14, Strawberry Hill, Salford M6 6AH 35, Riverbank Tower, Bridgewater Street, Salford M3 7JY 11, Peterhead Walk, Salford M5 4HY MAN/00BR/HNA/2022/0106
REASONS
[28]The Tribunal notes that the Applicant has not raised any issues regarding the procedural requirements in respect of the Notices and/or the FPNs, but it is satisfied that the Respondent has complied with the procedural requirements as required under Schedule 13A to the 2004 Act.[29]The Tribunal further notes that there is no statutory requirement upon the Respondent to provide evidence to a person which it may use in defence of an appeal against a FPN by that person at the time of the issue of a Notice of Intent and/or Final Notice. Issues for determination by the Tribunal[30]In reaching its determinations set out in paragraphs 42 and 43, it was necessary for the Tribunal to consider the following matters:30.1 is each of the Properties properly classified as an HMO?30.2 is the Applicant to be regarded as “a person managing” the relevant premises?30.3 does the Applicant have a reasonable excuse defence in respect of any of the offences? Weight to be attached by the Tribunal to the Applicant’s evidence[31]In considering the matters listed in paragraph 30 above, the Tribunal had first to consider what, if any, weight it was to place on the Applicant’s evidence submitted in support of his application dated 31 January 2025. 31.1 In this respect, the Tribunal notes as follows:(1) the possibility of the Applicant and his witnesses giving evidence remotely from a jurisdiction outside of the UK was first discussed at the Case Management Conference held on 30 September 2024;(2) the Applicant states in his application that this had proved impossible as neither the Applicant nor the witnesses were ordinarily resident in or citizens of Poland. The Applicant states that the Applicant and Mr Martin Drmola both live in Prague whilst Michal Kravec Senior and Junior both live in Slovakia;(3) the Tribunal is aware that the Applicant is a lawyer with some stated expertise in English law and fluency in English. The Tribunal therefore considers that it is reasonable to assume that the Applicant was able to independently research how to make such an application to the Tribunal. Further the Tribunal is aware that the Applicant was provided with a copy of the Guidance Note for Parties: Giving Evidence from Abroad.(4) Having regard to the Guidance, it appears that there would have been no bar to the Applicant and Mr Drmola giving evidence from Czechia and Michal Kravec Senior and Junior giving evidence from Slovakia.(5) Notwithstanding the Applicant’s stated concern that the unavailability of himself and his witnesses at the hearing “may prevent the Appellant from fairly presenting his appeals”, there is no evidence that the Applicant made any attempt to make such application for himself and/or Mr Drmola from Czechia and/or Michal Kravec Senior and Junior from Slovakia.(6) The Tribunal is therefore drawn to the conclusion that, rather than the Applicant being in any way “prevented….from fairly presenting his appeals”, he has chosen to make himself and his witnesses unavailable at the hearing, and thus unavailable for cross-examination by the Respondent and questioning by the Tribunal.(7) In view of that conclusion, the Tribunal determines that little weight should be attached to the Applicant’s evidence or to the evidence of the Applicant’s witnesses set out in their respective witness statements each dated 24 January 2025 to the extent that such evidence is not supported by 3rd party independent evidence or where the nature/content of agreements and/or the timing of their production raise questions which have not been answered.[32]The Tribunal is satisfied that the main purpose of the lease and tenancy agreements between the Applicant and Michal Kravec in respect of Strawberry Hill and Riverbank Tower was to try to create a distance between the Applicant and his involvement in the management of those Properties at the date of the offences. The timing of the production of these agreements suggests that these were produced retrospectively at a time when the Applicant was aware of the possibility of enforcement action by the Respondent. No evidence has been produced to explain why new backdated tenancy agreements were produced in the name of Michal Kravec or why the requests to occupants to change the bank payee details were made some 3 months after the date of the assignment of the leasehold interest to Michal Kravec. Further, no evidence has been produced to explain why the Applicant continued to receive the rents for these Properties after the date of that disposition. As such, the Tribunal is satisfied that the lease agreements are a sham and did not dispose of a leasehold interest in these Properties in favour of Michal Kravec and that they and the tenancy agreements created by Michal Kravec are to be disregarded.[33]Further, in respect of all of the Properties, the Tribunal accepts that there is evidence of the continuing involvement of the Applicant with various occupants after the date of the alleged disposition of his interest in the respective Property. A notable example of this is the Applicant’s WhatsApp conversations with Mr Dwyer up to January 2023 concerning issues at Strawberry Hill. In this respect, the Tribunal is not persuaded that access given by the Applicant to other members of his family to use his mobile phone is evidence of him having ceased his involvement with the management of the Property and that messages to/from “Maros” are properly to be considered as having been sent to/by the Applicant. Is each of the Properties an HMO within s254 of the 2004 Act?[34]Strawberry Hill: 34.1 The Tribunal is satisfied that, as at the offence date of 17 May 2022, 4 unrelated people were occupying the Property, namely, Messrs Kondraciuk, Dwyer, Oyeniran and Shaik. In reaching this determination, the Tribunal had regard to the following:(1) the presence of Messsrs Kondraciuk and Dwyer at the Property during the inspection on 17 May 2022, and the references by each of them in their statements to 2 other occupants, named as “Tommy” and “Habib”, who the Tribunal is satisfied are references to Messrs Oyeniran and Shaik;(2) the Applicant’s bank statements showing payments on various dates during the period from 5 January 2022 to 6 May 2022 from each of Messrs Kondraciuk, Dwyer, Oyeniran and Shaik;(3) the bank statements of Michal Kravec showing payments from each of the above after the date of the last payment in each case to the Applicant; and,(4) the making of an application dated 24 March 2022 for a TEN in respect of the Property which suggests that, as at that date, the Applicant accepted that the Property was operating as an HMO. The evidence from the bank statements from that date until 17 May 2022 indicate that the same occupants were occupying the Property as at the date of the TEN application.[35]Riverbank Tower: 35.1 The Tribunal is satisfied that, as at the offence date of 23 March 2022, 4 unrelated people were occupying the Property, namely, Messrs Quinn, Badru, Zeya and Zakari. In reaching this determination, the Tribunal had regard to the following:(1) the presence of Messsrs Quinn,Badru and Zeya at the Property during the inspection on 23 March 2022 and of Mr Zakari at the inspection on 26 July 2022;(2) the Applicant’s bank statements showing payments on various dates during the period from 6 January 2022 to 28 April 2022 from each of Messrs Quinn and Zakari;(3) the bank statements of Michal Kravec showing payments from Messrs Quinn, Zakari and Zeya after the date of the last payment in each case to the Applicant; and,(4) use of the Property address for the purpose of Mr Zeya being registered to vote.[36]Peterhead Walk: 36.1 The Tribunal is satisfied that, as at the offence date of 21 February 2023, 4 unrelated people were occupying the Property, namely, Messrs Valverde, Teklehrahan, Tason and Mihalache. In reaching this determination, the Tribunal had regard to the following:(1) the presence of Messrs Valverde and Teklehrahan at the Property during the inspection on 21 February 2023 and the contents of their statements stating, in each case, that they live with 3 other people;(2) the evidence of occupation by Messrs Tason and Milhalache in the form of photographs of important documents eg ID card and passport of Mr Tason, and official correspondence addressed to Mr Milhalache at the Property;(3) the Applicant’s bank statements showing payments on various dates during the period from 7 January 2022 to 6 May 2022 from each of Messrs Valverde, Teklehrahan, Tason and Milhalache; and,(4) the bank statements of Michal Kravec showing payments from Messrs Valverde, Teklehrahan, Tason and Milhalache after the date of the last payment in each case to the Applicant.[37]“Only or main residence”37.1 The Tribunal is satisfied that, in determining whether or not each of the Properties was being occupied as the “only and main residence” of the occupants, it is appropriate to follow the Upper Tribunal’s reasoning in the Opara decision and to draw inferences from the circumstances where direct evidence of the Property being the “main and only residence” of the occupants is not available to it. The Tribunal notes in similar “blunt terms” to those of Judge Elizabeth Cooke in the Opara decision, each of the Properties is low-value housing and it is reasonable to infer that the occupants are unlikely to have second homes. In this respect, the Tribunal accepts as a general statement, Ms Chilton’s evidence that, in her experience, information regarding other/alternative accommodation is generally volunteered in these circumstances. The Tribunal is therefore satisfied that, in respect of each of the Properties, it was occupied by the occupants as their “only or main residence”.37.2 Further evidence in respect of Strawberry Hill and Peterhead Walk which the Tribunal has taken into account in this respect is as follows:(1) Strawberry Hill : (i) Mr Kondraciuk being named as the person liable for the Council Tax on the Property; (ii) the evidence that each of Messrs Kondraciuk, Dwyer, Shaik and Oyeniran had used the Property address to make credit applications; and, (iii) the content of the WhatsApp messages between “Maros” and Ian Dwyer of various dates between August 2022 and January 2023 which concern various issues relating to his occupation of the Property. The Tribunal notes that where a problem with a wasp infestation in August 2022 was not satisfactorily resolved, Mr Dwyer tells him that he has been forced to sleep at his mother’s house. Likewise, the messages appear to suggest that Mr Dwyer’s signature of the Joint Statement with Michal Kravec was a condition of his receipt of a landlord’s reference which Mr Dwyer required to secure alternative accommodation.(2) Peterhead Walk: (i) Mr Gleave’s evidence that, following the fire at the Property on 2 December 2023, Mr Teklehrahan was re-housed by the Respondent. Is the Applicant to be regarded as “a person managing” the relevant premises within s253 of the 2004 Act?[38]In respect of each of Strawberry Hill and Peterhead Walk, the Tribunal notes the HM Land Registry evidence that the Applicant was the registered freehold owner at the relevant dates and, in respect of Riverbank Tower, the Tribunal notes that the Applicant was the registered leasehold owner at the relevant date.[39]In respect of the Properties, and having regard to the Tribunal’s determination in paragraph 32 of this Decision in respect of Strawberry Hill and Riverbank Tower, the Tribunal is satisfied that, in each case, the receipt by Michal Kravec of the rents for these Properties after 9 May 2022 is as an agent or trustee for the Applicant within s263(3)(b) of the 2004 Act. As such, the Tribunal is satisfied that the Applicant falls within the definition of “a person managing” in respect of these Properties.[40]The Tribunal makes no determination as to whether Martin Drmola undertook some maintenance duties at the Properties but is satisfied that the existence of such an arrangement does not have any relevance on whether the Applicant was “a person managing the premises” within s263(3) of the 2004 Act as there is no suggestion that Mr Drmola was in receipt of rents from the Property or that the Applicant was in receipt of rents as agent or trustee for Mr Drmola. Offences under s234(3) of the 2004 Act: breach of regulation 4 of the Management Regulations[41]In respect of each of the Properties, the Tribunal is satisfied that the Respondent has provided sufficient evidence in the form of photographs and in the witness statements of Mr Gleave of the breaches of Regulation 4 of the Management Regulations. In each case, the details of the breaches are set out in the Final Notices. In this respect, the Tribunal notes that the Applicant has not disputed the Respondent’s evidence regarding the breaches themselves.[42]The Tribunal is therefore satisfied beyond reasonable doubt that, in respect of each of the Properties, the Applicant’s conduct amounted to an offence under s234(3) of the 2004 Act, (breach of Regulation 4 of the Management Regulations), in each case, entitling the Respondent to impose a financial penalty under s249A of the 2004 Act. Offences under s72(1) of the 2004 Act: failure to have an HMO licence, as required[43]In respect of each of Riverbank Tower and Peterhead Walk, in the absence of any evidence of an HMO licence having been granted in respect of the respective Property at the relevant dates, the Tribunal is satisfied beyond reasonable doubt that the Applicant’s conduct amounted to an offence under s72(1) of the 2004 Act, (failure to have an HMO licence as required), in each case, entitling the Respondent to impose a financial penalty under s249A of the 2004 Act. Reasonable Excuse Defence[44]Riverbank Tower: the Tribunal accepts that, on the face of it, a lay person might consider that the exemption in Schedule 14, paragraph 2 of the 2004 Act is applicable to the Property. The Tribunal is satisfied that Salix Homes neither had control or was managing the Property at the relevant date and the exemption does not apply accordingly. The Tribunal notes that:(1) the Applicant has a degree in English law and it is reasonable to expect that, if not on first glance but having made reasonable enquiry, he would have understood why the exemption did not apply to the Property; and,(2) whilst the correspondence between the Applicant and the Respondent did not explicitly explain why the exemption was inapplicable (presumably because it pre-dated the exemption being raised as an issue by the Applicant), it was clear in communicating to the Applicant that a licence was required for the Property. In assuming a contrary position, the Applicant should have been put on notice of the need for further enquiry as a result of the Respondent’s clearly stated position.[45]Having regard to the above, the Tribunal is satisfied that, in the absence of any evidence of a reasonable belief on the Applicant’s part that the exemption was applicable to the Property, there is no “reasonable excuse” defence to the s72(1) offence.[46]In view of the Tribunal’s determination that the Applicant was “a person managing” the Properties at the relevant dates, the Tribunal is satisfied that there is no basis for a reasonable excuse defence based on the Applicant’s claimed lack of involvement with the Properties. Quantum of the FPNs[47]With regard to the assessment of harm in the calculation of the FPNs, the Tribunal is satisfied that it is in accordance with the AGMA Policy that no actual harm needs to have occurred.[48]The Tribunal notes that, save as referred to in paragraph 47 above, the Applicant has not challenged the individual assessments of the FPNs rather that, having regard to the aggregate amount of the FPNs, the Respondent has failed to act proportionately and reasonably as required by the AGMA Policy.[49]The Tribunal is satisfied that in the calculation of the FPN the following circumstances are relevant:49.1 the FPNs relate to 3 separate properties, each of which was occupied as a bedsit-style HMO, the nature of which occupation involves inherent risks which require proper management;49.2 the s234 offences relate to the inadequacy of fire safety measures;49.3 the consequence of the failure to apply for an HMO licence where required means that there is no inspection of a property which would reveal the inadequacies seen at the inspections of the Properties; and,49.4 in the case of Peterhead Walk, a fire actually occurred. Determinations[50]In accordance with paragraph 10(4) of Schedule 13A to the 2004 Act, the Tribunal determines as follows:50.1 Strawberry Hill: s234 offence:(1) The Tribunal confirms the assessment of high harm/high culpability in the calculation of the FPN which should have been determined in accordance with the AGMA Policy at £22500, other than for what appears to have been an administrative error on the Respondent’s part.(2) The Tribunal therefore varies the FPN by increasing it from £22000 to £22500.50.2 Riverbank Tower: s234 offence: (1) The Tribunal considers that: (i) having regard to the nature of the defects identified in the context of the nature of the occupancy giving rise to a serious risk of harm to the occupants, the Respondent’s assessment of low harm is perverse and not in accordance with the AGMA Policy and should be varied by an assessment of medium harm; and, (ii) in the absence of evidence of recklessness, the Tribunal determines that the assessment of high culpability should be varied by an assessment of medium culpability. (2) The Tribunal therefore varies the FPN by increasing it from £12500 to £16500.50.3 Riverbank Tower: s72(1) offence: (1) The Tribunal notes as follows: (i) it confirms the Respondent’s assessment of low harm as it appears that this was a first offence; (ii) in the absence of evidence of actual knowledge on the Applicant’s part, it considers that an assessment of low culpability (ie negligence) rather than medium culpability is more appropriate. (2) The Tribunal therefore varies the FPN by reducing it from £7500 to £2500.50.4 Peterhead Walk: s234 offence (1) The Tribunal confirms the FPN at £28500.50.5 Peterhead Walk: s72(1) offence (1) The Tribunal considers that; (i) having regard to the occurrence of a fire which might have been avoided had an inspection been undertaken (which would have been prompted by a licence application), the Tribunal determines that the assessment of low harm should be varied by an assessment of medium harm; (ii) the Tribunal agrees with the assessment of very high culpability. (2) The Tribunal therefore varies the FPN by increasing it from £16500 to £25500.[51]Aggravating or Mitigating Factors The Tribunal does not consider that there are any aggravating or mitigating factors to be taken into account in the calculation of the FPNs.[52]Financial Means of the Applicant Whilst the Applicant made submissions regarding the relationship between the rental income from the Properties and the quantum of the FPNs, no evidence was presented to the Tribunal regarding the Applicant’s financial means which could be taken into account.