Awad v Hooley (2021) UKUT 55 (LC)

This was an appeal to the Upper Tribunal of the FTT decision on a rent repayment order application that we first saw here.

The applicant tenant had had rent arrears at the start of the period for which an RRO was sought, and had accrued further arrears after the period, though the rent was paid during the period. The landlord had not licensed the property as was required. There were some further issues raised about the tenant’s conduct, the persistent failure to pay rent after the end of the period claimed and that she had obstructed inspections.

The FTT had made an RRO, but deducted from the award the arrears outstanding at the start of the period, on the basis that any payments of rent would first be set against the oldest of the arrears as standard practice, so these were not payments of rent for the period claimed.  The FTT had then made a further 75% reduction in the award based upon the tenant’s conduct.

The tenant appealed. The Upper Tribunal dismissed the appeal, finding:

Whether or not an individual landlord regarded or accounted for the first payments made during the relevant period as going to the arrears, the reasoning set out by the FTT seems to me to be an entirely fair way to calculate the rent paid “in respect of” the relevant period for the purposes of section 44(3)(a).

And:

The circumstances of the present case are a good example of why conduct within the landlord and tenant relationship is relevant; it would offend any sense of justice for a tenant to be in persistent arrears of rent over an extended period and then to choose the one period where she did make some regular payments – albeit never actually clearing the arrears – and be awarded a repayment of all or most of what she paid in that period. That default, together with the respondent’s kindness and the respondent’s financial circumstances, led the FTT to make a 75% reduction in the maximum amount payable, and I see no reason to characterise any of those considerations as irrelevant or the decision as falling outside the range of reasonable orders that the FTT could have made.

The FTT’s decision was a wholly reasonable exercise of its discretion as to the amount of an award.

On the FTT discretion generally, the UT noted the decision in Ficcara & Ors v James (2021) UKUT 0038 (LC) (our note) and restated the comments made in that case about the full rent being “the starting point” for an RRO award. On considering the FTT discretion, the present appeal

is no more than a useful example of an unimpeachable exercise of discretion on the part of the FTT, and says nothing further about the amount to be awarded in the absence of anything that weighs with the FTT under section 44(4). The only clue that the statute gives is the maximum amount that can be ordered, under section 44(3). Whether or not that maximum is described as a starting point, clearly it cannot function in exactly the same way as a starting point in criminal sentencing, because it can only go down; however badly a landlord has behaved it cannot go up. It will be unusual for there to be absolutely nothing for the FTT to take into account under section 44(4). The statute gives no assistance as to what should be ordered in those circumstances; nor can this Tribunal in the absence of a suitable appeal.

This, then, is further guidance to the FTT that an award of full rent, although certainly within its discretion, might be for cases with bad conduct by the landlord. Full rent is not the ‘default’ position in the absence of any other factors.