City of Bradford Metropolitan District Council v Hasan Kazi

A local authority’s civil-penalty policy does not fetter discretion merely because it states that a specified percentage will normally be applied for aggravating or mitigating factors. The usual percentage is not a mandatory limit. Separate factors may be cumulative, and the policy must be read as a whole. An appeal to the First-tier Tribunal under Schedule 13A is a rehearing of the penalty decision, rather than a general challenge to the authority’s policy. The Court of Appeal allowed the appeal and fixed each penalty at £13,500.

The Council imposed three civil penalties on a landlord under the Housing Act 2004: two for failing to comply with improvement notices under section 30, and one for failing to comply with HMO regulations under section 234. The First-tier Tribunal upheld the penalties. The Upper Tribunal allowed the landlord’s appeal, held that the Council’s enforcement policy unlawfully fettered discretion, and re-made the penalties at lower amounts: [2023] UKUT 263 (LC).

The Council appealed. It challenged the construction of the policy, but did not pursue the policy’s final-determinant mechanism and abandoned its challenge to mitigation based on tenant conduct. The central issue was whether the policy’s ordinary 5% adjustment for each aggravating or mitigating factor imposed an inflexible limit.

1. Appeal allowed. The policy did not fetter the discretion of the Council or the First-tier Tribunal. The Court observed that section 249A of the Housing Act 2004 leaves the amount of a financial penalty to the local housing authority, subject to the statutory maximum. Schedule 13A provides for a rehearing before the First-tier Tribunal, which may confirm, cancel or vary the penalty.
2. The policy had to be read as a whole. Its provision that a penalty would normally be adjusted by 5% for each applicable aggravating or mitigating factor meant that 5% was the usual figure, not a mandatory limit. A factor could justify a greater or smaller adjustment, and separate factors could accumulate.
3. The provision dealing with multiple items of non-compliance was a qualified exception concerning that particular aggravating factor. Its ordinary single 5% or 10% uplift did not remove the wider discretion, particularly because the provision itself used the word normally. The First-tier Tribunal had therefore acted lawfully in using the policy.
4. The Council did not pursue the final-determinant ground and abandoned its challenge to the further mitigation for tenant conduct. The Court re-made the decision under sections 14(2)(b)(ii) and 14(4) of the Tribunals, Courts and Enforcement Act 2007. The section 234 penalty was fixed at £13,500, and each section 30 penalty was fixed at £13,500 by applying the ordinary 5% discount. No order for costs was made.
5. The Court did not decide the separate question whether, on an appeal of this kind, the First-tier Tribunal should depart from a policy which unlawfully fetters discretion. That issue was left for a case in which it mattered.

• Court of Appeal (Civil Division) allowed the Council’s appeal and re-made the decision, fixing each of the three civil penalties at £13,500: [2024] EWCA Civ 1037.
• Upper Tribunal (Lands Chamber) allowed the landlord’s appeal, found that the Council’s policy unlawfully fettered discretion, and re-made the penalties: [2023] UKUT 263 (LC).
• First-tier Tribunal (Property Chamber) found the offences proved and upheld the penalties imposed by the Council. Its citation was not stated in the judgment.