George Marigold & Ors v Robert Wells

A reasonable-excuse defence to the continuing offence of controlling or managing an unlicensed HMO must be established for the whole period during which the offence is alleged to have been committed. An assurance from a local housing authority may initially provide a reasonable excuse, but its reasonableness may diminish as time passes without further contact or inquiry. The issue is evaluative and fact-sensitive. An appellate tribunal should not reassess the facts afresh, but must intervene where the first-instance tribunal has failed to consider a material factor or give adequate reasons. A rent repayment order appeal may be brought on a ground other than a point of law under section 53(1) of the Housing and Planning Act 2016.

The appellants, former tenants of a self-contained flat occupied as an HMO, sought a rent repayment order against the respondent landlord. The flat became subject to additional licensing under Part 2 of the Housing Act 2004 from 1 April 2019, but remained unlicensed.

The landlord relied on a telephone assurance from the local housing authority that no licence was then required and that he would later be contacted when a different licence became necessary. The First-tier Tribunal accepted that account and found a reasonable excuse, dismissing the application in substance. It did not address whether the excuse remained reasonable throughout the claimed period. The central issue on appeal was whether that omission required the decision to be set aside.

1. Appeal allowed. The FTT’s decision was set aside and the rent repayment application was remitted for further consideration.
2. An appeal from an FTT rent repayment order decision may be brought either on a point of law under section 11 of the Tribunals, Courts and Enforcement Act 2007, or on another ground under section 53(1) of the Housing and Planning Act 2016. Permission is required in either case. A factual challenge will rarely succeed, but may do so where a finding is unsupported by the evidence or one which no reasonable tribunal could have reached.
3. The decision whether a landlord has a reasonable excuse is an evaluative, multi-factorial assessment. On appeal, the Upper Tribunal must ask whether the FTT’s decision was undermined by an identifiable flaw, such as a gap in logic, inconsistency, or failure to take account of a material factor. It must not conduct the balancing exercise afresh.
4. The offence under section 72(1) of the Housing Act 2004 is continuing. A person relying on the defence in section 72(5) must therefore establish a reasonable excuse for the entire period during which the offence is alleged to have continued.
5. The FTT had accepted the landlord’s account of the authority’s assurance, and that finding was not itself challenged. However, the FTT failed either to consider the tenants’ central submission that the assurance became less reasonable to rely on as time passed, or to explain its conclusion on that issue. That was an identifiable flaw or, alternatively, a failure to give adequate reasons.
6. The systematic approach in Perrin v HMRC [2018] UKUT 156 (TCC) provided useful guidance: identify the asserted facts, determine which are proved, and decide objectively whether they amount to a reasonable excuse and when that excuse ceased, taking account of the individual’s relevant attributes and circumstances.
7. The FTT could reconsider the matter, including the duration of the excuse, without revisiting its primary finding about what the authority employee told the landlord. It could decide whether to admit additional evidence.

• Upper Tribunal (Lands Chamber): allowed the appeal from the First-tier Tribunal and remitted the rent repayment application for further consideration.
• First-tier Tribunal (Property Chamber): found that the landlord had a reasonable excuse for controlling an unlicensed HMO and dismissed the rent repayment application in substance; it stated that it would otherwise have ordered repayment of £24,143.42.