Phoebe Cottam & Ors v Lowe Management Limited
[2023] UKUT 306 (LC)
Nottingham City Council v Housing 35 Plus Limited
14 November 2024
[2024] UKUT 349 (LC)
Upper Tribunal
A housing co-op challenged fines for not licensing its buildings as HMOs. The rules said members make decisions at meetings, but a committee actually made many choices. The court said the rules didn't meet the law's requirements, so the co-op lost, but the fines will be reconsidered based on the new information.
Key Facts
- •Nottingham City Council (appellant) issued financial penalty notices to Housing 35 Plus Limited (respondent) for managing unlicensed HMOs.
- •The respondent is a co-operative society managing two properties.
- •The case hinges on whether the respondent's rules meet the requirements of paragraph 2B of Schedule 14 to the Housing Act 2004, which exempts certain co-operative buildings from HMO licensing.
- •The key dispute concerns the interpretation of the respondent's rules regarding the decision-making process between the general meeting and the management committee.
Legal Principles
Paragraph 2B of Schedule 14 to the Housing Act 2004 exempts buildings managed by co-operative societies from HMO licensing if certain conditions are met, including that all management decisions are made by members at a general meeting.
Housing Act 2004, Schedule 14, paragraph 2B
The interpretation of the respondent's rules must be based on their plain meaning.
Upper Tribunal's interpretation of the respondent's rules.
Outcomes
The Upper Tribunal (UT) allowed the appeal.
The UT found that the respondent's rules did not ensure that all management decisions were made by the members at a general meeting, as required by paragraph 2B(2)(b) of Schedule 14. The UT held that the 'discuss' in rule 30 did not equate to 'decide', and that the management committee retained significant decision-making powers.
The UT's decision regarding the FTT's findings of fact (ground 2) remained undisturbed due to agreement between the parties that the rules, not practice, were determinative.
The parties agreed that the legality of the exemption depended solely on whether the rules met the requirements of paragraph 2B(2), regardless of actual practice.
The case was remitted to the First-tier Tribunal (FTT) to consider the respondent's remaining grounds of appeal against the financial penalties.
With the main point of the appeal decided, the FTT needed to reconsider the penalty notices in light of the UT's ruling that the buildings were HMOs.