London Borough of Waltham Forest v Lisa and Michael John

On an appeal from a civil penalty decision, the First-tier Tribunal must start from the local authority’s enforcement policy and explain any departure from it. An appellate tribunal may interfere only for an unreasonable decision or an identifiable flaw in reasoning, such as a logical gap, inconsistency or failure to consider a material factor.

Mitigation may affect the amount of a penalty within the policy’s band, but does not justify departure from the band unless exceptional circumstances exist. The commission of an offence does not make a civil penalty inevitable. Separate offenders need not be equally culpable.

The London Borough of Waltham Forest imposed civil penalties under the Housing Act 2004 on Michael John and Lisa John for failing to obtain a selective licence. The First-tier Tribunal found that both had committed the offence, but reduced Mr John’s penalty to £4,000 and imposed no penalty on Mrs John.

The authority appealed, arguing that the First-tier Tribunal had departed from its enforcement policy without identifying exceptional circumstances, wrongly treated delay and family illness as mitigation, allowed an unauthorised discount, and wrongly imposed no penalty on Mrs John.

1. Appeal concerning Mr John allowed. The First-tier Tribunal’s decision was set aside and the Upper Tribunal substituted a penalty of £4,000.
2. The appellate restraint described in [2021] EWCA Civ 20 applied. A civil penalty involves evaluation and discretion. Interference was justified only where the decision was unreasonable or affected by an identifiable flaw in reasoning.
3. The First-tier Tribunal had to start from the authority’s enforcement policy and explain any departure from it, as stated in [2020] UKUT 35 (LC). Mr John’s delayed licence application was not mitigation. His son’s illness was a proper mitigating factor, but it was not an exceptional circumstance justifying departure below band 2.
4. The First-tier Tribunal also erred in allowing a 20% early-payment discount while the matter remained under appeal. The penalty was therefore set at £5,000, with the policy discount applied because an application for a licence had been made, producing £4,000.
5. Appeal concerning Mrs John dismissed. The policy did not make a financial penalty inevitable after an offence had been committed. The decision-maker could choose a warning or caution, or impose no financial penalty where culpability was insufficient. Separate offenders were not necessarily equally culpable.
6. The First-tier Tribunal was entitled to conclude that Mrs John’s limited practical involvement and lack of prior communications meant that her culpability did not justify a financial penalty. Its evaluative judgment was not flawed in the appellate sense.

• Upper Tribunal (Lands Chamber): appeal allowed as to Mr John; the First-tier Tribunal decision was set aside and a £4,000 penalty substituted. Appeal dismissed as to Mrs John.
• First-tier Tribunal (Property Chamber): found both respondents liable, reduced Mr John’s penalty to £4,000 and imposed no penalty on Mrs John.