Gaskin, R (On the Application Of) v Richmond Upon Thames London Borough Council & Anor

Letting and managing private residential accommodation for profit is a service for the purposes of the Services Directive where it constitutes self-employed economic activity normally provided for remuneration. The Part 2 licensing regime under the Housing Act 2004 is an authorisation scheme regulating that activity. An authority may charge only fees reasonable and proportionate to the cost of the authorisation procedures and formalities. It may not require payment at the application stage of sums attributable to the subsequent management or enforcement of the licensing scheme.

The claimant owned and managed houses in multiple occupation. He applied to renew an HMO licence but refused to provide certain occupier information and declined to pay the local authority’s fee, which included costs of managing and enforcing the licensing scheme. Criminal proceedings for operating an unlicensed HMO were stayed.

A different Divisional Court had already ruled on the domestic-law grounds and adjourned the Services Directive issue. The question before this Divisional Court was whether, in refusing to process the renewal application without the demanded fee, the Council acted contrary to the Services Directive.

1. Claim allowed. The court granted declarations that the claimant’s letting activity was a service activity, that Part 2 of the Housing Act 2004 constituted an authorisation scheme, and that the Council could not demand the fee sought.
2. The expression “service” in Article 4 of the Services Directive and regulation 2 of the Provision of Services Regulations 2009 has a broad scope. It covers any self-employed economic activity normally provided for remuneration. The claimant personally managed rented accommodation and performed activities including negotiating utilities and insurance and arranging maintenance. Those activities formed such an economic activity.
3. The characterisation did not depend on whether the activity was carried on through a company, whether the claimant was registered as a business, whether business rates were paid, or whether the occupants used the accommodation for business purposes. The focus was on the provider’s activity.
4. The HMO licensing regime regulated more than the physical suitability of the property. Sections 64, 66, 67, 68 and 70 of the Housing Act 2004 showed that it also regulated the licence holder, manager, management arrangements, use and occupation. The licensing provisions were therefore an authorisation scheme for the economic activity.
5. Article 13(2) of the Services Directive and regulation 18(4) of the Provision of Services Regulations 2009 limited an application-stage charge to the cost of the relevant procedures and formalities. The Council’s fee included a substantial contribution to later management and enforcement costs and was unlawful. The distinction between an initial application and renewal did not alter that conclusion.
6. The court could not reopen the challenge to the section 16 notice under the Local Government (Miscellaneous Provisions) Act 1976. That issue had been finally determined by the earlier Divisional Court’s perfected order, and no appeal had been brought.

• Earlier Divisional Court: In [2017] EWHC 3234 (Admin), the court allowed the claim on the occupier-information issue, dismissed the other domestic-law grounds, and adjourned the Services Directive issue.
• High Court (Administrative Court), Divisional Court: The present court allowed the remaining claim and granted the declarations sought.