![Housing Barrister Summary of Upper Tribunal (Lands Chamber) Decision of Daff v Gyalui & Anor (Rent Repayment Orders) [2023]](/media/a0okqtu4/_henry-percy-raine.png?mode=crop&width=1000)
The facts
Ms Daff owned and let a one-bedroomed flat in the London Borough of Tower Hamlets. In 2016, a selective licensing scheme applied to the flat under Part 3 of the 2004 Act. Ms Daff was in Australia at the time and unaware of the licensing scheme and did not apply for a licence. In 2018 she granted a nine-month tenancy to the respondents, she did not have a licence during the period of the tenancy and accordingly acknowledged that she committed an offence under section 95(1) of the Act. Shortly after being given notice of the application for a rent repayment order, Ms Daff applied for a licence but was informed, after explaining that the flat was now her home, that it had been “exempted” from the selective licencing scheme.
The FTT’s decision
The FTT determined the application after a hearing attended by Ms Daff remotely. The FTT did not accept as a reasonable excuse her explanation that she had been unaware of the requirement to obtain a licence. It found that ‘she had received emails from the National Landlords’ Association [sic] about relevant changes in the law and should have checked whether these affected her letting’. Neither did it accept that subsequent exemption of her property as a residential address could operate retrospectively under the 2004 Act [11-12].
The FTT had details (albeit not comprehensive details) of Ms Daff’s financial circumstances before it in the hearing bundle. She provided details of her current expenditure and outgoings, documents corroborating many of these expenses and some evidence supporting her complex health conditions. In determining quantum, the FTT however stated that 'the financial circumstances of the respondent are unknown because she made no financial disclosure.' Overall, the rent repayment was set at around 80% of the total rent paid by the respondents.
The Appeal
Ms Daff was granted permission to appeal on two grounds, namely:
(1) That the FTT may have failed to take account of what she had provided concerning her financial circumstances.
(2) That without an explanation of the basis on which exemption had been allowed it could not be known whether Ms Daff had been entitled to it while the flat was let, and it was therefore possible that the FTT had taken too narrow an approach to the relevance of the exemption.
The second ground of appeal was not successful. It was held that a further possible basis of exemption had not been raised at the hearing and the FTT was entitled to limit its consideration to noting that an exemption is not retrospective [33].
The first ground of appeal however concerned s.44(4)(b) of the 2016 Act, namely one matter the FTT must take into account in determining quantum is 'the financial circumstances of the landlord'.
On appeal, it was considered that the FTT had proceeded on the incorrect assumption that Ms Daff had given no financial disclosure – such disclosure as was provided possibly being overlooked or that the FTT had expected Ms Daff to refer to such in her oral evidence [25].
In either scenario, the FTT failed to exercise its discretion with regard to relevant financial information available to it. In allowing the appeal on this ground, the point was raised that a tribunal may adopt an inquisitorial role particularly in circumstances when a litigant is self-representing and where the basis on which the tribunal needed to reach a decision included incomplete material [26-27].
The amount of the rent repayment order was re-determined on appeal; the Court received an additional witness statement and heard oral evidence from Ms Daff. Relevant financial circumstances included her lack of any income from employment/ savings, that she derived no net income from other rental properties and was funding herself by drawing down capital secured on her flat in Australia.
It was noted that the circumstances in which a landlord lets properties and the scale on which they do so are relevant considerations but the temptation to classify a landlord as 'professional' or 'amateur' should be resisted, particularly if that classification is taken to be a threshold to an entirely different level of penalty [52].
Overall, it was found that the circumstances were exceptional in that Ms Daff was in a precarious financial position: being of limited means and no earning power, whose poor health contributed to her lack of attentiveness to her licensing obligations. The rent repayment order was substituted in the sum of £2,000.