Upper Tribunal clarifies the importance of reasonable excuse in Park Green Investments v Teignbridge District Council case

Citation: [2023] UKUT 292 (LC)
Judgment on

Introduction

In the case of Park Green Investments Limited v Teignbridge District Council [2023] UKUT 292 (LC), the Upper Tribunal (Lands Chamber) was tasked with hearing an appeal against a decision of the First-tier Tribunal (Property Chamber). The appeal addressed the imposition of a financial penalty under section 249A of the Housing Act 2004 for alleged failure to comply with an improvement notice served by the Council. The notice concerned the repair of a fire alarm system and the obstruction of common escape routes in a building with three flats. The case explored the boundaries of reasonable excuse and the application of a local housing authority’s policy in determining financial penalties.

Key Facts

Park Green Investments Limited appealed the First-tier Tribunal’s reduction of a £10,000 financial penalty to £5,000, as they were unable to repair the fire alarm in one of the flats due to the leaseholder’s lack of cooperation. The building’s common escape routes were also obstructed by items placed by the leaseholders. Despite efforts, access to carry out repairs was denied, and obstructions were continuously restored by the leaseholders.

The Upper Tribunal examined the application of the statutory provisions regarding improvement notices and civil financial penalties, the concept of reasonable excuse, and the adequacy of the FTT’s consideration of the Council’s enforcement policy.

The Upper Tribunal considered several legal principles under the Housing Act 2004, including:

  • Categories and enforcement measures related to hazards on residential premises (sections 5, 7, 11-19, and Schedule 1).
  • Definitions of “owner” (section 262(7)) and “person managing” the premises (section 263).
  • The service of improvement notices (section 18 and paragraphs 1-5 of Schedule 1).
  • The offence of failing to comply with an improvement notice (section 30(1)).
  • The statutory defence of “reasonable excuse” for non-compliance (section 30(4)).
  • Appeals against improvement notices (Schedule 1, particularly paragraph 11(1) and 16(3)).
  • Local housing authority policies (Schedule 13A and relevant Government Guidance).

The case also involved examining the exercise of discretion by decision-makers, as articulated by Judge Cooke in London Borough of Waltham Forest v Marshall [2020] UKUT 35 (LC) and confirmed by Sutton v Norwich City Council [2021] EWCA Civ 20, which underscore the need for a tribunal to begin with the policy but not be bound by it if there are compelling reasons to depart from it.

Outcomes

The Upper Tribunal allowed the appeal and set aside the financial penalty notice. Key outcomes and rationale included:

  • Reasonable Excuse: The Upper Tribunal found that the FTT did not adequately consider whether the appellant had a reasonable excuse for non-compliance. The persistent denial of access by a leaseholder and difficulties in removing obstructions were considered reasonable excuses.
  • Policy Application: The Tribunal found that the FTT mistakenly believed it was applying government guidance when it was, in fact, the council’s own policy. Moreover, it misdirected itself by treating the Council’s policy as binding when it thought the policy was arbitrary.
  • Redetermination: The Tribunal held that the FTT’s significant error in applying the policy requires its decision to be set aside. The Upper Tribunal redetermined the matter, absolving the appellant of the financial penalty on the basis of a reasonable excuse.

Conclusion

In Park Green Investments Limited v Teignbridge District Council, the Upper Tribunal demonstrated the importance of a proper and contextual interpretation of legal principles, such as the statutory defence of a “reasonable excuse.” Furthermore, this case underlines that tribunals must exercise their discretion and may depart from local authority policies that are deemed arbitrary or illogical. The decision also clarifies that the statutory requirements for complying with improvement notices must be taken literally and that missing an implied requirement does not necessarily equate to non-compliance. The ruling therefore offers valuable clarity on the interaction between local authority policies, statutory defences, and the duties of landlords with respect to improvement notices.