Housing – House in multiple occupation (HMO) – Licence renewal – Claimant applying to first defendant local authority to renew HMO licence – Claimant refusing to supply tenant information or pay fee – Defendant serving section 16 notice requiring information about interests in property – Defendant deciding to prosecute claimant – Claimant applying for judicial review – Whether, in refusing to process application without fee demanded from claimant, first defendant acting contrary to EC Services Directive – Application granted
The claimant was the freehold owner of a property at 157, Mortlake Road, Kew Gardens, a house in multiple occupation (HMO), under Part 2 of the Housing Act 2004. In December 2013, the claimant applied to the first defendant local authority for renewal of his HMO licence. The claimant was asked to provide tenant information as required by Part 3.1 of the standard renewal form but refused to do so on the basis that the defendants were not entitled to require such information on a renewal application. He also declined to pay the application fee of £1,799 because he considered it to be unlawfully high.
The first defendant failed to issue a renewed licence and decided to prosecute the claimant in the second defendant magistrates’ court under section 72 of the Housing Act 2404 and section 16 of the Local Government (Miscellaneous Provisions) Act 1976 for failure to pay the required fee and to provide the names of all the occupiers of the property. Before the matter came on for trial, the claimant applied for judicial review under domestic law. A differently constituted court allowed that application in part: see [2017] EWHC 3234 (Admin); [2017] PLSCS 220.
The court was now asked to determine the lawfulness of the fee demanded under EU law. The single issue was whether, in refusing to process the application without the fee demanded from the claimant, the first defendant had acted contrary to Directive 2006/123/EC of the European Parliament and Council (on services in the internal market) (the Services Directive). The question was whether, by letting and managing private residential accommodation for profit, the claimant was properly to be regarded as providing a “service” for the purposes of the Services Directive.
Held: The application was granted.
(1) As a matter of construction, in letting and managing the property for profit, the claimant was providing a “service” within the scope of the Services Directive. That conclusion 
was clear as a matter of construction of the Services Directive itself. 
Although “service”, as used in the Services Directive, was a word whose meaning was ultimately a matter of construction, a good starting point was the common use of that word together with the term “self-employed economic activity … provided for remuneration”. 
The claimant would, in general terms, be regarded as providing a service 
by managing rented accommodation as a self-employed person and in return for the 
payment of rent. Having purchased, converted and extended the property for letting purposes, the claimant managed the property himself, rather than using letting agents. The functions which he carried out included a host of different aspects, ranging from negotiating energy terms and conditions (and rates) and negotiating insurance terms and conditions to carrying out (or arranging to be carried out) maintenance work such as plumbing. There was no reason why those did not amount to activities which, together, comprised a “self-employed economic activity … provided for remuneration”.
(2) As a term, “service” was clearly used in a very broad sense in the Services Directive and the Provision of Services Regulations 2009. It was defined in article 4 of the Services Directive (and in Regulation 2 of the Services Regulations) as meaning “any self-employed economic activity” which was “normally provided for remuneration”. The use of the word “any” could only have been intended to ensure that the “self-employed economic activity” which qualified as “services” included the broadest range of activity. As a matter of construction, by letting and managing private residential accommodation for profit, the claimant was properly to be regarded as providing a “service” for the purposes of the Services Directive. It followed that the first defendant was a “”competent authority” running an “authorisation scheme” within the meaning of the Services Directive and the Services Regulations.
3) Accordingly, the court would grant declarations to the effect that the claimant, by letting the building, was engaging in a service activity for the purposes of the Services Directive and the Services Regulations. The licensing provisions of Part 2 of the Housing Act 2004 we
re an authorisation scheme for the purposes of the Directive and the Regulations. Therefore, the first defendant was not entitled to demand that the claimant pay, when making his application to renew his licence for the property under Part 2 of the Housing Act 2004, an application fee of because that fee infringed article 13(2) of the Services Directive and Regulation 18(4) of the Services Regulations as it was not limited to the costs of the procedures and formalities of the authorisation scheme under Part 2 of the Housing Act.
Jonathan Manning and Alexander Campbell (instructed by Public Access) appeared for the claimant; Simon Butler and Jake Richards (instructed by Richmond upon Thames London Borough Council) appeared for the first defendant; The second defendant did not appear and was not represented.
Eileen O’Grady, barrister
