LDC (Ferry Lane 2) GP3 Limited & Ors v Maria Ayoob & Ors

Case No: LC-2025-23

AN APPEAL AGAINST A DECISION OF THE FIRST-TIER TRIBUNAL (PROPERTY CHAMBER)

Refs: LON/00AP/HMF/2022/0191, LON/00AP/HMF/2023/0074

LON/00AP/HMF/2023/0146, LON/00AP/HMF/2023/0015          

LON/00AP/HMF/2023/0173, LON/00AP/HMF/2023/0205

Royal Courts of Justice, Strand,

3 July 2025

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

HOUSING – RENT REPAYMENT ORDER – 115 applications by tenants in the same properties – 113 applications stayed in the First-tier Tribunal pending the hearing of two - decision made on the remaining 113 without a hearing – inconsistent decisions on the same facts

BETWEEN:

LDC (FERRY LANE 2) GP3 LIMITED (1)

USAF MANAGEMENT 12 LIMITED (2)

UNITE ACCOMMODATION MANAGEMENT

20 LIMITED (3)

Appellants

and-

MARIA AYOOB AND OTHERS

Respondents

North Lodge,

Station Court and Emily Bowes Court,

London, N17

Upper Tribunal Judge Elizabeth Cooke

25 June 2025

Mr Paul Whatley for the appellants, instructed by Walker Morris LLP

Mr George Penny for the respondent s, instructed by Flat Justice Community Interest Company

© CROWN COPYRIGHT 2025

The following cases were referred to in this decision:

LDC (Ferry Lane) GP3 Limited v Garro and others [2024] UKUT 40 (LC)

Newell v Abbott [2024] UKUT 181 (LC)

R (Niazi v Secretary of State for the Home Department) [2008] EWCA 755

R (O’Brien) v Independent Assessor [2007] 2 AC 312

Introduction

1. This is an appeal from a decision of the First-tier Tribunal in response to applications for rent repayment orders made by 113 tenants of student accommodation in three blocks in north London: North Lodge, Station Court and Emily Bowes Court. The orders were made against the appellants, each of which is the landlord of one the blocks.

2. The applications were decided by the FTT without a hearing, following the hearing of two other applications by tenants in one of the blocks. The decision made in response to the 113 applications was inconsistent with the decision made about the two earlier applications, despite there being no difference in the relevant facts. The appeal is brought on the ground that - in essence - that inconsistency was unfair.

3. The appellants were represented in the appeal by Mr Paul Whatley and the respondents by Mr George Penny, and I am grateful to them both.

The legal and factual background

The licensing requirement

4. Houses in multiple occupation (HMOs) are defined by the Housing Act 2004; many of them are required to be licensed by the local housing authority. The requirement for a licence can arise in two ways: one is the general requirement under the Houses in Multiple Occupation (Prescribed Designation) (England) Order 2018; the other is the requirement that arises where a local housing authority makes an additional licensing designation under section 56 of the 2004 Act.

5. The general requirement under the 2018 regulations applies to HMOs that meet the “standard test” in section 254 of the 2004 Act (broadly, shared accommodation where individuals have their own room but share a kitchen and bathroom) where there are five or more occupiers in two or more households; but the requirement does not apply to an HMO within that description that is a purpose-built flat situated in a block comprising three or more self-contained flats.

6. Some landlords are exempt from the requirement to have a licence; for example, specified educational establishments (paragraph 4 of Schedule 14 to the 2004 Act). The appellants are not specified education establishments. However, the accommodation in the three blocks is in the form of purpose-built “cluster flats”, familiar in the context of student flats with individual rooms and a shared kitchen; they are HMOs within the “standard test”, but do not fall within the general licensing requirement under the 2018 regulations because there are (many) more than three of them in each block.

7. On 20 May 2019 the London Borough of Haringey made an additional licensing designation in respect of area where the three blocks stand; the terms of the designation were such that there is no exemption for purpose-built flats in blocks like the one set out in the 2018 regulations. Neither the appellants nor, it seems, the local housing authority realised for some time that that meant that an HMO licence was required for the three blocks. The appellants contacted the authority in the summer of 2022 to ask if their blocks required a licence, and after some weeks and some expressions of uncertainty the authority confirmed in late September 2022 that they did. It then became clear that the authority’s on-line application system could not cope with 1,500 applications at once and further correspondence ensued. The applications were made in March 2023.

8. Until that point the appellants were committing the offence, under section 72(1) of the 2004 Act, of being a person managing or in control of an HMO that requires a licence and does not have one. The Housing and Planning Act 2016 gives the FTT jurisdiction to make a rent repayment order against a landlord who has committed that offence, on the application of a tenant who was occupying the property while the offence was being committed.

9. Where the FTT is satisfied beyond reasonable doubt that the offence is committed it has a discretion whether to make a rent repayment order and a discretion as to how much rent is to be repaid. Section 44 of the 2016 Act provides that a maximum of 12 months’ rent may be ordered to be repaid, and says this:

“(4) In determining the amount the tribunal must, in particular, take into account—

(a) the conduct of the landlord and the tenant,

(b) the financial circumstances of the landlord, and

(c) whether the landlord has at any time been convicted of an offence to which this Chapter applies.”

The North Lodge litigation

10. In August 2022 two students who had occupied individual rooms in two flats in North Lodge during the 2020/21 academic year applied to the FTT for rent repayment orders. The FTT made orders in May 2023 that 50% of their rent be repaid. The landlord appealed to the Tribunal on the ground that it had a defence of reasonable excuse, and the students cross-appealed on the ground that the award was too low in light of the landlord’s conduct. The appeal and cross-appeal were heard in January 2024, and in a decision of 12 February 2024 LDC (Ferry Lane) GP3 Limited v Garro and others [2024] UKUT 40 (LC) the Tribunal (the Deputy President, Mr Martin Rodger KC) held that both failed. Mr Whatley and Mr Penny referred to those proceedings as the “North Lodge litigation.”

The present proceedings: directions in the FTT

11. Meanwhile the present respondents, who are students in North Lodge and two other blocks, made their 113 applications. The FTT stated at paragraph 7 of the decision now appealed that the respondent to the 113 applications was “the same” as the respondent to the North Lodge applications. That cannot be quite right, since there are three respondents to the present appeal and only one to the North Lodge litigation. But they are members of the same group of companies, closely related to each other; Mr Whatley explained that each is a Special Purpose Vehicle created to hold one of the blocks. Mr Penny did not suggest that there was any material difference of identity between the three appellants in this appeal and the respondent to the North Lodge litigation, and I treat them as being for all practical purposes the same.

12. The 113 applications were all stayed pending the decision of the Upper Tribunal in the North Lodge litigation, on the basis that there was no material difference in the accommodation, the identity of the respondent, the relevant licensing scheme and the factual background. After the Tribunal gave its decision in the appeal in the North Lodge litigation, on 14 May 2024 following a case management hearing the FTT gave directions. In the recitals to its order the FTT noted that the Tribunal in the North Lodge appeal “made the following key decisions…;

(i) Rejecting the defence of reasonable excuse advanced by the Respondent

(ii) Making a Rent Repayment Order (‘RRO’) at the rate of 50%

(iii) Not taking into account issues of conduct raised by the Applicants when considering the level of the RRO

(iv) Making deductions from the total rent paid by Applicants in respect of costs of utilities provided by the Respondent.”

13. The FTT further recited that the landlords (the appellants in this appeal) were not going to defend the present proceedings on the grounds of reasonable excuse and were going to accept that rent repayments could be made, and that the applicants accepted that deductions would be made in respect of utility costs. The FTT noted that many of the applicants still wished to pursue allegations of conduct and gave directions for the parties to produce a spreadsheet setting out the allegations of conduct and the landlords’ responses to each.

14. On 23 August 2024 the FTT directed that the applications would be determined without a hearing. The reasons for not conducting a hearing were said to be that the Upper Tribunal had already given its opinion in the North Lodge litigation on the issue of the percentage award and on questions of the landlord’s conduct, that the flats involved were similar to those in the North Lodge litigation, that there were a large number of cases, only quantum (not liability) was in issue and the FTT’s resources were limited. Provision was made for the parties to exchange statements of case.

The FTT’s decision

15. In its decision of 29 November 2024 the FTT set out the background, much as it had done in the recitals to its directions. It noted that the failure to obtain a licence was inadvertent; that nevertheless this was a failure by a large landlord to regulate its own procedures, and that that failure was serious given that its business was the provision of accommodation for students; and that there was a prolonged failure to obtain a licence. It referred to the Tribunal’s decision in Newell v Abbott [2024] UKUT 181 (LC), on which both the students and the landlord had relied, and said this:

“40. Bearing in mind the above, and looking at Newell, it is difficult to conclude that 50% is the appropriate level of for the cases before me. Newell itself was a case which involved the landlord of a single property where the UT concluded that 60% was appropriate. The cases before me concern a very large landlord that should have realised the need to licence and which had the resources to make sure that it complied with the law. In Newell, the UT surveyed various awards approved/awarded by the UT in respect of RROs based on failure to licence. As a distillation of that survey, I set out the following;

80% - Substantial landlord, prolonged period of failure to licence, finding that the property would not have been licensed given its poor condition (Williams)

85% - Substantial landlord, prolonged period of failure to licence (there was in addition, evidence that the landlord knowingly let the property to 3 persons with a restriction in the contract to ‘single occupation – in its decision the UT referred to taking a ‘serious view of the landlord’s conduct’) (Aytan)

90% - Smaller landlord but property lacked important fire safety features (Wilson)

80% - Substantial landlord, clear evidence of specific incidents of bad behaviour (Simpson House 3 Ltd)

75% - Failings in fire safety, deposit not protected, failure to obtain gas or fire safety certificates (Choudhury)

45% - Owner of 4 properties one of which was an HMO (Dowd)

65% - Substantial landlord, deliberate offence, evidence that licence would not have been granted without improvements (Hancher)

75% - Substantial landlord, deliberate offence (Irvine)

41. Taking the summary as a rough guide (bearing in mind the difficulty to trying to distinguish between the varying facts in each case), the award merited in the cases before me should be based on; Substantial landlord, prolonged period of failure to licence, but not deliberate, and no evidence that licences would not have been granted if applied for; I consider that aggravating features like deliberate offending and safety risks in a property would warrant a substantial increase in the percentage award. Neither factor is present here. Accordingly it seems to me that 65% is the appropriate award (before taking into account behaviour).”

16. As to the landlords’ behaviour, the FTT concluded that there was nothing in relation to the landlords’ conduct as alleged in the spreadsheet that could make any difference to the amount of rent to be repaid. Accordingly it ordered repayment of 65% of the rent paid during the relevant period. The appellants appeal, with permission from this Tribunal, from the decision that they are to repay 65% of the rent to each of the respondents, rather than the 50% ordered in the North Lodge litigation.

The arguments in the appeal

17. Mr Whatley argued four grounds of appeal, while acknowledging that there was some overlap between them. He argued that the appellants had a legitimate expectation that the decision in the North Lodge litigation would be followed absent any sufficiently powerful supervening factor; that the delay in licensing should not have been a factor that made a difference since it had already been part of the factual background in the North Lodge litigation; that the FTT erred in regarding Newell as a precedent; and that the FTT had failed to have regard to the principle of judicial consistency.

18. I can take the second and third points there quite briefly. As to delay, Mr Penny did not rely upon it as a factor that “moved the dial” (to use Mr Whatley’s expression) from 50% to 65%, and took the view that the FTT likewise did not regard delay as something that distinguished these cases from the North Lodge litigation. Mr Penny focused on the final words of the relevant paragraph where the judge merely said “For the purpose of this decision, it is sufficient to note the unlicensed periods mentioned above”. I agree with Mr Whatley that the FTT could not properly have picked out delay as a special factor that made a difference in the present cases, because the same delay was part of the factual matrix that led to an award of 50% in the North Lodge litigation; and I agree with Mr Penny that the FTT did not do so. It simply mentioned delay as part of the factual background, alongside the nature of the landlord and the nature of the accommodation. It was explicitly recognising the same factual background as had been presented in the North Lodge litigation, but then took a different view of the appropriate outcome arising from those common facts.

19. As to Newell, Mr Penny agreed that there are no precedents so far as the amount of the award is concerned. Other decisions may be borne in mind but - as the Tribunal has emphasised (in its decision in the North Lodge litigation and other cases) - neither Newell nor any of the other cases is a precedent that determines the amount of rent to be repaid. Mr Penny took the view that the FTT did not fall into that error. It was not using Newell or any other case as a precedent. I agree. The FTT did look at previous decisions for guidance and in the interests of consistency across the jurisdiction as a whole. I come back to that later.

20. The real thrust of the appeal lies in the first and fourth ground, namely that the FTT disregarded a legitimate expectation and disregarded the need for judicial consistency.

21. Mr Whatley referred me to rule 23 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, which makes provision for lead cases to be designated when two or more cases have been started before the FTT and they raise common or related issues. He pointed out that the two cases comprising the North Lodge litigation were not lead cases, and could not have been so designated because of timing issues; nevertheless, he argued the procedure adopted by the FTT of staying the 113 later applications pending the decision in the North Lodge litigation and then shaping its procedure in light of what the Tribunal had decided in that litigation gave rise to a “substantive legitimate expectation” that the disposals in that litigation would be followed absent any sufficiently powerful difference. There was no such difference and therefore the disposal in the North Lodge litigation should have been followed.

22. Mr Whatley came armed with public law authorities to support that argument; Mr Penny in his skeleton argument pointed out that the concept of legitimate expectation requires a direct assurance or indication, of “pressing and focussed” nature (R (Niazi v Secretary of State for the Home Department) [2008] EWCA 755) which cannot be found to have been made here by the FTT.

23. I agree, and in the course of discussion at the hearing Mr Whatley modified his argument in such a way that really it merges with his fourth ground: in light of what had already been decided, and the procedure adopted by the FTT of staying the applications to wait for the appeal decision in the North Lodge litigation, the order to repay 65% of the rent in the absence of any different facts was unfair, and offended against the need for courts and tribunals to be consistent in their decision-making (R (O’Brien) v Independent Assessor [2007] 2 AC 312). As Mr Whatley put it in his skeleton argument, while it is correct to say that the FTT was required to reach its own conclusion regarding quantum on the facts of the case before it, where a competent court or tribunal has already reached a decision on the same factual matrix it is contrary to the principle of judicial consistency to arrive at a materially different outcome. That is the case even if no issue estoppel arises because the parties are not exactly the same.

24. In response, Mr Penny argued that the FTT has a discretion about the amount of the award – there are no precedents. It is a necessary consequence of the allocation of cases to different judges that different judges can, do and must be allowed to respond differently, and so long as they are within a reasonable margin of appreciation those different responses are to be expected and are legitimate. The judge was entitled, in light of his survey of the authorities, to reach his own conclusion. Newell was referenced because it was advanced by both parties; by the appellants because of the comments in it about the importance of conduct and by the respondents to suggest a higher award. So the judge had to engage with it. Mr Penny argued that while a true rule 23 case might be a rare case where the judge could not reach his own independent conclusion, this was not a rule 23 case and therefore the judge had the usual margin of appreciation. The different award in the present case, when the amounts payable to the 113 tenants are put together, is in the order of £150,000; in the context of this very large group of companies Mr Penny argued that that was a small difference and well within the judge’s margin of appreciation.

25. I asked Mr Penny whether it was fair for the FTT to reach a different conclusion on identical facts without conducting a hearing; Mr Penny’s response was that it had been clear to all the parties that there was going to be a fresh assessment and that the FTT was going to make fresh findings; the different result was not even surprising. Both parties had ample opportunity to make written arguments and did so.

Decision