Respect is due! Upper Tribunal considers the weight to be given to local authority financial penalty decisions

Read more articles by: Anna Moon, Read more articles by: Simon Kiely,

This week, a significant Upper Tribunal decision was handed down by Judge Elizabeth Cooke in Waltham Forest LBC v (1) Marshall (2) Ustek [2020] UKUT 0035 (LC).

The cases of Marshall and Ustek began as separate appeals in the First-tier Tribunal (FTT) against financial penalties imposed by the London Borough of Waltham Forest (the Council) under Section 249A of the Housing Act 2004. Judge Cooke found that in both Marshall and Ustek, the FTT had erred in law by placing only limited consideration on the Council’s policy which had been specifically drafted to assist with the calculation and handing down of Section 249A penalties.

This decision will have several impacts on the way in which First-tier Tribunals are entitled to consider appeals made against Section 249A financial penalties. Firstly, during such appeals, the FTT will have to place very careful weight on the Local Authority’s penalty decision. Secondly, the scope for departure from a Local Authority’s penalty decision has been affirmed as limited for the FTT. Finally, where exceptional circumstances arise and a departure is justifiable, the reasons must be clearly set out in the FTT’s decision.

This is excellent news for Local Authorities striving for fair and uniform application of Section 249A penalties. Simon Kiely and Anna Moon explore the background, facts and implications of this Upper Tribunal decision below.

Background: the Policy and the Matrix

To alleviate any confusion with regards to the calculation of Section 249A financial penalties, the Ministry of Housing, Communities and Local Government issued formal guidance for Local Housing Authorities in 2017, with revised guidance issued in 2018. The guidance advised that the following 7 factors should be considered by local authorities when deciding on the level of penalty for housing offences:

  1. Severity of the offence
  2. Culpability and track record of the offender
  3. The harm caused to the tenant
  4. Punishment of the offender
  5. Deter the offender from repeating the offence
  6. Deter others from committing similar offences
  7. Remove any financial benefit the offender may have obtained as a result of committing the offence.

Based on the above, the London Borough of Waltham Forest introduced its own civil penalties policy in 2017 (“the Policy”). incorporating a “Civil Penalties Matrix” (“the Matrix”), organising offences into 6 bandings (Moderate 1, Moderate 2, Serious 3, Serious 4, Severe 5 and Severe 6). Each band is then set a minimum and maximum financial penalty. Guidance was issued to accompany the Matrix which detailed where certain offences should fall on the scale and listed various aggravating factors to offences that may support the imposition of a penalty within a higher banding. In particular, intentions were made clear that ‘Moderate 1’, which caps penalties at £4,999, was to be reserved for very minor offences only. It was suggested that a failure to licence a property would never be appropriate for Moderate 1 banding. It is also notable here that the Policy identified a history of non-compliance and knowledge of the need to obtain a licence as aggravating factors.

The Council applied the Policy and the Matrix when deciding the level of financial penalty to impose upon Mr Marshall and Mr Ustek in May and September of 2018 respectively.

Mr Marshall –

Mr Marshall had let out a single property within the Waltham Forest area for several years without ever having a proper licence in place, leaving his tenants unprotected. The Council had written to Mr Marshall to notify him of the need to licence the property, and despite several attempts to complete the licence application, Mr Marshall failed to successfully apply for a licence.

It was clear from the correspondence between Mr Marshall and the Council that Mr Marshall was aware of the need to gain a licence to let his property out. After 3 and a half years of the property being let unlicensed, the Council imposed a financial penalty upon Mr Marshall in line with the Matrix and the accompanying guidance. Mr Marshall’s knowledge of the need to obtain a licence was counted as an aggravating factor and the financial penalty imposed was £5,000. This effectively placed Mr Marshall’s offence within the “Moderate 2” banding on the Matrix.

Mr Ustek – 

Mr Ustek let out three properties within the Waltham Forest area. As with Mr Marshall, Mr Ustek was familiar with the need to gain a licence in order to have tenants in his properties, as he had previously applied for a licence for two of his three properties. After several years of letting the third property without a licence, Waltham Forest imposed a financial penalty upon him. Due to his knowledge of the need to obtain a licence, the fact that he was a more experienced landlord, and as he had failed to comply with improvement notices that the Council had served upon him, the penalty imposed was £12,000. This placed Mr Ustek’s offence within the “Severe 4” banding on the Matrix.

FTT Decision & Upper Tribunal Decision

Mr Marshall and Mr Ustek each separately appealed their penalties to the FTT. The FTT was presented with the Council’s Policy, the Matrix and accompanying guidance, which evidenced that the decisions taken against Mr Marshall and Mr Ustek were reasoned, consistent and fair. The FTT disagreed, however, and despite neither Mr Marshall nor Mr Ustek taking issue with the Council’s Policy or setting out why their penalties ought to be reduced, took the decision to substantially reduce the penalties imposed by the Council. Mr Marshall’s penalty was reduced from £5,000 to £1,500 – a 70% reduction. Mr Ustek’s penalty was reduced from £12,000 to £4,000 – a reduction of 67%. Both Mr Marshall and Mr Ustek were effectively, therefore, given penalties in line with those who commit “Moderate 1” offences. The were no reasons given for the reductions in penalties set out in either FTT decision.

Waltham Forest appealed the FTT’s decisions to the Upper Tribunal and both appeals were heard together. In the joint appeal, Counsel for Waltham Forest put forward that there were two relevant considerations. First, that the FTT should not have departed from the Council’s Policy and Matrix and, second, if the FTT needed to depart from the established Council Policy, then a clear justification should have been provided.

The Upper Tribunal agreed.

With regards to Mr Marshall, Judge Cooke found the FTT’s decision had been “fundamentally flawed” in its disregard of Council’s Policy. Going further in regards to Mr Ustek, Judge Cooke found that the FTT paid only “lip-service to the policy” and “did not acknowledge” that to place the offence of failure to licence and respond to improvement notices within the bounds of “Moderate 1” banding, the FTT was in fact “going outside the policy”.

The Council’s original penalties were reinstated.


The implications of this decision can perhaps best be framed by the exploratory questions that Counsel for the appellant posed in his submissions. These were as follows:

  • Is the FTT required to accept and apply policy?
  • When can the FTT lawfully depart from policy?
  • What weight should the FTT afford to a Council’s decision?

Judge Cooke contemplated these questions in her decision, ultimately concluding that “the FTT is not the place to challenge the policy about financial penalties” and that a departure from the Policy could have been justified only in exceptional circumstances. Judge Cooke also found the appellants would bear the burden of presenting any such exceptional circumstances and of persuading the FTT to depart from such a policy. It was affirmed that the FTT must place “special” and “considerable” weight on the Council’s civil penalty policies, which is a significant decision for local authorities who have or will be developing these. In terms of its wider implications, Judge Cooke ’s decision speaks to the importance of separation of powers and ensuring that policies drafted through democratic means be protected.

If you have concerns about the weight placed by the FTT upon a policy your Council has implemented, then the Sharpe Pritchard Litigation team can help to give you the best chance of success. For more information, please contact

Posted in Anna Moon, Authors, Local government, Simon Kiely.