Gaskin, R (on the application of) v Richmond Upon Thames London Borough Council & Anor [2017] EWHC 3234 (Admin)

Case No CO/2448/2016[2017] EWHC 3234 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
DIVISIONAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 11/12/2017
Before
LORD JUSTICE BEANMRS JUSTICE CARR
Between
THE QUEEN (on the application of PETER GASKIN)ClaimantRICHMOND UPON THAMES LONDON BOROUGH COUNCILFirst DefendantLAVENDER HILL & WIMBLEDON MAGISTRATES’ COURTSecond Defendant
Mr Jonathan Manning and Mr Alexander Campbell (instructed by Public Access) for ClaimantMr Simon Butler (instructed by London Borough of Richmond) for First Defendant for The Second Defendant did not appear and was not representedHearing Hearing date: 29 th November 2017
JudgmentLord Justice Bean :This is the judgment of the court to which we have both contributed.
[1]This is a claim for judicial review brought by the Claimant, Mr Peter Gaskin, against Richmond-upon-Thames London Borough Council (“the Council”) and Lavender Hill & Wimbledon Magistrates’ Court. The Claimant seeks to challenge the Council’s failure to issue him with a renewed licence for a house in multiple occupation (“HMO”) under Part 2 of the Housing Act 2004 in respect of property at 157 Mortlake Road, Kew Gardens, TW9 4AW (“the Property”), and the Council’s subsequent decision to prosecute him in the magistrates’ court under s. 72 of the 2004 Act and s. 16 of the Local Government (Miscellaneous Provisions) Act 1976 for failure to pay the required fee and to provide the names of all the occupiers of the property.

The facts

[2]The Claimant is the freehold owner of the Property, a HMO within the meaning of Part 2 of the 2004 Act. While at least some of the Claimant’s family lives there, there are 7 units of accommodation at the Property which the Claimant rents out.[3]After the mandatory licensing provisions in Part 2 of the 2004 Act came into force, the Claimant applied for and, on 9th December 2009, was granted a 5 year HMO licence by the Council (“the Licence”). On 14th June 2013 he applied for a variation to the Licence so as to increase the permitted number of occupiers from 7 to 12, which was also granted (on 5th December 2013). The Claimant was not asked to provide occupancy details for this purpose.[4]The Licence expired on 2nd December 2014. On the preceding day the Claimant applied for renewal. Part 3.1 of the standard renewal application form (“Part 3.1”) was entitled “Tenant Information” and read as follows:
“Please write the rooms making up each separate letting and list the occupiers in each of those rooms. The names of all the members of the household including children should be given. Indicate vacant rooms.”
The box for completion included a column headed “Tenancy start and end date”.[5]The Claimant declined to provide this information, writing the words “Not relevant” across the box. He says that he did so on the basis that he did not believe that the Council was entitled to require such information on a renewal application. There was no change to the licence requirements. He completed the remainder of the application form, including a declaration that to the best of his knowledge none of the information described in paragraphs 2 (c) to (g) “of that Act” and previously submitted to the Council had materially changed since the grant of the Licence. (The paragraphs mentioned were in fact to be found in Schedule 2 to the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (England) Regulations 2006, as amended, but nothing turns on that inaccuracy in the form.)[6]Part 16 of the application form included a schedule of fees, showing a basic fee payable on submission of £257 per lettable unit. The schedule identified additional costs payable in certain circumstances, such as submission of an incomplete application. The fees had been set by the Council’s Cabinet and Member Committee following a report from the Cabinet member for Adult Services, Health and Housing dated 29th January 2014. No distinction was made between fees payable on renewal and those payable on an original application. Mr Simon Butler, appearing for the Council, told us on instructions that neither the report nor any record of the decision-making process can now be found.[7]The Claimant declined to pay the fee of £1,799 for 7 units on the basis that he considered it to be unlawfully high. He says that he had in mind other boroughs charging “far less” for licence renewals. He transferred £850 to the Council’s account (on 1st December 2014) but the Council later returned those monies.[8]On 11th December 2014 Nicholas Hancock, a Senior Environmental Health Officer of the Council, wrote to the Claimant identifying that his application was incomplete in two respects: first in that question 3.1 had not been answered, and secondly that £949 was outstanding. The fee, he wrote, was non-negotiable. Mr Hancock requested that these matters be remedied within 14 days. He stated that until the outstanding matters were attended to, the Claimant would not be issued with a licence.[9]On 13th January 2015 Mr Hancock wrote again to the Claimant indicating that he had received neither the outstanding information nor the correct fee. Therefore he was unable to process the Claimant’s application or to carry out an inspection. He recommended that the Claimant reconsider his position. He reminded Mr Gaskin of his legal obligation to comply with Part 2 of the 2004 Act. By this stage the Claimant had made a request for information under the Freedom of Information (“FOI”) Act 2000 relating to the Council’s HMO licensing accounts. Mr Hancock stated that he had passed the request to appropriate colleagues. It was subsequently answered by the Council.[10]On 3rd March 2015 the Council (again through Mr Hancock) served a notice under s 16 of the 1976 Act (“the s 16 notice”)requiring the Claimant to state in writing within 14 days the nature of his interest in the Property and also “to state in writing the name and address of any other person known to you who has an interest in the land or premises, as freeholder, mortgagee, lessee or otherwise, or who receives rent for the land.” It went on to say that the purpose for which the information was required was set out overleaf. Overleaf the notice stated:
“The information is required by the Council with a view to performing their function of Enforcement Authority and service of enforcement notice under powers conferred on them by the Housing Act (Part 2) Licensing of Houses in Multiple Occupation”
[11]The Claimant did not comply with the s 16 notice. Accordingly on 19th June 2015 the Council commenced a prosecution against him for failing to have a licence contrary to s 72 of the 2004 Act and failure to comply with the s 16 notice. In relation to the s 16 offence the Schedule of Alleged Offences stated:
“….The [s.16] Notice was served with a view to the Council performing their statutory functions under Part 2 Housing Act 2004…and it required you, as a person having an interest in the property, to furnish to the Council the nature of your interest in the property and the names and address of each person who you believed to have an interest.”
[12]On 7th July 2015 the Claimant entered “not guilty” pleas in the Magistrates’ Court to each offence. The matter was fixed for trial on 17th May 2016.[13]On 3rd December 2015 the Council, at the conclusion of the complaints procedure which the Claimant had instigated, gave the following explanation to the Claimant:
“The Council charges the same for renewal and first time licensing because in our opinion the same amount of work is required for both. The original licence lasts for five years, so a rigorous check is required. The Council believes it is very thorough when carrying out this task. The fees are based on estimates of staff time used and assessments show that the average resource required is the same for renewals as for initial applications.”

Procedural history

[14]The Claimant issued this claim for judicial review on 12th May 2016. Urgent interim relief was obtained on the same day staying the criminal proceedings. On 13th June 2016 William Davis J refused permission to apply on the papers on the grounds both of delay and of lack of substantive merit. He certified the claim to be totally without merit. On delay he wrote:
“The notion that the First Defendant’s decisions not to issue the Claimant with a renewed HMO licence and subsequently to prosecute the Claimant in the magistrate’s court were continuing decisions is wholly unarguable. The decisions were taken almost a year prior to the issue of these proceedings. There is no conceivable basis on which to extend time, not least because it is apparent from the chronology provided by the Second Defendant that the Claimant was on notice about the prospect of judicial review from July 2015. These proceedings were commenced only after several hearings in the magistrates’ court involving case management of the summary trial without any reference to an application for judicial review.”
[15]However, on 7th December 2016 Gross LJ granted permission to apply and any necessary extension of time on the following basis:
“These issues are best resolved on their merits, rather than taking more time arguing whether the Applicant is out of time or whether [the Council’s] decisions are continuing decisions. Accordingly, if it is necessary to do so, I extend time for the claim to be brought.”
There is no right of appeal against such a decision to extend time for bringing a judicial review claim (see R v Criminal Injuries Compensation Board ex parte A [1999] 2 AC 330), although the Court can still consider the question of undue delay in deciding whether to grant substantive relief (s 31(6)(b) of the Senior Courts Act 1981).[16]The Claimant served an Amended Statement of Facts and Grounds dated 14th February 2017 (to which the Council raised no objection). The effect of the amendments was to introduce arguments based on EU law by reference in particular to the decision of the CJEU, given on 16 November 2016, in R (Hemming (trading as Simply Pleasure Ltd) and others) v Westminster City Council (Case C-316/5 ) [2017] 3 WLR 317 (“Hemming”).[17]The Claimant has also served two witness statements: i) from Mr Dave Offord, operations manager of the National Landlords Association, of which the Claimant is a member, dated 16th June 2016. Mr Offord states (although no dates are given) that as head of private housing at the Borough of Hammersmith and Fulham he was seconded to the Department of Communities and Local Government to oversee the introduction of parts of the 2004 Act, including national mandatory HMO licensing. He commissioned the production of a Financial Toolkit aimed at providing a standard framework to assist local authorities assessing the likely cost of licensing. He then gives opinion evidence on his interpretation of the evidence relating to the Council’s explanation of its costs, his experience of the cost of licence renewal applications and his views as to the need for information as to current tenants of HMO property; ii) from the Claimant himself dated 2nd November 2017. In challenging the Council’s justification of the fixed fees charged by reference to an average of 50 hours over a five year period to administer a HMO licence, he details the limited contact he has had over the years with the Council since the initial grant of the Licence.[18]The Council has served Detailed Grounds for Resistance but no evidence in defence of the claim, even after the grant of permission by Gross LJ in December 2016. This is an omission on which the Claimant lays great weight, as set out further below. Relevant legislation Part 2 of the 2004 Act

Relevant legislation

[19]A HMO is a property comprising of 3 storeys or more, being occupied by 5 or more persons and by persons living in 2 or more single households (see Article 3(1) and (2) of the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) Order 2006 SI 2006/371). By s. 61 of the 2004 Act every HMO (save for presently immaterial exceptions) must be licensed.[20]Section 63 is central to the claim and provides:
“(1) An application must be made to the local housing authority. (2) The application must be made in accordance with such requirements as the authority may specify. (3) The authority may, in particular, require the application to be accompanied by a fee fixed by the authority. (4) The power of the authority to specify requirements under this section is subject to any regulations made under subsection (5). (5) The appropriate national authority may by regulations make provision about the making of applications under this section. (6) Such regulations may, in particular - (a) specify the manner and form in which applications are to be made; (b) require the applicant to give copies of the application, or information about it, to particular persons; (c) specify the information which is to be supplied in connection with applications; (d) specify the maximum fees which are to be charged (whether by specifying amounts or methods for calculating amounts); (e) specify cases in which no fees are to be charged or fees are to be refunded. (7) When fixing fees under this section, the local housing authority may (subject to any regulations made under subsection (5)) take into account— (a) all costs incurred by the authority in carrying out their functions under this Part, and (b) all costs incurred by them in carrying out their functions under Chapter 1 of Part 4 in relation to HMOs (so far as they are not recoverable under or by virtue of any provision of that Chapter).” (a) specify the manner and form in which applications are to be made; (b) require the applicant to give copies of the application, or information about it, to particular persons; (c) specify the information which is to be supplied in connection with applications; (d) specify the maximum fees which are to be charged (whether by specifying amounts or methods for calculating amounts); (e) specify cases in which no fees are to be charged or fees are to be refunded. (a) all costs incurred by the authority in carrying out their functions under this Part, and (b) all costs incurred by them in carrying out their functions under Chapter 1 of Part 4 in relation to HMOs (so far as they are not recoverable under or by virtue of any provision of that Chapter).”
[21]Regulation 7 of the 2006 Regulations was made pursuant to s 63(5) above. It specified that an application, whether for an initial or renewal application, had to include information as to the number of occupiers.[22]Regulation 7 was amended by the Licensing and Management of Houses in Multiple Occupation and Other Houses (Miscellaneous Provisions) (Amendment) (England) Regulations 2012 SI 2012/2111 with effect from 10th September 2012. Importantly for present purposes, it limited the information to be provided on a renewal application to details of the applicant, the proposed licence holder, the person managing or having control of the HMO or house, and any person who had agreed to be bound by a condition in the licence, and details of the property in question. There was no requirement for information as to the number of occupiers or the names of individual occupiers.[23]The 2012 Regulations were accompanied by an explanatory memorandum and an impact assessment carried out by the Department for Communities and Local Government which considered various options. The explanatory memorandum stated:
“2.2 The 2006 Regulations specify the information required in a [HMO] licence application form. These Regulations reduce the information requirements for applicants for the renewal of licences for HMOs requiring a licence under Part of the [2004 Act]. … 4.4 These Regulations amend the 2006 Regulations so that where an application under Part 2…is a renewal application…the information required by paragraph 2(c) to (g) of Schedule 2 to those Regulations is not required. Instead, the applicant will be required to declare that the information had not materially changed since the existing licence was granted or to set out any material changes as part of the declaration. [emphasis added] … 7.1 …Whilst the Government is satisfied that the overall legislative framework for tackling problems in HMOs achieves the right balance between the rights and obligations of private landlords and tenants, they wish to simplify the application form for HMO licence renewals as part of the commitment to reduce red-tape and unnecessary form filing….. 7.2 ….These Regulations therefore simplify the HMO licence renewal application form for those properties where there has been no material change since the initial licence was granted, as the information will already be held by the local authority. … 9.1 We not propose to publish guidance for these Regulations. Local authorities have the discretion to make the necessary changes to their HMO licensing renewal application forms.”
[24]The impact assessment suggested that, by limiting the amount of information to be required from applicants, the 2012 Regulations would simplify and speed up renewal applications as well as reduce associated costs. The assessment recognised that local authorities have the discretion to set the licence fee, resulting in differentiation in fees across the country, with the number and types of HMOs varying from area to area. The suggestion was of a 25% reduction in cost. The assessment was based on an average HMO licence fee of £500. The assessment suggested that following the 2012 Regulations all local authorities would be required to introduce a simplified form for HMO licence renewals.

The 1976 Act

[25]Section 16 of the 1976 Act provides:
“(1) Where, with a view to performing a function conferred on a local authority by any enactment, the authority considers that it ought to have information connected with any land, the authority may serve on one or more of the following persons, namely— (a) the occupier of the land; and (b) any person who has an interest in the land either as freeholder, mortgagee or lessee or who directly or indirectly receives rent for the land; and (c) any person who, in pursuance of an agreement between himself and a person interested in the land, is authorised to manage the land or to arrange for the letting of it, a notice specifying the land and the function and the enactment which confers the function and requiring the recipient of the notice to furnish to the authority, within a period specified in the notice (which shall not be less than fourteen days beginning with the day on which the notice is served), the nature of his interest in the land and the name and address of each person whom the recipient of the notice believes is the occupier of the land and of each person whom he believes is, as respects the land, such a person as is mentioned in the provisions of paragraphs (b) and (c) of this subsection. (2) A person who— (a) fails to comply with the requirements of a notice served on him in pursuance of the preceding subsection; or (b) in furnishing any information in compliance with such a notice makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular, shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.” (a) the occupier of the land; and (b) any person who has an interest in the land either as freeholder, mortgagee or lessee or who directly or indirectly receives rent for the land; and (c) any person who, in pursuance of an agreement between himself and a person interested in the land, is authorised to manage the land or to arrange for the letting of it, a notice specifying the land and the function and the enactment which confers the function and requiring the recipient of the notice to furnish to the authority, within a period specified in the notice (which shall not be less than fourteen days beginning with the day on which the notice is served), the nature of his interest in the land and the name and address of each person whom the recipient of the notice believes is the occupier of the land and of each person whom he believes is, as respects the land, such a person as is mentioned in the provisions of paragraphs (b) and (c) of this subsection. (a) fails to comply with the requirements of a notice served on him in pursuance of the preceding subsection; or (b) in furnishing any information in compliance with such a notice makes a statement which he knows to be false in a material particular or recklessly makes a statement which is false in a material particular, shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.”

Grounds of challenge

[26]The Claimant originally raised four grounds of challenge: i) The Council’s failure to process the application was unlawful; the Council misdirected itself in law in requiring a fee of £257 per unit; ii) The Council’s failure to process the application without the provision of information in Part 3 was unlawful; the Council misdirected itself in law in requiring information concerning the names of the occupiers; iii) The s 16 notice was unlawful; iv) The decision to prosecute was unlawful.[27]We raised at the outset of the hearing our concern as to whether Gross LJ had had jurisdiction (as a judge of the Court of Appeal, Civil Division) to consider an application for permission to appeal based on the fourth ground of challenge, since such an appeal would at least arguably have been from the judgment of the High Court in a “criminal cause or matter” (s 18(1) of the Senior Courts Act 1981, and now see Belhaj v DPP [2017] EWHC 3056 (Admin)). Mr Jonathan Manning for the Claimant did not pursue this ground before us: it is difficult to see what it would have added to the case in any event. Thus only the first three grounds fall for our consideration.[28]Although it is for the Claimant to make out his entitlement to judicial review, public authorities whose decisions are challenged by way of judicial review are expected to “explain fully what they have done and why they have done it” (per Sir John Donaldson MR in R v Lancashire CC ex p Huddleston [1986] 2 All ER 941 at 945f). It would have been far preferable for the Council to have put in evidence, not necessarily at any great length, in response to the statements of Mr Offord and Mr Gaskin. But they were not compelled to do so; and we have before us their Detailed Grounds of Defence and the answers to the Claimant’s FOI request on which Mr Butler is entitled to rely.

Requirement for fee of £257 per unit

[29]In his witness statement Mr Offord writes:- “I am astonished that a licensing re-application complying with the SI should take as long as 50.0 hours to process, particularly as the premises had been recently inspected and unconditionally licensed.”[30]It is not suggested by the Council, nor by anyone else, that the processing of one application takes 50 hours. The figure of 50 hours, explained in greater detail in the Council’s answer to the FOI request, is the average total number of staff hours per HMO licence required over the 5 year period for which each licence runs, comprising 19.1 hours of an assistant’s time, 26 hours of an Environmental Health Officer’s time, 3½ hours of a manager’s time and 2 hours of a systems administrator’s. At the relevant rates of pay the cost of these amounts to £1125.66. A further £200.40 per licence is incurred on non-staffing costs. The resultant total for the year 2015/16 was £1326.06.[31]The Claimant has exhibited the impact assessment which accompanied the draft 2012 Regulations. This estimated that a licence for a typical HMO might be expected to cost £500 per property for a first application and £375 per property for a renewal. We do not consider that this takes the Claimant any further: such estimates or predictions are not necessarily accurate. If the Claimant, or the National Landlords’ Association of which Mr Offord is Operations Manager, had been able to adduce a table of HMO licence fees charged by a large number of comparable local housing authorities demonstrating that Richmond was an outlier, that might have thrown an evidential burden on the Defendant to explain why £257 per unit was proportionate. But we are well short of that in the present case. Indeed we note that Mr Offord does not say in terms that Richmond is an outlier nor that £257 per unit is disproportionate.[32]Mr Offord also writes that “overall I would expect that renewal applications should cost substantially less than new applications”. The Defendant disputes this, submitting that a scheme under which licences run for 5 years means that the costs of enforcing and maintaining a safe inspection and licensing regime do not greatly vary as between original applications and renewals. In any event, even if Mr Offord were right, section 63(7) expressly permits the Council in fixing fees under section 63 to take into account all costs incurred in carrying out their functions under the relevant Part of the 2004 Act. It cannot make a profit from the fees, in the sense of levying more from HMO licence applicants than is required to cover the overall cost of these functions. But it is not unlawful to charge the same for a renewal as for a first application.[33]The Claimant and Mr Offord also rely on the fact that the Defendant held reserves in its accounts relating to the HMO licensing scheme of between £63,000 and £75,000 for the three years of account ending in 2016. That too does not assist the Claimant’s case. Mr Butler is right to submit that “the Defendant has to retain funds in the account to meet the budget and overheads of administering and enforcing HMO licensing. If the Defendant does not have sufficient reserves in the account then it cannot comply with its statutory obligations …”[34]The attack on the proportionality of the fee of £257 per unit as a matter of domestic public law therefore fails. It follows that (subject to the EU law issue considered below) Mr Gaskin was not entitled to refuse to make payment in full when applying for the renewal of his licence.

Requirement of provision of information on the renewal application form

[35]We have noted that Part 3.1 of the renewal application form requested the applicant to list the occupiers in each of the rooms making up each separate letting and that the Claimant declined to give this information, on the basis that the Council was not entitled to require the information on a renewal application. He did, however, complete a declaration stating that there had been no material change since the original licence had been granted in the information set out in a number of respects which included the number of people occupying the Property.[36]We have set out s 63 of the Housing Act 2004 above. Subsections (3) and (7) deal with fees. Subsections (4)–(6) deal with the power to specify requirements more generally. Section 63(4) states that “the power of the authority to specify requirements under this section is subject to any regulations made under subsection (5)”. Section 63(6)(c) provides that such regulations (that is to say those made by the Secretary of State) may “specify the information which is to be supplied in connection with applications”. The use of the definite article is highly significant: the words “specify the information which is to be supplied” mean that it is only those items of information listed in the Regulations whose provision can be made mandatory by the local housing authority. The list, in other words, is a maximum, not a minimum. If s 63(6)(c) had merely stated that the regulations may “specify information which is to be supplied” it would have been a minimum, and the Council would have had a discretion to require more. We reject the submission of Mr Butler that s 63(6) is merely an aid to the construction of s 63(2).[37]Following the amendment made in 2012 the Regulations (as the explanatory memorandum emphasises) no longer require occupants to be named on a renewal application, and accordingly the Council’s insistence on the provision of information in box 3.1 before renewal was unlawful. There would be nothing wrong, however, with an application form inviting the landlord to give names on a renewal application so long as it is made clear that this is voluntary. We should also emphasise that there is nothing unlawful in our view in requiring the applicant landlord to sign a declaration, as Mr Gaskin did in the present case, as to whether there has been any material change in the information submitted to the housing authority since the previous grant of a licence.

Section 16 notice

[38]As noted above, after the Claimant refused to complete section 3.1 of the renewal application form or to pay the full fee of £1,799 the Council served a notice under section 16 of the 1976 Act requiring him to state the nature of his interest in the Property and the names and addresses of any other person who had an interest in the premises as lessee or otherwise. Mr Manning submits that this was an unlawful attempt to circumvent the restrictions imposed by the 2012 Regulations on the information to be supplied with the renewal application.[39]We do not agree. By the time the s 16 notice was served the Claimant had failed to pay the proper fee and was accordingly liable to prosecution. The purpose identified on the face of the notice was to enable the Council to carry out its enforcement functions under the 2004 Act. The power to seek information under section 16 is a broad one. A notice of this kind can be served whenever the local housing authority considers that it ought to have information about the number of occupiers at the premises. It is certainly not a request which can be made only at the time of a first application for an HMO, nor only once every 5 years thereafter or when there is a change in ownership of the freehold. The HMO licensing regime established by Parliament in the 2004 Act clearly requires local housing authorities to have proper powers of inspection and enforcement, and a s 16 notice is an appropriate means of obtaining information with a view to enforcement.

Relief and delay

[40]S. 31(6) of the Senior Courts Act 1981 provides:
“Where the High Court considers that there has been undue delay in making an application for judicial review, the court may refuse to grant……. b) any relief sought on the application, if it considers that the granting of the relief sought would be likely to cause substantial hardship or, or substantially prejudice the rights of, any person or would be detrimental to good administration.”
[41]We are satisfied that there was undue delay in making this application (and on granting permission Gross LJ did not conclude otherwise). The Council’s decision not to renew the Claimant’s licence was made and notified to the Claimant by letter dated 13th January 2015. The s. 16 notice was dated 3rd March 2015. The prosecution summons was dated 19th June 2015 and the Claimant’s first appearance in the Magistrates’ Court was on 7th July 2015. This claim was not issued until 12th May 2016, a matter of days before the Claimant’s criminal trial was due to start.[42]However, Mr Butler only pressed the issue of detriment through delay on the fixed fee issue, and since he has succeeded on that point the delay becomes irrelevant. He did not suggest that, in the event of a finding in the Claimant’s favour in relation to the provision of information on the form, declaratory relief should be denied on the ground of delay.

The EU law challenge

[43]By his amended grounds, the Claimant raised challenges to the lawfulness of the Council’s actions by reference to EU Directive 2006/123/EC (“the Services Directive”) transposed into domestic law by the Provision of Services Regulations 2009 SI 2009/2999 (“the Services Regulations”).[44]The Claimant contended that the Council was a competent authority running an authorisation scheme within the meaning of the Services Regulations. The provision of rental accommodation for a profit by an individual fell within the definition of “services”. The requirement at Part 3.1 to provide the information specified violated Regulations 15 and 18 of the Services Regulations, given the terms of the 2012 Regulations, the lack of any proper reason for requiring the information and the absence of any material on which the Court could conclude that the request was justified and proportionate to any public interest objective. The requirement was clearly dissuasive and unduly complicated and delayed the provision of the service by the Claimant. He also argued that the fee fixed by the Council was unlawful in that it contravened Regulation 18(4) of the Services Regulations, in particular by reference to Hemming. (In Hemming the CJEU held that charges for authorisation under a scheme regulating entry into the sex establishment market could not lawfully nor consistently with Article 13(2) of the Directive require payment on submitting an application of a fee which covered more than the costs of processing the application itself. An additional second stage fee to successful applicants relating to the costs of administering the scheme as a whole was legitimate. But a scheme which charged full costs up front, even if unsuccessful applicants were partially reimbursed, fell foul of Article 13(2) of the Directive.)[45]The Council took issue with the proposition that the Services Directive applies to the present facts at all and disputes the Claimant’s interpretation of the Services Directive, even were it to be held to apply.[46]No case law other than Hemming was cited to us on the proper interpretation of the Services Directive and Regulations. In short, the Claimant asserted that the provision of rental accommodation by an individual for profit falls within the definition of “service”. The Defendant, by contrast, asserted that the Services Regulations clearly establish that such an activity is not within the scope of the Directive and Regulations. These rival assertions did not take us much further as to whether the present case does indeed fall within this area of EU law.[47]If the Claimant’s argument based on Hemming is correct, it potentially involves saying that any fee for authorisation of a service, even one based on the express authority of a primary statute such as s 63(7) of the Housing Act 2004, is unlawful unless divided into two phases:(a) an initial fee to cover the cost of processing the application and(b) a further fee payable only on the grant of a licence; and that the costs of enforcement can only be met from the second stage fees. (Whether there could be any exception in areas where the success rate of applications for licences is very high would be a matter for argument). If so, section 63(7) could only be lawful if read with qualifying words at the end on the following lines:- “… but in fixing fees for the processing of an application (as opposed to the grant of a licence to successful applicants) the authority may not take into account costs incurred by them in carrying out any function other than the processing of the application.”[48]Rule 19.4A of the Civil Procedure Rules has since 2000 provided that a party who seeks a declaration of incompatibility under section 4 of the Human Rights Act 1998 must give notice to the Crown, so that a minister or Law Officer may seek to be joined as a party to the litigation. Although there is no corresponding provision in respect of EU law, we indicated that if the Hemming point is to be argued in this case we would require notice to be given to the Crown, so that the court can be addressed on what might be the very wide ramifications of a decision on this issue.[49]In those circumstances, the hearing proceeded on the basis of domestic law alone, with further submissions on EU law to be made if the Claimant so wishes in the light of our decision on the domestic law issues.

Conclusion

[50]For these reasons, we allow the Claimant’s challenge to the Council’s decision to refuse to grant him a renewed licence on the basis of his failure to answer Part 3.1 and will grant declaratory relief accordingly. However, we dismiss his challenge to the Council’s decision to refuse to renew his HMO licence on the basis of his failure to pay the fee of £1,799. We also dismiss his challenge to the lawfulness of the s 16 notice.[51]We direct that the Claimant is to inform the Court and the Defendant’s solicitor in writing by 11 January 2018 whether he wishes to pursue the EU law issue; and, if so, is to give notice within 14 days thereafter to the Treasury Solicitor of the terms of this judgment. We also invite the parties to agree all other consequential matters, including costs to date so far as possible. CLAIM NO: CO/2448/2016 IN THE HIGH COURT OF JUSTICE QUEEN’S BENCH DIVISION ADMINISTRATIVE COURT BEFORE: THE RIGHT HONOURABLE LORD JUSTICE BEAN AND THE HONOURABLE MRS JUSTICE CARR BETWEEN: THE QUEEN on the application of PETER GASKIN Claimant -and- RICHMOND UPON THAMES LONDON BOROUGH COUNCIL First Defendant LAVENDER HILL AND WIMBLEDON MAGISTRATES’ COURT Second Defendant ________________ ORDER ________________ UPON hearing counsel for the Claimant and the First Defendant and UPON the Claimant discontinuing ground 4 of the claim IT IS ORDERED THAT:

CLAIM NO: CO/2448/2016

[1]Judgment shall be given for the Claimant on ground 2 of the claim.[2]Ground 1, on domestic law, and ground 3 shall be dismissed.[3]It is declared as follows:
“The First Defendant was not entitled, as a condition of granting the Claimant a renewed HMO licence, to require the Claimant to provide the information relating to the occupiers of his HMO sought at section 3.1 of its renewal application form; the First Defendant’s refusal to process the Claimant’s application for a renewed HMO licence for failure to supply such information was thereby unlawful.”
[4]Time for applying for permission to appeal from the decision of the Court is extended for all parties to 4pm on 11 January 2018. In the event that the Claimant notifies the Court and the Secretary of State by 4pm on 11 January 2018 that he intends to proceed with his claim insofar as it relates to the alleged unlawfulness of the fee demanded by the First Defendant by virtue of EU law, the Provision of Services Regulations 2009 and the decision of the Court of Justice of the European Union in R. (on the application of Hemming (t/a Simply Pleasure Ltd)) v Westminster City Council (C-316/15) [2017] 3 W.L.R. 317 (the “Hemming issue”), then the time for applying for permission to appeal will be further extended for all parties until 21 days after final disposal by this Court of that aspect of the claim.[5]If the Claimant decides to proceed with the Hemming issue, then the costs shall be determined at the conclusion of the claim. If the Claimant discontinues that part of his claim, then costs shall be decided by the Court on the basis of written submissions by the parties in accordance with the following timetable:(i) The Claimant shall file and serve written submissions on costs, by 4pm on 18 January 2018;(ii) The First Defendant shall file and serve written submissions on costs by 4pm on 25 January 2018;(iii) The Claimant may, if so advised, file and serve written submission in reply by 4pm on 1 February 2018;(iv) At each individual stage described above, the written submissions shall be limited to two sides of A4 paper in a minimum of size 12 font.

Cited in 1 later judgment