Tenancy Fraud & Unlawful Profit Orders – a conference presentation

It is a real shame there are 2 wonderful conferences on the same day. On Thursday, 17 November 2022 we have the Oxford Investigation Service’s 7th Annual Fraud Conference at Oxford Town Hall, promoted in this blog on Sunday, and the Social Housing Law Association’s annual conference in the Ashworth Centre, Lincoln’s Inn in London.

I am speaking at the later event with the ever impressive Raj Vine, the Counter-Fraud Specialist at the Riverside Housing Group, on ‘Tenancy Fraud and unlawful profit orders’. Last June on this blog I wrote about the court case we were both involved in, and at which an unlawful profit order of over £145,000 was awarded.

We also spoke at the OIS’s 6th Annual Fraud Conference last year, and co-presented a webinar.

Booking details are on SHLA’s website.

Oxford Investigation Service – 7th Annual Fraud Conference

One of the best conferences of any year – the Annual Fraud Conference organised by the Oxford Investigation Service – is due to take place on 17 November 2022 at Oxford Town Hall. This year’s theme is ‘Prevent to Protect’ and the draft agenda is:

As you can see from the programme above, there are some great and knowledgeable speakers, and a typically broad range of topics.

To book your place, simply go to the OIS’s website.

Short-term lets, data sharing and Social Housing abuse

The issue
There has rightly been much publicity recently in the housing, legal and indeed wider press about the recent Norwich Pharmacal order obtained by the Royal Borough of Kensington & Chelsea (“RBKC”). As RBKC’s own press release explained:

“In a major victory against social housing tenancy fraud, Kensington and Chelsea Council has worked with Airbnb to unlock critical information that can be used in future legal action or criminal proceedings against alleged fraudsters.  

The collaboration will see Airbnb Payments UK share payments data with the Council for two estates in North Kensington to help crack down on illegal short-term lets.

The data sharing, which will take place under a court order due to GDPR requirements, will provide the Council with payment evidence of social housing properties identified as being potentially listed as holiday and short-term lets. This will allow the Council to take enforcement steps having obtained the evidence.

The order was agreed by Airbnb and Kensington and Chelsea as part of the Council’s efforts to crackdown on the number of illegally sublet Council-owned properties, as the Council aims to free up homes for individuals and families on the housing waiting list.” 

Previous articles
I wrote about the issue of short-term lets and sub-letting 3 years ago on this blog.

What are Norwich Pharmacal orders?
In EUI Ltd v UK Vodaphone [2021] EWCA Civ 1771 Lord Justice Baker explained Norwich Pharmacal orders and when they can be applied for:

“1. This is an appeal against a judge’s refusal to order disclosure of information under the principle in Norwich Pharmacal v Customs and Excise Commissioners [1974] AC 133. 

2. The principle was summarised by Lord Reid at page 173:

“if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration.”

3. In Mitsui & Co Ld. v Nexen Petroleum UK Ltd [2005] EWHC 625 (Ch), [2005] 2 All ER 511, Lightman J at paragraph 21 summarised the components of the principle in these terms:

“The three conditions to be satisfied for the court to exercise the power to order Norwich Pharmacal relief are:

i) a wrong must have been carried out, or arguably carried out, by an ultimate wrongdoer;

ii) there must be the need for an order to enable action to be brought against the ultimate wrongdoer; and

iii) the person against whom the order is sought must: (a) be mixed up in so as to have facilitated the wrongdoing; and (b) be able or likely to be able to provide the information necessary to enable the ultimate wrongdoer to be sued.

4. The power to order disclosure in such circumstances does not extend, however, to “mere witnesses”. This limit on the jurisdiction was recognised by Lord Reid in Norwich Pharmacal at page 174:

“But that does not mean, as the appellants contend, that discovery will be ordered against anyone who can give information as to the identity of a wrongdoer. There is absolutely no authority for that. A person injured in a road accident might know that a bystander had taken the number of the car which ran him down and have no other means of tracing the driver. Or a person might know that a particular person is in possession of a libellous letter which he has good reason to believe defames him but the author of which he cannot discover. I am satisfied that it would not be proper in either case to order discovery in order that the person who has suffered damage might be able to find and sue the wrongdoer. Neither authority, principle nor public policy would justify that.”

5. The crucial question, therefore, is whether the defendant to the claim for information is more than a “mere witness” or “bystander”. In Various Claimants v News Group Newspapers Ltd (No.2) [2013] EWHC 2119 (Ch), [2014] Ch 400, Mann J observed (at paragraph 52) that participation or facilitation was not the sole test. He continued:

“It is true that the traditional formulation of the test is in such terms, but that is because those are the usual circumstances in which someone becomes something beyond a mere witness. On the facts of the cases where orders were made, the respondent was usually in that position. In my view the answer to the question lies in recognising that what the cases are doing is contrasting two things – the mere witness on the one hand, and the person who is not a mere witness on the other. On the cases the latter class is generally described in terms of participation/facilitation, as though that were the opposite of being a mere witness. But the real analysis lies in appreciating that the courts are holding not that those factors are indeed the other side of a dichotomy, but that those factors prevent the respondent from being a mere witness. Once that is recognised then it becomes relevant to consider whether there are other facts, short of participation/facilitation, which could prevent a person from being a mere witness.”

The question (paragraph 54) was therefore whether the defendant

“is a mere witness (or metaphorical bystander) or whether its engagement with the wrong is such as to make it more than a mere witness and therefore susceptible to the court’s jurisdiction to order Norwich Pharmacal disclosure.”

6. The distinction can be illustrated by the decision in Norwich Pharmacal itself. An order for disclosure was made against the Commissioners of Customs and Excise to obtain the names and addresses of importers of a chemical compound which, it was thought, was being brought into this country in breach of patents. Lord Reid explained why an order for disclosure was justified in law in these terms (at page 174):

“From the moment when they enter the port until the time when the consignee obtains clearance and removes the goods, they are under the control of the Customs in the sense that the Customs authorities can prevent their movement or specify the places where they are to be put, and in the event of their having any suspicions they have full powers to examine or test the goods. When they are satis?ed and the appropriate duty has been paid the consignee or his agent is authorised to remove the goods. No doubt the respondents are never in possession of the goods, but they do have considerable control of them during the period from entry into the port until removal by the consignee. And the goods cannot get into the hands of the consignee until the respondents have taken a number of steps and have released them.”

Similarly in  Various Claimants v News Group Newspapers Ltd (No.2), in which the claimants were seeking to bring proceedings against the proprietor of a national newspaper for phone hacking, an order was made against the Metropolitan Police for disclosure of information relating to the hacking which they had acquired in the course of an investigation.” (Emphasis added in bold)

Further guidance

The solicitors advising RBKC, Pinsent Masons, have not only explained their role in this important case but have also helpfully provided an excellent and comprehensive updated guide on obtaining Norwich Pharmacal orders.

Recent case on the court’s jurisdiction to set aside judgment for fraud

I wrote recently about the position of a judgment which is later discovered to have been procured by fraud. Mr Justice Leech had cause to consider such a potential (but not, ultimately, actual) case in Tinkler v Esken Ltd [2022] EWHC 1375 (Ch) (and thank you to Arun Chauhan for alerting me to this judgment in one of his posts on LinkedIn):

5. Mr Tinkler now invokes the court’s jurisdiction to set aside the Judgment for fraud on the grounds that individual witnesses (whose conduct can be attributed to SGL) deliberately failed to disclose documents (or destroyed them) and that they gave false evidence at the Trial.

Paragraphs 11 to 35 of the judgment are especially interesting in re-affirming the correct approach:

11. It was common ground that one party is entitled to have a judgment set aside for fraud if three limbs or conditions are satisfied: first, the successful party (or someone for whom it must take responsibility) committed conscious and deliberate dishonesty (“Limb 1“); secondly, the dishonest conduct was material to the original decision (“Limb 2“); and, thirdly, there was new evidence before the Court (which was either not given or not disclosed in the earlier proceedings) (“Limb 3“). The principal issues between the parties were the test for materiality under the Limb 2 and the way in which the Court should approach new evidence deployed under Limb 3.

The analysis that followed on each of these limbs in this section of a long judgment is worth a read.

The Court also reminded itself of some particular features when dealing with allegations of fraud:

36. Mr Leiper also made a number of general points about the trial of fraud claims. He reminded me that although the standard of proof was the civil standard, the Court should take account of the fact that fraud is inherently improbable. In Bank St Petersburg PJSC v Arkhangelsky [2020] 4 WLR 5 Males LJ summarised the approach which the Court should take at [117]:

“In general it is legitimate and conventional, and a fair starting point, that fraud and dishonesty are inherently improbable, such that cogent evidence is required for their proof. But that is because, other things being equal, people do not usually act dishonestly, and it can be no more than a starting point. Ultimately, the only question is whether it has been proved that the occurrence of the fact in issue, in this case dishonesty in the realisation of the assets, was more probable than not.”

37. Mr Leiper also reminded me that proof of fraud requires cogent evidence which must be commensurate with the seriousness of the conduct: see JSC BTA Bank v Ablyazov [2013] EWHC 510 (Comm) at [37] (Teare J). He submitted that where the Court was being invited to draw an inference of dishonesty from primary facts the Court must be satisfied that “an inference of dishonesty is more likely than one of innocence or negligence”: see JSC Bank of Moscow v Kekhman [2015] EWHC 3073 (Comm) (Flaux J). In the present case, Mr Tinkler alleges both perjury and the deliberate destruction and non-disclosure of documents. I accept that cogent evidence is required before those allegations can be found to be proved.

The claim to set aside the judgement for fraud was ultimately dismissed.

Witness Statements – their purpose & strike out of all/part

i wrote about the exclusion of all or part of a witness statement in an earlier blog in August 2018. Earlier today (21 April 2022) Mrs Justice Steyn DBE handed down judgment on a series of pre-trial applications in Rebekah Vardy v Coleen Rooney [2022] EWHC 946 (QB).

Those applications included one each by the claimant and defendant seeking to strike out parts of each other’s statement. The result of these applications is unimportant for the purposes of this blog, and I’d rather highlight and emphasise the principles and law applied.

The judge began by setting out the relevant parts of the CPR:

“93. CPR 32.1 provides, so far as material:
“The court may control the evidence by giving directions as to—
(a) the issues on which it requires evidence;
(b) the nature of the evidence which it requires to decide those issues; and
(c) the way in which the evidence is to be placed before the court.
(2) The court may use its power under this rule to exclude evidence that would otherwise be admissible.”

94. CPR 32.4(1) provides:

A witness statement is a written statement signed by a person which contains the evidence which that person would be allowed
to give orally.””

She then went on to consider paragraph 10.60 of the Queen’s Bench Guide 2022:

“1. A witness statement must contain the truth, the whole truth and nothing but the truth on the issues it covers;

2. Those issues should consist only of the issues on which the party serving the witness statement wishes that witness to give evidence in chief and should not include commentary on the trial bundle or other matters which may arise during the trial or may have arisen during the proceedings;

3. A witness statement should be as concise as the circumstances allow; inadmissible or irrelevant material should not be included. An application may be made by an opposing party to strike out inadmissible or irrelevant material. If a party does object to the contents of a witness statement, they should notify the other party of their objection within 28 days after service of the statement and the parties should seek to resolve the matter. Otherwise an application should be made to the court for direction; …” (Emphasis added.)”

That was then followed, from paragraphs 96 to 99 of the Judgment, by the all important analysis of the relevant case-law which I think it worth setting out in the words of the Judge:

(1) As Sedley LJ observed in William v Wandsworth LBC [2006] EWCA Civ 535 at [80], “witness statements are a proper vehicle for relevant and admissible evidence going to the issue before the court, and for nothing else. Argument is for advocates. Innuendo has no place at all.”

(2) In JD Wetherspoon plc v Harris (Practice Note) [2013] 1 WLR 3296 Sir Terence Etherton C heard, amongst other matters, an application to strike out the majority of a witness statement made by Mr Goldberger on behalf of the second to fourth defendants. He held:
“33. The vast majority of Mr Goldberger’s witness statement contains a recitation of facts based on the documents, commentary on those documents, argument, submissions and expressions of opinion, particularly on aspects of the commercial property market. In all those respects Mr Goldberger’s witness statement is an abuse. The abusive parts should be struck out.

39. Mr Goldberger would not be allowed at trial to give oral evidence which merely recites the relevant events, of which he does not have direct knowledge, by reference to documents he has read. Nor would he be permitted at trial to advance arguments and make submissions which might be expected of an advocate rather than a witness of fact. These points are made clear in paragraph 7 of Appendix 9 to the Chancery Guide 7th ed (2013), which is as follows:
“A witness statement should simply cover those issues, but only those issues, on which the party serving the statement wishes that witness to give evidence in chief. Thus it is not, for example, the function of a witness statement to provide a commentary on the documents in the trial bundle, nor to set out quotations from such documents, nor to engage in matters of argument. Witness statements should not deal with other matters merely because they may arise in the course of the trial.”

41 I recognise, of course, that these rules as to witness statements and their contents are not rigid statutes. It is conceivable that in particular circumstances they may properly be relaxed in order to achieve the overriding objective in CPR r 1 of dealing with cases justly. I can see no good reason, however, why they should not apply to Mr Goldberger’s witness statement in the present proceedings.” (Emphasis added.)

(3) In Aven v Orbis [2020] EWHC 474 (QB) Warby J observed at [17] that the additional points made in the passage from the Chancery Guide cited by the Chancellor in JD Wetherspoon at [39], that it is not the function of a witness statement to set out quotations from documents in the trial bundle nor to engage in matters of argument, are not specific to the Chancery Division. At [13], Warby J observed that the Chancellor, in JD Wetherspoon
“evidently accepted the submission for the claimant, that the claimant would be placed in difficulty by such a statement because it would be difficult for counsel to decide how much of, and precisely which parts of, the witness statement should be the subject of cross-examination. I would respectfully accept and adopt that point. I would add that a proper separation between evidence and argument, fact and opinion, is important for other participants in or observers of the judicial process. The task of the Judge is complicated if these distinct matters are confused or intertwined, in a witness statement. Muddling up these separate elements of the process will also tend to make proceedings harder for observers to follow, and for reporters to explain. For all these reasons, it is important that documents presented to the Court should focus on the functions they are meant to perform, and not stray into other domains.”

(4) In Wilkinson v West Coast Capital [2005] EWHC 1606 (Ch) Mann J considered an application, at a pre-trial review, to strike out paragraphs in witness statements on the grounds of obvious irrelevance and/or disproportionality. He observed at [5]:
“… However, desirable though the power to control evidence obviously is, particular care must in my view be taken when it is sought to exercise the power before a trial. It is noteworthy that the two cases which I have referred to above were both cases in which the issues as to evidence arose during the course of trials. By the time that the issue arises in that context, the judge is likely to have a much fuller overall picture of the issues in the case and of the evidence which is going to be adduced in support of them.

In a large number of cases, he or she is likely to be in a better position to make judgments which turn on the real value of the line of evidence in question and its proportionality, and in very many cases its admissibility. A court which is asked to approach these questions at the interlocutory stage is much less likely to have that picture, and should be that much more careful in forming a view that the evidence is going to be irrelevant, or if relevant, unhelpful and/or disproportionate. One must also bear in mind the extent to which it is desirable to consider these matters at all at an interlocutory stage. One must be on one’s guard, in applications such as this, not to allow case management in relation to witness statements to give rise to significant time− and cost−wasting applications; those should not be encouraged. In my view, I should only strike out the parts of the witness statements which I am currently considering if it is quite plain to me that, no matter how the proceedings look at trial, the evidence will never appear to be either relevant or, if relevant, will never be sufficiently helpful to make it right to allow the party in question to adduce it. With evidence of this nature, that is likely to be quite a heavy burden. ”

Seeking more information – Part 18

One of my frequently-used tools for “fleshing out” a defendant’s case in a possession claim concerning allegations of sub-letting, false representation, no longer living at the demised premises, only or principal home, ‘false succession’ etc is by use of the CPR Part 18 procedure:


The Practice Direction to Part 18 effectively requires, first, an attempt at pre-litigation information request:


The litigation use of the Part 18 process was considered in the recent High Court case of (1) HRH Prince Khaled Bin Sultan Bin Abdulaziz Al Saud (2) HRH Princess Deema Bint Sultan Bin Abdulaziz Al Saud v (1) Ronald William Gibbs (2) Sunnydale Services Ltd [2022] EWHC 706 (Comm) where Mr Richard Salter QC, sitting as a Deputy Judge of the High Court, said (Emphasis in underlining):

“27. In support of his submission that the court should take a liberal approach to the scope of CPR Pt 18, Mr Atrill relied upon Harcourt v Griffin[2007] EWHC 1500 (QB), [2008] Lloyd’s Rep IR 386. In that case, Irwin J granted an application by a personal injury claimant for an order under CPR Pt 18 for further information to establish the full nature and extent of the insurance cover enjoyed by the respondents who were liable for his injuries. Mr Atrill particularly drew my attention to Irwin J’s observation (at [10]) that:

The nature and extent of the Defendants’ insurance cover is not in itself a ‘matter .. in dispute in the proceedings’ between the Parties, in the sense that the proper quantum of damages payable to the Claimant could be determined without determining whether the Defendants can actually pay those damages. However, it appears to me that the wording of CPR. r. 18 requires to be interpreted reasonably liberally. The purpose of the jurisdiction must be taken to be to ensure that the Parties have all the information they need to deal efficiently and justly with the matters which are in dispute between them. Moreover, the wording need not be taken to imply that there must be a live disagreement about the relevant issue, since on very many occasions parties are properly required to furnish information pursuant to CPR r. 18 precisely to discover whether there is or is not a live disagreement between the parties on a given point. The whole thrust of the new approach to civil litigation enshrined in the Civil Procedure Rules is to avoid waste of time and cost and to ensure swift and, as far as possible, proportionate and economical litigation. Therefore, I have no hesitation in finding that if there is no rule of law or significant rule of practice to the contrary, then the wording of CPR r. 18 is broad enough to cover information of this kind…”

32. With great respect to Irwin J, it seems to me that his more liberal and pragmatic approach to CPR Pt 18 risks stretching the scope of the rule beyond that which can reasonably be thought to be contemplated by its terms. The rule expressly says that the matter about which clarification or further information can be sought must be one “which is in dispute in the proceedings”. That wording, in my judgment, makes it clear that there are two cumulative aspects to this restriction: the matter must be “in dispute”, and that dispute must be “in the proceedings”.

33. That means (for example) that requests under Pt 18 cannot be used for the purpose of obtaining material for cross-examination as to credit (Thorpe v Chief Constable of Greater Manchester [1989] 1 WLR 665), or to obtain material to support different claims between the same parties or claims against different parties (Trader Publishing Ltd v Autotrader.com Inc [2010] EWHC 142 (Ch)). As Morgan J observed in Barness v Formation Group Plc [2018] EWHC 1228 (Ch) at [10]:

34. The terms of the Practice Direction also make it clear that requests and orders under CPR Pt 18 must be strictly confined to matters which are reasonably necessary and proportionate for the stated purposes. In Hall v Sevalco Ltd [1996] PIQR 344 at 349 (a case about interrogatories under the RSC) Lord Woolf MR observed that “necessity is a stringent test”: and in King v Telegraph Group Ltd [2004] EWCA Civ 613, [2005] 1 WLR 2282  at [63], Brooke LJ laid particular stress on the strictness required by the terms of the Practice Direction:

35. In my judgment, the requirement of the rule that the information sought must relate to a “matter which is in dispute in the proceedings”, and the requirement of the practice direction that any request must be strictly confined to matters which are reasonably necessary and proportionate for one or other of the stated purposes, are threshold conditions. If those conditions are not satisfied, then the court simply has no jurisdiction to make any order under CPR Pt 18 (though, as Thirlwall J has pointed out, there may be other powers available to the court to assist in avoiding the waste of time and costs and in achieving the “swift and .. proportionate and economical litigation” referred to by Irwin J).

36. If, however, those threshold conditions are satisfied, then the question becomes a matter for the court’s discretion. The power under CPR Pt 18 is one of the court’s case management powers, and its exercise should be considered in the context of the overall case management of the action: see Toussaint v Mattis [2001] CP Rep 61, CA, at [16], per Schiemann LJ.”

The Judge importantly concluded:

“46. One of the complaints made by the claimants about Mr Gibbs’ responses to the RFI is that they show that he has failed to exercise reasonable diligence in examining relevant documents and undertaking reasonable enquiries. Mr Atrill invited my attention to the following passage in paragraphs [20.96], [20.98] and [20.101] of Matthews and Malek, Disclosure (5th edn, Sweet & Maxwell 2017):

.. It is incumbent upon a party responding to a Request to a Pt 18 order to exercise reasonable diligence in formulating a response ..
.. [T]he court is likely to regard a party [as] being under a duty to undertake reasonable enquiries, but what constitutes reasonable enquiries will depend on the circumstances .. [A] party is not bound to make enquiries to the extent that such enquiries place an unfair or oppressive burden on him ..
.. If it is necessary for the purposes of responding to a Request, the party must examine the documents in his control .. or that of his servants or agents held in that capacity. If a such search would be unduly burdensome, then that may be a ground for objecting to the Request ..

47. In my judgment, those passages accurately state the law in this area. I would, however, add this rider. Where, as in the present case, a request under Pt 18 has already been answered, and the objection is that the answer given is inadequate because reasonable diligence has not been exercised, the proper way forward will not usually be to ask the court (as the claimants in the present case have done) simply to order that the original generally worded request should be answered again. Such a course will often just postpone until an application for sanctions for non-compliance or for relief from such sanctions is made the inevitable issue of what reasonable diligence in formulating a response to that request – and thus compliance with the order – actually requires. By that time it is likely to be too late to consider the appropriateness of the scope of the original order: see eg Griffith v Gourgey [2015] EWHC 1080 (Ch) at [40] and [54(1)]. 

48. The better course will usually be, wherever possible, to ask the court to specify in its order precisely what further enquiries the party responding to the Pt 18 request should carry out, so that the issue of what proper compliance requires is plainly defined from the outset. 

49. A related issue (which similarly arises on the facts of the present application) is how the court should approach assertions by the party responding to a Pt 18 that that party is not able to recall and/or to provide the requested information, either at all or in the detail requested. 

50. On an application under Pt 18, the court is not required to take at face value and without analysis everything that a party says in its response or its witness statements. In some cases it may be clear that there is no real substance in the assertions made: see eg (in the context of CPR Pt 24) ED & F Man Liquid Products v Patel [2003] EWCA Civ 472 at [10], per Potter LJ. However, it is also clear that the court should not, on such an interim application, conduct a “mini-trial”. In most cases, it will neither be possible nor appropriate (having regard to the overriding objective) to go behind what is said in answers to Pt 18 requests: cf the guidance given by Beatson J in West London Pipeline and Storage Ltd v Total UK Ltd [2008] EWHC 1729 (Comm) at [80], in relation to challenges to claims to privilege. To reject a statement contained in a document verified by a statement of truth will, in many cases, involve the implicit conclusion that the person making the statement has lied. That is a conclusion which a court will understandably be reluctant to reach on an interim application where the statement has not been tested in cross-examination.”


Court reject challenge to fraud conviction

A. Introduction

Mr Zeroual (the applicant), a (now former) secure tenant of the London Borough of Hammersmith & Fulham, was convicted on 18 December 2018 of two counts of fraud, contrary to section 1 of the Fraud Act 2006:

  1. Count one – dishonestly failing to disclose information that he was under a legal duty to disclose “namely that he had sub-let part of the premises” of the flat in breach of the tenancy conditions.
  2. Count three – dishonestly failing to disclose that his wife was living with him between 2010 and 2013 (before their later separation), which meant that he was no longer eligible for the single person’s discount in respect of council tax payable for the flat.

He was acquitted on count two which alleged that he had dishonestly failed to disclose a change in circumstances (i.e. that he no longer lived at his flat as his only or principal home) in relation to his application to purchase the flat under the Right to Buy.

The sentence passed down on 23 January 2019 was:

  • 18 months imprisonment suspended for 18 months,
  • with a 30 day Rehabilitation Activity requirement;
  • in July 2020 he was ordered to pay £89,074 (of which £17,500 was to be paid as compensation to the council) pursuant to the Proceeds of Crime Act 2002.

B. The Appeal

The ground of appeal on count one focused on the directions given in relation to sub-letting and whether they were sufficient to deal with the issue of exclusive possession and whether any persons staying in the flat were rather and ’merely’ lodgers.

With respect to count three, which wasn’t originally appealed, it was argued both that the Judge failed to properly direct the jury as to the elements required to convict him and that it should not have been left to the jury because the failure to disclose information charged under this count was not a failure to disclose information which he was under a legal duty to disclose for the purposes of the Fraud Act 2006.

C. The decision

In R v Zeroual [2022] EWCA Crim 288 the Court of Appeal (Criminal Division):

(a) refused an application for an extension of time to appeal in light of the merits of the substantive appeal;

(b) refused permission to appeal on count 1;

(c) refused the application to vary the grounds of appeal to challenge the conviction on count 3 because the judge’s directions were sufficient and the evidence showed that there was a case to answer;

(d) refused the new applications for permission to appeal against sentence, the confiscation order and the costs order because there were no arguable grounds of appeal.

D. Reasons

The applicant’s case at trial on count one had been that he had always lived at the relevant flat but from time to time had lodgers. However, the jury clearly rejected his evidence that he was living at the flat, which had been a central blank of the prosecution’s case. It therefore followed that if he had been found to have moved out of the flat the occupants remaining had exclusive possession and there had been a clear sub-letting of part.

Complaint as to the failure of the judge to explain the terms dishonesty and gain was not made out given that it had been common ground that if sub-letting was made out then the applicant was intending to make a gain and was acting dishonestly.

As for count three, it was the applicant’s case that he had made an application to the local authority for a 2-bedroom property (rather than his 1-bedroom demised premises) because his wife was pregnant and that should have been sufficient notification that she was living with him. He hadn’t realised, he said, that he needed specifically to inform the Council Tax department and he was not acting dishonestly.

However, it was common ground that there was a legal duty to inform the local authority of any relevant change of circumstances, as confirmed by regulation 16 of the Council Tax (Administration and Enforcement) Regulations 1992, and there was therefore no basis for allowing a late variation to the grounds of appeal to allow this issue to be raised.

Interestingly the applicant had been acquitted on count two (see above) following the trial judge’s direction to the jury that they had to be sure he no longer had the intention to use the flat as his only or principal home against the backdrop of his intention to exercise the right to buy (remembering that the allegation was of sub-letting of part not all of the flat).

E. Conclusion

You often hear the comment that fraud is not a victimless crime but it would seem in this case that this would extend to the applicant himself, albeit the consequences follow on from his actions. As Lord Justice Dingemans explained at paragraph 9 of the judgment:

“He has been evicted from the flat, which he had intended to purchase under the right to buy scheme. He has lost his job with the civil service. His family circumstances have deteriorated. His savings have been confiscated. The applicant has suffered mental health problems being severe reactive depression, requiring treatment.”

Housing fraud in the criminal courts – an introduction

A. Introduction
For many housing practitioners – whether that be those working for a social landlord, investigators or lawyers – their primary experience of seeking to ‘apply’ the results of their work in the fraud field is in the civil courts. In particular, it is in the context of (residential) possession proceedings in the county court.

However, the “crossover” into the criminal courts is not unusual and a quick review of the Cornerstone on Social Housing Fraud twitter account (@CSHousingFraud) for 2021 will show, by way of example, references to 13 convictions:

B. Housing fraud (criminal) charges
The usual offences charged in this field (primarily allocation fraud/unlawful sub-letting) are:

(1) Fraud Act 2006

Section 2 (fraud by false representation)

Section 3 (fraud by failing to disclose information)

Section 4 (fraud by abuse of position)

Section 7 (making or supplying articles for use in frauds)

Conviction (section 1(6))
– Summary conviction, to imprisonment for a term not exceeding 12 months or to a fine not exceeding the statutory maximum (or to both);

– Conviction on indictment, to imprisonment for a term not exceeding 10 years or to a fine (or to both).

Sentencing guidelines (Magistrates’ Court) can be seen here.

Sentencing guidelines (Crown Court) can be seen here.

(2) Prevention of Social Housing Fraud Act 2013

Section 1 (unlawful sub-letting: secure tenancies)

Section 2 (unlawful sub-letting: assured tenancies)

Conviction (sections 1(5)(6), 2(6)(7))

– A person convicted of an offence under sections 1(1), 2(1) is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

– A person convicted of an offence under sections 1(2), 2(2) is liable—

(a) on summary conviction, to imprisonment for a term not exceeding 6 months or a fine not exceeding the statutory maximum (or both);

(b) on conviction on indictment, to imprisonment for a term not exceeding 2 years or a fine (or both).

(3) Housing Act 1996

Section 171 (false statements and withholding information)

Section 214 (false statements, withholding information and failure to disclose change of circumstances)

Conviction (sections 171(2), 214(4))

A person guilty of an offence under these sections is liable on summary conviction to a fine not exceeding level 5 on the standard scale.

*Note that section 85 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 replaced the previous statutory maximum of £5,000 in the magistrates’ court with an unlimited fine. This applies only to offences committed on or after 12 March 2015.

C. Sentencing guidelines
The Sentencing Council website says:

“On 1 December 2020 the Sentencing Code came into effect in England and Wales, consolidating existing sentencing procedure law into a single Sentencing Act.

The Code covers sentencing for adults and under 18s and applies to all convictions made on or after 1 December 2020, irrespective of the date on which the offence was committed. From this date, judges and magistrates need to refer to the Code, rather than to previous legislation, although there will be some transitional cases where an offender is convicted before 1 December but is sentenced later.

The Code includes general provisions relating to sentencing procedure, the different types of sentences available to the courts, and certain behaviour orders that can be imposed in addition to a sentence. It is a consolidation only so has made no substantive changes to the law.”

And so, for example, section 59 of the Sentencing Act 2020 provides:

“(1) Every court—

(a) must, in sentencing an offender, follow any sentencing guidelines which are relevant to the offender’s case, and

(b) must, in exercising any other function relating to the sentencing of offenders, follow any sentencing guidelines which are relevant to the exercise of the function,

unless the court is satisfied that it would be contrary to the interests of justice to do so.

(2) The duty imposed by subsection (1) is subject to—

(a) section 125(1) (fine must reflect seriousness of offence);

(b) section 179(2) (restriction on youth rehabilitation order);

(c) section 186(3) and (6) (restrictions on choice of requirements of youth rehabilitation order);

(d) section 204(2) (restriction on community order);

(e) section 208(3) and (6) (restrictions on choice of requirements of community order);

(f) section 230 (threshold for imposing discretionary custodial sentence);

(g) section 231 (custodial sentence must be for shortest term commensurate with seriousness of offence);

(h) sections 273 and 283 (life sentence for second listed offence for certain dangerous offenders);

(i)section 321 and Schedule 21 (determination of minimum term in relation to mandatory life sentence);

(j) the provisions mentioned in section 399(c) (mandatory minimum sentences).”

Section 60 then goes on to say:

“(1) This section applies where—

(a) a court is deciding what sentence to impose on an offender for an offence, and

(b) offence-specific guidelines have been issued in relation to the offence.

(2) The principal guidelines duty includes a duty to impose on the offender, in accordance with the offence-specific guidelines, a sentence which is within the offence range.”

Section 73 deals with guilty pleas and the reduction of sentence that thereupon applies (depending on when the plea is made, minimum sentences that apply to some sentences, etc). See the Sentencing Council reference here.

By way of example, if a person has been convicted of a section 1 Fraud Act offence in the Magistrates’ Court and the court is retaining the case for sentencing then the court will:

  1. Determine the offence category – high, medium or lesser culpability – and as part of that consideration determine the harm by reference, in the latter instance, to value and impact.
  2. Use that to reference the case in the tables provided – that covers custodial sentences, fines and community orders, and allows for aggravating factors.
  3. Consider any factors which indicate a reduction, such as assistance to the prosecution – see section 74.
  4. Reduction for guilty pleas – see section 73.
  5. Totality principle – If sentencing an offender for more than one offence, or where the offender is already serving a sentence, consider whether the total sentence is just and proportionate to the overall offending behaviour. See guidance here.
  6. Confiscation, compensation and ancillary orders – see re magistrates’ court here and re Crown Court here.
  7. Reasons for sentence – see section 52.
  8. Consideration for time spent on bail (tagged curfew) – see section 240A of the Criminal Justice Act 2003 and section 325.

The Crown Court “version” can be seen here.

D. Conclusion

This blog is by way of an introduction to the criminal prosecution of housing fraud, and future articles will aim to build on its operation and the practical considerations that may need to be borne in mind in considering whether to go down this route instead of or, more likely, in addition to the civil litigation process. In the meantime there are earlier articles available on this site covering confiscation orders and compensation orders.

International Fraud Awareness Week 2021

Sunday (14th) saw the start of the International Fraud Awareness Week 2021.

This week has been run by the Association of Certified Fraud Examiners since 2000 as a dedicated time to raise awareness about fraud. To cite from the bespoke website:

“The week-long campaign encourages business leaders and employees to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education. Organizations and individuals are encouraged to register as Official Supporters prior to International Fraud Awareness Week, and to host training opportunities, distribute anti-fraud information or otherwise promote anti-fraud activities during the week.”

One of the supporters of this week is the London Borough of Hillingdon, as is evident from their tweet on the first day of the week:

Annual Fraud Conference 2021 – Oxford Town Hall

On 24 November 2021 I will be “going home” to speak at the Annual Fraud Conference 2021 – The Power of Partnerships – being held at Oxford Town Hall. This is in its 6th year now and is organised by Oxford City Council’s Oxford Investigation Service (OIS).


From 1987 to 1997 I worked in Oxford for the Oxfordshire Money Advice Project, a debt training, support and advocacy agency funded by Oxfordshire County Council and run by the National Association of Citizens Advice Bureaux. During that time I also spent 4 years as a city councillor, including almost 2 years as chair of the Housing Committee.

Oxford, and the Town Hall in particular, has always therefore held precious memories for me and I have always enjoyed my returns since coming to the Bar in 1999, primarily to the County Court, and the nostalgia-bug invariably grips me whenever I am there.

This time I am privileged to be surrounded by such an impressive line-up covering fraud from its detection and investigation stage through to its prosecution and appropriate response.

I am especially lucky to be talking in a workshop with Raj Vine, the fantastic Counter Fraud Specialist at Riverside. I worked with Raj, and indeed the OIS, in a sub-letting possession trial I wrote about earlier this year.

The title of this year’s conference is especially important for two main reasons. Firstly, when you look at any housing fraud case which has produced a successful outcome for the landlord then it will always have only done so because of the input of various agencies, individuals and professions. I am fortunate that by the time I get involved much of the hard work has already been done!

Secondly, it illustrates for me as a lawyer where I could do more, listen more and learn more – whether that be investigation work, officer input, etc. Teamwork is not, and should never be, an empty mantra and partnerships are essential to identify the true factual scenario, maximise prospects of success and hone the case to the extent it warrants.