Upper Tribunal clarifies mitigation and totality principles in Hasan Kazi v Bradford Metropolitan District Council

Citation: [2023] UKUT 263 (LC)
Judgment on

Introduction

In the case of Hasan Kazi v Bradford Metropolitan District Council (2023) UKUT 263 (LC), the Upper Tribunal (Lands Chamber) examined the appeal against decisions by the First-tier Tribunal related to civil penalties imposed for housing offences. This case focused on key legal principles, including mitigation, the totality principle, and the imposition of civil penalties ensuring no landlord profits from housing offences. Through careful analysis, the judgment elucidates the appropriate application of these principles in determining the outcome.

Key Facts

The appellant, Mr. Hasan Kazi, experienced landlord owning several properties, was subject to civil penalties for failing to comply with the Housing Act 2004 in relation to the property at 2 Laisteridge Lane, Bradford. The local authority imposed penalties for non-compliance with improvement notices concerning two flats, each lacking a proper heating system and a new kitchen, and for violations of regulations governing the management of Houses in Multiple Occupation (HMO).

The First-tier Tribunal upheld the penalties determined by the local housing authority, citing high culpability and medium harm. Mr. Kazi appealed the decision on the grounds that mitigation was not adequately considered, specifically the local authority’s dual role in housing vulnerable tenants at the property, the tenants’ contributions to the state of the property, the inflexibility of the Council’s policy on mitigation, and the incorrect application of the totality principle.

Mitigation

Mitigation involves considering circumstances that may warrant a reduction in the severity of the penalty. One key issue in this case was the accommodation of vulnerable tenants at the request of the local authority. While the appellant’s argument of the authority’s dual role did not provide a basis for mitigation, the tenants’ contribution to property damage and the difficulties faced in rectifying issues due to tenant behavior were deemed significant factors for mitigation.

Totality Principle

The totality principle requires that multiple penalties reflect all offending behavior and remain just and proportionate. The First-tier Tribunal was found to have erred in assessing this principle, as it did not consider reducing each individual penalty proportionally.

Fettering of Discretion

A local authority or Tribunal should not adopt an inflexible policy, known as ‘fettering its discretion’, that precludes case-by-case evaluation. The FTT incorrectly adhered to the Council’s policy of using a fixed 5% mitigation adjustment, failing to exercise proper discretion.

No Benefit from Non-Compliance

Established in Sutton v Norwich City Council [2020] UKUT 90 (LC), penalties should be high enough to prevent landlords from benefitting financially from their offences. However, the ‘final determinant’ policy of the Council, which the FTT followed, was found not to accurately remove financial benefit and was thus an incorrect application of this principle.

Outcomes

Upon appeal, the Upper Tribunal found that the First-tier Tribunal had significantly restricted its discretion by rigidly adhering to the 5% mitigation limit imposed by the local authority’s policy. Furthermore, the FTT’s application of the ‘final determinant’ was irrational, and the totality principle was not properly taken into account.

As a result, the Upper Tribunal exercised discretion to reassess the appropriate mitigation for each specified offence and set aside the initially imposed penalties. New penalties were determined and adjusted accordingly for mitigation and avoidance of double counting, leading to a total penalty reduced from over £49,000 to £26,500.

Conclusion

The Upper Tribunal in Hasan Kazi v Bradford Metropolitan District Council has clarified important legal principles regarding the imposition of civil penalties for housing offences. It emphasized the need for Tribunals to exercise discretion when considering mitigating circumstances. The judgment also rejects the ‘final determinant’ policy as irrational and underlines the accurate application of the totality principle, ensuring penalties are proportional and do not over-penalize for related offences. This case reaffirms the principle that a landlord must not financially benefit from non-compliance while insisting on a balanced and tailored approach to setting civil penalties.