PAUL MORTIMER MR STEPHEN BARCHAN v MR GUISSEPPE CALCAGNO [2020] UKUT 122 (LC)

UPPER TRIBUNAL
LANDS CHAMBER
[2020] UKUT 122 (LC)Case No RRO/9/2019
Between
PAUL MORTIMER MR STEPHEN BARCHANApplicantMR GUISSEPPE CALCAGNORespondent
Before
Judge Elizabeth CookeFlat Justice for AppellantProperty: 53a Lordship Lane,, London,, SE22 8EP, Judge Elizabeth CookeCatchwords: HOUSING – RENT REPAYMENT ORDER – HMO licence – burden of proof of offences – period of offence
[1]This is an appeal from the decision of the First-tier Tribunal (“the FTT”) on 24 October 2019 not to order a rent repayment order in favour of the appellants against their landlord, the respondent. The appellants had applied to the FTT for that order on the grounds that the respondent had committed the offence of managing a house in multiple occupation (“an HMO”) without having an HMO licence.[2]The Tribunal directed on 2 January 2020 that the appeal would be determined under its written representations procedure, and it has received representations from Flat Justice for the appellants and from the respondent who has not been legally represented.[3]In the paragraphs that follow I set out the factual background and summarise the law, and then discuss the evidence given to the FTT and its reasons for refusing to make a rent repayment order, the grounds of appeal, and my conclusions. The appeal fails, because although the decision of the FTT reveals some errors of law and fact it is clear that the FTT made a rational assessment of the evidence given by the appellants and found on that basis that they had not proved, to the criminal standard of proof, that the relevant offence had been committed and therefore that it was not possible for a rent repayment order to be made. The factual background[4]The appellants each applied to the FTT on 23 May 2019 for a rent repayment order against the respondent in respect of 53a Lordship Lane, London SE22 8EP (“the property”), and those applications were treated as a single application by the FTT.[5]The FTT described the property as “a four bedroom flat on two floors above commercial premises with shared use of kitchen and bathroom/w.c.”. Mr Mortimer’s evidence was that he rented a room there from 8 April 2017 until he left in on 7 June 2018; Mr Barchan rented a room there from 25 February 2017. His application form gave the property as his address. Both said in their application forms that “there were four occupants” in the flat. Both said that the flat was subject to an additional licencing scheme introduced by the London Borough of Southwark in January 2016 and that therefore the respondent, their landlord, committed the offence of being on control of or managing a house in multiple occupation when it was not licensed. The respondent applied for a licence on 11 June 2019.[6]Mr Mortimer applied for a rent repayment order for the period of 12 months from 8 June 2017 until the date he left the property, in the sum of £8,400 representing 12 months’ rent at £700 per month. Mr Barchan applied for “12 months rent to be repaid in the most recent period of my tenancy: 12 x £715 = £8589.” The law[7]I can explain the legal basis of the application briefly as follows. 3[8]Section 40 of the Housing and Planning Act 2016 enables the FTT to make a rent repayment order in favour of a tenant if the landlord has committed certain offences during the tenancy, one of those being the offence of being in control of or managing an unlicensed HMO.[9]The tenant may apply for a rent repayment order only if the offence related to housing that was let to the tenant at the time of the offence, and was committed within the 12 months ending on the date of the application (section 41). The FTT may make an order if it is satisfied, beyond reasonable doubt, that the offence was committed (section 43). Section 44 states that if the FTT decides to make a rent repayment order in respect of the offence in question here, the amount payable under that order must relate to a period not exceeding 12 months during which the landlord was committing the offence.[10]Turning to the offence itself, section 72(1) of the 2004 Act provides that a person commits an offence if he has control of or manages an HMO which is required to be licensed and is not so licensed.[11]Section 254 of the Housing Act 2004 (“the 2004 Act”) sets out a number of criteria by which a property will be an HMO. Relevant to this appeal is subsection (2) which states that a building or part of a building is an HMO if:
“(a) it consists of one or more units of living accommodation not consisting of a self-contained flat or flats; (b) the living accommodation is occupied by persons who do not form a single household (see section 258); (c) the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259); (d) their occupation of the living accommodation constitutes the only use of that accommodation; (e) rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living accommodation; and (f) two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities.”
[12]Not all HMOs satisfying the test set out above have to be licensed. Section 61 of the 2004 Act requires every HMO to which Part 2 of the 2004 Act applies to be licensed, subject to certain exemptions that are not relevant here. Part 2 of the 2004 Act applies, according to section 55(2), toa. any HMO falling within any prescribed description of HMO, and 4b. any HMO in an area that is designated under section 56 as subject to additional licensing if it is within the description specified in the designation.[13]Regulations made under section 61 prescribe descriptions of HMO for that purpose, and include a requirement that the building is occupied by five or more persons living in two or more separate households. Where the property is in an area designated by the local authority under section 56, a licence may be required where there are fewer than five occupants. The FTT found in this case that the London Borough of Southwark had so designated the relevant area and that the designation required the licensing of HMOs occupied by three or more persons in two or more separate households. That does not appear to have been in dispute. The appellants say that the property met this description, and the respondent’s case is that the appellants failed to prove to the criminal standard that the property was occupied by more than two person at any time. The evidence before the FTT[14]Insofar as it is possible to deduce from the FTT’s decision and from the bundle provided to the Tribunal, the evidence before the FTT was as follows.[15]First, it had the application forms of the two appellants. Mr Barchan’s was signed by him and verified with a statement of truth; the copy of Mr Mortimer’s that I have in the bundle is not signed. Both set out their case in identical terms (save for the dates of their own occupancy and the sums claimed) in section 9 of the form, saying that there were four occupants in the property, in two or more households, and listing a number of health and safety issues including the failure to display a gas safety certificate and the absence of fire extinguishers, fire doors and emergency lighting. Neither form gives the names of other occupants or the dates on which others were in occupation. Mr Mortimer’s form says that he had an assured shorthold tenancy from April 2017 to April 2018 and a periodic tenancy thereafter, until he moved out on 7 June 2018. Mr Barchan’s form says that his contract started on 25 February 2017 “for 6 months which I have renewed since”; the form gives his address as the property.[16]Mr Barchan did not attend the hearing before the FTT.[17]Mr Mortimer did attend and was cross-examined; I say more about his oral evidence later.[18]The respondent provided a statement of case to the FTT, which has not been provided to the Tribunal. He attended the hearing and was represented by a representative of Hulian Ltd, a letting agency.[19]The FTT said that it had copies of tenancy agreements:a. For Mr Mortimer, dated as he said in his application form;b. For Mr Barchan, likewise 5c. Made between Joel Laule and the respondent granting an assured shorthold tenancy of the third double bedroom at the property from 11 March 2017 to 10 September 2017.[20]Those three agreements are in the bundle provided to the Tribunal.[21]The FTT also had a schedule of occupancy prepared by the appellants. A copy of that schedule has been provided to the Tribunal. It is not easy to interpret, but the FTT (which would have had explanation from Mr Mortimer and his representative) found that the schedule said this: “The Applicants prepared a Schedule of Occupancy in which it was alleged that from April 2017 until January 2018 (inclusive) there were for tenants in occupation of the subject property, namely Paul Mortimer, Stephen Barchan, Mathew Hope (replaced by Abdo Ishmael in October 2017) and Joel Laule. For the months February 2018 and March 2018 this Schedule showed only the applicants in occupation; for the month of April 2018, three persons were said to be in occupation (including the applicants and a person called Ayodeji); in May and June 2018, four persons were in occupation (including the applicants, Ayodeji, and a person called Angela).[22]That was what the FTT said the Schedule said, not – it is worth repeating – what the FTT found as a fact. Indeed, the contents of the Schedule were disputed. The respondent made a Statement in Response (which has not been provided to the Tribunal) and attended the hearing. He did not dispute what the applicants said about their own occupation or the rent they said they had paid, but he said that he had been unaware of the requirement to obtain a licence and “as far as he had been aware there were never more than two tenants in occupation at any time”. It was argued on his behalf that the applicants had failed to show that an offence had been committed, and that remains his position in this appeal. The FTT’s decision and reasons, and the grounds of appeal[23]In paragraphs 17 to 19 of its decision the FTT gave a number of reasons why it refused to make a rent repayment order. The grounds of appeal respond to each of the reasons given. I am going to take those paragraphs one by one. Paragraph 17: the duration of the offence[24]In paragraph 16 the FTT stated that it was satisfied that the property was an HMO within the local authority’s additional licensing scheme. Paragraph 17 continues:
“The applicants are also required to show beyond reasonable doubt that an offence was being committed by showing that there were three or more tenants in occupation comprising more than one household and that the offence was being continuously committed during the period for which the rent repayment order is sought. The tribunal finds that on the applicants’ own evidence by way of the 6 Schedule of Occupancy there were only the two applicants in occupation for the months of February and March in 2018 and therefor the alleged offence could not have been committed during this period.”
[25]It appears that the FTT took the view that a rent repayment order could only be made if the offence was committed continuously during the period for which an order was sought.[26]The appellants’ representative says that if there was a two month gap in occupancy during the twelve month period, the offence continues to be committed during that gap. I am not convinced that that is the case and I do not decide it since I have not heard legal argument on that point from the respondent and the point is not essential to this decision.[27]What the respondent says is that for a rent repayment order to be made there must have been more than two tenants in the property at any time in the twelve months prior to the application date. That is incorrect; the offence must have been committed “in the period of 12 months ending with the day on which the application is made” (section 41(2)), and the rent to be repaid must relate to “a period, not exceeding 12 months, during which the landlord was committing the offence” (section 44(2), emphasis added).[28]Turning to the FTT’s decision, it is not clear whether the FTT took the view, as does the respondent, that the offence must be shown in all cases to have been committed for a period of 12 months; if it did, that was an error. What the FTT clearly did find is that since there was a two month gap during which (it found as a fact) only two people lived in the property, during the 12 months for which an applicant claimed, no order could be made at all, whether or not there were three or more occupants at any other time. That is an obvious error. There is no “all or nothing” requirement such that if the appellant cannot satisfy the burden of proof for the whole of the period for which he claims, no order can be made at all. Insofar as it refused to make a rent repayment order for that reason the FTT made an error of law.[29]It should be noted that since Mr Barchan was claiming for a twelve month period ending on the date of his application (paragraph 6 above) the gap did not fall within the twelve months for which he claimed, but as will be seen that does not make any difference to the outcome of the appeal. Paragraph 18: the number of occupants proved to have been in the property[30]Paragraph 18 reads as follows:
“In tis instance the tribunal was not provided with any witness statements (with statements of truth) from either of the applicants or any of the other tenants testifying to their dates of their occupation of the subject premises as set out in the tribunal’s clear directions given on 18 June 2019. Further, no evidence was given by the applicants as to whether either or both were in receipt of any universal credit or housing benefit during any part of their occupation and if so, in what sum. Despite the production of a tenancy agreement for Mr Laule without further written or oral evidence the tribunal is not satisfied so that it is sure beyond reasonable 7 doubt that there were three or more tenants comprising more than one household during the period for which the applicants seek a rent repayment order.”
[31]The appellants take issue with all three sentences in that paragraph.[32]First, it is not the case that the FTT had no statements verified by a statement of truth. Mr Barchan’s application form was so verified. I agree (paragraph 15 above).[33]Second, the appellants say that there was no reason why the FTT should have been troubled by the absence of any evidence about universal credit or housing benefit, since neither was in receipt of either and so there was no reason for them to mention these benefits. I agree.[34]Third, the appellants say that they had provided sufficient evidence to prove, to the criminal standard, that the offence had been committed. Here I part company with the appellants.[35]The absence of evidence from one or more occupants of an HMO in a case such as this need not be fatal to the tenants’ case. They have to prove their case beyond reasonable doubt, but – depending upon the view the FTT takes of their credibility – they may well be able to do that by a combination of their own evidence and corroborating documentation. As I said in a recent appeal, Opara v Olasemo [2020] UKUT 0096 (LC), for a matter to be proved to the criminal standard it must be proved “beyond reasonable doubt”; it does not have to be proved “beyond any doubt at all”. In that case there was no dispute about the number of occupiers; the issue was whether they had been in occupation as their only or main residence, and the tribunal had to consider the evidential difficulties that arise when the applicant gives evidence but the other occupiers do not. The Tribunal pointed out that it is legitimate to draw inferences from proven circumstances, under the criminal standard of proof as under the civil standard.[36]In the present appeal, similarly, none of the people who the appellants said were in occupation of the property attended to give evidence. For one of them a tenancy agreement was produced. Does that make it impossible to prove occupancy beyond reasonable doubt? Or does it, as Flat Justice for the appellants claims, make reasonable doubt impossible?[37]The answer is going to vary from case to case. It is unlikely that the FTT would be sure that an offence had been committed on the basis of a written statement – sworn or not – from an applicant together with a copy of another person’s tenancy agreement; an applicant who does not attend for cross-examination should not be surprised if his written evidence alone does not furnish proof beyond reasonable doubt, whether or not it is backed up by documentary evidence. On the other hand in a case such as the present where the FTT had an application verified by a statement of truth from one applicant, three tenancy agreements, and the evidence of Mr Mortimer who attended for cross-examination, the strength of the evidence taken together would depend very much upon the evidence given by Mr Mortimer at the hearing. It is well-established that the tribunal will be slow to interfere with the FTT’s assessment of evidence where it has heard and seen the witness.[38]What the FTT said about Mr Mortimer’s evidence, at its paragraph 12, was this: 8 “In oral evidence to the tribunal Mr Mortimer stated that when he had moved into the subject premise there were three other tenants in occupation including Stephen Barchan, Mathew Hope and Joel Laule. Mr Mortimer stated he had moved out of the premises on 07/06/2018 as he wanted to go travelling and had sought permission to sub-let his room which was refused. Mr Mortimer told the tribunal that during his occupancy other tenants came and went from the property although he was not able to be specific about the dates or their identity”.[39]I have explained above that the FTT was in error about the length of time for which the offence had to continue in order for a rent repayment order to be made; and other errors have been seen in paragraph 18 of its decision. But it is clear that even if it had not made those errors, it would not have made the order because of the standard of evidence given by Mr Mortimer. He did not give enough detail about dates or about the identity of other occupants – those being very basic elements of the evidence that the FTT needed – to prove beyond reasonable doubt that the offence had been committed. Paragraph 19: Mr Barchan[40]Finally at paragraph 19 the FTT said: “… the tribunal finds the period for which Mr Barchan claims a rent repayment order is unclear from the application and other documentary evidence relied upon by the tribunal. As the tribunal was not provided with any signed witness statement or oral evidence from Mr Barchan, it has not been satisfied so that it is sure beyond any reasonable doubt that an offence was being committed during his period of occupation. Further, the tribunal is unclear whether Mr Barchan’s occupation of the premises is continuing or if it has come to an end and if so when.[41]The FTT made further errors of fact in considering Mr Barchan’s evidence. The period for which he claimed a rent repayment order is clearly stated in Mr Barchan’s application form. The form gives his address as the property, so it would appear that he was there at the application date. On the other hand, as I said above, it was reasonable for the FTT not to regard Mr Barchan’s evidence as being of any assistance so far as the number of occupants was concerned, since he did not attend for cross-examination. That aspect of the FTT’s approach to Mr Barchan’s evidence was cannot be faulted. Conclusion[42]The FTT gave a number of reasons for its decision, and those reasons have to be examined with care. It appears that the FTT made some factual errors about Mr Barchan’s position, which could have been cleared up had Mr Barchan attended and which were not fundamental to the decision. The FTT did not pick up matters that were clear from Mr Barchan’s application, namely his address and the period for which he claimed a rent repayment order. The FTT made some errors of law in its reasoning, in particular the misconception about the period for which the offence must be shown to have continued; the latter point would have made the decision a flawed one if it had been the FTT’s only reason for refusal. However, the reason why the appeal must fail is that the FTT, which saw and heard the evidence of Mr 9 Mortimer, came to the conclusion that it could not be sure about the occupation of the property during the relevant period.[43]This is not a case where the FTT demanded a higher standard of evidence than is required to meet the criminal burden of proof. It was left in doubt by the evidence of Mr Mortimer, who was not able to be specific about the identity of other occupants or about the dates on which they were present. Mr Barchan did not attend to give evidence and so could not dispel those doubts. On that basis it is unsurprising that the FTT was not satisfied that the offence had been committed, and its decision would have been the same even without the errors identified above. It is unusual for the Tribunal to interfere with a decision that turns on the FTT’s assessment of the evidence of witnesses who attended the hearing, and there is no reason for the Tribunal to do so in this case. The appeal fails. Judge Elizabeth Cooke 17 April 2020 10 (signature 1) (signature 2) (Judge Name) (Member Name) Dated: (insert date)

Cited in 2 later judgments