Banning Orders – original sin
A recent First-Tier Tribunal decision on banning orders highlights the importance of getting the Notice of Intention correct, writes Archie Maddan.
London Borough of Barking and Dagenham v NTM Limited (formerly All Seasons Lettings and Management Limited) LON/00BB/HBA/2022/0004 – decision 20th December 2023 (Coram: Deputy Regional Judge N Carr, Regional Surveyor Ms H C Bowers BSc & Ms R Kershaw BSc)
An application for a banning order under the Housing and Planning Act 2016 (“the 2016 act”) s.15(1) failed due to the Notice of Intention (“NOI”) served by the applicant housing authority being invalid due to its failure to cite sufficiently the reasons for the application being made.
The London Borough of Barking and Dagenham (“the council”) brought an application to the First Tier Tribunal for a banning order to be made in respect of a private sector landlord and property management business; NTM Limited (formerly All Seasons Lettings and Management) (“the respondent”). The council served an NOI on 23 August 2022 pursuant to s.15 of the Act. This notice cited two convictions contrary to Housing Act 2004 s.95 with total fines of £4,200. The NOI did not give any other explanation for the proposed banning order application and did not give any analysis of the two offences or their circumstances. The respondent sent written representations dated 16 September 2022 to the council addressing the circumstances of the convictions and making general representations as to why a banning order should not be made. The council rejected the representations and on 21 November 2022 made an application to the tribunal for a banning order.
In between receipt of the respondent company’s representations and the making of its application the council commenced further investigations into the respondent and its affairs. This resulted in a substantial quantity of material being obtained from a number of sources. This material was subsequently included in evidence in the form of a 591 page evidence bundle served by the council on 23 March 2023. The material included multiple allegations of further offences and regulatory matters. Much of the material consisted of hearsay. The respondent applied to the tribunal for a case management hearing to consider the admissibility of the material and directions to address how the hearing should proceed. The tribunal declined to consider matters in a CMC and stated that any question of the validity of the NOI could be addressed at the substantive hearing on 23 November 2023.
Prior to the substantive hearing the tribunal sent the parties copies of Maharaj v Liverpool City Council [2022] UKUT 140 (LC) with an instruction that the tribunal would deal as a preliminary issue with the question of whether the NOI was defective in that it did not explain the reasons why the council considered that a banning order should be made. Maharaj concerns the validity of a notice of intent served prior to the imposition by Liverpool City Council of a financial penalty pursuant to s.249A and schedule 13A of the Housing Act 2004.
At the hearing the council argued that in banning order applications it was not necessary for the NOI to contain more detail than to state the “gateway” convictions as had been the case in the present application. The council pointed out that it had based its NOI upon the sample notice attached to the guidance issued in April 2018 by central government. The respondent argued that the NOI in banning order cases was of much greater importance than allowed for by the council’s stance: The requirement was that the NOI stated “why” the banning order was being sought. In the present case the two convictions on their own were clearly not sufficient to justify the making of such a draconian order. The respondent had had no opportunity to make representations about the numerous additional matters being alleged and relied upon at the substantive hearing.
The tribunal found that the NOI served by the council was invalid and did not comply with the requirements of 2016 Act s.15(3)(a). The tribunal first considered what was the purpose of the NOI required by s.15. It found (at para. 91 of its decision) that the reasons an NOI has to set out “why” a banning order is being sought are firstly to enable a person against whom an order is sought to know what they are alleged to have done and to have the opportunity to either correct their conduct or to persuade the council that the conduct is not so serious as to justify a banning order AND secondly to enable a council to think carefully about any decision to press on with the banning order application with all of the attendant expense involved. In the present case the NOI served by the council failed to explain “why” the council considered the two convictions serious enough to justify a banning order. This was despite the government guidance containing at paragraph 3.3 a list of particular factors that a council should take into account before deciding whether to apply for a banning order; none of those factors was addressed in the NOI.
The tribunal therefore dismissed the council’s application for a banning order on the basis that the NOI was invalid.
The tribunal did however also go on to hear the evidence in full with cross examination of witnesses. Having heard the evidence the tribunal concluded that even if it was incorrect on the NOI validity matter the evidence presented by the council was not adequate to justify the making of a banning order. It should be noted that some of the evidence that the council had included in its 591 page bundle was eventually abandoned by the council at the hearing for various reasons. Clearly these were issues that could also have been avoided if the NOI had been in a fuller form.
The findings of the tribunal regarding the NOI are of interest because banning order applications are still quite rare and indeed this was the first one brought by Barking and Dagenham LBC. The decision is first instance but given the composition of the tribunal and the full helpful reasons contained in the decision it would be a brave local housing authority that will totally disregard the contents of this decision.
The most important issue in the decision was the total lack of any detail regarding “why” the council considered a banning order to be appropriate. The following passages in the decision explain this:
- Para. 95: “…The Notice of Intent is an important step to enable a person against whom it is proposed to apply for a banning order to firstly set out any reason it considers that the LHA has not made the right assessment, or to tell the LHA about any improvement that have made in their business practices that might result in a banning order application no longer being justified on the LHA’s own analysis, or to convince the LHA that the desired result (such as improved housing standards) is in the process of being achieved or potentially more generally to give that person an opportunity to address the conduct complained of such that by the time of the hearing of any such application it has taken steps to put in place proper systems for better housing management such that a banning order is no longer appropriate”
- Para. 96: “…The fact of conviction is less likely to be relevant to the LHA’s assessment of whether a banning order should be sought than the circumstances of the conviction.”
- Para. 98: “In this case the Notice of Intent contains a statement of the banning order offences of which the respondent was convicted. It gives no reasons why those offences are considered serious, makes no mention of inclusion on the Rogue Landlord database, and sets out no analysis of the competing effect of the making of a banning order on anyone, as paragraph 3.3 of the Guidance sets out the LHA should take into account.”
Local Housing Authorities must give proper thought to why they are of the opinion that a banning order is appropriate and be able to ground that decision in the circumstances of the gateway convictions and broader issues of housing management. The LHA should also show that it has considered the paragraph 3.3 matters and explain its consideration. In the present case the council had totally failed to do this, having been possibly led astray by using the sample NOI in the guidance without properly considering the actual statutory purpose of the NOI. A further issue in this case was the way in which the council introduced substantial further material to bolster its case after service of an NOI which made no mention of this material or these matters. As the tribunal noted, it remained unclear how much, if any, of this additional material had formed part of the council’s decision to apply for a banning order: Altogether the circumstances were unsatisfactory and helped to render the NOI invalid.
The decision is also interesting for the observations it makes about matters that a LHA and a respondent may wish to take into account in preparing for a banning order hearing; these include the circumstances of the gateway convictions, any changes that a respondent has made since the convictions, issues and concerns regarding housing management, any errors in the analysis made by the LHA and the paragraph 3.3 matters that the LHA is required to take into account.
The message for Local Housing Authorities is clearly that proper thought must be given to a decision to seek this most draconian of measures: Shutting down a business with all of the consequences that entails is not a step that should be taken lightly. The NOI is an important document and not just a procedural piece of paperwork. However conversely, completion of a proper NOI process will help to allow an LHA to be certain of its reasons and evidence and to be prepared for any challenges that a respondent may bring at the final hearing.
The message for landlords and property professionals faced with banning order applications is to carefully scrutinise the NOI and demand full reasons for shutting down your business. Also, be willing and able to improve your practices and to be able to demonstrate that you have learnt from any past failings or convictions.
Archie Maddan is a barrister at Five Pump Court.
