Housing 35 Plus Limited v Nottingham City Council [2026] EWCA Civ 204

[2026] EWCA Civ 204

Case No CA-2025-000200

IN THE COURT OF APPEAL

ON APPEAL FROM THE UPPER TRIBUNAL

(LANDS CHAMBER)

Upper Tribunal Judge Elizabeth Cooke

[2024] UKUT 349 (LC)

Venue The Royal Courts of Justice, Strand, London, WC2A 2LL

Date Wednesday, 14 January 2026

Before

LADY JUSTICE KING

LORD JUSTICE NUGEE

LORD JUSTICE MILES

Between

HOUSING 35 PLUS LIMITEDApplicant/

NOTTINGHAM CITY COUNCILRespondent

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Jonathan Manning and Poppy Henderson (instructed by Anthony Collins Solicitors) appeared for Appellant

Andrew Lane and Jeremy Ogilvie-Harris (instructed by Nottingham City Council Legal Services) appeared for Respondent

Approved Judgment

Crown Copyright©

[1]This appeal from the Upper Tribunal (Lands Chamber) raises one short question. The appellant, Housing 35 Plus Limited (“H35”), is a registered co-operative society which provides housing in numerous properties in Nottingham. The question is whether its rules are such as to secure that all its management decisions are made by the members in general meeting (“the statutory requirement”).

[2]The significance of that is that if the answer is Yes, it is common ground that its properties are exempt from the requirements of Part 2 of the Housing Act 2004 (“the 2004 Act”), under which houses in multiple occupation (“HMOs”) are generally required to be licensed.

[3]The respondent, Nottingham City Council (“Nottingham”) took the view that H35’s rules did not meet the statutory requirement and issued financial penalties against H35 under the 2004 Act for being in control of two properties that were HMOs without being licensed. H35 appealed to the First Tier Tribunal (“FTT”), which allowed an appeal on the basis that the rules did meet the statutory requirement. Nottingham appealed to the Upper Tribunal (“UT”), which allowed Nottingham’s appeal, concluding that H35’s rules did not meet the statutory requirement.

[4]H35 now appeals to this Court with the permission of Falk LJ. We have had the benefit of able submissions this morning from Mr Jonathan Manning, who appeared with Ms Poppy Henderson for H35, but we concluded after hearing from him that we did not need to hear from Mr Andrew Lane, who appeared with Mr Jeremy Ogilvie-Harris for Nottingham, and informed the parties that the appeal would be dismissed. I now give my reasons for agreeing to this course. Facts

[5]H35 is a fully mutual, non-profit housing co-operative. It is registered as a co-operative society under the Co-operative and Community Benefit Societies Act, 2014. It was founded to provide housing, primarily for those over the age of 35, although it now also provides housing to students. It prioritises housing those who are homeless or at risk of homelessness. It operates numerous properties across Nottingham. The FTT heard evidence that it currently has between 75 and 80 properties with about 500 bed spaces. Two of its properties are at 27 Paylin Street and 29 Eland Street.

[6]Nottingham took the view that these properties were HMOs for the purposes of Part 2 of the 2004 Act and hence required to be licensed. Part 2 of the 2004 Act provides for HMOs to be licensed by local authorities: see sections 55(1) and (2), and section 61(1). The latter provides:

“(1) Every HMO to which this Part applies must be licensed under this Part unless— (a) a temporary exemption notice is in force in relation to it under section 62, or (b) an interim or final management order is in force in relation to it under Chapter 1 of Part 4.”

Neither of those have any application. Section 61(2) provides; “(2) A licence under this Part is a licence authorising occupation of the house concerned by not more than a maximum number of households or persons specified in the licence.” (a) a temporary exemption notice is in force in relation to it under section 62, or (b) an interim or final management order is in force in relation to it under Chapter 1 of Part 4.”

[7]By section 72(1) and (6):

“(1) A person commits an offence if he is a person having control of or managing an HMO which is required to be licensed under this Part (see section 61(1)) but is not so licensed. … (6) A person who commits an offence under subsection (1) or (2) is liable on summary conviction to a fine.”

[8]Sub-sections (7A) and (7B) were inserted into section 72 by the Housing and Planning Act 2016 with effect from 6 April 2017. They provide as follows:

“(7A) See also section 249A (financial penalties as alternative to prosecution for certain housing offences in England). (7B) If a local housing authority has imposed a financial penalty on a person under section 249A in respect of conduct amounting to an offence under this section the person may not be convicted of an offence under this section in respect of the conduct.”

[9]Section 249A provides, so far as relevant: “(1) The local housing authority may impose a financial penalty on a person if satisfied, beyond reasonable doubt, that the person's conduct amounts to a relevant housing offence in respect of premises in England. (2) In this section “relevant housing offence” means an offence under— … (b) section 72 (licensing of HMOs). … (4) The amount of a financial penalty imposed under this section is to be determined by the local housing authority, but must not be more than £30,000.” (b) section 72 (licensing of HMOs).

[10]Nottingham took the view that H35’s properties were required to be licensed, but were not, and so offences had been committed under section 72. On 22 March 2023, it issued two financial penalties against H35, one in respect of each of Palin Street and Eland Street, in each case on the basis (as it was set out in the final notice for Palin Street) that it was:

“satisfied beyond a reasonable doubt that your conduct amounts to a relevant offence in respect of premises in England, in that from 2 October 2021 to 3 August 2022, you had control of and/or managed the house in multiple occupation, namely 22 Palin Street, which required a license under Part 2 of the Housing Act, 2004, and was not so licensed, contrary to section 72(1) of the Act.”

[11]A similar notice with slightly different dates was given in respect of Eland Street. In each case, the financial penalty imposed was £15,000. H35 appealed to the FTT, and took a number of points in its appeal. One of them was that no offences had been committed because the properties were not HMOs as defined, because of the provisions of schedule 14 to the 2004 Act. The FTT heard that as a preliminary issue, and as already referred to, decided it in H35’s favour.

[12]It is convenient next to set out the relevant provisions of schedule 14. Schedule 14 is headed “Buildings which are not HMOs for the purposes of this Act (excluding Part 1)”, and paragraph 1(1) provides:

“(1) The following paragraphs list buildings which are not houses in multiple occupation for any purposes of this Act other than those of Part 1.”

[13]Paragraph 2 lists certain buildings controlled or managed by public sector bodies and paragraph 2A certain buildings which are social housing.

[14]Paragraph 2B, which was added by the Localism Act 2011 with effect from 1 April 2012, is headed “Buildings controlled or managed by a co-operative society” and, so far as relevant, reads as follows:

“(1) A building where— (a) the person managing or having control of it is a co-operative society whose rules are such as to secure that each of the conditions set out in sub-paragraph (2) is met, and (b) no person who occupies premises in the building does so by virtue of an assured tenancy, a secured tenancy or a protected tenancy. (2) The conditions are— (a) that membership of the society is restricted to persons who are occupiers or prospective occupiers of buildings managed or controlled by the society, (b) that all management decisions of the society are made by the members (or a specified quorum of members) at a general meeting which all members are entitled to, and invited to, attend, (c) that each member has equal voting rights at such a meeting, (d) that, if a person occupies premises in the building and is not a member, that person is an occupier of the premises only as a result of sharing occupation of them with a member at the member’s invitation. (3) For the purposes of sub-paragraph (1) “co-operative society” means a body that— (a) is registered as a co-operative society under the 2014 Act or is a pre-commencement society (within the meaning of that Act) that meets the condition in section 2(2)(a)(i) of that Act, and (b) is neither— (i) a non-profit registered provider of social housing, nor (ii) registered as a social landlord under Part 1 of the Housing Act 1996.” (a) the person managing or having control of it is a co-operative society whose rules are such as to secure that each of the conditions set out in sub-paragraph (2) is met, and (b) no person who occupies premises in the building does so by virtue of an assured tenancy, a secured tenancy or a protected tenancy. (a) that membership of the society is restricted to persons who are occupiers or prospective occupiers of buildings managed or controlled by the society, (b) that all management decisions of the society are made by the members (or a specified quorum of members) at a general meeting which all members are entitled to, and invited to, attend, (c) that each member has equal voting rights at such a meeting, (d) that, if a person occupies premises in the building and is not a member, that person is an occupier of the premises only as a result of sharing occupation of them with a member at the member’s invitation. (a) is registered as a co-operative society under the 2014 Act or is a pre-commencement society (within the meaning of that Act) that meets the condition in section 2(2)(a)(i) of that Act, and (b) is neither— (i) a non-profit registered provider of social housing, nor (ii) registered as a social landlord under Part 1 of the Housing Act 1996.”

[15]It is not disputed that H35 is a co-operative society within the meaning of sub-paragraph (3), nor that conditions (1)(b), (2)(a), (2)(c) and (2)(d) are all met. The only question is whether the condition at (2)(b) is met, that is that its rules are such as to secure that “all management decisions of the society are made by the members (or a specified quorum of members) at a general meeting.” It is not disputed that there are rules providing for general meetings which all members are entitled to and invited to attend.

[16]I will come to the rules in due course, but to complete the narrative, the FTT (Judge D Jackson and Mr A McMurdo) heard the appeal on 26 January 2024, and issued their decision on 8 February 2024. They allowed the appeal, deciding that H35’s rules did meet the statutory requirement. Nottingham appealed to the UT. The appeal was heard by Judge Elizabeth Cooke (“the Judge”) on 14 November 2024. She concluded that H35’s rules do not meet the statutory requirement, as they provide for a management committee which is empowered to make management decisions and hence not all management decisions had to be made by the members in general meeting. She therefore allowed the appeal and said at [49] of her decision:

“In conclusion, the appeal succeeds. That means that the buildings were HMOs, and the matter is remitted to the FTT so that it can make a decision on the respondent’s other seven grounds of appeal from the financial penalties to the FTT.”

[17]H35 appeals on one ground with the permission of Falk LJ. This is that the Judge erred in concluding that H35’s rules do not meet the requirements of paragraph 2B(2)(b) of schedule 14 to the 2004 Act.

Analysis

[18]We were referred to a fair number of the rules of the society, starting with rules 1 to 3 which, so far as relevant, provide as follows:

“1. The name of the Co-operative shall be Housing 35 Plus Limited [“the Co-operative”]. 2. The Co-operative is registered under the provisions of the Co-operative and Community Benefits Society Act [“the Act”] and is a “co-operative housing association” as defined by Section 5(2) of the Housing Act 1995 because these rules: (a) restrict membership to persons who are occupiers or prospective occupiers of the Co-operative’s properties and (b) preclude the granting or assignment of the accommodation licence to persons other than members. 3. The objects of the Co-operative shall be - (a) the provision, construction, conversion, improvement or management on not for profit Co-operative Principles as set out in the appendix 1 to these rules [the “Cooperative Principles”] of housing exclusively for occupation by members of the Co-operative under the terms of a licence granted to them by the Co-operative solely or jointly with another member or members which shall…”

Then it sets out the terms of the licence and various other objects.

[19]That is sufficient to explain the general nature of the Society’s business. The key rules, for present purposes, are rules 30, 48 and 69. These provide as follows:

“30. The functions of ordinary general meetings shall be to discuss all management decisions of the Co-operative that have arisen since the last general meeting. 48. The Co-operative shall have a management committee [called “the committee”] which shall control and direct the management of the day to day business of the Cooperative in accordance with its objects and these rules… 69. The business of the Co-operative shall be conducted by the committee which may exercise all such powers as may be exercised by the Co-operative in accordance with its objects and these rules and are not by these rules or by statute required to be exercised by the Co-operative in general meeting. The committee shall in all things act for and in the name of the Co-operative. Without prejudice to the general powers conferred on the committee by these rules, the committee may exercise the following powers to: (a) purchase, sell, build upon, lease, mortgage or exchange any property or land and to enter into any contracts and settle the terms of such cont[r]acts; (b) compromise, settle, conduct, enforce or resist either in a Court of Law or by arbitration any suit, debt, liability or claim by or against the Co-operative; (c) determine from time to time the terms and conditions upon which the property of the Cooperative is to be let, leased or sold, and to make, revoke, and alter and at all times enforce as it thinks fit, such terms and conditions; (d) appoint and remove all solicitors, architects, surveyors and employees; (e) appoint and remove managing agents and to determine from time to time their remuneration and the terms and conditions upon which the managing agents are to act on behalf of the Co-operative…”

That is followed by (f) to (i) which contain some further powers.

[20]Mr Manning’s argument can, I think, be summarised as follows:(1) (Step 1) Rule 30, although it uses the word “discuss”, is to be understood as meaning that it is the function of the members in general meeting to decide all management decisions.

(2) (Step 2) Rule 69 does not empower the committee to decide anything which is entrusted by the rules to a general meeting. That means the committee cannot decide anything which is properly to be characterised as a management decision.

(3) (Step 3) The rules therefore do require all management decisions to be taken by the members at a general meeting and hence the rules satisfy the statutory requirement in paragraph 2B(2)(b) of schedule 14 to the 2004 Act.

[21]These submissions were skilfully advanced, but I do not consider that either step 1 or step 2 is well founded. Taking first the meaning of rule 30, what

the Judge said in her decision at [42] was that:

“As a matter of ordinary language to discuss is not the same as to decide. Where the rules wish to talk about deciding, they do so explicitly [and then she gives some examples]. If the rules wanted the general meeting to take management decisions it would have said so. This is not, as Mr Manning suggested, a “purely semantic” point; it is about the plain meaning of words. As for the subject matter of those discussions, decisions “that have arisen since the last general meeting” is not the clearest way of putting things, but it seems to me to mean that the general meeting is to discuss management decisions that have been made (by the committee) since the last general meeting, not to make decisions on issues or problems or the like that have arisen since the last general meeting and now have to be decided upon. It may also mean discussion of management issues that have arisen and have not yet been decided since the last meeting; but rule 30 provides for the general meeting to discuss them, not to decide.”

[22]Mr Manning took issue with that. He relied on numerous indications in the rules that general meetings are intended to be more than just a discussion forum or talking shop and, in particular, are intended to make decisions. This requires looking at some of the other rules. The rules provides for two types of general meetings, rule 21 providing that:

“The Co-operative shall meet in general meetings, which shall be either an annual general meeting or an ordinary general meeting.”

[23]The business of annual general meetings is set out in rule 28, and it includes:(a) receiving the accounts;

(b) receiving a report on the state of affairs of the cooperative;

(d) deciding the frequency of ordinary general meetings;

(e) appointing the auditor and

(f) considering “any other resolutions relating to the business of the Co-operative which have been included in the notice convening the meeting.”

[24]As far as ordinary general meetings are concerned, these are provided for by rules 29 and 30. Rule 29 is as follows:

“29. Ordinary general meetings shall be held at such times as may be decided by the Co-operative at its annual general meeting, or convened as provided for under the rules titled ‘Provisions applicable to convening ordinary general meetings.’ ”

[25]Rule 30 I have already set out, and provides that the functions of ordinary general meetings shall be to discuss all management decisions which have arisen since the last general meeting.

[26]The other rules which we were referred to include rules 23, 24, 25, 34 and 39, which respectively provide as follows:

“23. Each notice convening a general meeting shall state which type of general meeting is being convened, the date, time and place of the meeting and the business to be transacted at the meeting. 24. Proceedings at a general meeting shall not be invalidated by reason of accidental omission to send notice of a meeting to a member, or by non-receipt of such notice by a member. 25. Each member shall be entitled to attend and vote at a general meeting… 34. The only business which shall be transacted at a general meeting is that mentioned in the notice convening the meeting, and any business raised at the meeting by the present members. 39. Every adjourned meeting shall be deemed a continuation of the original meeting and any resolution passed at the adjourned meeting shall for all purposes be treated as having been passed on the date on which it was in fact passed and shall not be deemed to have been passed on any earlier date.”

[27]I accept, as Mr Manning submitted, that these rules taken together do contemplate members not simply talking about things, but taking decisions at general meetings. The rules make express provision for some decisions, including the election of the committee to be made at the AGM, as I read from rule 28, and others are specifically referred to elsewhere in the rules. For example, rule 17, which deals with expulsion, provides that a member may be expelled by resolution carried by the votes of two-thirds of the members present and voting at a general meeting of the Co-operative. Rule 96, which deals with the appointment of the auditor, provides that every appointment of an auditor, other than the first, shall be made by resolution of the Co-operative at a general meeting. Rule 119, which deals with changing the rules, provides that:

“119. Any rule of the Co-operative contained in these rules may be rescinded or amended or a new rule may be made by a resolution carried by two-thirds of the votes given on the resolution to amend these rules at any general meeting...”

[28]It may well be that over and above that members in a general meeting can pass resolutions expressing their views on the Co-operative’s business. It may be that they can even give binding directions to the committee as they think fit. That, I think, is open to some doubt, as rule 48, as I read, provides that the management committee “shall control and direct the management of the day to day business of the Co-operative” and rule 69 I think goes further in referring to the business of the Co-operative being “conducted by the committee”, and to the committee being able to exercise all powers as may be exercised by the Co-operative which are not required to be exercised in a general meeting.

[29]By analogy with some decisions in relation to companies the effect of those rules may be that so long as the committee remains in office, members in general meeting cannot tell the committee how it is to exercise its powers, and that they either have to remove the committee or pass a special resolution altering the rules. But we have not heard any argument on that point, and I will assume that it would be competent for members in a general meeting to give binding directions to the committee.

[30]Nevertheless, that is not enough for Mr Manning’s purposes. He needs to establish that the rules require that all management decisions are to be made by members in a general meeting. That effectively means reading “discuss” in rule 30 as if it said “discuss and decide, to the exclusion of the committee, all management decisions.” I agree with the Judge that that is simply not what it says. On the face of it, it says that the function of general meetings is to discuss all management decisions. The word “discuss” is an unusual one in the context. The normal meaning of it is undoubtedly to talk about something. The rule naturally reads as if the function of the general meeting is to review the decisions that have been made since the last general meeting, and express views on them. I accept that, as the Judge said, it may also contemplate a discussion of issues which are yet to be decided on, but it cannot, I think, be read as meaning that it is the function of the general meeting to decide, to the exclusion of the committee, all management decisions. That, as I have said, is simply not what it says.

[31]That conclusion is fatal to Mr Manning’s argument, but I do not think step 2 is well-founded either. Looking at rule 69, it is not drafted on the basis that management decisions are to be made by the general meeting, leaving only their implementation to the committee. Evidence was given before the FTT by Mr Alex Pridmore, the Chief Executive of H35, and among other things he said this at paragraph 29 of his witness statement:

“The Committee actions the decisions made at the general meetings, and have discretion to make minor operational decisions. Examples of operational decisions include, ordering station[e]ry for the office, chasing members for licence fees, serving warning notices for breaches of the licence agreements, and making payments in line with agreed contracts, issuing notices for the meetings, collecting the data for the meetings, signing the licence agreements, room checks to name a few. Any decision that does not relate to the day-to-day operation of the society would be put to a general meeting. Examples of these include: taking the lease of a new property, entering into contracts with utility providers, accepting new members to the society, terminating members licence agreements, instructing contractors and instructing consultants.”

[32]The FTT accepted his evidence, but the question, as accepted by Mr Manning before us, is not what is done in practice but what the rules provide. They seem to me plainly to provide that the committee does have power to make decisions on these matters, not just to implement decisions made by the members in general meeting.

[33]Mr Manning was reluctant to be drawn on precisely which decisions count as management decisions, saying that that was not something where a list could be drawn up in the abstract, but had to be decided on a case by case basis. He did, however, accept that a decision to buy a property would be a major management decision, not just a day to day matter. But rule 69 to my mind clearly contemplates such decisions being ones that can be made by the committee. As I read, rule 69 sets out a list of particular things that the committee has power to do, and the very first one is to purchase property. That list also includes a number of the other things which Mr Pridmore in his evidence had referred to as not being operational day to day matters, but matters that he said would be put to a general meeting. I have no reason to doubt his evidence, which as I have said was accepted by the FTT, but it does seem absurd for rule 69 to set out and list a whole raft of powers which, without prejudice to their general powers, the committee may exercise, if what it meant was that all these things were to be decided by the members in general meeting, and that the committee had no power to make a decision on these matters, only to implement decisions which had already been made.

[34]In addition to that, there are various other specific rules, which confer specific powers on the committee. Rule 12, which deals with admission to membership, provides that:

“The committee may within their absolute discretion and in accordance with the procedure which may be laid down for time to time by the Co-operative in general meeting admit or refuse to admit any person to membership of the Co-operative, save that such person must be a licencee or prospective licencee of the Co-operative.”

Rule 13 provides that:

“Every application for membership shall be made to the committee… The committee shall consider any membership application and, if it is approved, the applicant shall be required to forward the sum of £1...”

Rule 15, which deals with termination of membership, provides:

“15 A member shall cease to be a member, if: … (e) they are a resident in housing provided or furnished by the Co-operative, and in the opinion of the committee are in material or serious breach of their licence agreement; … (g) the member is a prospective licencee and: … (iii) is reasonably deemed by the committee to have no real and present prospect of being offered a licence of a home in a property owned or managed by the Co-operative within the following twelve months.”

These, I think, are all fairly significant decisions, and would naturally fall to be characterised as management decisions.

[35]There was some discussion before us about the purpose of the exemption in paragraph 2B of schedule 14. What

the Judge said on that in her decision at [7] was as follows:

“The point of paragraph 2B is obvious: where a building that would otherwise be an HMO is managed or controlled by a body of which the residents are all members with equal voting rights on all management decisions then there is no need for that body to be regulated in order to protect its members from their manager; they manage themselves and can protect themselves. The exemption applies whether the co-operative society manages and controls just the building in question, or (as in the present appeal) a number of buildings, provided that only and all the residents in the buildings are themselves the decision-makers.”

[36]In the light of the view I have come to, it is not necessary to reach any conclusion on this, but that seems to me to be right. Part 2 of the 2004 Act is about the management of properties and paragraph 2B itself begins by referring to a building where “the person managing or having control of it” is a co-operative society whose rules meet certain requirements. That, I think, primarily refers to such practical matters as doing repairs to the property and the like. The purpose of requiring HMOs to be licensed in Part 2 is presumably to improve the standard of management of properties. One can understand that if all the people occupying the property manage it themselves, there is no need to regulate them. They are analogous to owner occupiers, who can be left to look after themselves. That is not necessarily the case if the occupiers do not run it themselves and it is run by someone else; and that, it seems to me, would apply to a committee who may or may not be responsive to the needs and wishes of the occupiers.

[37]Whether that is so or not, I am of the clear view that the Judge was right that the rules of H35 are not such as to require that all management decisions of the society are made by the members in general meetings. That means, as the Judge said, that the two properties in question are not exempted from being licensed as HMOs by paragraph 2B of schedule 14 to the 2014 Act.

[38]Those are the reasons why I agreed that the appeal should be dismissed. LORD JUSTICE MILES

[39]I agree with the reasons given by Lord Justice Nugee for dismissing the appeal. LADY JUSTICE KING

[40]I also agree. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Tel No: 020 7404 1400 Email: civil@epiqglobal.co.uk