Salford City Council v Richard Brown

Under section 251 of the Housing Act 2004, a director is not liable merely by holding office: the company offence and the director’s consent, connivance or neglect must be proved. Neglect can be inferred from responsibility for the matters giving rise to the offence; no specific omitted act need be identified. A sole director cannot avoid possible liability merely by delegating statutory compliance to someone without the legal status of a director or other company officer. Delegation does not establish guilt: the tribunal must still determine whether the company committed an offence and whether it was attributable to the director’s neglect.

Salford City Council imposed a financial penalty on Richard Brown as the sole director of Want This Room Limited (WTR), which managed a house in multiple occupation. The Council alleged that WTR had breached applicable regulations and that the offence was attributable to Brown’s neglect under section 251 of the Housing Act 2004. The First-tier Tribunal (Property Chamber), in a decision dated 18 August 2025, accepted that Brown had delegated day-to-day compliance to Kemi Egan, described as a shadow director, and found no neglect. It did not decide whether WTR had committed the offence. The Council appealed. The central issue was whether delegation to a person who was not a statutory director, officer or employee could prevent Brown’s liability under section 251.

The appeal was allowed because the FTT was wrong to treat delegation to Ms Egan as a complete answer to liability. The matter was remitted to a differently constituted FTT to be determined afresh.

1. Statutory conditions. Section 251 of the Housing Act 2004 does not make an officer liable by reason of office alone. The company’s offence must first be proved, together with the officer’s consent, connivance or neglect. The appeal decided only that Brown’s liability was not excluded as a matter of law by the delegation; it did not establish that WTR had committed an offence or that Brown was liable.
2. Neglect and responsibility. It is not necessary to identify a specific act that the officer should have performed. Neglect may be inferred where the circumstances giving rise to the offence fall within the functions of the office. The inference is easier where the risk was under the officer’s direction or control, and harder as the officer’s responsibility becomes more remote. The Tribunal drew on the dicta in Wotherspoon v H M Advocate (1978) JC 74, the treatment of those dicta in R v P [2008] ICR 96, and R v Chargot Limited (t/as Contract Services) & ors [2009] 1 WLR 1.
3. Delegation and divided responsibilities. Huckerby v Elliott [1970] 1 All ER 189 concerned a division of responsibility between directors. A director responsible for one area was not required to supervise a co-director responsible for another. That principle did not establish that a director could transfer statutory responsibility by delegating compliance to someone who was not a director, officer or employee. Ms Egan’s description as a director or shadow director did not give her the legal role and statutory responsibilities of a director. Brown’s extensive workload did not remove his statutory responsibilities. More than one person might be liable under section 251.
4. Remittal. The FTT must first decide whether WTR committed an offence. It must then decide, on the criminal standard of proof, whether the offence was attributable to Brown’s neglect, by direct finding or inference. Only if it finds neglect should it determine the penalty. A breach resulting from a failure to take required action may readily support an inference of neglect, but breaches do not invariably result from a failure to act; that assessment remains for the FTT.

1. Upper Tribunal (Lands Chamber): Allowed the Council’s appeal and remitted the matter to a differently constituted FTT for a fresh determination.
2. First-tier Tribunal (Property Chamber): On 18 August 2025, found no neglect by Brown and did not determine whether the company had committed an offence or the amount of any penalty.