John Anthony Newell v Joe Abbott & Anor

A landlord’s ignorance of a licensing requirement may constitute a reasonable excuse, but only where the ignorance was objectively reasonable in the landlord’s circumstances. The standard reasonably expected of landlords is relevant, although individual knowledge, experience and circumstances may affect the assessment.

When fixing a rent repayment order for an unlicensed property, the tribunal must assess the seriousness of the particular offence both against other offences attracting rent repayment orders and against other examples of the same offence. Licensing offences are generally less serious than violence, unlawful eviction and banning-order offences. The maximum award is ordinarily reserved for the most serious cases. Serious or potentially serious misconduct should be considered, but trivial matters need not be examined in detail.

The appellant, John Newell, owned and informally let a flat in Tower Hamlets. The property fell within a selective licensing scheme under Part 3 of the Housing Act 2004, but he did not obtain a licence and said he was unaware of the scheme.

The respondents, Joe Abbott and Aleksander Okrojek, applied to the First-tier Tribunal for rent repayment orders. The FTT rejected the reasonable-excuse defence and ordered repayment of 80% of the rent paid during 12 months, namely £5,760 to each respondent. The central issues were whether the FTT had erred in rejecting the defence and whether it had applied the correct principles in assessing the amount repayable.

1. Reasonable excuse. The appeal failed on this ground. The objective approach in Marigold v Wells [2023] UKUT 33 (LC) requires the tribunal to identify and find the facts relied on, then decide whether those facts objectively constituted a reasonable excuse for this landlord in the circumstances. An honest mistake is insufficient by itself.
2. The standards reasonably expected of landlords are an important measure of objective reasonableness. They do not create an inflexible rule that ignorance can never be excused. Individual knowledge, experience and circumstances may adjust what is objectively reasonable. The FTT had considered the appellant’s circumstances and was entitled to find that his prolonged failure to inform himself did not amount to a reasonable excuse. The first ground was dismissed.
3. Quantum. The appeal succeeded on the assessment of the rent repayment orders. Under section 44(4) of the Housing and Planning Act 2016, the FTT must consider the conduct of landlord and tenant, the landlord’s financial circumstances and relevant convictions. The seriousness of the offence is a significant aspect of landlord conduct.
4. Following Acheampong v Roman [2022] UKUT 239 (LC), the seriousness of the offence must be assessed both against other offences for which rent repayment orders may be made and against other examples of the same offence. Managing an unlicensed Part 3 house is generally one of the less serious housing offences, although individual licensing offences may vary substantially. The maximum award is ordinarily reserved for the most serious cases.
5. The FTT had assessed the offence only against other section 95(1) offences and had also expressed disagreement with binding Upper Tribunal guidance. That was an error of principle sufficient to undermine its decision. The Tribunal therefore set aside the FTT’s decision and redetermined the awards on the undisputed findings, disregarding unproved allegations.
6. The appellant’s inadvertence, single-property ownership and the generally good condition of the accommodation justified a lower award. His respectful and considerate treatment of the tenants was capable of mitigating the penalty. The appropriate repayment was 60% of the rent received: £4,320 to each respondent, payable within 21 days.

• Upper Tribunal (Lands Chamber): allowed the appeal in part, set aside the First-tier Tribunal’s decision and substituted orders for repayment of £4,320 to each respondent.
• First-tier Tribunal (Property Chamber): on 20 December 2023 ordered repayment of £5,760 to each respondent, representing 80% of rent paid during the final 12 months of the relevant tenancy periods.