Shaikh & Ors v Semhi & Ors [2025] EWCC 51

Case No K01UB376

[2025] EWCC 51

IN THE COUNTY COURT AT CENTRAL LONDON

Thomas More Building

Venue Royal Courts of Justice

Date Friday, 17 January 2025

Strand

London, WC2A 2LL

Before

HER HONOUR JUDGE EVANS-GORDON

Between

SHAIKH & OTHERSClaimant

SEHMI & OTHERSDefendant

MR DECKER appeared for Claimant.

for THE DEFENDANTS were not present and not represented.

JUDGMENT

Approved

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[1]HER HONOUR JUDGE EVANS-GORDON: This is the appeal of five individuals who were all tenants of a property known as 47 Beavers Lane, TW4 6EH (“the property”). They occupied it under an assured shorthold tenancy, dated 31 March 2022. It was a fixed term tenancy which ended 12 months later on 30 March 2023. Thereafter. the tenancy continued as a statutory periodic tenancy.

[2]The issue in this case relates to the tenants' deposit paid by the tenants jointly. The deposit was £2,354. Upon the termination of the tenancy, the landlord failed to repay the deposit, and investigations by the tenants subsequently discovered that the deposit scheme, which they had been informed was holding their deposit was not, in fact, the deposit holder. It appears the judge at first instance saw an email where the landlord's agent told the tenants that a particular deposit scheme was holding their deposit.

[3]The defendant, Daljit Kaur Sehmi, is the owner of the property and the landlord. She has not engaged in the proceedings at all, did not attend the first instance trial, did not, as far as I can tell, file a Defence or take any other step in the proceedings, neither did the property management company, her agent. The landlord has not engaged in this appeal either.

[4]I should only allow an appeal if the decision of the first instance judge was wrong or procedurally unfair. In this case it is said the judge was wrong in law.

[5]At first instance, it was argued that section 214(4) of the Housing Act 2004 (“the 2004 Act”), required a court to award multiple penalties to a tenant for breach of the tenancy deposit requirements. The tenancy deposit requirements are set out in the 2004 Act between sections 212 and 215B. Section 212 requires the securing of a tenant's deposit in an authorised scheme. Sections 213 and 214 contain the relevant provisions in this appeal. The most relevant are as follow:

"(3) Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 30 days beginning with the date on which it is received. …… (5) A landlord who has received such a tenancy deposit must give the tenant and any relevant person such information relating to - (a) the authorised scheme applying to the deposit, (b) compliance by the landlord with the initial requirements of the scheme in relation to the deposit, and (c) the operation of provisions of this Chapter in relation to the deposit, as may be prescribed (6) The information required by subsection (5) must be given to the tenant and any relevant person— (a) in the prescribed form or in a form substantially to the same effect, and (b) within the period of 30 days beginning with the date on which the deposit is received by the landlord."

[6]Section 214(1) provides:

"(1) Where a tenancy deposit has been paid in connection with a shorthold tenancy on or after 6 April 2007, the tenant or any relevant person (as defined by section 213(10)) may make an application to the county court on the grounds - (a) that section 213(3) or (6) has not been complied with in relation to the deposit, or (b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme. (1A) Subsection (1) also applies in a case where the tenancy has ended, and in such a case the reference in subsection (1) to the tenant is to a person who was a tenant under the tenancy. …. (2A) Subsections (3A) and (4) apply in the case of an application under subsection (1) if the tenancy has ended (whether before or after the making of the application) and the court— (a) is satisfied that section 213(3) or (6) has not been complied with in relation to the deposit, or (b) is not satisfied that the deposit is being held in accordance with an authorised scheme as the case may be. (3A) The court may order the person who appears to the court to be holding the deposit to repay all or part of it to the applicant within the period of 14 days beginning with the date of the making of the order. (4) The court must order the landlord to pay to the applicant a sum of money not less than the amount of the deposit and not more than three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order."

[7]Section 215B, which was added by way of amendment by the Deregulation Act 2015, provides that if the tenancy requirements have been complied with in relation to the original or, indeed, any subsequent tenancy, there is no further obligation on the landlord to provide the information again, he is deemed to have complied with the tenancy deposit regulations in relation to any subsequent tenancy. A subsequent tenancy arises either by way of a new tenancy of the same premises, or by way of a statutory periodic tenancy.

[8]The Deputy District Judge declined to order two penalty payments pursuant to section 214(4) on the basis that there was only one breach, which was the original failure to secure the tenant's deposit. The failure to secure it again upon the arising of the statutory periodic tenancy was simply a continuation of the original breach.

[9]I have been referred to a number of cases, the most relevant ones are a Court of Appeal decision in Superstrike Ltd v Rodrigues

[2013] 1 WLR 3848

where Lloyd LJ gave the leading judgment with which Lewison LJ and Gloster LJ agreed.

[10]That case concerned, essentially, whether a statutory periodic tenancy, which arises automatically on the expiration of a fixed term assured tenancy was a new tenancy, such that it gave rise afresh to the landlord's obligations to comply with the tenancy deposit scheme. Superstrike was a case where the original tenancy arose before the statutory provisions came into effect therefore, there were no obligations on the landlord to secure the deposit at commencement. The question was whether those obligations did apply to him, in circumstances where a statutory periodic tenancy arose on 8 January 2008, after the provisions came into effect. It was held that a statutory periodic tenancy is a new tenancy which gave rise to fresh obligations to comply with the 2004 Act.

[11]In Superstrike, the landlord already held the deposit prior to the statutory periodic tenancy and retained it when the new tenancy arose. Lloyd LJ explained that there was an obligation to repay the deposit which arose at the expiration of the fixed term tenancy, and an obligation on the tenant to pay a deposit. These obligations, effectively, could be set off against one another, so there was a notional repayment and payment afresh of the deposit.

[12]The precise point in this case was considered in this court by HHJ Johns KC: it is the subject of his decision on appeal dated 6 June 2023. While the learned judge seems to have, very boldly, disagreed with the Court of Appeal's analysis of what happens to the tenants' deposit, HHJ Johns KC held that the appellants were correct that the court must make multiple awards. He considered that was the consequence of the analysis in Superstrike, a consequence which had not been undone by section 215B of the 2004 Act. His reasoning is set out at paragraphs 12 and 13, where he said:

"Section 215B operates by treating the requirements relating to the protection of deposits as having been complied with in relation to the new tenancy, where they had been complied with in connection with the original tenancy, and so operating the section does not undo the analysis in Superstrike. On the contrary, it seems to me premised on that analysis. Its provisions are on the basis that the requirements would bite on the commencement of the new tenancy, but are to be treated as having been met where the section applies. In the present case, the section does not apply, as the respondent and landlord did not comply with the requirements on the grounds of the original fixed term. 215B does not apply this case."

[13]HHJ Johns KC’s analysis was that as the original tenancy did not comply with the 2004 Act and the provisions of the 2004 were not complied with on the arising of the new tenancy either, there were two breaches of the 2004 Act. The consequence was that multiple awards should be made, at least one in relation to each breach.

[14]That decision, of course, is not binding on me, but as Mr Decker who appears for the appellant, submits it is a persuasive authority, and should be afforded some respect. In fact, I agree with that decision. It seems to me that where there is an obligation that can arise more than once, as is the case under the statute and in line with Superstrike, i.e. an obligation to pay and/or secure a deposit on the arising of a statutory periodic tenancy, that is akin, for example, to an obligation that arises more than once under a lease for example, an obligation to pay rent on a monthly basis. If rent is not paid in month one, it is not a continuing breach to fail to pay rent in month two, it is a completely separate breach of the lease. It seems to me that reasoning applies here.

[15]On the facts of this case, the landlord’s obligation was to secure the tenancy within 30 days of the payment of the deposit on the fixed term tenancy. She did not do so. That was a breach of her statutory obligations which gave rise to a penalty. The obligation arose again on the automatic commencement of the statutory periodic tenancy but, again, the landlord did not comply with the statutory obligations in relation to the deposit. That was a second breach of her statutory obligations because it was not open to her to rely on compliance at the outset of the first tenancy. It seems to me, therefore, that as a matter of principle, the appellants are correct to say that two separate breaches took place giving rise to two separate penalties. The 2004 Act states that the court must make an award for a breach therefore the Deputy District Judge was wrong not to make a second award of at least the sum of the deposit.

[16]There is no transcript of judgment because either the recording equipment was broken or it was not switched on. As the respondent did not appear, there was nobody on their side with whom the appellant could agree a note of judgment. All I have is the appellant's counsel's note of the hearing, and that note records that the Deputy District

Judge said:

"In relation to culpability, I have had time to read the witness statements of Mr Nadeem Shaik and heard additional evidence, and seen on a mobile phone email. He pursued the letting agent and sought confirmation of the deposit having been secured. He then received via email in June 2023, the response from the letting agent, confirming it had been secured. It subsequently transpired that they (the deposit company) had no record of a deposit in his name. I find that RPS (landlord's agent) deliberately misled the claimant as to the protection of the deposit, and take the view that the compensation should be the highest level, given the deliberate misleading of the claimant."

[17]The letting agent’s address is the address given for the landlord in the tenancy agreement, for the purposes of section 48 and for the purposes of service of any notices or proceedings. I am told that the landlord had not repaid the deposit at all, and is still, I understand, in default of the order of the Deputy District Judge. I am asked to make my own order on the facts of this case because it is, essentially, a point of law. I cannot see there would be any other material available to a Deputy District Judge or a District Judge if I returned the matter to the lower court. To do so would be disproportionate and unlikely to achieve anything, given the wholesale failure of the respondent to engage in any way at all.

[18]This, therefore, is an appropriate case for me to substitute my own order, notwithstanding it is an exercise of discretion. The finding of the Deputy District Judge, which has not been challenged, was to the effect that there was a deliberate deception of the tenants by the landlord’s agent, in relation to the tenants' deposit. That seems to me to be at the highest level of culpability. It is essentially fraud, deception by an apparently professional managing agent.

[19]I therefore substitute paragraph (a) of the Deputy District Judge's order with an order that the defendant is to pay to the claimant the following sums:(a) £7,062, being three times the deposit, pursuant to section 214(4) of the Housing Act, 2004 in relation to the failure to secure the deposit at the outset of the fixed term tenancy.

(b) £7,062 being three times the deposit pursuant to section 214(4) of the Housing Act, 2004 in relation to the failure to comply with the tenant deposit provisions in relation to the statutory periodic tenancy that arose thereafter.

[20]I will leave untouched (b) and (c) of the Deputy District Judge's order, which relates to the deposit itself, and I will leave it to counsel to do the arithmetic to put in the headline figure, adding up all those sums. The sums shall be payable within 14 days. Epiq Europe Ltd hereby certify that the above is an accurate and complete record of the proceedings or part thereof. Lower Ground, 46 Chancery Lane, London WC2A 1JE Email: civil@epiqglobal.co.uk