United Kingdom Upper Tribunal (Lands Chamber)

UPPER TRIBUNAL (LANDS CHAMBER)

UT Neutral citation number: [2015] UKUT 165 (LC)

UT Case Number: HA/7/2014

 

 

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

 

HOUSING – enforcement action – improvement notice targeting hazard in a flat in a section 257 HMO – hazard arising from deficiency in neighbouring flat – notice served on owners of both flats requiring alternative remedial action – whether alternative remedies permissible – whether service on two owners permissible –  sharing of cost of remedial action – ss. 11-13 and paras 1-4, 11 and 16, Sched 1, Housing Act 2004 - appeal allowed

 

IN THE MATTER OF AN APPEAL AGAINST A DECISION OF THE FIRST TIER TRIBUNAL (PROPERTY CHAMBER)

BETWEEN:  

MR DAVID WOOD

Appellant

 

and

 

KINGSTON UPON HULL CITY COUNCIL

 

Respondent

 

Re: Flat 4, 141 Princess Avenue,

Hull, HU5 3DL

 

Before Martin Rodger QC, Deputy President

Sitting at: Royal Courts of Justice, Strand, London WC2A 2LL

on

2 March 2015

 

David Wood the Appellant represented himself

Michael Paget instructed by Kingston Upon Hull City Council for the Respondent

 

© CROWN COPYRIGHT 2015

The following cases are referred to in this decision:

 

Pollway Nominees v Croydon LBC [1987] AC 79

 

DECISION

 

1.        Where inadequate material separation exists between two flats in a house in multiple occupation and risks the spread of fire between floors, who should be required to carry out necessary improvements: the owner of a flat on the first floor whose tenant is at risk, but who could only provide the required protection by expensive and disruptive improvements carried out from that flat, or the owner-occupier of the ground floor flat where the same level of protection could be provided by relatively inexpensive works? 

2.        That issue arises in this appeal from a decision of the First-tier Tribunal (Property Chamber) (“the FTT”) made on 21 January 2014 in which it upheld an improvement notice given under s.12 Housing Act 2004 by the respondent, Hull City Council, to both the appellant, Mr David Wood, who is the freehold owner of Flat 4 on the first floor of 141 Princes Avenue, Hull, and to Ms Sarah Peacock, who is the freehold owner of the flat on the ground floor immediately below Flat 4.  The improvement notice required additional fire protection to be provided for the occupier of Flat 4 either in the form of plaster board applied to the ceiling of the ground floor flat, or by the installation of fire resistant material beneath the floor of Flat 4. 

3.        The FTT dismissed Mr Wood’s appeal and decided that the improvement notice had been properly served on both owners.  It also decided that the cost of the work should be met by Mr Wood alone, unless Ms Peacock refused access to the ground floor flat, in which case the cost should be divided between them, with Ms Peacock being responsible for the amount by which the cost was increased as a result of the work having to be carried out from Flat 4.

4.        The FTT granted Mr Wood permission to appeal.  The City Council responded to the appeal.  Ms Peacock chose not to participate formally in the appeal, but attended the hearing and told me that she remained willing to allow the work to be carried out in her flat provided she was not expected to contribute towards the cost.

5.        The appeal engages an important practical question for local housing authorities concerning the circumstances in which remedial action may be required to be taken by a person who is not themselves an owner or controller of residential premises on which a hazard exists.  The statutory scheme is not straightforward, and I will begin by explaining the relevant provisions of the Housing Act 2004 with which this appeal is concerned.

 

The statutory framework: the Housing Act 2004

Part 1 of the 2004 Act

6.        Part 1 of the Housing Act 2004 (“the 2004 Act”) introduced a new system of assessing the condition of residential premises, to be used in the enforcement of housing standards. It replaced the concept of fitness for human habitation in s. 604 of the Housing Act 1985 (which dated back to the Artizans and Labourers Dwellings Act 1868) with a new Housing Health and Safety Rating System (“HHSRS”).  The new rating system involves a risk based assessment of the effect of any deficiencies in dwellings using objective criteria.

7.        Part I of the 2004 Act provides for hazards to be prescribed which will be categorised by calculating their seriousness as a numerical score.  A hazard is defined in s. 2(1) as “any risk of harm to the health or safety of an actual or potential occupier of a dwelling which arises from a deficiency in the dwelling (whether the deficiency arises as a result of the construction of any building, an absence of maintenance or repair, or otherwise).” 

8.        The Housing Health and Safety Rating System (England) Regulations 2005 prescribe the method of calculating the seriousness of a hazard. More serious hazards are classed as category 1 hazards, whilst lesser hazards are in category 2.  The hazards with which this appeal is concerned are in category 2.

9.        Where a local housing authority consider that a category 1 hazard exists on any residential premises they are under a duty, imposed by s. 5(1) of the 2004 Act, to take appropriate enforcement action.  Where an authority are aware of a category 2 hazard s. 7(1) confers on them a power to take enforcement action.  In both cases enforcement action may include serving a notice, referred to as an improvement notice, requiring the person on whom it is served to take such remedial action in respect of the hazard concerned as is specified in the notice.

10.    Improvement notices relating to category 1 hazards are described in s. 11 of the 2004 Act, while s. 12 is concerned with improvement notices relating to hazards in category 2.  By s. 12(1) “if the local housing authority are satisfied that a category 2 hazard exists on any residential premises …the authority may serve an improvement notice” under s. 12 in respect of the hazard.

11.    The provisions of s. 11(3) and (4) are incorporated by reference in s. 12(3) and apply to both categories of improvement notice.  They are relevant to this appeal because they describe the premises in relation to which remedial action may be required to be taken.  They provide as follows:

“11 (3) The notice may require remedial action to be taken in relation to the following premises—

(a) if the residential premises on which the hazard exists are a dwelling or HMO which is not a flat, it may require such action to be taken in relation to the dwelling or HMO;

(b) if those premises are one or more flats, it may require such action to be taken in relation to the building containing the flat or flats (or any part of the building) or any external common parts;

(c)  if those premises are the common parts of a building containing one or more flats, it may require such action to be taken in relation to the building (or any part of the building) or any external common parts.

Paragraphs (b) and (c) are subject to subsection (4).

(4) The notice may not, by virtue of subsection (3)(b) or (c), require any remedial action to be taken in relation to any part of the building or its external common parts that is not included in any residential premises on which the hazard exists, unless the authority are satisfied—

(a) that the deficiency from which the hazard arises is situated there, and

(b) that it is necessary for the action to be so taken in order to protect the health or safety of any actual or potential occupiers of one or more of the flats”.

12.    Provision for the contents of improvement notices served under either s. 11 or s. 12 is made by s.13.  The information which must be specified in relation to a hazard includes, by s. 13(2)(b) and (d), “the nature of the hazard and the residential premises on which it exists” and “the premises in relation to which remedial action is to be taken in respect of the hazard and the nature of that remedial action”.  By s. 13(5) the premises in relation to which the remedial action is to be taken are referred to in Part 1 of the Act as the “specified premises”.

13.    By s. 30(1) of the 2004 Act, it is a criminal offence for a person on whom an improvement notice is served to fail to comply with it; it is a defence that such a person had a reasonable excuse for failing to comply with the notice (s.30(4)).

 

Parts 2 and 3 of the 2004 Act

14.    Part 2 of the 2004 Act introduced a new scheme for the licensing of houses in multiple occupation, HMOs, by local housing authorities.  An HMO is a building or part of a building which satisfies one of five alternative tests listed in s. 254(1) of the Act.  HMOs take different forms, and may comprise a house, a self contained flat, a converted building, a building in mixed use, or even, in certain circumstances, a block of flats.  This appeal concerns a block of flats.

15.    The typical or “standard” HMO is a building occupied by persons who do not form a single household but who share basic amenities, and is described in greater detail in s. 254(2).  This standard test of an HMO does not include a block of flats (s. 254(2)(a)). 

16.    A block of flats can only be an HMO where it is a “converted block of flats” to which s. 257 applies.  A converted block of flats is a building or part of a building which has been converted into, and consists of, self-contained flats. The object of s. 257 is to bring within the scope of the legislation controlling HMOs certain converted blocks of flats which do not satisfy modern building standards.  In the case of a converted block of flats on which building work was completed before 1 June 1992, s. 257 applies if two conditions are satisfied: first, that the works undertaken in connection with the conversion did not comply with building standards equivalent to those imposed by the Building Regulations 1991; and secondly, that less than two-thirds of the self-contained flats are owner occupied (s. 257(2)-(3)).  Such a block of flats is referred to as “a section 257 HMO”.

17.    With immaterial exceptions every HMO to which Part 2 of the 2004 Act applies is required by s. 61(1) to be licensed. Part 2 does not apply to all HMOs, and in particular it does not apply to section 257 HMOs.  These are not within Part 2, and therefore are not subject to mandatory licensing, but they are nonetheless HMOs for the purposes of the enforcement of housing standards by Part 1 of the Act.

18.    Part 3 of the 2004 Act also provides for licensing of other residential accommodation which is not an HMO.

Improvement notices - procedure

19.    Paragraphs 1 to 5 of Part 1 of Schedule 1 to the 2004 Act deal with the requirements for the service of improvement notices, including identifying the person on whom a notice must be served.  Four distinct situations are catered for, each of which identifies the recipient of the notice by reference to the nature of the “specified premises” in the improvement notice; “specified premises” is defined in s. 13(5) as the premises specified in the notice as premises in relation to which remedial action is to be taken in relation to the hazard (and is therefore to be distinguished from the premises on which the hazard itself exists).  The situations are:

(1)          Where the premises in relation to which remedial action is to be taken are licensed under Part 2 or Part 3 of the 2004 Act, paragraph 1 of Schedule 1 requires the local housing authority to serve the notice on the holder of the licence. 

(2)          Where the premises in relation to which remedial action is to be taken are not so licensed and are not a flat, paragraph 2 applies.  In that case, where the specified premises are a dwelling the local housing authority must serve the notice on “the person having control of the dwelling”.  Where the specified premises are an HMO it must serve the notice either “on the person having control of the HMO” or on the person managing it.

(3)          Where the premises in relation to which remedial action is to be taken are a flat which is either a dwelling not licensed under Part 3 of the Act, or an HMO which is not licensed under Parts 2 or 3, paragraph 3 applies.  In such a case the local housing authority must serve the notice either on the person managing the flat, or on a person who is both an owner of the flat, and, in the authority’s opinion, ought to take the action specified in the notice.

(4)          Finally, where the specified premises are the common parts or other non-residential parts, of a building containing one or more flats, paragraph 4 applies. The local housing authority must, in such a case, serve the notice on a person who is an owner of the specified premises, and who, in the authority’s opinion, ought to take the action specified in the notice.

20.    More than one person may have an interest in a flat or HMO, whether as freeholder, long lessee or short term tenant.  The provisions in Schedule 1 of the 2004 Act make it necessary to identify the “owner” and the “person having control” on whom an improvement notice may be served.

21.     The “owner” in relation to any premises is defined in s. 262(7).  It always includes the owner of the freehold interest.  It also includes “a person holding or entitled to the rents and profits of the premises under a lease of which the unexpired term exceed 3 years”.  Thus, if the premises are subject to a lease with more than 3 years left to run the “owner” will include both the lessee (the holder of the lease) and the lessor (the person entitled to receive the rent payable under the lease).

22.    For most HMOs the expression “person having control” used in paragraph 2 is defined in s. 263, as follows:

“263(1) In this Act “person having control”, in relation to premises, means (unless the context otherwise requires) the person who receives the rack-rent of the premises (whether on his own account or as agent or trustee of another person), or who would so receive it if the premises were let at a rack rent.”

It will be noticed that this definition allows for some flexibility since it applies “unless the context otherwise requires”.  Those words featured prominently in Mr Wood’s submissions.

23.    A slightly modified definition of “person having control” is provided for section 257 HMOs by the Houses in Multiple Occupation (Certain Blocks of Flats) (Modifications to the Housing Act 2004 and Transitional Provisions for section 257 HMOs) (England) Regulations 2007.  These disapply s. 263 in relation to references in Part 2 and 3 of the Act to “person having control” and substitute an alternative definition in s. 61(7).  The modified definition in s. 61(7) applies only to the use of the expression in Parts 2 and 3 of the 2004 Act, and therefore applies only in relation to HMO licensing.  It has no application to the provisions of paragraph 2 of Schedule 1, governing the service of improvement notices; those provisions are given effect to by s. 18 of the Act, which is found in Part 1.  The unmodified definition in s. 263 accordingly applies for the purpose of identifying the person having control on whom an improvement notice in respect of a section 257 HMO is to be served.

24.    The “person having control” of an HMO may be more than one person. In Pollway Nominees v Croydon LBC [1987] AC 79 the House of Lords considered the meaning of that expression as it was used in s. 39(2), Housing Act 1957, which was in substantially the same terms as s. 263 of the 2004 Act.  It was held that in the case of a house comprising a number of residential units let on long leases at ground rents the definition applied collectively to all the long leaseholders who between them either received the rack rent of units sublet at rack rents or would receive the rack rents if the units were so sublet.  It must have been the intention of Parliament that there would always be a person who satisfied the description of being in control of any relevant house, and on whom an improvement notice could be served.  It was therefore permissible to read the phrase “person who receives the rack rent” as including the plural “persons”, so as to apply to “a number of persons, having interests in different parts of the house which together comprise the totality of the house”.

25.    Part 3 of Schedule 1 to the 2004 Act is concerned with appeals.  Under paragraph 10 an appeal against an improvement notice may be made to the appropriate tribunal; such an appeal is by way of a re-hearing (paragraph 15(2)(a)). There is no restriction on permissible grounds of appeal, but certain grounds are specifically contemplated.  Paragraph 11 provides for an appeal on the ground that one or more other persons, as an owner or owners of the specified premises, ought to take the action concerned or pay the whole or part of the cost.  In such a case a copy of the notice of appeal must be served on the other person or persons.

26.    Where the grounds of an appeal include a claim that another person ought to be responsible for the action required by an improvement notice, or ought to bear all or part of the cost, paragraph 16(2) of Schedule 1 gives the tribunal power to vary the notice to require any other owner mentioned in the notice of appeal to take the action, and may require any such owner to make a payment to the appellant. Paragraph 16(3) identifies factors which the tribunal must take into account in making such an order.  I will refer to those factors in greater detail later in this decision.

The facts

27.    The improvement notice in issue in this appeal was served by the City Council on Mr Wood and Ms Peacock on 5 September 2013.  An earlier notice targeting the same hazard (the risk to the occupiers of Flat 4 of injury by fire) had been served on Mr Wood alone on 7 June 2012, but had been the subject of a successful appeal to the Residential Property Tribunal (the predecessor of the FTT)(“the RPT”).  In its decision quashing the 2012 notice the RPT provided a clear exposition of the facts which the FTT was able to refer to and adopt when it came to consider Mr Wood’s appeal against the 2013 notice.  I gratefully do the same for the purpose of this appeal, taking the following statement of the facts substantially from the RPT’s decision supplemented by a helpful statement of agreed facts provided by the parties. 

The Building

28.    Flat 4 is a self contained flat on the first floor of a three storey building which, in its current form, is the result of a conversion of two substantial semi-detached properties, 141 and 143 Princes Avenue (“the Building”). The two properties were built around 1875 and are likely to have been designed as homes for prominent Hull merchants.  In the 1950’s the Building was converted to form seven self contained flats, referred to as Flats 1 to 6, 141 Princes Avenue and the Ground Floor Flat, 143 Princes Avenue.

29.    Access to Ms Peacock’s Ground Floor Flat is by the front door of the former 143 Princes Avenue. Flats 1 to 6 are accessed through a communal entrance which previously served 141 Princes Avenue alone. The 143 Princes Avenue part of the Building now contains the Ground Floor Flat, Flat 4 immediately above it on the first floor and Flat 6 above that on the second floor. 

30.     An unusual feature of this case is that the flats in the Building are freeholds rather than being held on long leases. Flats 5 and 6 are held under a single freehold title, while each of the remaining five units has its own separate freehold title.  The flats on the upper floors of the building are accordingly flying freeholds.  The property register for the Ground Floor Flat refers to a covenant by the owner requiring her to contribute an equal fifth part of the expense of maintaining and repairing and if necessary renewing the main structure of the Building. 

31.    The RPT found that the legal title of Flat 4 includes one-half in depth of the joists above its ceilings and one-half in depth of the joists between the floor of Flat 4 and the ceilings of the Ground Floor Flat.  The only title documents provided to the Tribunal for this appeal were electronic copies of entries in the Property Register which do not identify lateral boundaries, but there was no challenge to the RPT’s finding either before the FTT or before the Tribunal.  The finding was important because it fixes the boundary between the property belonging to Ms Peacock and the property belonging to Mr Wood.

32.    Mr Wood purchased the freehold of the first of his flats in the Building in 1986 and has gradually acquired others so that he now owns Flats 1 to 6, which he lets on assured tenancies. Ms Peacock owns the freehold of the Ground Floor Flat, which has been her home since 1989.

The Building’s status as an HMO

33.    It is common ground that the Building is an HMO because it is a converted block of flats to which s. 257, Housing Act 2004 applies.

34.    The Building meets the requirements of section 257 because the building work undertaken in its conversion in the 1950s did not comply with the appropriate (modern) building standards, and because only one of the self contained flats is owner occupied (Ms Peacock’s flat).  Although it is possible for an individual flat also to be an HMO, it is common ground that Flat 4 is not an HMO.

The 2012 improvement notice

35.    In July 2011 the City Council carried out an inspection of the Building after a complaint by the occupier of Flat 4 about water leaks. The inspection identified three category 2 hazards, as defined in Part 1 of the 2004 Act.  Agreement was reached between Mr Wood and the City Council on remedial action to deal with two of those hazards, but not in relation to the third hazard - fire. 

36.    The City Council was advised that 30 minutes fire separation should be provided between all flats in the Building and that the Ground Floor Flat should be connected to the automatic fire detection system for the whole Building previously installed by Mr Wood.

37.    With the benefit of that advice the City Council identified two deficiencies which were responsible for the category 2 fire hazard, namely:

(1)          The absence of an adequate automatic fire detection system within the Ground Floor Flat linked to the whole building automatic fire detection system.

(2)          Inadequate material separation between Flat 4 and the Ground Floor Flat, in the area above a suspended ceiling in the ground floor bathroom and hallway. The remaining ceiling areas in the Ground Floor Flat provided adequate separation, but the area above the suspended ceiling did not.

The City Council considered that it was Mr Wood’s tenant, the occupant of Flat 4, rather than Ms Peacock, the owner-occupier of the Ground Floor Flat, who was at risk from these deficiencies.  Not only did the inadequate material separation risk the spread of a fire from the Ground Floor Flat, the absence of a connection between its fire detection system and the whole building system heightened the risk to the occupant of Flat 4.

38.    In December 2011 the City Council asked Mr Wood to carry out works to remedy these deficiencies. The works requested were to incorporate the fire sensors in the Ground Floor Flat into the whole building fire detection system, and to install a suitable fire resistant material between the floor joists of Flat 4 in an area of 10 square metres above the bathroom and hallway of the Ground Floor Flat.

39.    Mr Wood questioned the City Council’s authority to require him to carry out works on a property which did not belong to him, and he was not prepared to do the work unless Ms Peacock contributed to the cost.  He also suggested that the works proposed to remedy the inadequate material separation were not practical and would be expensive and disruptive to the occupants of Flat 4, costing an estimated ₤7,000 and requiring that the flat be vacated to enable the bathroom fittings to be removed and the floor lifted in that area. Mr Wood proposed that renewing the ceiling boards in Ms Peacock’s flat would be a more practical and inexpensive option.  In March 2012 Ms Peacock offered to grant reasonable access to enable the necessary works to be carried out to the ceiling of her flat. 

40.    On 7 June 2012 the City Council issued an improvement notice (“the 2012 improvement notice”) requiring Mr Wood to extend the whole building fire detection system to include the Ground Floor Flat and to take down and replace 10 square metres of Ms Peacock’s ceiling.  The notice was addressed to Mr Wood alone.  Paragraph 1 of the notice stated that Mr Wood was the owner of the residential premises at Flat 4, and reference was made in paragraph 2 to the existence within those premises of the category 2 hazard. The actions to remedy the hazard were specified in Schedule 2, as I have described; the premises in relation to which remedial action was to be taken were therefore the Ground Floor Flat.

41.    Mr Wood appealed against the 2012 improvement notice.  He did not dispute the existence of a category 2 hazard to the occupier of Flat 4 but argued that the City Council had no power to serve an improvement notice requiring him to undertake works in a property not in his ownership.  He contended that the 2012 improvement notice should be revoked and that the City Council should serve a new notice on Ms Peacock as the owner of the Ground Floor Flat.

The RPT’s decision on the validity of the 2012 improvement notice 

42.     In its decision on the appeal against the 2012 improvement notice the RPT concluded that the City Council had had no lawful authority to serve notice on Mr Wood requiring him to carry out work in the Ground Floor Flat.  Because the premises specified in the notice had been Flat 4, and the remedial work had been required in the Ground Floor Flat, the RPT first considered whether the City Council “was correct in treating Flat 4 as an entity separate and apart from the designation of the building as an HMO”.  If the notice had been served on the correct person, then the view of the RPT (at paragraph 49) was that the combined effect of ss. 11(3) and (4) was sufficient to empower the City Council to give notice requiring Mr Wood to carry out remedial work on the Ground Floor Flat.  This was because it considered the circumstances were as described in s. 11(4)(a) and (b): the deficiency from which the hazard arose was situated in the Ground Floor Flat, and it was necessary for the remedial action to be taken in order to protect the health and safety of the occupiers of Flat 4.

43.    The RPT was nonetheless satisfied that the notice had not been served on the correct person.  The City Council would only be entitled to serve an improvement notice on Mr Wood alone if it did so under paragraph 3(2) of Schedule 1, treating “the specified premises” as a single flat, Flat 4.  In paragraph 52 of its decision the RPT explained that the City Council should have treated the Building as a whole as the relevant residential premises.  If that was done, paragraph 2(2) of Schedule 1 would require that the improvement notice be served on the person having control of the HMO.  Following the decision of the House of Lords in Pollway, that person was not Mr Wood alone, but was Mr Wood and Ms Peacock.

44.    In reaching its conclusion the RPT focused on the fact that the definition of “residential premises” in s. 1(4) of the 2004 Act included an HMO.  It considered that if a building was an HMO the City Council was not entitled to treat it as individual flats.  It also considered that s. 11(3)(b) did not entitle the City Council to require action in relation to the Building or any part of the Building, because s. 1(5) makes it clear that the expression “building containing one or more flats” does not include an HMO.  It therefore considered that s. 11(3)(b) had no application where the building in question was an HMO.  Only by treating the Building as an HMO could the City Council require work to be done to any part of the Building under s. 11(3)(a).  Such an improvement notice is required to be served on the person having control of the HMO, which was not Mr Wood alone, but was Mr Wood and Ms Peacock.  By serving the notice on Mr Wood alone, as the owner of Flat 4, the City Council had deprived him of opportunity to argue under paragraph 11(1) of Schedule 1 that Ms Peacock was also an owner of the residential premises concerned and should contribute towards the cost of the works.

45.    At the conclusion of its decision the RPT quashed the 2012 improvement notice on the grounds that it had not been served on the correct persons, but it said that it was prepared to give permission to appeal.  The City Council chose not to appeal, but instead served a further notice.

The 2013 improvement notice

46.    On 5 September 2013 the City Council served a second improvement notice (“the 2013 improvement notice)”, requiring that the same hazard be remedied.  The justification for the notice was stated to be a lack of adequate material separation either “at the boundary” between Flat 4 and the Ground Floor Flat “or alternatively fixed to the ceiling joists in the Ground Floor Flat”.  The consequence of this state of affairs was said to be that “the defect increases the risk to the occupants of Flat 4”. 

47.    The work required by the 2013 notice was either the replacement of 10 square metres of the ceiling of the Ground Floor Flat (the same work as had been specified in the 2012 improvement notice) or, in the alternative, the installation of “a suitably certified fire resistant product between the floor joists of the existing timber floor construction to Flat 4”. 

48.    The same notice was addressed to and served on both Mr Wood and Ms Peacock, the only difference in each case being the recipient’s name and address; each of them was therefore required separately to carry out the same work.

49.    On 9 September 2013 Mr Wood appealed to the FTT against the 2013 improvement notice, and identified Ms Peacock as a person who ought to be required to carry out the required remedial work.  Ms Peacock responded in writing to that contention and the FTT exercised its power to join Ms Peacock as an additional appellant.

The FTT’s decision

50.    Three matters were in dispute before the FTT: 

(1)          The first was the identity of the “person having control” of the relevant premises (which the FTT took to be the HMO), on whom the notice was required to be served.  Mr Wood contended that the notice should not have been served on him, but on Ms Peacock alone.  The FTT decided that that the City Council had been correct to serve the notice on both Mr Wood and Ms Peacock.

(2)          The second issue was whether the 2013 improvement notice properly included alternative schemes of remedial work.  The FTT decided that there was no reason why it should not do so.

(3)          The final issue concerned payment for the work.  Ms Peacock argued that, whatever work was to be carried out, it ought to be paid for by Mr Wood.  With the consent of Mr Wood the FTT treated Ms Peacock’s submissions as raising the ground of appeal in paragraph 11 of Schedule 1 to the 2004 Act.  It decided that if Ms Peacock permitted the work to be carried out in her flat Mr Wood should be solely responsible for the cost, but that if she refused access and the work had to be carried out from Flat 4, she should contribute a sum equal to the amount by which the total cost had been increased.

51.    The same three issues were argued on the appeal. Permission to appeal was sought and granted on the second and third issues, but not formally on the first.  Nonetheless, before addressing those issues it is essential first to consider whether the FTT was correct in its conclusion that Mr Wood and Ms Peacock collectively were persons on whom the 2013 improvement notice ought properly to have been served.

Issue 1: On whom should the improvement notice have been served?

52.    On the appeal Mr Wood said that his main concern was to establish clearly who ought to be responsible for carrying out the work, and he complained that the City Council’s approach of serving the same notice on two owners with different interests was likely to promote confusion and dispute.  I agree.

53.    The purpose of an improvement notice is to require remedial action to be taken, which may include action on premises other than the dwelling on which the hazard exists. The statutory scheme limits the premises in relation to which remedial action may be required by means of the rules in s. 11(3) and (4) (which apply both to notices under s. 11 and to those under s. 12). 

54.    Three categories of residential premises are identified in s.11(3).  The first category in subparagraph (a) comprises a dwelling or HMO which is not a flat, the second in subparagraph (b) comprises one or more flats, and the third in subparagraph (c) comprises the common parts of a building containing one or more flats. It is apparent that the first of these categories may overlap with the second.  An HMO which is not a flat may nonetheless contain one or more flats (a section 257 HMO, for example, or a converted building containing a flat and a number of other units of living accommodation which are not flats).  Residential premises falling within subparagraph (3)(b) may therefore be part of residential premises within subparagraph (3)(a). This can be illustrated by considering a house on three floors, which has been converted to create a self contained basement flat and individual bedsits with shared bathroom and kitchen on the upper floors, occupied by more than two households.  Such a building would be an HMO which is not a flat, but would contain a flat.

55.    If the residential premises on which a hazard exists are within s. 11(3)(a) an improvement notice may require action to be taken in relation to any part of the dwelling or HMO.  In such a case the further restrictions in subsection (4) have no application.  If the residential premises on which the hazard exists are within s. 11(3)(b) i.e. they are one or more flats, action may be required in relation to any part of the building containing the flats, but such action will be subject to the limitations in subsection (4).

56.     In the case of a building which is both an HMO and contains one or more flats, the critical question in determining whether the restrictions in subsection (4) apply will be the identity of the residential premises on which the hazard exists.  That is question of fact.  If the hazard exists in part of an HMO which is not a flat subparagraph (3)(a) will apply.  If the hazard exists in part of an HMO which is a flat, subparagraph (3)(a) will not apply because it excludes dwellings (or HMOs) which are flats, and instead subparagraph (3)(b) will apply; in such a case the power to serve a notice requiring remedial action to be taken in relation to any part of the building containing the flat is subject to subsection (4).

57.    Subsection (4) restricts the premises in relation to which remedial action may be required.  A notice may not require action to be taken in relation to any part of the building that is not included in residential premises on which the hazard exists unless the authority is satisfied that two conditions are met.  The first is that the deficiency from which the hazard arises must be situated in that part of the building; the second is that it must be “necessary for the action to be so taken” in order to protect the health or safety of the occupiers of one or more of the flats.  Two important matters should be noted when considering the second of these conditions.  The first is that the statute prescribes a test of necessity, not convenience; it must be “necessary” for action to be so taken.  The second is that it must be necessary for the action to be “so taken” i.e. it must be necessary for the remedial action to be taken in a part of the building which is not the residential unit on which the hazard exists.  The condition is not simply that it must be necessary for action to be taken somewhere; it must be necessary that it be taken outside the unit where the hazard arises.

58.    The principle which underlies these provisions seems to me to be clear.  It is that wherever possible remedial action should be taken in the residential premises on which the hazard exists.  Only if a hazard arises as a result of a deficiency situated outside the residential premises on which the hazard exists may remedial action be required to be taken somewhere other than those premises; and even then such action may be required only if action outside the premises on which the hazard exists is the only way of protecting the health or safety of the occupiers of those premises.  If there is more than one way of remedying a hazard, the preferred method, if it is available, is therefore always to require action within the premises on which the hazard exists.  But if the hazard is caused by a deficiency in other premises and the only way of removing the hazard is by work to those other premises, an improvement notice may require work to the premises on which the deficiency exists in order to protect the occupiers of the premises on which the hazard arises.   

59.    In this case the residential premises on which the hazard arises are Flat 4. The 2013 improvement notice described the property as 141-143 Princes Avenue, i.e. the Building as a whole, but I do not think that was an accurate or permissible statement.  The notice correctly stated that “the defect increases the risk to the occupants of Flat 4”, and there was no suggestion that the inadequate fire separation created a risk to the occupier of any other part of the Building.  It is important that the location of the hazard be distinguished as accurately as possible, and in this case it was clearly Flat 4.

60.    Although Flat 4 is part of an HMO it is also a flat, so s. 11(3)(a) has no application, and instead the remedial action which may be required is governed by s.11(3)(b) and is subject to s. 11(4). It follows that remedial action may only be required to be taken outside of Flat 4 if it is necessary to do so, i.e. because there is no remedial action which could be taken within Flat 4 itself which would protect the health or safety of its occupier against the relevant hazard.

61.    Is it necessary for remedial action to be taken outside of Flat 4?  That critical question of fact was not specifically addressed either by the RPT in 2012 or by the FTT in the decision under appeal, because each of them considered that s. 11(4) had no application to this case.  The evidence on that issue is also rather limited, but the following conclusions seem to me to be justified on such evidence as there is. 

62.    First, all parties agree that the most convenient and least disruptive remedial action would be to replace the relevant area of the ceiling of the Ground Floor Flat.  Secondly, it is not disputed that the installation of a fire resistant product between the floor joists on Flat 4 would be an alternative course of remedial action which would protect the occupiers of Flat 4 equally well.  Thirdly, there is no description of the appropriate product in the 2013 improvement notice, other than that it is to be installed between the floor joists, a location described in Schedule 1 of the notice as “at the boundary” between the two flats.  That description accords with the finding of the RPT that the area between the floor joists is for half of its depth within the title to the Ground Floor Flat and for the remaining half within Flat 4.  Fourthly, the remedial action involves the laying of some unspecified fire resisting product not on top of the joists, but within the area between the joists.  It seems reasonable to assume that a foam or roll or sheet of fire resistant material will lie in the bottom of the area between the joists, which is within the title to the Ground Floor Flat. It follows that the installation of fire resistant material is remedial action which is required to be carried out in part of the Building outside Flat 4, (although obviously the material itself would be laid from above and so action is also required in Flat 4).

63.    As the only two courses of action identified by the City Council as capable of mitigating the hazard require action to be taken outside of Flat 4 and within the boundaries of the Ground Floor Flat, I conclude that it was within the power conferred by s. 11(3)(b) for the 2013 improvement notice to require such action to be taken.  Had there been an available course of action which could have been undertaken entirely within Flat 4, it would not in my judgment have been lawful for the City Council to have required action within the Ground Floor Flat.

64.    Having identified the premises in relation to which remedial action is required, it is then possible to consider the person on whom an improvement notice requiring that action ought to be served.  That question is governed by the provisions of Schedule 1 which I have described in paragraph 19 above.  These require that the “specified premises” be identified. 

65.    The “specified premises” in relation to an improvement notice are the premises specified in the improvement notice as premises in relation to which remedial action is to be taken (s. 13(5)).  The specified premises are therefore the Ground Floor Flat (so far as the replacement of part of the ceiling is concerned) and the Ground Floor Flat and Flat 4 (as far as the installation of material in the space between the floor joists is concerned).

66.    Where the specified premises are a dwelling which is not licensed under Part 2 or an HMO which is not licensed under Part 3 of the 2004 Act, and which in either case is a flat, paragraph 3(2) of Schedule 1 requires that an improvement notice be served on a person who is an owner of the flat, and who in the authority’s opinion ought to take the action specified in the notice.  It follows that in relation to the work required to be carried out wholly within the Ground Floor Flat, the only permissible recipient of the notice was Ms Peacock.  Mr Wood is not an owner of the Ground Floor Flat, and a notice requiring work entirely within the Ground Floor Flat cannot be served on him.  For that reason, to the extent that the 2012 improvement notice required Mr Wood to replace the ceiling of the Ground Floor Flat, it was unlawful.

67.    It follows also that Mr Wood was not properly required by the 2013 notice to carry out work to replace part of the ceiling of Ms Peacock’s flat.  Only she could be required to carry out that work.  The 2013 improvement notice served on Mr Wood ought therefore to have been varied by removing from it the first of the two alternative remedial schemes.

68.    The position is less clear in relation to a requirement to take remedial action which requires work to be carried out partly within Flat 4 and partly within the Ground Floor Flat.  A notice served on each of the owners requiring that each carry out part of the work within their own flat would be unsatisfactory, since this is a single scheme of work. A pragmatic solution would be to regard Ms Peacock and Mr Wood jointly as the appropriate addressees of such a notice.  Each of them is a necessary addressee of an improvement notice requiring work within their own flat. To the extent that the fire resistant material is to be layed in an area forming part of the Ground Floor Flat, a notice must be served on Ms Peacock; the work also requires action in Flat 4, to lift floor boards and gain access to the space between the joists, so Mr Wood is also a necessary recipient.  There is only one scheme of work and rather than serving separate notices on each owner requiring each to carry out the part within their own premises it would seem preferable for a single notice to be addressed to them both.

69.    Such a joint notice would treat Mr Wood and Ms Peacock collectively as the owners of the flats where the remedial work is required.  It would be in accordance with the approach taken by the House of Lords in Pollway.  With the aid of s. 6 of the Interpretation Act 1978, unless the contrary intention appears, words in the singular include the plural.  The 2004 Act does not appear to me to demonstrate any intention which would prevent reading paragraph 3(2) of Schedule 1 as extending in the case of specified premises which are two flats, to requiring the local housing authority to serve notice on the persons who are owners of those flats. 

70.    If a single notice was served on both of the owners they would have to agree how the work was to be carried out, or they would each be guilty of the offence under s. 30 of the 2004 Act of failing to comply with an improvement notice unless they were able to rely on the defence of reasonable excuse.  If one was willing for the work to be done, but the other was not prepared to give necessary access, s. 35 of the 2004 Act allows a magistrates court to order that access be provided.  If the owners were not able to agree on who should pay for the work they would each be entitled to appeal to the appropriate tribunal under paragraph 11 for an order that the other, as an owner of the specified premises, ought to pay all or part of the costs of taking the action.

71.    I therefore conclude that in relation to the second scheme of remedial action, the installation of fire resistant material between the joists, the FTT was correct to find that the 2013 improvement notice was properly addressed both to Ms Peacock and to Mr Wood.  I have reached that conclusion by a different route from that taken by the FTT, and it is necessary that I explain why I consider my alternative analysis is to be preferred.

72.    The FTT reached the conclusion that Mr Wood and Ms Peacock were the “composite” persons having control of the HMO and for that reason the 2013 improvement notice was properly served on them both.  It took as its starting point (in paragraphs 16 and 34(a) of the decision) the proposition that the residential premises with which it was concerned were the Building as a whole.  It explained why it had chosen that point of departure in paragraph 16, as follows:

“The starting point for our decision is therefore to consider the “residential premises” where the deficiency arises: see s. 12(1). In this case the parties are agreed that 141/143 Princes Avenue is an HMO which is not a flat (although it contains flats): they are the residential premises on which the hazard exists pursuant to s. 11(3)(a).  Subsection 11(4) limits the circumstances where remedial action can be required to premises other than where the hazard exists and is not applicable in this case.”

73.     In paragraph 34 the FTT arrived at its conclusion by the following reasoning: 

“(a) The starting point is that the premises on which the hazard exists is an HMO which is not a flat. 

(b) Once premises have been identified as an HMO under s. 11(3)(a), it is not possible to consider them otherwise as e.g. separate self-contained flats.

(c) Section 11(4) is not applicable and the notice correctly specified that the remedial action should be taken in respect of the HMO.  In accordance with s. 13(5) the HMO is accordingly the “specified premises” for the purposes of the Act.

(d) Accordingly the appropriate paragraph of Schedule 1 of the 2004 Act defining who should be served is paragraph 2 as the specified premises is an HMO.

(e) The Act must be read as intending the specified premises to remain consistent throughout.  Thus once the specified premises have been identified these are the same premises to which s. 263 refers.  Accordingly the Council asked itself the correct question, i.e. who is the person having control of 141/143 Princes Avenue.

(f) There is no basis for departing from the decision in Pollway that where premises are in multiple ownership the person who receives or would receive the rack-rent are made up of a composite of those persons.  In this case the Council correctly identified them as Mr Wood and Ms Peacock as the composite persons.”

74.    The FTT therefore rejected Mr Wood’s case that the 2013 improvement notice ought not to have been served on both him and Ms Peacock.

75.    It is apparent that the FTT’s reasoning and my own diverge from the start. It considered that the starting point was that the premises on which the hazard exists is an HMO which is not a flat.  I respectfully disagree.  The residential premises on which the hazard exists are Flat 4, as both the 2012 and 2013 improvement notices had stated, as the RPT had found for the reasons in paragraph 38 and 41 above, and as I have explained in paragraph 60 above.

76.    By regarding the relevant residential premises as the HMO as a whole, and not as Flat 4, the FTT was required to disapply subparagraph (4) of s. 11.  If the premises on which a hazard exists are an HMO which is not a flat, the premises in relation to which remedial action can be required are defined by s.11(3)(a) which is not subject so subparagraph (4). 

77.    In focussing on the Building as a whole as the premises on which the hazard exists the FTT was following the approach of the RPT. 

78.    The RPT had rejected the City Council’s argument that s. 11(3)(b) was applicable (which, as I have explained, I consider to have been the correct analysis).  It considered that the City Council’s argument was precluded by the definition of the expression “building containing one or more flats” in s. 1(5) of the Act, which provides that in Part 1 of the Act “building containing one or more flats” does not include an HMO.  The City Council argued that because the premises on which the hazard exists are a flat, subparagraph (3)(b) entitled it to serve a notice requiring action to be taken “in relation to the building containing the flat or flats”, but subject to subparagraph (4); it pointed out that the fact that the flat was in an HMO was irrelevant because the expression “building containing one or more flats” defined in s. 1(5) as not including an HMO is not found in subparagraph (3)(b),.  The RPT rejected this argument, saying that it “strained the ordinary and natural meaning of building containing one or more flats beyond acceptable limits”.  I respectfully disagree.  The draftsman has not employed the expression “building containing one or more flats” in subparagraph (3)(b) and there is therefore no reason to exclude a flat which is part of an HMO from the scope of that provision and, most significantly, from the scope of subparagraph (4).

79.    The FTT also proceeded on the basis that the premises on which the hazard exists are the HMO, the Building as a whole, and not the individual flat or flats.  It did not explain why, but I infer that it must have done so by adopting the reasoning of the RPT.  I consider that reasoning was wrong, and that the FTT’s conclusion, that a notice could be served on both Mr Wood and Ms Peacock requiring each to carry out work in the flat belonging to the other, was not supported by its reasoning.

80.    I am nonetheless satisfied that the FTT’s conclusion was correct so far as it related to the remedial action which could only be carried out by undertaking work in both Flat 4 and the Ground Floor Flat.  In relation to that work the appropriate “specified premises” were the two flats, and their owners were Mr Wood and Ms Peacock collectively. 

81.    Variations are required to the 2013 improvement notices in order to give effect to these conclusions.  A person who receives an improvement notice and who fails, without reasonable excuse, to comply with it commits a criminal offence.  It is therefore essential that an improvement notice should be both accurate and precise, so that the recipient knows what they must do to comply. 

82.    Before considering the necessary variations, I will next consider the second issue in the appeal, namely whether the City Council was entitled to include more than one scheme of remedial action in the 2013 notice.

Issue 2: May an improvement notice properly include alternative schemes of remedial work? 

83.    As for the second issue, the FTT recorded that it was accepted by all concerned that the most reasonable way to carry out the necessary remedial work was by replacing the defective part of the ceiling of Ms Peacock’s flat.  Mr Wood argues that that should have been the only work specified in the notice.  The FTT considered that in principle there was no reason why the City Council should not specify alternative works, especially where a notice was to be served on more than one person.

84.     An improvement notice is required by s. 13(2)(d) of the 2004 Act to specify “the premises in relation to which remedial action is to be taken in respect of the hazard and the nature of that remedial action”.

85.    Nothing in the 2004 Act expressly prohibits an authority from specifying more than one type of remedial action in a single notice.  It is striking, however, that the draftsman has seen fit in s.11(6) and s. 12(4)/(5) specifically to authorise the service of an improvement notice which combines in a single document more than one hazard, and hazards in both category 1 and category 2.  This form of drafting is obviously to dispel any doubt that there might have been over the permissible content of an improvement notice.  Clarity on that subject is essential because of the criminal sanctions which attend a failure to comply with an improvement notice.  The draftsman has not specified whether a notice requiring alternative remedial schemes is permissible.

86.    There seems to me to be no obvious reason why a notice may not clearly require one person to remedy a hazard by taking either remedial action A or remedial action B, leaving the recipient of the notice to choose which is his or her preferred course.  But what of a case where alternative courses of action are available which would be required to be taken by different people?  The circumstances in which such a choice may have to be made are likely to be rare, but the facts of this case show that they are not impossible. 

87.    I think it is highly undesirable to require two persons to remedy a hazard by taking either remedial action A or remedial action B, unless they are joint owners of the same interest in the premises on which the action is to be taken. A notice should not require a recipient to carry out work on premises in which they have no interest.  Paragraphs 2 to 4 of Schedule 1 to the 2004 Act carefully identify the persons on whom a notice may be served, and in each case the appropriate person is one who has a sufficient interest in the premises (whether as owner, person having control, manager or licence holder) to enable them to exercise a right of access or, if they have not reserved a right of access, to enable them to apply to the magistrates court under s. 35 to obtain an order requiring the occupier of the premises to permit them access.  Such an order may be granted only to a “relevant person” in relation to “specified premises”, defined in s. 35(8) as an owner of the premises, or a person having control, a manager or the holder of a licence under Part 2 or 3 of the Act in respect of those premises.  Parliament cannot have intended to expose a person to criminal liability for failing to comply with an improvement notice without ensuring that they have the means of doing so.

88.    Where, as in this case, a single scheme of remedial action requires work to be undertaken in premises belonging to more than one owner, the approach taken by the House of Lords in Pollway allows the specified premises to encompass the premises of all of the necessary owners.  The premises on which remedial action is required to be taken are premises belonging to two different owners, but acting jointly they are in a position to carry out that action.  In the event that they fail to cooperate, if both premises have been specified in an improvement notice an order under s. 35 may be made by the magistrates court against one owner requiring them to permit access to the extent that it is required by the other owner to carry out work for which they are both responsible.  

89.    Even if it is permissible to serve a notice requiring A and B to carry out alternative courses of action, I do not think it would be desirable for an authority to do so and, as a matter of discretion at least, it ought to be avoided.  In particular I consider that it is essential that an improvement notice should not require alternative forms of remedial action to be taken where one of the alternatives is to carry out work in premises of which one of the recipients of the notice is the sole owner, and the other alternative is to carry out work either in the premises of the other owner or in both of the premises.  As a matter of practicality the better course in any case is likely to be to serve a notice specifying a single course of remedial action to be carried out by a single owner acting alone.  If it is not possible to do so, because a single course of remedial action is required to be carried out in premises belonging to different owners, the proposal of alternative courses of action risks making the necessary cooperation more difficult to achieve and, for that reason, should be avoided.

90.    The complexities which have bedeviled this case are a clear example of what may happen if parties with different interests are given a choice that one or other of them is to carry out different works.  More than three and a half years after the original identification of the category 2 hazard created by the inadequate material separation, and almost three years since the service of the first improvement notice, no remedial action has yet been taken.  

91.    In this case there is agreement that the cheapest, quickest and most convenient course of remedial action is the replacement of a modest area of the ceiling in Ms Peacock’s Ground Floor Flat.  Some inconvenience would be caused to Ms Peacock, but it would be as nothing compared to the inconvenience to the occupier of Flat 4 whom the RPT and FTT accepted would have to vacate entirely to enable the floor of the bathroom to be lifted. The only person who can be required to do the work in the Ground Floor Flat is Ms Peacock.  She does not require the cooperation of Mr Wood to complete it and it would put the defective area of her ceiling into the same condition (as concerns fire protection) as the ceiling of the remainder of her flat.  The need for improvements is caused by the risk of harm to occupiers of Flat 4 from a fire spreading from Ms Peacock’s flat, and it does not seem unreasonable to expect Ms Peacock to undertake the work in those circumstances. It is relevant to note that the existence of the risk and the City Council’s duty to consider enforcement action is nothing to do with the fact that the Building is an HMO.  Contrary to a point made by Ms Peacock in writing, the City Council would be obliged to consider enforcement action, and entitled to serve an improvement notice on her even if all of the flats in the Building were owner occupied.  The City Council’s power under s. 12(1) to serve an improvement notice arises “where it is satisfied that a category 2 hazard exists on any residential premises”.

92.    The FTT thought that it would be unreasonable for Ms Peacock to refuse to allow the replacement of the defective ceiling in her flat. I agree, but the question for me at this stage is whether the alternative course of action should have been included, requiring Ms Peacock and Mr Wood to cooperate in installing fire resistant material between the floor joists.  Despite such a course of action being undesirable, for the reasons I have given, it would be necessary to go further before it would be possible to describe it as unlawful.  In particular, the approach of the House of Lords in Pollway allows a reading of the Act which makes compliance with such an improvement notice possible for both recipients, so that if the other does nothing each of them will be able to comply with the notice and avoid the risk of prosecution.  In reality the degree of cooperation required in this case in relation to the more expensive work is very limited. Although work is required within Ms Peacock’s flat, it is very much at the margins as it is likely all to be above ceiling level.  For the most part Ms Peacock’s role will be permissive, in that she will be required to permit material to be installed above the level of her ceiling in an area which is within her freehold ownership.

93.    It seems to me that, in the circumstances of this case, before a decision can be taken on which courses of action may reasonably be required by the improvement notice it is necessary to consider the cost consequences for the parties concerned.  The FTT was of the same mind, saying in paragraph 39 of its decision, after considering the alternative remedial schemes, that “ultimately in our view the matter rests on who is to pay for the works”.

94.    The RPT had found, in paragraph 51 of its decision that the replacement of the ceiling in the Ground Floor Flat would cost £1000, whereas the laying of fireproof material between the floor joists would cost £7,000.  The FTT adopted the RPT’s factual findings without specific comment on the quantum of those costs.

95.    That brings me to the third issue, namely who may be required to contribute towards the cost of the necessary remedial action.

Issue 3: Who should pay?

96.    The persons who may be required by an appropriate tribunal to contribute towards the cost of complying with an enforcement notice are restricted by paragraphs 11 and 16(2) of Schedule 1 to the 2004 Act.  The factors which must be taken into account by such a tribunal are specified in paragraph 16(3).  It is convenient to set those provisions out here:

11(1) An appeal may be made by a person under paragraph 10 on the ground that one or more other persons, as an owner or owners of the specified premises, ought to—E+W

(a) take the action concerned, or

(b) pay the whole or part of the cost of taking that action.

(2) Where the grounds on which an appeal is made under paragraph 10 consist of or include the ground mentioned in sub-paragraph (1), the appellant must serve a copy of his notice of appeal on the other person or persons concerned.”

16(1) This paragraph applies where the grounds of appeal consist of or include that set out in paragraph 11.E+W

(2) On the hearing of the appeal the tribunal may—

(a) vary the improvement notice so as to require the action to be taken by any owner mentioned in the notice of appeal in accordance with paragraph 11; or

(b) make such order as it considers appropriate with respect to the payment to be made by any such owner to the appellant or, where the action is taken by the local housing authority, to the authority.

(3) In the exercise of its powers under sub-paragraph (2), the tribunal must take into account, as between the appellant and any such owner—

(a) their relative interests in the premises concerned (considering both the nature of the interests and the rights and obligations arising under or by virtue of them);

(b) their relative responsibility for the state of the premises which gives rise to the need for the taking of the action concerned; and

(c) the relative degree of benefit to be derived from the taking of the action concerned.”

97.    When considering who should pay for the works the FTT referred to the right of the recipient of an improvement notice to appeal under paragraph 11, but made no reference to paragraph 16, which sets out the matters which must be taken into account by a tribunal determining such an appeal.  Consideration of those matters is mandatory in all cases.  The FTT said it was not aware of any decisions indicating how it should approach an appeal under paragraph 11.  It is not clear whether it was aware of paragraph 16 and it did not consider the matters listed in it in a systematic way.  For that reason I am satisfied that the FTT’s assessment was flawed and ought to be reconsidered.  In addition the FTT approached this issue on the basis that the specified premises were properly regarded as the Building as a whole, rather than the Ground Floor Flat and Flat 4.  As I have already explained I consider that that approach was also flawed.

98.    The FTT considered that the proper approach was to ask who would benefit from the works.  It considered that only Mr Wood would benefit and that Ms Peacock would not because “she currently has a perfectly adequate suspended ceiling which requires no works of repair”, and the remedial work would be to the surface of the original ceiling concealed above that suspended ceiling. The FTT concluded that if the works were carried out in Ms Peacock’s flat, Mr Wood should pay for them, but if Ms Peacock were to refuse access for Mr Wood to carry out the works, making it necessary for the more expensive works to be undertaken in Flat 4, she should be responsible for the excess sum “caused by such unreasonable behaviour”.

99.    On the hearing of an appeal raising the issue of whether a person other than the appellant should pay the whole or part of the cost of compliance with an improvement notice the power conferred on the tribunal by paragraph 16(2)(b) is to make such order as it considers appropriate with respect to the payment to be made by any owner mentioned in the notice of appeal.  The only person who may be identified in a notice of appeal under paragraph 11(1) is “an owner or owners of the specified premises”.  It follows that the only person who may be required to contribute is an owner of the specified premises.  This allows, for example, the owner of freehold premises on whom an improvement notice has been served to appeal on the grounds that the owner of a leasehold interest in the same premises ought to pay for the work. 

100.What paragraph 11(1) does not allow is for a person who is not an owner of the specified premises to be required to pay towards the cost of compliance with an improvement notice.  The purpose of these provisions is to allow the allocation of cost between the owners of different interests in the same premises, and not to allow someone who is not an owner of the premises to be required to contribute.  This is consistent with paragraphs 1 to 4 of Schedule 1, which do not allow an improvement notice to be served on anyone other than an owner, manager or person having control of the specified premises.

101.The FTT therefore had no power to order Mr Wood to pay any part of the cost of the first of the two courses of action required by the 2013 improvement notice, the replacement of the ceiling of Ms Peacock’s flat.  Mr Wood is not an owner of Ms Peacock’s flat and cannot be required to contribute to work required exclusively within her flat.  The only person who can be required to bear that cost (found by the RPT to be £1,000) is Ms Peacock herself.

102. So far as the second course of action is concerned, which requires action to be taken in both of the flats, and where the appropriate specified premises are therefore both flats, Mr Wood and Ms Peacock are each “an owner of the specified premises”.  Once again the approach taken by the House of Lords in Pollway makes that a permissible analysis.  It is then necessary to apply the criteria in paragraph 16(3) to decide to what extent they should each be liable to contribute.

103. The premises concerned are the Ground Floor Flat and Flat 4.  Neither Mr Wood nor Ms Peacock has any interest in the flat belonging to the other.  Each owns half of the area beneath the floor in which the fire resistant material will be laid.  Each is equally responsible for the cost of work to the structure of the Building as a whole (although the remedial action does not involve such work).

104. As regards their relative responsibility for the state of the premises which gives rise to the need for the taking of the remedial action, the FTT found that the absence of an adequate fire barrier was not related to the maintenance of the original ceiling.  On that basis neither Mr Wood nor Ms Peacock is any more responsible than the other for the absence of fire protection. 

105. As regards the relative degree of benefit to be derived from the taking of the action concerned, the FTT was of the view that Ms Peacock would derive no benefit.  I disagree.  The proposed action will have the effect that Ms Peacock’s flat will no longer be the source of a risk to the health and safety of the occupiers of Mr Wood’s flat. The condition of her ceiling will be improved, although admittedly in an area where it is concealed from sight by the presence of a suspended ceiling.  No doubt the greater benefit is to Mr Wood and the occupiers of Flat 4, but I do not think that Ms Peacock will enjoy no benefit at all.

106. Thus the first and second of the factors which are required to be taken into account by paragraph 16(3) are evenly balanced, while the third is weighted towards a greater contribution by Mr Wood.  The weight to be given to the different factors is a matter of assessment, but it does not seem to me to be possible to say that the first and second factors are irrelevant in this case and ought to be given no weight.  Taking all three factors into account I would regard an equal contribution to the cost of the work of installing fire resistant material between the floor joists as fair.  That is a more generous assessment in Ms Peacock’s favour than the FTT’s (which would have held her responsible for the whole of the difference between the cost of the cheaper work and the cost of the more expensive, so that on the findings of the RPT she would pay £6,000 of the £7,000 cost). 

107. I therefore find that if the remedial action is to be the replacement of the ceiling of the Ground Floor Flat the cost, found by the RPT to be £1,000, would be borne by Ms Peacock alone and no contribution by Mr Wood could lawfully be required.  If the remedial action is to be the installation of fire resistant material between the floor joists, at a cost of £7,000, Mr Wood and Ms Peacock should be equally responsible.

108. That is not the end of the matter, as it remains to consider what impact these conclusions on how the cost of the different remedial measures should be allocated affects the action which ought to be required to be taken.

Conclusions and variation of the 2013 improvement notice

109. The 2013 improvement notice specified alternative courses of remedial action.  It is not suggested that one of them is likely to be any more effective than the other.  The only practical difference is in the degree of disruption and cost which each will involve.

110. In my judgment it would be irrational to require more expensive and more disruptive work where a cheaper and easier alternative is available.  It would be irrational to require action which would cost both parties to incur expenditure of £3,500, where alternative action would achieve the same result at a cost to one of £1,000 and at no cost to the other. 

111. Although in considering issue 2 above I concluded that, in principle at least, it would be permissible (although undesirable) to specify alternative courses of action on different premises, having considered the financial consequences for each of those concerned I am satisfied that it would be irrational, and therefore unlawful in this case to specify as alternatives the only two courses of action which will remove the hazard.  The only permissible response to the available courses of action is to require the replacement of part of the ceiling of Ms Peacock’s flat.

112. In order to give effect to these conclusions I therefore first quash the 2013 improvement notice served on Mr Wood.  There is no appeal by Ms Peacock against the FTTs’ conclusions concerning the notice served on her, but as a result of my decision on Mr Wood’s appeal she is not entitled to any contribution from Mr Wood to the costs of compliance with the notice.  As a consequence also of my conclusions on Mr Wood’s appeal I vary the terms of the improvement notice served on Ms Peacock as follows:

(a) by modifying the description of the premises in Schedule 1 so that it reads “the Ground Floor Flat, 141/143 Princes Avenue”, rather than simply “141/143 Princes Avenue” as in the original; and

(b) by deleting paragraph II of Schedule 2 which describes the alternative works involving the installation of fire resistant product between the floor joists. 

As varied, the improvement notice requires Ms Peacock alone to repair the ceiling of her own flat.

113. The Tribunal has no power to require Mr Wood to contribute to the cost of compliance with the notice as varied. I am satisfied that the requirements of such a notice are reasonable in the circumstances, and, importantly, that they are consistent with the powers conferred by Part I of the 2004 Act. 

 

 

Martin Rodger QC, Deputy President

15 April 2015