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First-tier Tribunal (General Regulatory Chamber)


You are here: BAILII >> Databases >> First-tier Tribunal (General Regulatory Chamber) >> Ragdon Ltd v London Borough of Redbridge [2025] UKFTT 554 (GRC) (21 May 2025)
URL: http://www.bailii.org/uk/cases/UKFTT/GRC/2025/554.html
Cite as: [2025] UKFTT 554 (GRC)

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Neutral Citation Number: [2025] UKFTT 554 (GRC)
Case Reference: FT/SL/2024/0014

First-tier Tribunal
General Regulatory Chamber
Professional Regulation

Heard: Remote CVP Hearing
Heard on: 2 December 2024
Decision Given On: 21 May 2025

B e f o r e :

JUDGE FINDLAY
Sitting in Chambers

____________________

Between:
RAGDON LIMITED
Appellant
- and -

LONDON BOROUGH OF REDBRIDGE
Respondent

____________________

Representation:
Appellant: Mr Z Hossain Construction Manager
Respondent: Mr A Hoang-Brown, Counsel
Ms N Gregg witness

____________________

HTML VERSION OF DECISION
____________________

Crown Copyright ©

    Decision:

    The appeal is dismissed. The Final Notice (FN) dated 31 January 2024 imposing a Financial Penalty (FP) of £5,000 for a breach under regulation 3 of The Client Money Protection Schemes for Property Agents (Requirement to belong to a Scheme etc.) Regulations 2019 (CMPSR) is confirmed.

    REASONS

  1. I have conducted a hearing by CVP and considered an Open Bundle (pages A1 to A91), a completed witness statement of Ms S Frensham, additional pages of the representations meeting minutes – Exhibit NMG/6, and the Appellant's Reports and Accounts for the years ending 31 August 2022 and 31 August 2023. I have heard a submissions from Mr Hossain, on behalf of the Appellant and Mr Hoang-Brown, on behalf of the Respondent.
  2. Mr Hossain told me that the two Directors were unable to attend to represent the company but they were content for him to represent them and the Appellant. At all material dates Mr Hossain was a self-employed construction manager who undertook work for the Appellant was not involved in the finances of the Appellant or in the decision making for the Appellant company. Accordingly, the information he could provide was limited. During the hearing Mr Hossain sought a recess to enable him to contact the Directors and the Appellant's accountant to obtain the copies of the Report and Accounts.
  3. I agreed to Mr Hossain lodging the Report and Accounts for the years ended 31 August 2022 and 31 August 2023 as it was just to do so taking into account that Mr Hossain did not have knowledge of the Appellant's finances and in the appeal it was raised that the company was making no profit. Mr Hoang-Brown was given the opportunity to consider the Reports and Accounts.
  4. Mr Hoang-Brown told me that the reference to £10,000 in the FN (A3) was an administrative error.
  5. Grounds of appeal

  6. The Appellant put forward the following points:
  7. a) The Appellant had been a member of The Property Ombudsman (TPO) since 2020 but due to the closure of the bank account the renewal fee by direct debit was not made and the membership ended. The membership could not be extended due to the renewal failure.

    b) The Appellant was in contact with TPO from March 2023 by email and telephone.

    c) The TPO required the Appellant to make a new application which took time to set up.

    d) The Appellant became members on 8 November 2023. The Appellant obtained Redress Scheme in October with Propertymark.

    e) The Appellant had valid and active indemnity insurance, employee's liability and public liability insurance.

    f) The Appellant never stopped trying to get membership as soon as it was realised that membership had ended.

    g) The Appellant has been a member of Propertymark since October 2023. Propertymark opened the application for membership with the condition that a client account was opened.

    h) The Appellant applied to open a client bank account but the applications were rejected.

    i) Propertymark and TPO granted the Appellant time until February 2024 to open a client bank account.

    j) This was a very unfortunate accident. Membership was not cancelled or stopped and it was not intended.

    k) After Covid 19 until 2022 and from the start of the business in 2020 the Appellant did not receive any rent or deposits so did not require a client account. At that time the Appellant was trading doing construction work and as a construction company the Appellant did not require to have Client Money Protection (CMP) scheme membership.

    l) The Appellant asks that the FP be waived.

    m) The Appellant's intention has always been to be lawful and good.

    n) The FP would be an injustice for such a small business. The business is small and is not making hardly any profit.

  8. Mr Hossain at the hearing put forward the following points:
  9. a) The delay in obtaining membership was due to problems with banks.

    b) When the business began the Appellant managed 2 or 3 properties and at the date of the hearing managed 15 or 16 properties.

    c) The Appellant is a small business and still struggling.

    d) The business cannot afford to pay £5,000.

    e) He was unable to comment on the Reports and Accounts as is not involved in the finances of the business.

    Grounds of opposition

  10. The Respondent submitted the following points:
  11. a) The Appellant is challenging the decision to impose a FP but not appealing the amount of the FP.

    b) The Appellant did not have CMP membership between 1 August 2021 until the Notice of Intent was served on 5 December 2023.

    c) The Appellant company was incorporated on 28 August 2018 and has two Directors Mohammad Ali Zinnah and Md Imam Hossain. Md Imam Hossain was appointed Director on 5 December 2023.

    d) On 14 November 2023 a complaint was received from a consumer reporting that the Appellant had no redress membership with either TPO or the Property Redress Schemes.

    e) On 5 December 2023 two officers of the Respondent, Ms Gregg and Ms Bowes, visited the offices of the Appellant and spoke to Md Imam Hossain who described himself as the branch manager. He was, in fact, a Director.

    f) It was noted during the visit that a CMP certificate with a commencement date of 3 March 2020 and an expiry date of 2 March 2021 was displayed on the wall of the office.

    g) On 5 December 2023 a Notice of Intent (NI) was served on Mr Hossain one of which related to not having CMP scheme membership.

    h) Representations were received on 11 January 2024.

    i) The FP was reduced to £5000 for the following reasons:

    •    No evidence was provided that client money ceased to be handled following lapse of CMP.

    •    The CMP logo was still displayed on Zoopla.

    •     The CMP certificate was still displayed in the office meaning consumers were being misled.

    •    The Appellant has traded for two years without CMP.

    •    When the NI was served there was still no CMP in place.

    •    The Appellant should not be continuing to handle client money.

    •     No evidence of financial hardship was provided.

    j) The aggravating factors were that the Appellant was misleading consumers, there was a lack of resolution and there was a long period without CMP. The Appellant could reasonably have known of the requirement and has not given a reasonable explanation as to why there was no CMP for two years. It was factually incorrect for the Appellant to state that it never stopped to pay correct memberships, insurance or anything that requires to keep a business in legal aspect up to date.

    k) The tribunal is invited to dismiss the appeal.

    Conclusions

  12. I find that the Appellant joined TPO on 23 March 2020 with jurisdictions in residential sales and residential lettings. This membership ceased on 27 April 2023 for non-payment of renewal fees. The Appellant then rejoined TPO on 8 November 2023 with jurisdictions in residential sales and residential lettings. The Appellant's application was received on 26 October 2023 but could not be processed because it was believed that the person applying as the Director was a resigned Director on Companies House. Confirmation of the identity of the Director was received and checked and an invoice for registration membership was sent on 2 November 2023 and membership became active on 8 November 2023.
  13. The Respondent is authorised to enforce the CMPSR.
  14. I find that from incorporation to the date of the hearing the Appellant was operating as a property agent handling client money at required to be a member of an approved CMP scheme. This is on the basis of the information from Mr Hossain that this was the case.
  15. I find that the Appellant was in breach of regulation 3 of the CMPSR and on the basis of the breach there were grounds to impose a FP.
  16. I find that the NI and FN included all the information as required by the legislation.
  17. I find that the representation provided by the Appellant were taken into account by the Respondent.
  18. I find that the Appellant is a professional in its field and there is an onus on the Appellant to keep itself up to date and comply with the legislative obligations placed on it. The Appellant cannot blame its failure to comply with its legislative obligations on the difficulties in obtaining a client account. The requirement to be a member of an approved CMPS has been in force since 2019. The Appellant has accepted the breach and this is not in issue.
  19. In relation to the financial impact of the FP on the Appellant's business, I have borne in mind that the FPs must be proportionate to the Appellant's means and must take into account the impact of the FP on the business.
  20. Mr Hossain told me that he thought the Appellant could not afford the FP but he had limited information and knowledge about the Appellant's financial situation. The Directors have had ample time to address this matter and submit information about the impact of the FP on the business but have chosen not to do so. No bank statement have been lodged despite having been given sufficient opportunity to do so.
  21. I considered whether I should adjourn the appeal to enable the Directors to lodge further information about the Appellant's financial situation and decided it was not proportionate to do so taking into account that the Directors have had ample opportunity to do so and have chosen not to do so.
  22. I find that the turnover of the company had increased from 2021 to 2023 as had the gross profit. Ms Hossain could provide no explanation of the large administrative expenses which meant the business appeared to be running at an increased loss year on year from 2021 to 2023. He could provide no explanation for the substantial increase in wages and salaries between 2022 and 2023 when the number of employees remained the same.
  23. On the basis of the evidence before me I find that there are no extenuating circumstances to support a reduction in the FP on the grounds that the FP would be onerous to the business, that the FPs would place the business in financial difficulties or put the company out of business.
  24. I find that the level of the FP is high enough to ensure a real economic impact and demonstrates the consequences of not complying with the legislation.
  25. I find the level of the FP is at the right level to deter the Appellant from future breaches.
  26. I have considered whether the amount of the FP was unreasonable for any reason. I note that the amount of the FP is within the discretion of the Respondent and below the maximum FP which can be imposed under the legislation for this breach. Taking into account the nature of the breach, the length of time of the breach and taking into account all the circumstances put forward by the Appellant, I do not consider that it was unreasonable for the Respondent to impose the FP and I consider that the level of the FP was reasonable.
  27. I find that that the decisions to impose the FP were not based on an error of fact, the decision was not wrong in law and the amount of the FP was not unreasonable and the decision to impose the FP was not unreasonable for any other reason.
  28. The appeal is dismissed and the FN is confirmed.
  29. Signed: Judge J Findlay

    Date: 18 May 2025

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