Jackson v Cambridge City Council [2008] EWHC 2529 (Admin)

Case No CO/6202/2007

[2008] EWHC 2529 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

THE ADMINISTRATIVE COURT

Venue Royal Courts of Justice

Date Wednesday, 15 October 2008

Strand

London WC2A 2LL

B e f o r e:

MR JUSTICE BURNETT

Between

PHILLIP JACKSONAppellant

Between

CAMBRIDGE CITY COUNCILRespondent

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Mr Miles Croally (instructed by Lees Lloyd Whitley) appeared for Appellant

Mr Ranjit Bhose (instructed by Cambridge C.C, Legal Services) appeared for Defendant

J U D G M E N T

[1]MR JUSTICE BURNETT: This is an appeal against the decision of the Cambridgeshire Valuation Tribunal given on 26 June 2007, whereby they dismissed Mr Jackson's appeal against a decision of Cambridge City Council that he was liable to Council Tax on a property known as 5 Tweedsmuir Court, Cambridge between 22 October 1997 and 22 October 2001.

[2]The appeal is a statutory appeal. It is brought under paragraph 51 of the Valuations and Community Charge Tribunals Regulations 1989 (as amended). Paragraph 51(1) provides:

"An appeal shall lie to the High Court on a question of law arising out of a decision or order which is given or made by a tribunal on an appeal and may be made by any party to the appeal."

Sub-regulation (4) provides:

"The High Court may confirm, vary, set aside, revoke or remit the decision or order of the tribunal, and may make any order which the tribunal could have made."

[3]In Doncaster Borough Council v Stark [1998] RVR 80, Potts J identified the starting point in such appeals as- "... whether the Tribunal has misdirected itself in law or reached a conclusion that is inconsistent with the only reasonable conclusion that a Tribunal properly directed on the law could have reached."

[4]The amount at stake in this appeal is about £2,500, which was made the subject of a liability order in the Magistrates' Court on 16 June 2005. The appellant has consistently denied his liability for Council Tax on that house on the ground that, despite being the tenant (at least for six months), he never lived there.

[5]The basis upon which the Tribunal dismissed his appeal was that the house was, for statutory purposes, a house in multiple occupation, in respect of which the appellant was liable for Council Tax because he had a tenancy of the whole property. It was the contention of the Council before the Tribunal that, save for the last six months of the period in question, the appellant was resident in the house: in other words, that he occupied it as his sole or main residence. The Council argued that, for the remainder of the period, it was, for statutory purposes, a house in multiple occupation. Its fall-back position, or perhaps more accurately described as alternative case, was that the house was in multiple occupation for statutory purposes for the whole of the period. It was that alternative case that was accepted by the Tribunal.

[6]The Tribunal did not in terms conclude that the appellant was resident in the property, but it did accept that it was a house in multiple occupation for the whole period. The decision of the Tribunal is found in a short passage at the end of the record of proceedings before it. It is in these terms:

"Having thoroughly reviewed the evidence presented by both parties, including the regulations and case law, the Tribunal finds in favour of the respondent. The reasons for this are as follows: 1. Mr Jackson had an Assured Shorthold Tenancy at the subject property from 22 October 1997. He contends that he did not take up occupation on that day or from 5 November 1997 as contended by the Billing Officer. The Tribunal believes there is insufficient evidence from either party to prove conclusively the whereabouts of Mr Jackson's sole or main residence between those dates and 5 August 2001. 2. Mr Jackson has stated that at the beginning of his tenancy he installed a number of sub-tenants in the property, on the basis of a verbal agreement, each with their own room. In the Tribunal's opinion, this means that Mr Jackson created a House in Multiple Occupation (HMO) and as such, he becomes liable for Council Tax payments. 3. When Mr Jackson's six month Assured Shorthold Tenancy Agreement expired, he believed that his tenancy, and liability for Council Tax, ended with it, whereas it became a statutory periodic tenancy. 4. His tenancy at 5 Tweedsmuir Court therefore continued despite his having taken the tenancy at 32 Verulam Way on 6 August 2001, and did so until the sub-tenants at the subject property negotiated their own tenancy agreement, effective from 23 October 2001. 5. Mr Jackson is therefore liable for all Council Tax payments at 5 Tweedsmuir Court from the start of his tenancy agreement on 22 October 1997 until 22 October 2001. The appeal is dismissed."

[7]Those conclusions came at the end of a long document recording the proceedings before them, including the arguments advanced by both parties and a detailed summary of the evidence which the Tribunal had heard or read. Additionally, the Tribunal set out the material statutory provisions with which they were concerned.

[8]The appellant contends that the Tribunal misdirected itself in law in two ways. First, that the Tribunal made an error of law in concluding that the appellant continued to be a statutory tenant of the property after his six-month tenancy had come to an end. Secondly, that the Tribunal did not make a proper finding that the house was in multiple occupation for the purposes of the relevant statutory provisions, and appeared to conclude that it was sufficient that a number of individuals occupied separate bedrooms. It was contended that there was a need for the Tribunal to consider whether they each had sub-tenancies of part of the property rather than a joint tenancy of the whole and express clear conclusions on that issue. In the light of these two errors, the applicant submits that the matter must be remitted to the Tribunal for further consideration.

[9]The first of these complaints arose in a supplementary skeleton argument settled by Mr Croally served two days ago. It was not raised in the original grounds. Indeed, in the first skeleton argument served on behalf of the appellant, it was positively asserted on his behalf that the Tribunal was right in that conclusion. All other points originally pursued on behalf of the appellant, other than the two that I have sought to summarise, are no longer pursued. Mr Croally did not settle either the grounds or original skeleton argument.

[10]As can be seen from the decision, the Tribunal did not make a finding about whether the applicant occupied the house as his sole or main residence. Both Mr Croally and Mr Bhose, who appeared for the respondent, suggested that the way in which the Tribunal referred to this factor suggests that they considered it was unnecessary to decide the issue. That is because it had become unnecessary in view of the conclusions that they had reached on the question whether the house was in multiple occupation.

[11]Before turning to the essence of the submissions advanced, I mention a few of the background facts. I start by observing that the history of the appellant's involvement in this property has been bedevilled by a lack of documentary evidence and contradictory accounts given by him and others who have lived there. There are relatively few fixed stars in the constellation of the evidence that was heard before the Tribunal. One, however, is this: the appellant entered into a six-month tenancy of the house from 22 October 1997. The landlord was Mr J Bowers and the rent agreed was £480 a month. The tenancy was in the familiar form of an Assured Shorthold Tenancy under Part 1 of the Housing Act 1988. Its terms were unexceptional. Other than the term of the lease itself and the rent, provision was made for the appellant to pay a deposit of £720, which he did. There were covenants against sub-letting or using the house other than as a single private dwelling. There were many other covenants of a familiar form.

[12]It was the appellant's consistent case in his dealings with the Council and before the Tribunal that he had in fact never resided in the property. He says that he entered into the tenancy agreement to enable other people to occupy it from the outset. The underlying reason advanced was apparently that they would not have been considered financially sound enough to take the tenancy themselves. The landlord acted through Premier Lettings, which is a local letting agency, who dealt with the lease and thereafter with matters of rent and other administrative matters on his behalf. One of those who it appears moved into the property was Christopher Cox. He had a business relationship with the appellant. Both, on the evidence I have seen, are involved in the taxi business. It would appear that a total of four other people moved in, including a couple.

[13]On 22 October 2001, which is the final date on which the Tribunal held the appellant liable for Council Tax, Mr Bone, one of those who lived there, took a tenancy from the landlord. Rent was paid up until that time, and it was recorded in the agent's books as coming from the appellant by BACS payments. The rent was increased on two occasions during the period with which I am concerned, and, as we shall see, during that period the appellant undoubtedly used the address, whether or not he lived there. He made applications for licences in connection with his taxi business using that address, and also used it for registering vehicles with the DVLA. In a document from November 1998 to which I shall return, Mr Cox represented that the appellant was his landlord.

[14]The statutory provisions that govern who has liability for Council Tax on a dwelling are found in the Local Government Finance Act 1992 and regulations made thereunder. For present purposes, I need only refer to sections 6 and 8 of that Act. Section 6 is the primary provision which deals with liability for Council Tax. It establishes a hierarchy dependent upon residence and the nature of the interest held in the dwelling. It was this provision that would have founded the appellant's liability to Council Tax had a finding been made that he had his sole or main residence in the house. However, it was under section 8 that liability was in fact founded. Section 8, as material, provides:(1) Subsections (3) and (4) below shall have effect in substitution for section 6 or (as the case may be) section 7 above in relation to any chargeable dwelling of a class prescribed for the purposes of this subsection. ... (3) Where on any day this subsection has effect in relation to a dwelling, the owner of the dwelling shall be liable to pay the council tax in respect of the dwelling and that day. (4) Where on any day two or more persons fall within subsection (3) above, they shall each be jointly and severally liable to pay the council tax in respect of the dwelling and that day. ... (6) Regulations prescribing a class of chargeable dwellings for the purposes of subsection (1) or

(2) above may provide that, in relation to any dwelling of that class, subsection (3) above shall have effect as if for the reference to the owner of the dwelling there were substituted a reference to the person falling within such description as may be prescribed."

[15]The regulations referred to in sub-section (6) are the Council Tax (Liability for Owners) Regulations 1992. Regulation 2 is material for our purposes. It provides:

"2. The following are the classes of chargeable dwellings prescribed for the purposes of section 8(1) of the Act- ... Houses in multiple occupation, etc Class C a dwelling which (a) was originally constructed or subsequently adapted for occupation by persons who do not constitute a single household; or (b) is inhabited by a person who, or by two or more persons each of whom either -- (i) is a tenant of, or has a licence to occupy, part only of the dwelling; or (ii) has a licence to occupy, but is not liable (whether alone or jointly with other persons) to pay rent or a licence fee in respect of the dwelling as a whole."

[16]Regulation 2A makes further provision about who should be treated as an owner for these purposes. It provides:

"(1) In relation to a dwelling within Class C in regulation 2, section 8(3) shall have effect as if, for the reference to the owner, there were substituted a reference to -- (a) the person who has a relevant material interest which is not subject to a relevant material interest inferior to it; or, if there is no such person -- (b) the person who has a freehold interest in the whole or any part of the dwelling. (2) In paragraph (1), 'relevant material interest' means a freehold or leasehold interest in the whole of the dwelling."

[17]This case is concerned with Class C(b)(i). The combined effect of these provisions is that, before a person's liability for Council Tax can be established, the Tribunal must conclude(a) that those occupying the house do so pursuant to agreements which allow them to occupy part only of the house; and

(b) the person whose liability is being considered must have a freehold or leasehold interest in the whole of the house; and

[18]What the statute is looking for is the first person whose interest is superior to those in multiple occupation as defined, who has an interest in the whole house rather than in part of it.

[19]Mr Croally says that the reasoning of the Tribunal was defective when they concluded that the criterion concerned with sub-letting of part only of the house was satisfied. He submits that they proceeded from the finding that the occupants each had their own room, directly to the conclusion that they had an interest in part only of the house without considering whether all of the occupants had a joint tenancy. If there were a joint tenancy, all would have a technical right to occupy the whole of the house. The own bedroom evidence might, submits Mr Croally, do no more than reflect the factual reality that those occupying the house respect the privacy of each other's rooms rather than the technical legal position.

[20]Mr Bhose submits that the Tribunal was well aware of the question whether this was a house in multiple occupancy. They were well aware that the question was central to the issues they had to determine. It arose in connection with six months of the period under consideration in any event, for the reasons that I have identified. Additionally it arose because it formed the Council's alternative case for the whole of the period under consideration if their primary case about residence was not successful. He submits that there was no misdirection because the Tribunal clearly set out the material statutory provisions with which it was concerned. It recorded the evidence on the issue, together with the argument advanced, and proceeded to the conclusion which I have read. In those circumstances, he submits, the reference to "own room" was plainly directed towards the point in issue. Had the Tribunal concluded that all four (or maybe five) occupants had a joint tenancy rather than a tenancy or licence relating to their own rooms with joint use of the other parts, they would have said so. The reason they would have said that is because it was the very dichotomy that they were seeking to resolve.

[21]I note that the only direct evidence from any of those occupying the premises (that is to say, on the assumption that the appellant was not occupying) came from Mr Cox. In an application for housing assistance made to the Council in November 1998, he set out the detail of his occupation of the house. He described himself as a lodger. That, submits Mr Bhose, is significant because it is consistent with the conclusion of the Tribunal that he seeks to support. Mr Cox described the appellant as his landlord. He said that he had his own room, but that he had no use of the other bedrooms, and that the living room and other rooms were shared.

[22]Mr Croally did not suggest that there was no evidence before the Tribunal on which they could have concluded that this aspect of the multiple occupancy test was made out. Rather, he submitted that the reasoning disclosed a misdirection, or, it might alternatively be said, there was a failure in the reasoning.

[23]In my judgment, the reasoning of the Tribunal, read in the context of the recital of evidence and submissions they heard or read, having set out the statutory provisions that they were applying, demonstrate that there was no error of law in their approach to this issue. There is, in my judgment, no basis for concluding that they misapprehended the law or failed to appreciate that they had to determine whether those occupying the house had an interest in part of it only. Furthermore, it seems to me that their reasoning, when looked at in a fair context, cannot be criticised.

[24]The second issue is whether the appellant continued to have a tenancy of the whole of the house during the relevant period. I have referred to the recent suggestion that the appellant did not continue as a statutory periodic tenant when the six-month lease expired. The Tribunal appear to have been referred to some material on that matter by Mr London, who was the Council representative before the Tribunal, but there is no sign in the detailed record of proceedings of consideration in any depth of the relevant statutory provisions in the Housing Act 1988. Those provisions include in section 5 details of the conditions necessary for a statutory tenancy to arise when the term of the tenancy agreed expires. One of those conditions is that the tenant should continue to occupy the dwelling as his residence. Although the precise language in the 1988 Act is different from that found in the 1992 Act, the effect of the language is the same, and it is of course that very point which the Tribunal failed to decide in this case.

[25]In these circumstances, Mr Bhose accepts on behalf of the Council that the Tribunal made an error of law. But, he submits, that cannot matter because the only conclusion that the Tribunal could have reached was that the appellant continued as a periodic tenant at common law.

[26]Mr Croally objects that the issue was not fully explored in evidence before the Tribunal, and so it would be unfair to accede to Mr Bhose's submissions whatever the apparent strength of the evidence. It is, he submits, classically a matter that should be remitted to the Tribunal for further determination.

[27]Since this issue was not raised in the grounds, it is also not the subject of a respondent's notice. However, both parties are content that I should deal with it as a matter of substance; that is, on the assumption that it were to be found in both grounds and a respondent's notice.

[28]The underlying legal position is not, as it seems to me, in doubt. When a tenant holds over at the expiry of his lease and he pays, and the landlord accepts, rent, a periodic tenancy will arise. I remind myself that it was the appellant's case before the Tribunal that he considered that when his tenancy expired (that is to say the six-month period), even though he had installed sub-tenants contrary to the terms of the lease who remained in physical occupation, his responsibility for the house came to an end, as did his lease. There has never been any suggestion in the volumes of material produced by the appellant that he informed the landlord or the agents of the true position. Indeed, it would, as it seems to me, be fanciful to suggest that he did, because the whole arrangement was entered into in a clandestine way to avoid legal difficulties.

[29]The high point of the appellant's case is that he suggests that the sub-tenants paid over money for rent in cash to the landlord's agents, and thus in some way acquired an unspecified interest in the house direct from the landlord. I should add that those circumstances would be ones in which the landlord was ignorant of what was going on.

[30]I am quite satisfied that the only conclusion that the Tribunal could have come to, if this matter had been directly considered by them, is that the appellant continued as a tenant of the whole of the house at common law when the fixed term tenancy expired. There is to my mind an overwhelming body of evidence that dictates that conclusion.

[31]I have noted already that the appellant took no steps to inform the landlord of the position at the expiry of the six-month period or at any time thereafter. There is no doubt that the rent was paid. It is also clear that the rent increased on two occasions, which under the statutory scheme the landlord thought he was operating could only have been by agreement. Although the appellant suggested to the Tribunal that the sub-tenants paid the rent in cash, that was flatly contradicted by what he had said earlier to the Council. In a notebook entry recording a telephone call on 11 July 2005, we find this:

"Mr Jackson then stated that he took the tenancy initially for some people who did not have a good credit rating and who could not get a tenancy. They had approached him and he therefore took a tenancy in his name to help them out and provide them with housing out of the goodness of his heart. He further stated that he continued to pay the rent through his bank account because they could not get bank accounts due to their bad credit ratings."

[32]The records of the agents show the rent being paid, as I have indicated, by BACS and not in cash, and also the records of payment are noted under the appellant's name until the change of tenant in 2001. Evidence of conversations between the Council and agents which were before the Tribunal show that the agents thought he, the appellant, continued as tenant.

[33]In November 1998, in his dealings with the Council, Mr Cox said that the appellant was his landlord. Perhaps most importantly the appellant himself repeatedly represented that he had an interest in the property. He made numerous applications for taxi licences long after the expiry of the six-month lease, in which he represented the house as his home address. It was of course precisely this sort of document on which the Council had relied in support of its main case that he continued to be resident there. They were official documents with statements of truth attached to them and warnings of prosecution if the information they contained were false. But in considering the question whether the appellant continued as a tenant, they would of course be highly material because they suggest unequivocally that he had some interest in the property even if he was not telling the truth when he said he lived there. Similarly, the appellant used the house as his home address for the purposes of registering vehicles.

[34]I should add that even if it were true that his sub-tenants paid the rent in cash to the agents for some or all of the time, that would not lead to the conclusion that he was no longer the tenant and they, without more, had become the tenants or licensees of the landlord. In my judgment, it was inevitable that the Tribunal, if directed clearly to this issue, would have concluded that the appellant continued as a tenant of the whole house during the material period. So although the appellant has, through the ingenuity of Mr Croally, demonstrated an error of law in the conclusions of the Tribunal, in my judgment it was not a material error. They would have been bound to come to the same practical conclusion for different reasons.

[35]In those circumstances, this appeal must be dismissed.

[36]MR BHOSE: My Lord, I am grateful. My Lord, during the course of my Lord's judgment, when my Lord said that once the tenancy came to an end, a periodic tenancy arose at common law when the statutory tenancy ended, I think my Lord meant when the fixed term tenancy ended.

MR JUSTICE BURNETT: I did, yes, because of the point Mr Croally made.

[38]MR BHOSE: My Lord, the only matter is that of costs. My Lord, I do not believe you have our cost schedule.

[39]MR JUSTICE BURNETT: I do not. I would be grateful for it.

[40]MR BHOSE: I think my friend does have it.

[41]MR CROALLY: I have, yes.

MR JUSTICE BURNETT: Everyone is in-house, are they?

[43]MR BHOSE: My Lord, they are, that is right. That is why one sees the very moderate hourly rate, and the total cost bill is £5,620.54. I do not know what my friend's position is. Maybe I will leave him to make his submissions and come back.

[44]MR CROALLY: I cannot object either to the principle or the amount, I do not think. I certainly have not got any instructions to oppose any particular detail of the amount.

[45]Can I mention two things?

MR JUSTICE BURNETT: Yes, of course.

[47]MR CROALLY: I hope that your Lordship would understand if I say, just to put on the record, that the earlier skeleton argument which your Lordship referred to in your judgment which asserted that there was a statutory periodic tenancy was not produced by me.

[48]MR JUSTICE BURNETT: Mr Croally, you are right. Had I not been giving an extempore judgment, I would have recorded that and I will try and pop it into the revised judgment.

[49]MR CROALLY: I am very, very grateful for that, and I think the only other point is I would ask for permission to appeal. I say that the points I made were goods ones. There was an error of law, and there should have been a remission to deal with the facts.

[50]MR JUSTICE BURNETT: Mr Croally, I am afraid you are going to have to ask for your permission elsewhere. So permission refused, and there will be an order that the appellant pay the respondent's costs, assessed in the sum of £5,620.24. I am grateful to both of you and, if I may say so, I am very grateful for the skeletons which enabled the oral argument to be taken much more quickly than would otherwise have been the case.