In two appeals from decisions of the Upper Tribunal (Lands Chamber) the issue was raised whether the use made by “property guardians” of their “living accommodation” constituted “the only use of that accommodation” for the purposes of section 254(2)(d) of the Housing Act 2004, meaning that the relevant properties in the appeals were a “house in multiple occupation” (“HMOs”) for the purposes of section 254. The Upper Tribunal (“the UT”) dismissed appeals from decisions of the First-tier Tribunal (Property Chamber) (“the FTT”) which had found that the relevant properties constituted HMOs. The relevant properties were at 35–37 William Road, Euston, London and at 14–16 Stamford Brook Avenue, London W6. The first appellant (Global 100 Ltd) was found by the FTT and the UT to be a company managing the William Road property. The second appellant (Global Guardians Management Ltd) and Global 100 were companies variously held by the FTT and UT to be in control of or managing the Stamford Brook property. The third appellant was a director of Global Guardians and Global 100. The respondents in the William Road appeal were Carlos Jimenez and two other occupiers who were property guardians at the William Road property granted Rent Repayment Orders (“RROs”) by the FTT. The respondents in the Stamford Brook appeal were: Hounslow London Borough Council, the local authority for the area in which the Stamford Brook property was located and which issued a financial penalty notice in relation to that property; and Maria Laleva and ten others who were property guardians at the Stamford Brook property, some of whom were granted RROs by the FTT.
The only ground of appeal in respect of the William Road property and ground (1) for the Stamford Brook property was the same, namely whether the UT had erred in finding that the property was an HMO. That depended on the issue whether the residential occupation by the property guardians of their living accommodation constituted the only use of their living accommodation.
There were three other grounds of appeal for the Stamford Brook property, one raised by a respondent’s notice. The following issues fell to be determined: whether the UT was wrong to conclude that Global Guardians had a tenancy of the Stamford Brook property (and that ground engaged the issue whether there was any issue estoppel); and if so, and pursuant to the respondent’s notice, whether Global Guardians was a person in control of the Stamford Brook property because Global Guardians was a person who would receive the rack rent in respect of the property if it was let at a rack rent; and, further, whether the UT had erred in finding that Global 100 was a person in control of the property because it was in receipt of the rack rent of the Stamford Brook property.
Held, appeals dismissed. (1) The words “use” and “purpose” could, on occasions, be used interchangeably but everything depended on the circumstances. In general terms the use described what use was being made of the living accommodation, and the purpose was the reason why that use was being made of the living accommodation. Section 254(2)(d) of the Housing Act 2004 focused on the “use” made by the property guardians of their living accommodation and not Global Guardians’ purpose in allowing the property guardians to reside in the property. On the findings of fact made by the FTT in both cases, it was apparent that the property guardians were using the living accommodation as their main residence. They had no responsibilities as property guardians save to live in the accommodation. The presence of the property guardians in their living accommodation and the property might have deterred persons from entering the property, but it did not convert the use made of the living accommodation. Thus the UT was right in both cases to have found that the occupation of the property guardians of the living accommodation constituted the sole use of that living accommodation (paras 50–51, 65, 66).
(2) The FTT had taken full account of the terms of the agreement, and found that NHS PS, the property owner, had no interest in permitting the property to be used as residential accommodation; their interest was only that the property should not be subject to squatting or be vandalised. There was not an issue as to the term or rent, and the only issue was whether Global Guardians had exclusive possession. The FTT found that Global Guardians was, in fact, being granted the exclusive right to exploit the whole of the property, and had therefore been granted exclusive possession of it. There was no misdirection of law, or a failure to consider the terms of the agreement between NHS PS and Global Guardians. It was plain that NHS PS had granted Global Guardians a tenancy of the Stamford Brook property. Global 100 had then licensed the guardians to occupy the Stamford Brook property (paras 57–58, 65, 66).
(3) The FTT and UT were entitled to find that Global 100 had received the rack-rent for the Stamford Brook property. Global 100 was not acting as a charity and was in the business of making money. The property guardians were willing licensees of the living accommodation and Global 100 was a willing licensor. The evidence of the transactions between Global 100 and the property guardians was, at the least, some evidence of the market value of the accommodation and the FTT and UT were entitled to rely on it to find the rack-rent of the property. There was nothing to suggest that anything more could be obtained from letting or licensing the property (paras 63–64, 65, 66).
Nicholas Grundy KC and Sean Pettit (instructed by Kelly Owen Ltd) for Global 100 Ltd.
Justin Bates and George Penny (instructed by Hammersmith and Fulham Law Centre) for Carlos Jimenez and the other occupiers.
Nicholas Grundy KC and Sean Pettit (instructed by Kelly Owen Ltd) for Global 100 Ltd and Global Guardians Management Ltd.
Ranjit Bhose KC and Tara O'Leary (instructed by HB Public Law) for Hounslow London Borough Council .
Justin Bates and George Penny (instructed by Hammersmith and Fulham Law Centre) for Maria Laleva and the other occupiers.