Louise Irvine v Dr Anthony Metcalfe & Ors

A rent repayment order under section 40 of the Housing and Planning Act 2016 may be made only against the applicant tenant’s immediate landlord. A superior landlord is outside the jurisdiction for rent paid while an intermediate tenancy subsists.

A reasonable excuse for control of an unlicensed HMO must excuse the continuing absence of a licence. An expectation that the property will soon cease to require licensing is insufficient, particularly where a temporary exemption notice is available. The person relying on the defence must establish it on the balance of probabilities.

Where a tribunal finds facts amounting to a criminal housing offence, it must give reasons which demonstrate that it addressed the essential issues and resolved the distinct defences advanced.

The tenant respondents obtained a rent repayment order from the First-tier Tribunal requiring Mrs Irvine, the superior owner of an unlicensed HMO, to repay £45,043.88. The house had been let to Uptown Properties Ltd under a company letting agreement. Uptown granted room agreements to the respondents and later entered liquidation.

An earlier Upper Tribunal appeal had been dismissed in Irvine v Metcalfe [2021] UKUT 60 (LC). That decision was set aside on review after the Supreme Court confirmed that a rent repayment order could be made only against the immediate landlord. Mrs Irvine then pursued a renewed appeal against the FTT’s order.

The central issues were whether the company letting agreement was a tenancy, whether the FTT had jurisdiction for the periods before Uptown’s liquidation and after the house ceased to be an HMO, and whether it had adequately addressed Mrs Irvine’s reasonable-excuse defence.

1. Appeal allowed. The FTT’s decision was set aside in its entirety. The Tribunal redetermined the application and substituted a rent repayment order totalling £9,800.

2. The agreement with Uptown created a tenancy. It granted Uptown occupation for a term at a rent, reserved no right inconsistent with exclusive possession, and expressly contemplated subletting. It continued periodically after the original term expired. Applying Rakusen v Jepsen [2023] UKSC 9, the FTT therefore lacked jurisdiction to order repayment of rent paid before Uptown’s liquidation on 7 February 2019, when Mrs Irvine was the respondents’ superior rather than immediate landlord.

3. The FTT also lacked a sufficient evidential basis to find, to the criminal standard, that the property remained an unlicensed HMO after 18 August 2019. The order could not cover that later period.

4. The FTT failed to address the separately advanced reasonable-excuse defence. Its later assertion that it had not been persuaded by the excuse did not identify the excuses, distinguish the relevant periods, or explain its conclusion. Although later reasons can suffice in principle, they must demonstrate that the essential issues were addressed. The need for adequate reasons was especially important because the order required a finding of criminal culpability.

5. On redetermination, Mrs Irvine did not establish a reasonable excuse between 7 February and 18 August 2019. The prospect that the property would soon cease to require a licence did not excuse continued control of an unlicensed HMO. A temporary exemption notice under the Housing Act 2004 provided a route for a short licensing period. Nor was there sufficient evidence that Mrs Irvine or her agent required time to discover the licensing requirement; the agent’s knowledge was available to her.

6. The Tribunal calculated rent paid during the relevant period, deducted service costs, and allowed a 25% reduction for the seriousness of the offence and landlord conduct. The substituted sums were payable individually to six respondents; no sum was payable to Ms Zuccala.

• Upper Tribunal (Lands Chamber): In Irvine v Metcalfe [2023] UKUT 283 (LC), the Tribunal allowed the renewed appeal, set aside the FTT decision, and redetermined the application.
• Upper Tribunal (Lands Chamber): The earlier appeal was dismissed in Irvine v Metcalfe [2021] UKUT 60 (LC). That decision was later set aside on review, permitting the appeal to be redetermined.
• First-tier Tribunal (Property Chamber): On 27 January 2020, the FTT made a rent repayment order of £45,043.88 against Mrs Irvine.