LONDON BOROUGH OF WALTHAM FOREST v HASAN YOUNIS [2019] UKUT 362 (LC)

UPPER TRIBUNAL
LANDS CHAMBER
[2019] UKUT 362 (LC)Case No HA/18/2019
Between
LONDON BOROUGH OF WALTHAM FORESTApplicantHASAN YOUNISRespondent
Before
Martin Rodger QCProperty: 25 Belmont Park Road,, London,, E10 6AU, Martin Rodger QC, Deputy Chamber President, 8 October 2019Catchwords: HOUSING – CIVIL PENALTY – validity of notice of intention to impose financial penalty – requirement to state reasons for giving notice - whether sufficient reasons stated in notice – whether failure to give sufficient reasons invalidated penalty – appeal allowed
[1]When a local housing authority gives a landlord a notice of its intention to impose a financial penalty for a housing offence under section 249A, Housing Act 2004, how clearly must it state its reasons for taking that action? And what is the consequence of a failure to state those reasons sufficiently clearly? These issues are raised in this appeal from a decision of the First-tier Tribunal (Property Chamber) (the FTT) given on 4 February 2019 by which it allowed the appeal of Mr Hasan Younis against a penalty of £20,000 imposed on him by the London Borough of Waltham Forest.[2]The FTT considered that the notice of intent given by Waltham Forest to Mr Younis was invalid because it did not provide sufficient details of the housing offence which was the reason for the notice being given. As a result, it cancelled the penalty but it granted Waltham Forest permission to appeal to this Tribunal against its decision.[3]At the hearing of the appeal Waltham Forest was represented by Ashley Underwood QC and Mr Younis was represented by David Stancliffe of Bowling & Co, solicitors. I am grateful to them both for their helpful submissions. The relevant statutory provisions[4]Part 3 of the 2004 Act allows a local housing authority to designate all or part of its district as subject to selective licensing if certain conditions are met. Those conditions include (in general terms) that designation will lead to a reduction in significant and persistent problems caused by anti-social behaviour which private sector landlords are failing to combat.[5]The whole of the Borough of Waltham Forest was designated a selective licensing area with effect from 1 April 2015, with the specific object of combatting anti-social behaviour.[6]Where an area becomes subject to selective licensing, with some exceptions every house in the area which is occupied under a tenancy or licence is required to be licensed (section 88). A licence granted under Part 3 may include conditions regulating the management, use or occupation of the house (section 90).[7]By section 95(2) of the 2004 Act a licence holder commits an offence if they fail to comply with any condition of the licence. A person who commits such an offence is liable on summary conviction to an unlimited fine (section 95(6); the former limit of £5,000 was raised by section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, with effect from 12 March 2015).[8]New provisions were inserted into the 2004 Act by section 126 and Schedule 9 of the Housing and Planning Act 2016. They included section 249A, which came into force on 6 April 2017 and which empowers a local housing authority in England to impose a financial penalty on a person if it is satisfied, beyond reasonable doubt, that the person's conduct 4 amounts to a “relevant housing offence”. The expression “relevant housing offence” includes an offence under section 95 of the 2004 Act.[9]The amount of any financial penalty is to be determined by the local housing authority but it may not be more than £30,000 (section 249A(4)). A financial penalty is an alternative to prosecution for a housing offence; thus, a penalty may not be imposed where the person has already been convicted of the offence in respect of the conduct in question, or where criminal proceedings have been instituted and not yet concluded (section 249A(5)).[10]Schedule 13A of the 2004 Act deals with the procedure for imposing financial penalties, including appeals, enforcement and guidance. By paragraph 1, before imposing a financial penalty under section 249A the local housing authority must first give the person concerned notice of its proposal to do so, referred to as a “notice of intent”. A time limit for the service of a notice of intent is imposed by paragraph 2, being six months beginning with the first day on which the authority had sufficient evidence of the conduct to which the financial penalty relates. For this purpose, a person's conduct includes a failure to act.[11]The content of a notice of intent is provided for by paragraph 3, as follows:[3]The notice of intent must set out—(a) the amount of the proposed financial penalty,(b) the reasons for proposing to impose the financial penalty, and(c) information about the right to make representations under paragraph 4.[12]A person who is given a notice of intent may make written representations to the local housing authority about the proposal to impose a financial penalty within a period of 28 days (paragraph 4). If the authority nevertheless decides to impose a financial penalty, it must give the person a notice (referred to as a “final notice”) setting out the reasons for imposing the penalty together with information, including information about rights of appeal (paragraphs 6, 8).[13]By paragraph 10(1) of Schedule 13A, a person to whom a final notice is given may appeal to the FTT against the decision to impose the penalty, or the amount of the penalty. Such an appeal takes the form of a re-hearing, which means that the FTT must make its own determination whether the conditions for imposing a penalty are satisfied, rather than simply reviewing the decision making of the local housing authority. When reaching its own decision the FTT may have regard to matters of which the authority was unaware. The FTT may confirm, vary or cancel the final notice.[14]A local authority is required by paragraph 12 of Schedule 13A to have regard to any guidance given by the Secretary of State about the exercise of its functions in relation to financial penalties. Guidance was issued by the Department for Communities and Local Government in April 2017, but it does not touch on the subject of this appeal. 5 The relevant facts[15]Mr Younis runs an estate agency and property management business. Among the properties he manages is 25 Belmont Park Road, a three-bedroom Victorian terraced house owned by his mother. On 7 August 2016 the house was let, through Mr Younis’ agency, to two tenants under an assured shorthold tenancy for a term of one year, continuing from month to month. The terms of the tenancy included a standard obligation on the tenants not to cause nuisance or annoyance to neighbours and not to use the property for illegal purposes.[16]In April 2017 Mr Younis applied for a licence for 25 Belmont Park Road under Part 3 of the 2004 Act, which was granted by Waltham Forest on 10 May 2017. The licence was subject to the Council’s standard conditions (in fact, two different versions of the conditions were attached to the licence, but they were substantially to the same effect and it is not suggested that they have caused confusion in this case).[17]Condition 20 of the standard conditions begins as follows:
“The Licence Holder must take all reasonable and all practicable steps for preventing and dealing effectively with anti-social behaviour by people occupying or visiting the premises; and for the use of the premises for illegal purposes.”
Without further introduction the condition then lists five distinct obligations: occupancy agreements must include a prohibition on anti-social behaviour; tenants must be made aware of that provision when taking up residence; the licence holder must respond to complaints of anti-social behaviour and, where it is discovered, inform the tenant within 14 days of the consequences of its continuation; the licence holder must keep records of correspondence relating to anti-social behaviour; and they must provide details of investigations undertaken if requested by the authority. The relationship between these specific obligations and the general duty to take “all reasonable and all practicable steps” which precedes them is not spelled out, but they are obviously intended as examples of steps which may be required, rather than as an exhaustive list of what a landlord is expected to do to combat anti-social behaviour.[18]In March 2018 Waltham Forest received complaints from local residents of anti-social behaviour by the occupants of 25 Belmont Park Road. The thrust of the complaints was that the premises were being used as a gambling den and for the sale of alcohol and take- away food cooked on the premises.[19]On 28 March 2018 Waltham Forest wrote to Mr Younis informing him of the complaints and explaining that the odours from food being stored and cooked on the premises, including from chicken carcasses and raw fish hanging in the open air at the rear of the property, were causing distress and discomfort to neighbours and amounted to an offence under the Environmental Protection Act 1990. Photographs were provided of food drying in the open air and alcohol stored at the rear of the property and Mr Younis was asked to speak to the tenants. The Council also warned Mr Younis that if the anti-social behaviour 6 continued action would be taken against him, which might result in a fine or the loss of his licence.[20]It was Mr Younis’ case before the FTT that, after he had received the letter of 28 March he had spoken to the tenants of the property telling them that their behaviour was not permitted and must stop. He had telephoned the writer of the letter, Mr Angove, to inform him of that action.[21]Waltham Forest enforcement officers visited the property during the day on 10 April 2018. They found evidence that it may be being used for gambling, but they were unable to establish whether it was also being used in connection with a catering business. No further contact was made with Mr Younis arising out of this visit.[22]Enforcement officers visited the property again, together with police and immigration officers, during the evening of 22 May 2018. They discovered 17 adults present, and found that the property was being used as a gambling establishment. A timber outbuilding at the rear was being used for the preparation of hot food, and alcohol was being served to customers on the premises.[23]A further letter was sent to Mr Younis on 24 May 2018 by Mr Beach, an environmental health officer, informing him that the occupation of the property was giving rise to serious anti-social behaviour issues affecting the adjoining properties and the wider neighbourhood, and that this was a serious breach of licence conditions, some of which, including condition 20, were recited in the letter.[24]Mr Younis responded by email on 29 May, acknowledging that he was responsible for managing the property. He said that he had spoken to the tenants that day regarding the anti-social behaviour and had advised them that if the situation recurred he would have to give them notice. In a further email of the same date Mr Younis said that he visited the property on a monthly basis, and that the anti-social behaviour had been brought to his attention ‘last month’.[25]On 2 June Mr Younis wrote to the tenants of the property referring to the visits by Waltham Forest and several visits of his own, and giving them a final warning that notice would be served terminating their tenancy if the anti-social behaviour and gambling did not cease. A copy of this letter was sent to Waltham Forest.[26]In email exchanges Mr Beach then pressed Mr Younis on his knowledge of what had been going on. In response to a request to provide details of complaints received and any action taken as a result, Mr Younis stated that he had received none directly but that his mother, who lived in the same street, had received phone calls from neighbours. He added that “whenever an issue was raised with my mother it would be discussed on the visit”.[27]Waltham Forest was sufficiently concerned by what its officers had discovered on their visit on 24 May that it decided to take decisive action. On 29 June it obtained a closure order from the Magistrates Court. Shortly after this order was served on the premises the tenants 7 returned the keys to Mr Younis and left on 9 July. The Council then turned to consideration of a financial penalty.[28]As it is encouraged to do by DCLG guidance, Waltham Forest has published a policy on the imposition of financial penalties. It includes indicative tariffs for different grades of offence; under the policy a “serious” offence will justify a penalty of up to £20,000 while for “severe” offences a penalty of £20,000 or more may be imposed (up to the limit of £30,000). The notice of intent[29]Waltham Forest’s formal notice of intent to impose a financial penalty was given under cover of a letter dated 20 July 2018. The letter gave the following reasons for proposing a penalty of £20,000:
“The Council is satisfied that you have committed a ‘relevant housing offence’ in that you failed to comply with condition 20 of the Selective Licence granted on 10 May 2017, contrary to section 95 Housing Act 2004. The attached witness statement[s] and exhibits provide further details regarding the offence that the Council is satisfied has been committed. The Council is satisfied that its proposal to impose a financial penalty and the amount of that financial penalty are in accordance with the relevant statutory provisions and its adopted enforcement policy, which may be viewed at [website address given].”
[30]Five separate witness statements were served with the covering letter, three from officers of the Council, and two from immediate neighbours of the property. Those from the Council’s officers were accompanied by numerous exhibits including photographs of raw carcasses hanging at the rear of the property which had previously been sent to Mr Younis.[31]The neighbours’ witness statements had been prepared in connection with the successful application to the Magistrates Court for a closure order, and described their experiences of living next door to the property during the previous two years. They explained that 15 to 20 people at a time would visit at all hours of the day and night, causing noise nuisance by slamming doors, shouting, and gathering in the rear garden in groups to smoke and drink. Vermin were attracted by refuse and food stored at the property and strong cooking smells made it impossible for the neighbours to use their own gardens. There had been no improvement after the enforcement visit of 22 May 2018 and the neighbours described their lives as a ‘living hell’. One statement made no reference to Mr Younis, but the other stated that the neighbour “had complained many times to the owner of the property’s mother and his brother … to pass on the message that his tenants cause a lot of nuisance and I pleaded for help, but no action was taken.”[32]The witness statement of Ms Wasinska, an anti-social behaviour officer employed by the Council, had also been prepared in support of the closure order application. She referred to the complaints received from neighbours and exhibited a copy of the letter sent to Mr Younis on 28 March 2018. She referred to the visit to the property on 22 May and to her 8 own investigations in June when neighbours reported that the same activities were still going on at the property.[33]Two additional statements were prepared by Council staff specifically in connection with the proposed financial penalty. One of these was by Sylvia Adjei, a licensing enforcement officer, and the other by Mr Beach. Both explained the decision to designate the Borough as a selective licensing area, referred to the licence granted to Mr Younis, and repeated the evidence of anti-social behaviour at the property.[34]Ms Adjei’s statement, running to 23 paragraphs, concluded with the following assertions:
“Mr Hassan Younis will be fully aware of his legal obligation to comply with the issued licence conditions especially around fire safety and ASB Management. Mr Hassan Younis’s failure to comply with his legal responsibilities has meant that the surrounding neighbours of his property have been exposed to significant noise nuisance and Anti-Social Behaviour.”
[35]Mr Beach’s statement also gave an account of his email correspondence with Mr Younis. His statement concluded with the same assertions as Ms Adjei’s, namely that Mr Younis was aware of his obligations, including in relation to anti-social behaviour management, and that his failure to comply had exposed his neighbours to anti-social behaviour.[36]Apart from the general references to anti-social behaviour management and his “failure to comply with his legal responsibilities” none of the witness statements made any specific allegation against Mr Younis or drew any inference concerning the time he had first known of the behaviour of his tenants.[37]Mr Younis made representations through his solicitor in response to the notice of intent on 2 August. The focus of those representations was on the date of Mr Younis’s knowledge of the anti-social behaviour and the steps he had taken since being made aware of it. It was said that the matters complained of “had only recently been brought to his attention before the receipt of the letter of 24th May 2018”. He had “given notice to the tenants to put matters right by the end of the month”. The tenants had acted wrongfully but Mr Younis had taken reasonable steps to warn them to cease their behaviour, and would, if necessary, have issued proceedings to bring the lease to an end had they not vacated on 9 July. In relation to the proposed penalty, the letter referred to the maximum fine which could be imposed on a criminal conviction in a serious case, which was £5,000, and asserted that ‘our client’s action and attitudes place him at the opposite end of the spectrum of conduct from that more serious extreme’.[38]Waltham Forest rejected these representations in a letter from Mr Beach on 10 August 2018 and on 21 August it issued a final notice imposing a penalty of £20,000. A discount of 20% was offered if payment was received within 28 days. 9 The appeal to the FTT and its decision[39]Mr Younis appealed the final notice to the FTT. His grounds of appeal included a complaint that the notice of intent did not comply with the requirements of Schedule 13A to the 2004 Act because the notice of intent had not sufficiently set out the reasons for the proposal to impose the financial penalty. The local authority had failed to specify which part of condition 20 was said to have been breached, what conduct of the appellant’s amounted to an offence, when the alleged offence was said to have been committed and what steps it was said the appellant ought to have taken. The same complaints were levelled against the final notice. Mr Younis also asserted that he had not been aware of the anti-social behaviour until he received the Council’s letter of 28 March 2018 and that he had then acted reasonably.[40]The FTT did not determine whether Mr Younis had been aware of his tenants’ behaviour before March 2018, nor whether the steps he had taken were sufficient to discharge his responsibilities under condition 20 of the licence. The only issue it considered was whether a sufficient notice of intent had been given. It stated its conclusion in these terms:
“The tribunal determines that it is not satisfied the Notice of Intent was valid, because it did not specify which section of Condition 20 was being relied on and that it failed to contain a date on which the alleged offence was committed. The FTT added that the notice of intent must specify the offence “in sufficient detail to enable the recipient to answer” and should “include a break-down and explanation of the penalty amount and how it was calculated”
. The appeal[41]Waltham Forest challenged the FTT’s decision on two distinct grounds. First, it submitted that the FTT had been wrong to find that the notice of intent was insufficient to satisfy the requirements of paragraph 3 of Schedule 13A to the 2004 Act; alternatively, if the notice of intent was insufficient, the FTT had nevertheless been wrong to conclude (as, at least by inference, it must have done) that the consequence of that inadequacy was that no financial penalty could be imposed on Mr Younis. Issue 1 – The adequacy of the statement of reasons in the notice of intent[42]Mr Underwood submitted that the requirement in paragraph 3 that the notice of intent should state ‘the reasons for proposing to impose the financial penalty’ requires only a simple, non-technical statement of the basis for the decision which need not include particulars or evidence. In this case, the notice of intent itself referred to the offence and to the relevant condition of the licence which had been broken; the accompanying letter drew attention to the evidence served with the notice and provided a link to Waltham Forest’s policy on financial penalties. Taken together, and in the context of the correspondence which had preceded the notice, the material provided was sufficient to explain to Mr Younis why the Council proposed to impose the penalty. The purpose of a notice of intent 10 was to give a licence-holder sufficient information to enable them to make relevant representations that the proposed penalty should not be imposed. It was clear from the representations which were made on behalf of Mr Younis that the notice had achieved its purpose.[43]On behalf of Mr Younis, Mr Stancliffe submitted that the minimum information required to satisfy the obligation in paragraph 3 to state the reasons for the authority’s proposed action comprised:(1) a clear description of the alleged offence;(2) the date on which the offence is said to have been committed;(3) the act or omission said to constitute the offence;(4) the legislation which defines the offence; and(5) the reasons for the level of financial penalty. Those were not onerous requirements but were analogous to the information which would routinely be set out in an indictment or summons. They were necessary to enable the recipient of a notice of intent to identify the offence alleged, and respond to it, as well as to make representations as to the level of penalty.[44]The appellant should not be permitted to rely on the witness statements and supporting documents served with the notice of intent, Mr Stancliffe submitted. It was contrary to the purpose of a notice of intent to allow documents to be incorporated by reference, and the notice itself ought to contain a clear statement of reasons. Even if the notice was not invalid for that reason, the information supplied still failed to meet the minimum requirements in this case.[45]Mr Stancliffe suggested that none of the witness statements specifically identified any act or omission on the part of Mr Younis which was alleged to constitute a breach of the licence condition. The commission of acts of anti-social behaviour by the tenants of the property (which was the principal subject of three of the witness statements) did not represent a breach of a licence condition by Mr Younis. The notice should have identified reasonable, practical and effective steps which it was said the licence holder could and should have taken, but did not.[46]It was also said to be impossible to infer from the witness statements the date of the offence relied on by the appellant. So far as it was possible to draw any inference, a reasonable recipient of the notice would assume that the offence was being said to have been committed at some point between the authority’s letter of 24 May 2018, which first suggested condition 20 of the licence may be being broken, and 29 June 2018 when the local authority obtained a closure order, following which the anti-social behaviour ceased. That was how the respondent and Mr Stancliffe had interpreted the information when making representations in response to the notice. But in its case to the FTT the Council argued instead that the offence had begun in March 2018. The lack of clarity as to a fundamental and basic detail of the alleged offence was said to be a material omission.[47]The notice of intent also failed to provide reasons for the amount of the financial penalty which, Mr Stancliffe submitted, was a requirement of paragraph 3. The inclusion in the notice of a website address, providing access (by way of a further link) to the appellant’s statement of its general enforcement policy, did not satisfy the statutory requirements to specify the reasons for imposing the financial penalty proposed in a specific notice. 11[48]This is the first occasion on which the sufficiency of a statement of reasons for proposing to impose a financial penalty has had to be considered by this Tribunal. In approaching that task it is relevant to draw attention to some unusual features of the financial penalty jurisdiction. The first point which must be kept in mind is that these are civil proceedings, and that they provide an alternative to a criminal prosecution. An appeal to the FTT is conducted under Schedule 13A of the 2004 Act and in accordance with tribunal procedure rules, rather than by importing criminal procedure rules. On the other hand, an important question for a local housing authority when it is considering the imposition of a financial penalty, and for the FTT when it is considering an appeal against a financial penalty, is that each must be satisfied beyond reasonable doubt that the conduct in question amounts to a relevant housing offence. It is unusual for a tribunal to be required to reach a decision applying the criminal standard of proof, but that novel feature of appeals against financial penalties under the 2004 Act does not require the FTT to adopt a different mind-set or apply a different approach to procedural principles from those which it would ordinarily apply. Those principles reflect the FTT’s overriding objective to deal with cases fairly and justly.[49]Paragraph 3(b) of Schedule 13A requires the local authority “to set out … the reasons for proposing to impose the financial penalty”. No form has been prescribed nor guidance given to assist local authorities on how such reasons should be stated, or how much detail should be provided. It may be that little useful guidance could be given since the variety of circumstances in which a financial penalty may be imposed is so wide. It is noticeable, however, that the requirement has been framed by reference to the authority’s reasons, rather than by reference to some more technical requirement. So long as the notice explains why a penalty is proposed it will have done what is required of it.[50]The approach taken by the appellant in this case was to specify the relevant housing offence which it was satisfied had been committed in respect of the premises. In doing so it was reflecting the ground for imposing a financial penalty in section 249A(1) of the 2004 Act, which provides: 249A Financial penalties for certain housing offences in England (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. It was not suggested by Mr Underwood that it would be sufficient for an authority to state baldly that it was satisfied that a person’s conduct amounted to a particular offence, without providing any further information. The purpose of setting out the authority’s reasons is so that the recipient of the notice of intent can respond to it with representations, which must then be taken into account by the authority. The notice must therefore provide a sufficient account of the authority’s reasons for proposing a financial penalty to enable the recipient to understand what conduct or omission is being said to amount to the offence which has been identified.[51]The notice of intent in this case described the conduct relied on as Mr Younis having “failed to comply with condition 20 of the selective licence granted on 10 May 2017”, contrary to 12 section 95 Housing Act 2004. It did not set out the text of condition 20 and, rightly in my view, it was not suggested by Mr Stancliffe that it was necessary for it to do so. Mr Younis had been issued with the licence itself, to which the conditions were annexed, and further copies were exhibited to the witness statements of the appellant’s officers which accompanied the notice of intent. It is not suggested that he was in any doubt as to the condition. By identifying the alleged offence and its statutory basis source the notice of intent satisfied the first and fourth requirements which Mr Stancliffe argued were the minimum necessary.[52]The notice was accompanied by a considerable body of evidence and documents which was referred to in the notice and described as providing details of the offence which was believed to have been committed. Mr Stancliffe submitted that it was not permissible to set out reasons in separate documents, but in the absence of a prescribed form there is no reason why paragraph 3(b) should be interpreted in such a restrictive way. What is required is that the authority’s reasons be set out sufficiently clearly so that they can be understood, and it is sufficient if that is done in more than one document. In this case the witness statements are properly treated as forming part of the notice because they accompanied it and were referred to in the authority’s explanatory letter as providing details of the offence.[53]The FTT considered that the notice of intent was defective because it failed to specify which of the provisions of condition 20 had not been complied with. That seems to me to involve a misreading of the condition which, it will be remembered, requires the licence holder to “take all reasonable and all practicable steps for preventing and dealing effectively with anti-social behaviour”. The fact that a number of distinct steps are then identified (see paragraph 17 above) does not dilute the requirement to take all reasonable and practical steps. An omission to refer to one of the specific steps listed in condition 20 would lead the reasonable recipient to conclude that the authority’s complaint was not directed narrowly at any one of them, but was a broader concern about the recipient’s failure to deal effectively with the behaviour in question. In any event, the information provided was not limited to the statement considered by the FTT. The details of the offence were provided in the witness statements which accompanied the notice of intent and to which attention was drawn in the covering letter. It is apparent from those statements that the reason for the authority’s concern was not the form of occupancy agreement, or any failure to draw complaints of anti-social behaviour to the tenants’ attention or the standards of Mr Younis’s record keeping, but was the continuation of serious anti-social behaviour for a period of years. I therefore do not agree with the FTT’s conclusion that the notice of intent was “invalid” because it was not more specific about the sub-paragraphs of condition 20.[54]For the same reason, and contrary to Mr Stancliffe’s submission, I do not consider it was incumbent on the local authority to identify specific steps which ought to have been taken to prevent anti-social behaviour. The nature of the offence did not permit such an approach. The authority did not know what steps had or had not been taken. It knew only that serious anti-social behaviour had been continuing for a lengthy period, and that any steps which had been taken had been ineffective. It knew that the behaviour was brought to an end on 9 July by the action of the authority itself rather than by any steps taken by the licence holder. All of those matters were apparent from the witness statements provided with the notice of intent. Condition 20 would be breached if there was any reasonable and practical step 13 which could have been taken to prevent and deal effectively with anti-social behaviour which was not taken. To be informed that the authority was satisfied that the licence holder has breached that condition was therefore a sufficient identification of the nature of the offence to enable the licence holder to answer the complaint. The licence holder would be in a position to explain what steps had been taken and why it was considered there were no other reasonable or practical steps which could have been taken to achieve the required outcome.[55]Nor do I accept that it was necessary for the statement of reasons to specify that Mr Younis had been aware of the anti-social behaviour from a particular date, or to give a precise date on which the offence was said to have been committed. Paragraph 20 of the standard licence conditions does not depend on the licence holder having notice of anti-social behaviour before being required to take all reasonable and practicable steps to prevent it and deal effectively with it. It was apparent from the statements of neighbours that they had endured the behaviour of Mr Younis’s tenants “for the past couple of years”. The occurrence of anti-social behaviour over a prolonged period would support the conclusion that there had been a failure to comply with paragraph 20. If all reasonable and practicable steps were being taken, the behaviour would either have been prevented altogether or would have been identified and stopped at a much earlier time.[56]In any event, the witness statements included one neighbour’s assertion that numerous complaints had been made to Mr Younis’s mother but that nothing had been done by him in response. Mr Younis had been aware of the problems at the latest by 28 March 2018 when he was contacted by the authority (and possibly earlier than that based on the evidence of neighbours and the equivocal statements of Mr Younis himself). It was for Mr Younis to explain why reasonable and practicable steps would not have enabled him to become aware of the problem any sooner.[57]I do not accept that the notice of intent was defective because it failed to explain in greater detail why the authority had decided that £20,000 was the appropriate level of penalty to be imposed. The link identified in the authority’s explanatory letter led eventually to Waltham Forest’s policy from which, Mr Underwood suggested, it would have been apparent that the penalty was set at the upper end of ‘serious’ and lower end of ‘severe’. I do not accept that following a link to a generic policy document is a sufficient way of conveying information about the reason for a specific decision. Apart from the relative difficulty of obtaining access to the document, its 18 pages deal with a whole range of enforcement matters. More usefully, the information provided in paper form with the notice of intent included an extract from the 2004 Act containing section 249A(4), which imposes a limit of £30,000 on a financial penalty. That information, together with the material included in the witness statements explaining the consequences of the failure to prevent the anti-social behaviour, provided a sufficient explanation of the seriousness of the offence to satisfy the requirement of paragraph 3(b) of Schedule 13A, 2004 Act to provide reasons proposing to impose the penalty. Through his solicitors Mr Younis was able to, and did, make representations about the seriousness of any offence and the level of penalty which he considered appropriate.[58]For these reasons I am satisfied that the FTT was wrong to regard the initial notice as defective or invalid. It stated the appellant’s reasons for proposing to impose a penalty in 14 such a way that they could be understood and responded to. The notice was far from ideal and it would be better if it was not used again by this or any other local authority. A concise statement of the facts said to amount to the breach of licence condition or other offence would be preferable to the practice of providing particulars by means of a number of repetitive witness statements. But, in my judgment, the poor technique employed in this case did not cause the notice to be defective. Issue 2 – The consequences of giving a defective notice of intent[59]My conclusion on the first issue is enough to dispose of the appeal, but in case I am wrong I will consider the appellant’s alternative ground of appeal. That ground is of more general importance.[60]Mr Underwood’s alternative submission was that the FTT had been wrong to assume that any defect in a notice of intent would be fatal to the process and would require that a subsequent appeal against a final notice be allowed. He submitted that if the notice of intent had failed to comply with the requirements of paragraph 3, the question which then had to be addressed was what, on a true construction of the statute, did Parliament intend should be the consequence of non-compliance?[61]The Act itself does not provide expressly for those consequences, but Mr Underwood suggested that the statutory context provides assistance. The role played by the notice of intent in the structure of the scheme of financial penalties is a subsidiary one. A right of appeal to the FTT is provided against the final notice containing the local authority’s decision and, significantly, the scope of that appeal is not confined to a review of the local authority’s reasons. The FTT’s function is to conduct a rehearing and to make its own decision, applying its own judgment, and in doing so it is entitled to have regard to facts which had not been known to the authority. The object of an appeal to the FTT is to get the right outcome on the merits, Mr Underwood submitted, rather than to consider the adequacy of the authority’s decision making.[62]If an appeal was allowed on technical grounds the authority would be unable to issue a new notice of intent more than six months after the matters complained of first came to its attention. In that case the licence holder would escape the consequences of their conduct, which was unlikely to have been the outcome Parliament would have intended.[63]Mr Underwood suggested that the FTT has power to deal flexibly with procedural defects. If the FTT considered a defect to have been so serious that the licence-holder was not in a position to understand what was alleged against them, it would properly allow the appeal. If a procedural error was minor and of no practical effect, it could safely be overlooked. Similar flexibility was available in the event of a prosecution based on a defective information or summons. Referring to a decision of the Divisional Court in Nash v Birmingham Crown Court [2005] EWHC 338 Mr Underwood submitted that in a prosecution for a regulatory offence, a failure to give sufficient particulars would not be treated as fatal, provided the defendant was in a position fairly to defend the case. The same principle, he suggested, should apply to a civil penalty. 15[64]Mr Stancliffe took issue with Mr Underwood’s submissions and pointed out that a local authority’s power to impose a financial penalty was statutory, and could not be exercised at all without compliance with the mandatory requirements Parliament had prescribed. A document which does not contain a sufficient statement of an authority’s reasons for proposing to impose a penalty could not initiate the statutory procedure and everything which followed from it was of no effect. Neither the local authority nor the FTT could impose a financial penalty in the absence of a valid notice.[65]Mr Stancliffe challenged Mr Underwood’s analogy between a defective notice of intent and a defective information or summons. In criminal proceedings the information is laid by an independent prosecutor, but a financial penalty under the 2004 Act is proposed by the very body which makes the original decision. Further, unlike criminal proceedings, the decision to serve a final notice imposing a financial penalty is dealt with solely by written representations. This made a clear statement of the offence and of the reason for the penalty essential. If inadequacies were pointed out the local authority could amend the notice of intent or serve an entirely new notice at any time within six months from the date of the offence. In this case the appeal to the FTT was made on 11 September 2018 and the appellant had had time to correct the notice by re-issuing it.[66]Mr Stancliffe also suggested that, if the appellant’s second ground of appeal was correct, the FTT would have a discretion to allow, or not allow, a financial penalty to stand where the notice of intent was defective. In this case, the FTT thought that the notice of intent was insufficiently compliant to be the basis for imposing a financial penalty. That decision was within the reasonable limits of the FTT’s discretion and, particularly as the public policy against ‘double jeopardy’ was engaged, the Tribunal should not interfere with it.[67]Neither party referred to the line of authority demonstrating the modern approach to the consequences of a failure to comply with a procedural requirement imposed by statute. For the purpose of this appeal it is not necessary to go back earlier than the decision of the Court of Appeal in R v Home Sec., Ex p Jeyeanthan [2000] 1 WLR 354.[68]Jeyeanthan concerned procedural compliance in the context of immigration, where the Secretary of State had used an out of date form when applying for permission to appeal. Lord Woolf MR recognized (at 358E) that the issue before the court had implications for failure to observe procedural requirements outside the field of immigration, and his speech has become the basis of the modern approach in public law to the question of non-compliance with the procedural requirements of primary and subordinate legislation. As he explained, the “conventional approach” had been to distinguish between mandatory and directory requirements, and to treat that classification as decisive:
"If [the requirement] is categorised as directory it is usually assumed it can be safely ignored. If it is categorised as mandatory then it is usually assumed the defect cannot be remedied and has the effect of rendering subsequent events dependent on the requirement a nullity or void or as being made without jurisdiction and of no effect. The position is more complex than this and this approach distracts attention from the important question of what the legislator 16 should be judged to have intended should be the consequence of the non- compliance. This has to be assessed on a consideration of the language of the legislation against the factual circumstances of the non-compliance. In the majority of cases it provides limited, if any, assistance to inquire whether the requirement is mandatory or directory. The requirement is never intended to be optional if a word such as “shall” or “must” is used. "
[69]After referring to relevant authorities and leading textbooks Lord Woolf then suggested a more helpful approach at 362:
"I suggest that the right approach is to regard the question of whether a requirement is directory or mandatory as only at most a first step. In the majority of cases there are other questions which have to be asked which are more likely to be of greater assistance than the application of the mandatory/directory test. The questions which are likely to arise are as follows: (a) Is the statutory requirement fulfilled if there has been substantial compliance with the requirement and, if so, has there been substantial compliance in the case in issue even though there has not been strict compliance? (The substantial compliance question.) (b) Is the non-compliance capable of being waived, and if so, has it, or can it and should it be waived in this particular case? (The discretionary question.) I treat the grant of an extension of time for compliance as a waiver. (c) If it is not capable of being waived or is not waived then what is the consequence of the non-compliance? (The consequences question.) Which questions arise will depend upon the facts of the case and the nature of the particular requirement. The advantage of focusing on these questions is that they should avoid the unjust and unintended consequences which can flow from an approach solely dependant on dividing requirements into mandatory ones, which oust jurisdiction, or directory, which do not."
[70]Lord Woolf’s more flexible approach focusses on the extent of compliance, on the consequences of non-compliance, and on whether, taking those consequences into account, Parliament can have intended the outcome of a particular instance of non- compliance to be the total invalidity of subsequent steps. That question must be resolved by "a consideration of the language of the legislation against the factual circumstances of the non-compliance."[71]Examples of the application of the same approach within the jurisdictions of this Tribunal are not difficult to find. The decision of the Court of Appeal in Newbold v Coal Authority [2014] 1 WLR 1288 (on appeal from the Lands Tribunal) concerned the validity of a landowners’ notice under the Coal Mining Subsidence Act 1991 initiating a claim for compensation. It had been submitted that there was a conflict between authorities such as Jeyeanthan on the one hand and others concerned with the acquisition of rights in property (such as the decision of the Court of Appeal in Speedwell Estates Ltd 17 v Dalziel [2002] 1 EGLR 55, a case under the Leasehold Reform Act 1967). Sir Stanley Burton disagreed, saying this, at [70]:
"I do not consider there is any such conflict. In all cases, one must first construe the statutory or contractual requirement in question. It may require strict compliance with requirement as a condition of its validity... against that, on its true construction a statutory requirement may be satisfied by what is referred to as adequate compliance. Finally, it may be that even non- compliance with the requirement is not fatal. In all such cases, it is necessary to consider the words of the statute or contract, in the light of its subject matter, the background, the purpose of the requirements, if that is known or determined, and the actual or possible effect of non-compliance on the parties. We assume that Parliament in the case of legislation, and the parties in the case of a contractual requirement, would have intended a sensible, and in the case of a contract, commercial result."
[72]The approach suggested by Mr Underwood to non-compliance with the requirement in paragraph 3(b) of Schedule 13A, 2002 Act, that a notice of intent “must set out … the reasons for proposing to impose the financial penalty”, is consistent with this line of authority. Mr Stancliffe’s characterisation of the requirement as mandatory, with the suggested consequence that non-compliance will always be fatal, reflects an approach which is no longer adopted.[73]The purpose of a notice of intent is to inform the recipient of the reasons why the authority is contemplating the imposition of a financial penalty. The notice also performs the important function of limiting the scope of the subsequent procedure. But the notice of intent does not represent the last word on any issue. Not only does the recipient of the notice have the opportunity to respond to it, but the authority also has the obligation to think again before making a final decision. Once that decision has been conveyed in a final notice, the recipient has the right to appeal to the FTT, where they may rely on matters which were not known to the authority.[74]Those characteristics of the statutory scheme suggest that the reasons given in a notice of intent should be clear enough to enable the recipient to respond, but they also suggest that if those reasons are unclear or ambiguous, Parliament would not have intended that the notice of intent should invariably be treated as a nullity. The seriousness of the offences for which civil penalties can be imposed, the relative shortness of the time available to a local authority to take action, and the availability of a right of appeal on the merits before an independent tribunal, are all features of the statutory scheme which militate against the adoption of an excessively technical approach to procedural compliance.[75]In this case, there is no credible suggestion that Mr Younis has been prejudiced by the features of the notice of intent which Mr Stancliffe took issue with. He made full representations, including on the level of penalty. On 10 August he received a detailed response to those representations from Mr Beach, who explained why the authority did not accept Mr Younis’s claims of only recently having become aware of his tenants’ behaviour, and responded to the suggestion that a penalty exceeding £5,000 would be 18 disproportionate. Mr Younis did not ask for the opportunity to make his response orally, and the fact that the procedure was conducted in writing was not a disadvantage to him. When he appealed, Waltham Forest was directed by the FTT to file a statement of case, explaining the grounds on which it had imposed the financial penalty and responding to Mr Younis’s statement of case. It did so by a document dated 12 November 2018, more than two months before the date of the hearing before the FTT. The document does not rely on additional grounds which could not have been predicted from the notice of intent or the final notice.[76]I am therefore satisfied that, even if the notice of intent was defective in some respect, Mr Younis had the opportunity to respond fully to the concerns of the authority, and did so. He also had the opportunity to come fully prepared to the hearing of his appeal before the FTT. In my judgment the FTT came to the wrong conclusion when it decided that the notice of intent was of no effect and allowed the appeal without investigating the facts.[77]I do not accept Mr Stancliffe’s final point that, if the FTT had a discretion to treat the notice of intent as valid, it had exercised that discretion and its decision should not be interfered with unless it was irrational. The FTT asked itself only the binary question, was the notice of intent valid or invalid, and having decided that it was invalid it did not separately address the consequences of the defects it had identified. It did not exercise a discretion at all. Disposal[78]For the reasons given in relation to the first ground of appeal I am satisfied that the notice of intent was valid. The appeal must therefore be allowed and the matter remitted to the FTT for full consideration. Martin Rodger QC, Deputy Chamber President 21 November 2019

Cited in 22 later judgments

and 13 more of the most senior