Reasonable excuse - a defence to not licensing an HMO

Thurrock Council v Khalid Daoudi concerned an appeal to the Upper Tribunal (UT) from the decision of the First-tier Tribunal (FTT)

to cancel a £10,000 civil penalty imposed upon the respondent by the appellant for the offence of managing or being in control of a house in multiple occupation (HMO) that is required by the Housing Act 2004 to be licensed, when it was not licensed. Although the elements of the offence had been made out, the FTT found that it was not reasonable or appropriate to impose a financial penalty.

The Council appealed.

The UT decided that whilst there was no reason in principle preventing the FTT from deciding not to impose a penalty despite a breach of the criminal law, a substantial justification would be required based on more than sympathy for the personal circumstances of the offender and his family. The UT found that at least two of the factors which the FTT took into consideration were irrelevant, but Mr Daoudi’s swift compliance with the notice requiring works and his cooperation with the investigation were significant mitigating features – although they did not justify imposing no penalty at all. Accordingly the FTT’s decision was set aside and the penalty was reduced to £4,000. Judge Rodger also stated that the Council may wish to give further consideration to its policy to explain more clearly how it is intended to operate and to eliminate some of its confusion and uncertainty.