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First Tier Tribunal wrongly struck out landlord penalty appeal after solicitor failed to pay hearing fee, Upper Tribunal rules

A private landlord will have her appeal of a £7,000 penalty for failure to license a house in multiple occupation (HMO) decided by a different judge after it was initially refused by the First Tier Tribunal (FTT) because her solicitor failed to pay the hearing fee on time, the Upper Tribunal has ruled.

In Silber v London Borough of Barnet (HOUSING - CIVIL PENALTY - case struck out by FTT for failure to pay the hearing fee - criteria for relief from sanctions) [2021] UKUT 206 (LC), Judge Elizabeth Cooke said that when the solicitor applied to the FTT to reinstate the appeal following the passing of the fee deadline, the tribunal considered irrelevant criteria, namely the merits of the case and its supposed relative importance, leading it to make a decision which fell outside its remit.

In September 2020, the appellant, Mrs Silber, was given a financial penalty of £7,000 for the offence of being in control of or managing a HMO which was required to be licensed and was not licensed.

She appealed against the penalty to the FTT. However, Mrs Silber missed the deadline to pay the £200 hearing fee.

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Her solicitors had received a letter in December 2020 which said the hearing fee needed to be paid within 14 days. However, the solicitor failed to pay the fee.

Later on, when the solicitor wrote to ask for an extension, the FTT learnt he had been in Brazil and was now in quarantine for a week after returning to the UK. During that time, he said he could not get to the office to send a cheque.

The solicitor made an application to reinstate the appeal. In his application statement, it emerged that he might have thought he had already paid the fee.

"It appears that he did not appreciate that what was wanted was the hearing fee, in addition to the initial application fee," said Judge Cooke.

In his application, he explained again that he was in Brazil and had then been in quarantine.

The London Borough of Barnet made submissions in response, pointing out, among other things, that he had access to his emails in Brazil and that he could have arranged for a colleague to deal with the matter in his absence.

In response, Mrs Silber's solicitor said that he had not had consistent access to the internet while he was abroad and that his colleagues could not have dealt with the matter in his absence because they were criminal practitioners.

Determining the appeal on the basis of the parties' written representations, the FTT judge did not accept the solicitor's arguments.

The judge also observed that the solicitor gave no reason as to why he did not deal with the FTT's letter asking for payment before his departure since he received it while still in the UK.

She then considered the prejudice to Mrs Silber should the appeal be refused and concluded from the grounds of appeal that Mrs Silber had a weak case, writing that "though the case may be important to [Mrs Silber], its overall importance in the context of other cases of appeals against financial penalties is low".

If the appeal were reinstated, the judge noted that no delay would be caused but concluded that fairness demanded that the appeal not be reinstated. The FTT made the decision over a month before the date fixed for the appeal hearing.

Considering the decision, Judge Cooke said that it was a cause for concern that the Denton criteria were neither mentioned nor followed.

In Denton v T H White Limited, the court laid down the approach to be followed by the courts in deciding whether to grant relief against sanctions for non-compliance. The criteria say that the judge should approach the question in three stages:

  1. identify and assess the seriousness of the failure to comply;
  2. consider why the default occurred;
  3. evaluate all the circumstances of the case to enable the court to deal justly with the application, including the need for litigation to be conducted efficiently and the need to enforce compliance with rules, practice directions and orders.

Judge Cooke added that the FTT judge might have taken the view that the failure to pay the fee was a serious default, and she was clearly unimpressed with the solicitor's explanation.

"She did consider the need to deal justly with the application, but she was heavily influenced by her view of the merits of Mrs Silber's case, which is not relevant to the decision about relief from sanctions," said Judge Cooke.

Judge Cooke added that the FTT judge failed to consider that the appellant was not at fault, and the result of striking out her case would be the loss of her right to appeal the financial penalty.

"And while the efficient use of the resources of the FTT was a relevant matter, it is difficult to understand the judge's comment that Mrs Silber's appeal was less important than other appeals from financial penalties and I fail to see how such an assessment could rationally or fairly be made," noted Judge Cooke.

The FTT's failure to take into account the Denton criteria, and its consideration of irrelevant criteria, namely the merits of the case and its supposed relative importance, led it to make a decision which fell outside the range of decisions available to it in the exercise of its discretion, Judge Cooke added.

The Upper Tribunal set aside the FTT's decision and reinstated Mrs Silber's case in the FTT, where a different judge will decide her appeal.

Adam Carey

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