, blamed the tenant, finding that she:

had been “less than forthright” in her submission to the FTT, in that she had not mentioned that she was an employee of the enforcing authority. It looked at her LinkedIn profile, supplied by the respondent and noted that she worked with landlords and tenants, prepared reports under the Housing Act 2016, compiled prosecution files and gave evidence in court where necessary; it also noted that a former role in Norfolk included HMO inspections. It found that it would have been apparent to the appellant when she decided to rent accommodation at the property that it fell short of licensing requirements, and that she then chose to continue living at the property and introduced a friend to rent a vacant room despite knowing that the property was unlicensed and despite having expressed concerns about its condition. The FTT concluded that “the Applicant chose to live in premises that fell short of legal requirements, possibly with the intention to apply for a rent repayment order in the future”.

(You may now pause for a moment, to retrieve your jaw from the floor.)

Ms W appealed, assisted by Shelter and the excellent counsel Alice Richardson, pro bono.

The landlord’s response on the appeal stated that by being “less than forthright”, Ms W had been guilty of misconduct.

The Upper Tribunal was having none of that, nor of the FTT’s decision:

I agree with the appellant that there was a breach of natural justice. The FTT made an adverse finding about her credibility and motivation without having conducted a hearing, and without giving her the opportunity to comment on what the respondent said about her or about why she did not mention her job to the FTT. It was not open to the FTT to reject her evidence that she was unaware at the start of the tenancy that the property was unlicensed without that being put to her in cross-examination; nor, for the same reason, was it open to it to make findings about her motivation for staying on at the property. This was not a fair procedure and on that ground alone the decision must be set aside and remitted to the FTT for a re-hearing.

I also agree that there are significant concerns about other aspects of the decision. The FTT was swayed by the appellant’s failure to mention her job to the FTT, her alleged knowledge that the house was unlicensed, and her alleged motivation for staying on. Those latter two points have not been proved on the balance of probabilities in a fair procedure; but even if they had been, it is not clear that any of those three factors amounted to misconduct. No consideration was given to that issue by the FTT. Moreover, the FTT’s decision does not give adequate reasons for the reduction of the award to £1, and in the absence of any explanation it would appear that the appellant’s evidence of misconduct on the part of the landlord has been ignored.

The appeal was allowed and the matter remitted to the FTT for rehearing (and it must be very much hoped, to a differently constituted FTT).

Comment

This is not the first time, and no doubt will not be the last time, that the FTT’s sometimes fast and loose approach to the general principles of evidence and of fairness to parties has been subject to criticism by the Upper Tribunal (and indeed by us). The FTT’s more informal rules, compared to the county court, sadly seem to encourage the FTT to sometimes think that it doesn’t have to bother with testing evidence, or allowing parties to respond to accusations or arguments, before reaching its own conclusions. (There may be a note of caution there for those arguing that a housing court should be based upon the tribunal.)

In any event, the UT is quite right here, not only (and obviously so) on the ‘natural justice’ point, but also that it is – at the very least – far from clear that anything the FTT held against Ms W would or could amount to tenant misconduct that could reduce a rent repayment award under s.44(3) Housing and Planning Act 2016. That section provides that the factors for the FTT to consider in deciding the amount of an RRO are:

(a) the conduct of the landlord and the tenant,
(b) the financial circumstances of the landlord, and
(c) whether the landlord has at any time been convicted of an offence to which this Chapter applies.

Taking a tenancy and staying there for 16 months until made to leave by the landlord seems very unlikely to be capable of amounting to tenant ‘misconduct’. Not announcing to the landlord from the word go that you work for a council EH dept is also, let’s face it, rather hard to characterise as misconduct…