If this Transcript is to be reported or published, there is a requirement to ensure that no reporting restriction will be breached. This is particularly important in relation to any case involving a sexual offence, where the victim is guaranteed lifetime anonymity (Sexual Offences (Amendment) Act 1992), or where an order has been made in relation to a young person.
This Transcript is Crown Copyright.  It may not be reproduced in whole or in part other than in accordance with relevant licence or with the express consent of the Authority.  All rights are reserved.

CO/6548/2016
Neutral Citation Number: [2017] EWHC 2547 (Admin)

IN THE HIGH COURT OF JUSTICE
QUEEN’S BENCH DIVISION
THE ADMINISTRATIVE COURT

Royal Courts of Justice
Tuesday, 10th October 2017

Before:

SIR ROSS CRANSTON
(Sitting as a Judge of the High Court)

- - - - - - - - - - - - - - - - -

B E T W E E N :

	WOKING BOROUGH COUNCIL	Applicant

-  and -

		JOHNSON	Respondent

- - - - - - - - - - - - - - - - -

Transcribed by Opus 2 International Ltd.
(Incorporating Beverley F. Nunnery & Co.)
Official Court Reporters and Audio Transcribers
5 New Street Square, London EC4A 3BF
Tel:  020 7831 5627     Fax:  020 7831 7737
admin@opus2.digital

This transcript has been approved by the Judge

- - - - - - - - - - - - - - - - -
A P P E A R A N C E S

MS P PATTNI (instructed by Woking Borough Council) appeared on behalf of the Applicant.

MRS M M JOHNSON appeared as a Litigant in Person.

- - - - - - - - - - - - - - - - -

J U D G M E N T

SIR ROSS CRANSTON:  

1	This is an appeal by way of case stated by Woking Borough Council ("the council").  It appeals against the decision of the South East Surrey Justices, sitting at the Redhill Magistrates' Court on 20th September last year, dismissing the information laid against the respondent, Mrs Johnson.  This alleged that on 19th November 2015, she managed an unlicensed house in multiple occupation ("an HMO") contrary to s.72(1) and 72(6) of the Housing Act 2004.

2	Mrs Johnson had faced a total of 26 allegations relating to the operation of a property in West Byfleet in Surrey as an HMO.  The prosecution was brought by the council and the offences were said to have been committed between 19th November 2015 and 26th February 2016.

3	Mrs Johnson was convicted in respect of offences 2-26, which were offences contrary to s. 234(3) and 234(5) of the Housing Act 2004.  

4	Mrs Johnson appealed to the Crown Court against conviction and sentence for offences 2-26. Guildford Crown Court upheld her convicted in relation to only some of those offences.  However, those proceedings have no relevance to the present appeal.  It is the acquittal of Mrs Johnson in relation to the first offence which is central to this appeal.

5	Mrs Johnson was not represented before the justices although she was represented at the Crown Court.  She has appeared in person. Although as I shall explain I will allow the appeal, I will direct that the matter not be remitted to the magistrates, since the council's concern is the principle behind her conviction and its application in future cases.  

6	In the case stated the justices recount that they heard oral evidence from the council's officer and saw a number of photographic exhibits. They learnt that the premises were a two storey self-contained flat situated above a restaurant.  They were told that the premises were occupied by more than five persons who did not form part of the same household.

7	According to the case stated they considered submissions on the law by the council’s representative.  They were referred to the decision of London Borough of Islington v The Unite Group Plc [2013] EWHC 508 (Admin). They concluded as follows: 

"9. We were of the opinion that the Premises was not an HMO relying on the Unite judgment, as the HMO comprised of two storeys and therefore did not meet the three storey requirement in Article 2 of the Licensing of Houses in Multiple Occupation (Prescribed Descriptions) (England) order. Accordingly, we returned the verdict of 'not guilty' in respect of that offence.”

8	The question that the justices have posed for this court is:  
 "Were we correct, when calculating the number of storeys, to exclude from the calculation the ground floor restaurant located below the self-contained flat?"

Legal Framework 
9	Part 2 of the Housing Act 2004 (“the Act”) establishes a licensing regime for HMOs.  Section 55 identifies the application of part 2 of that Act: 

"(2) This part applies to the following HMOs in the case of each Local Authority: 
(a) any HMO in the authority's district which falls within any prescribed description of HMO."

10	Section 61 is the requirement for every HMO to which Part 2 applies to be licensed.

11	Section 72 of the 2004 Act creates an offence if a person:

(1)"[...] having control of or managing an HMO which is required to be licensed under this part [...] is not so licensed.
[...] 
(6) A person who commits an offence under subsection (1) or (2) is liable on summary conviction to a fine." 

12	The meaning of "House in Multiple Occupation" is set out in s.254(1) of the 2004 Act.  Subsection (1) provides for five categories of HMO, sub-section (1)(b) being "the self-contained flat test".

13	Section 254 then reads as follows:  

"(3) A part of a building meets the self-contained flat test if  
             (a) it consists of a self-contained flat and 
 (b) paragraphs (b) to (f) of subsections (2) apply (reading references to the living accommodation concerned as references to the flat).”  

14	The reference there to subsections (b)-(f) in s.254(2) is to the following: 

“(b) the living accommodation is occupied by persons who do not form a single household (see section 258);
(c) the living accommodation is occupied by those persons as their only or main residence or they are to be treated as so occupying it (see section 259);
(d) their occupation of the living accommodation constitutes the only use of that accommodation;
(e) rents are payable or other consideration is to be provided in respect of at least one of those persons' occupation of the living room accommodation; and 
(f) two or more of the households who occupy the living accommodation share one or more basic amenities or the living accommodation is lacking in one or more basic amenities.”

15	There are also the relevant definitions in section 254:

“(8) In this section  
"basic amenities" means  
(a) a toilet.
(b) personal washing facilities, or 
(c) cooking facilities;

"converted building" means a building or part of a building consisting of living accommodation in which one or more units of such accommodation have been created since the building or part was constructed;

"enactment" includes an enactment compromised in subordinate legislation (within the meaning of the Interpretation Act 1978 (c.30);

"self-contained flat" means a separate set of premises (whether or not on the same floor)  
(a) which forms part of a building;
(b) either the whole or a material part of which lies above or below some other part of the building; and 
(c) in which all three basic amenities are available for the exclusive use of its occupants." 

16	The Licensing of Housing of Multiple Occupation (Prescribed Descriptions) (England) Order 2006, 2006, SI No. 371 (“the 2006 Order), sets out in Art.3 the description of HMOs prescribed by the Secretary of State.

17	Art.3 reads, in its relevant parts, as follows:

“Description of HMOs prescribed by the Secretary of State
3.(1) An HMO is of a prescribed description for the purpose of section 55(2)(a) of the Act where it satisfies the conditions described in paragraph (2). 
(2) The conditions referred to in paragraph (1) are that— 
(a) the HMO or any part of it comprises three storeys or more;
(b) t is occupied by five or more persons; and
(c) it is occupied by persons living in two or more single households.
(3) The following storeys shall be taken into account when calculating whether the HMO or any part of it comprises three storeys or more— 
[...]
(c) where the living accommodation is situated in a part of a building above business premises, each storey comprising the business premises.
[…]
(f) any other storey that is used wholly or partly as living accommodation or in connections with, and as an integral part of, the HMO." 

18	The Explanatory Note to the 2006 Order provides:  

"7.8 For the purpose of the mandatory licensing, any storey, including basements, attics and mezzanine floors that is used wholly or partly or in connection with living accommodation will count towards the calculation of a number of storeys.

Commercial premises above or below living accommodation, except where they are located in the basement, will also count towards the calculation of storeys.  This will include most premises that are not used in connection with or as an integral part of the living accommodation such as offices, shops, restaurants and pubs."

19	There are two relevant decisions of this court in relation to the licensing of HMOs in buildings of a number of storeys.  The first is the Unite (supra) case, referred to in the justices' case stated.  That was a case where there was a five storey property, the ground floor consisting of a shop and main entrance.  There were then four upper floors, comprising residential accommodation of four single storey self-contained so called "cluster flats".  Each of those cluster flats was an HMO within the definition of s.254 of the 2004 Act.

20	The Local Authority sought a declaration from this court that the HMOs were of a prescribed description within the meaning of Art.3 of the 2006 order and therefore subject to the licensing regime.

21	Blake J refused the application.  He held that whether an HMO was caught by the licensing requirement depended on whether it comprised at least three storeys for the purposes of sub paragraph (a) of Art.3(2) and not the building of which an HMO happened to be found.  In that case each flat in the property was self-contained and comprised a single storey.

22	Therefore, subject to the effect of Art.3(3), none of the HMOs would be subject to the licensing regime since none comprised of three storeys or more.   

23	Blake J considered in particular the application of Art.3(3)(f) and whether that meant that each of the self-contained flats in the building was caught. He held it did not. In his conclusions, he said this:

"30. Article 3(3) does not substitute for Art.3(2) and deprive it of its natural meaning, but sets out special rules for the limited purpose of bringing business premises and certain uses associated with the HMO into the equation whereas they would otherwise be excluded.

31. It is the HMO that must comprise the three storeys and not the building in which an HMO happens to be found."
 
24	The following year, in Bristol City Council v DIGS (Bristol) Ltd [2014] EWHC 869 Admin, the property at issue was a large house over five floors.  The house had been divided into two maisonettes, one over ground and first floors and one over the second and third floors.

25	Access to the maisonettes was through a shared lobby at street level.  The upper maisonette at issue in the case was accessed through a private doorway off the lobby from which stairs went up two floors, including a small first floor landing.  

26	The issue before Burnett J (as he then was) was whether the access through the ground floor hallway (the stairs to the first floor, the first floor landing and the stairs from the first floor landing to the second floor) could be taken into account in the calculation of the three or more storeys for the purposes of Art.3 of the Order.

27	The magistrate in that case had acquitted the owner of the second maisonette and, on the appeal by way of case stated, Burnett J dismissed the appeal.  In the course of his judgment, he referred to the Unite decision and said this:

"17. The conclusion in para 31 [of the Unite judgment] is subject to the inclusion of business premises and includes storeys and part storeys that are brought into account by the virtue of Art 3(3)…  The key to unlocking the statutory meaning identified by Blake J was that in all respects other than business premises, the search was for storeys comprised within the HMO itself, rather than the building in which it was located.  In that case each flat had one storey.  The business premises on the ground floor counted as another storey under article 3(3)(c).  The total was two in respect of each of the HMOs.  None fell to be licensed."

28	In this case, the council have relied, as I have said, on the self-contained flat test that applies to any part of a building which is a self-contained flat consisting of accommodation where five or more persons in two or more single households share one or more basic amenities and the rents are payable.  The basic amenities are defined, supra, in s.254(3) of the 2004 Act and their presence is not at issue at the hearing in this case.

29	Whether an HMO is of a prescribed description within s.55(2)(a) turns on whether in this case it satisfies the description in Art.3(2) of the 2006 Order.  That requires, in addition to the criteria set out in s.254, that the HMO must comprise three storeys or more and be occupied by five or more persons which constitute two or more single households.

30	As I have said, Art.3(3)(c) provides that where living accommodation is situated in part of a building above business premises, each storey comprising the business premises shall be taken into account when calculating whether the HMO or any part comprises three storeys or more.

31	The case stated makes clear that the sole issue to be determined was whether the restaurant in this building directly below the two stories of living accommodation counted towards the number of storeys comprising an HMO.  

32	The justices were unfortunately misled by reference to the Unite (supra) decision.  Taking paragraph 31 of Blake J's decision by itself, without reference to Article 3(3)(c), meant that they were in peril in approaching the issue before them.

33	As made clear in Burnett J's decision in Bristol City Council v DIGS (Bristol) Ltd (supra) and on a careful reading of Unite itself, the findings in Unite and in DIGS were in the context of quite different building arrangements.  Paragraph 31 of Unite must be read subject to the statutory exemptions contained in Art.3(3) of the 2006 Order. 

34	In this case, albeit that the restaurant was unconnected with the HMO, it should have been included in the number of qualifying storeys as a result of the application of Art.3(3)(c) of the 2006 order.  The distinction between the present case and Unite is between an HMO that consists of the whole building (save for the business premises) and an HMO that is found inside a block of purpose built self-contained flats.  In this case, business premises were caught in the calculation of the number of storeys as a result of Art.3(3)(c).  They count towards the final number of qualifying storeys. In not doing this the magistrates were in error.

35	On that basis I allow the appeal and answer the question posed in the case stated as "No".

SIR ROSS CRANSTON:  Ms Pattni, anything further? 
MS PATTNI:  No, my Lord.
SIR ROSS CRANSTON:  Thank you very much.  You have been most helpful.