Suurpere v Nice & Anor [2011] EWHC 2003 (QB)

[2011] EWHC 2003 (QB)

Case No QB/2010/0362

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 27/07/2011

Before

THE HONOURABLE MRS JUSTICE COX DBE

Between

KARIN SUURPEREAppellant/

CHRISTOPHER NICERespondents/

PATRICIA NICEDefendants

SIMON BUTLER (instructed by Burke Naizi, Solicitors) for Appellant/Claimant

CHRISTOPHER NICE and PATRICIA NICE – IN PERSON for in person

Hearing Hearing dates: 12 May 2011

Judgment

[1]Karin Suurpere (the Appellant) is appealing by permission of Eder J., granted in respect of one ground only, against the order of His Honour Judge Reid QC, dated 1 June 2010, dismissing her claim for damages for breaches by her former landlords, Mr and Mrs Nice (the Respondents), of sections 213–214 Housing Act 2004.

[2]The issue raised is whether the Respondents, when letting premises to the Appellant, fully complied with the deposit protection scheme contained in s.213(6)(a) of the Housing Act 2004 (the Act) and in Article 2 of the Housing (Tenancy Deposits) (Prescribed information) Order 2007. This issue is of some importance in practice.

[3]At the hearing before me the Appellant was represented by Mr Butler and the Respondents, Mr and Mrs Nice, appeared in person. I am grateful to them for their helpful, written and oral submissions. The matter is not straightforward.

The Relevant Facts

[4]On 6 January 2009 the Respondents, described by Judge Reid in his judgment as “inexperienced landlords” let part of the premises they owned at 3 Hillcrest Road, Guildford to the Appellant. She was granted an assured shorthold tenancy for a fixed term of 6 months, at a monthly rent of £300.00 payable on the 6th day of each month.

[5]On 6 January 2009 the Appellant also paid the Respondents a deposit of £500.

[6]For various reasons, which are not directly relevant to the issue arising on appeal, relationships between the Appellant and other tenants in the premises, and also between the Appellant and the Respondents, began to deteriorate. As Judge Reid expressed it, “things began to turn sour”. The Respondents alleged, amongst other things, that the Appellant was disturbing the other tenants. The Appellant alleged that the Respondents were harassing her.

[7]Mr Nice served a Notice to Quit on the Appellant, dated 11 May 2009. However the Notice was invalid, not being in the approved form and not providing the Appellant with two months notice, as required by section 21(1) of the Housing Act 1988. A two-month Notice to Quit was then served on 18 May, but in error the Respondents back-dated the Notice to 11 May 2009.

[8]It also appears that, on 12 June 2009, the Respondents fixed a notice to the front door of the Appellant’s property described as a “Notice of Eviction”, but which the Judge found was not in fact such a notice.

[9]On 15 July 2009 the Respondents issued summary proceedings for possession in Guildford County Court (Claim No. 9GU01413). However, it would appear that the Particulars of Claim were defective because the Respondents relied on the back-dated Notice to Quit served on 18 May stating, incorrectly, that it had expired on 11 July. The Court can only determine a tenancy and grant possession if the landlord has complied with the requirements of section 21.

The Tenant’s Deposit

[10]The Respondents did not in fact transfer the Appellant’s deposit from their bank account to the Deposit Protection Service, as required by the legislation, until 20 July 2009. The Respondents informed the Appellant of this transfer by a letter of the same date. This letter seems to have followed a letter sent to the Respondents on the Appellant’s behalf by the Citizens Advice Bureau, dated 15 July 2009, drawing attention to their obligations concerning the deposit protection scheme. However, no reference was made in that letter from the CAB to the statutory requirement for a landlord to provide a tenant with “prescribed information”.

[11]On 10 August 2009 the Appellant herself issued proceedings against the Respondents, which included a claim for the return of her deposit. She alleged that they were in breach of sections 213-214 of the 2004 Act. In her hand-written Particulars of Claim she alleged that s.213 of the Act requires a landlord to protect a deposit in an authorised tenancy protection scheme within 14 days of receiving the deposit; and, further, to provide the tenant with the information prescribed within 14 days. She alleged that the deposit had not been protected in a scheme within the 14 day period and that the Respondents had failed to provide her with the prescribed information at any stage. She therefore claimed that she was entitled to receive a sum of three times the amount of the deposit, in accordance with the relevant provisions of the Act.

[12]On 14 August 2009 the Appellant left the premises, allegedly as a result of unlawful harassment by the Respondents. She did not return. On 1 September 2009 her deposit was returned to her in full.

[13]In their Amended Defence the Respondents stated that, when Guildford Borough Council informed them in June 2009 that they were subject to the Act, they transferred the deposit into an approved scheme and “gave the Claimant the required information.” They pointed out that they had since returned the deposit to her in full and described what had happened as an “innocent technical breach” of the Act, which they had since corrected.

[14]In her Particulars of Claim the Appellant also pursued claims for wrongful eviction, on which point she failed, and for breach of the covenant of quiet enjoyment, which succeeded and for which she was awarded compensation of £1,000.00. No issue arises in this appeal in respect of either of those claims.

[15]It appears that Judge Reid stayed the possession proceedings brought by the Respondents, pending his determination of the Appellant’s claim for damages. In the course of his judgment on the Appellant’s claim, he noted that the Notice to Quit was defective, because it did not provide the Appellant with the appropriate statutory notice.

[16]In respect of the Appellant’s deposit claim, the Judge had before him at the hearing witness statements from the parties containing their respective contentions, as set out in the pleadings. A statement from Stuart Hamilton, senior housing officer at Guildford Borough Council, referred to him having given the Appellant advice in July 2009, including a booklet about the Rent Deposit Protection Scheme.

[17]It appears that the Deposit Protection Service (DPS) themselves provided the Appellant with some information concerning her deposit. It is not in dispute that, by their letter of 21 July 2009, the DPS informed the Appellant that her landlords had successfully submitted her deposit to the Deposit Protection Service. They provided a repayment ID for the deposit and informed her that she could download a copy of the rules of the scheme on the DPS website or by contacting them at a stated email address or telephone number. Further, they informed her that the details which had been provided by her landlord were as follows:

“Deposit ID: 11387753 Rental property: 3 HILLCREST ROAD, GUILDFORD, SURREY, GU2 8HR Name of Lead Tenant: Miss Karin Suurpere Agent/Landlord name: Mr Christopher Nice Agent/Landlord address: 79A WESTFIELD ROAD, WOKING, SURREY, GU22 9PX Start date of tenancy: 06 January 2009 Tenancy period: 6 months Deposit amount: £500.00 Date deposit received: 06 January 2009”

[18]In their subsequent letter to the Appellant, dated 8 September 2009, the DPS confirmed the date of 20 July as the date when the deposit had been submitted to them. In a deposit summary, dated 8 October 2009, the DPS set out the registration number, the name and contact details of the landlord, the address of the property and the amount of the deposit.

[19]That is the extent of the evidence before the judge concerning the transfer of the Appellant’s deposit and the provision of information to her concerning it.

[20]At the time he considered the matter, Judge Reid had before him the recent decision of Tugendhat J. in Draycott & Draycott v. Hannells Letting Limited (trading as Hannells Letting Agents)

[2010] EWHC 217

(QB), in which he considered the relevant sections of the 2004 Act.

[21]The Appellant, appearing in person before Judge Reid, alleged essentially that the Respondents were in breach of the statutory provisions both because the deposit had not been paid over to the DPS within 14 days of receipt, and because she had not been provided with the necessary, prescribed information by the Respondents. She therefore claimed to be entitled to a sum of three times the amount of the deposit she had paid, pursuant to s. 214(4) of the Act.

[22]Judge Reid dismissed her claim, applying the decision in Draycott and finding that, since the deposit had in fact been lodged under the Deposit Protection Scheme on 20 July, before the commencement of her proceedings on 10 August, the penal sanctions in s. 214(4) did not apply.

[23]Mr Butler submits that the Judge erred in so finding. The Appeal The Legal Framework

The Appeal

[24]Tenancy deposit schemes are dealt with in Chapter 4 of Part 6 of the Housing Act 2004. S. 212 requires the appropriate national authority to make arrangements for securing that one or more tenancy deposit schemes are available for the purpose of safeguarding tenancy deposits paid in connection with shorthold tenancies.

[25]Ss. 213 and 214 provide as follows: “213 Requirements relating to tenancy deposits(1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

(2) No person may require the payment of a tenancy deposit in connection with a shorthold tenancy, which is not to be subject to the requirement in subsection (1).

(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 14 days beginning with the date on which it is received.

(4) For the purposes of this section ‘the initial requirements’ of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.

(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 14 days beginning with the date on which the deposit is received by the landlord.

(7) No person may, in connection with a shorthold tenancy, require a deposit which consists of property other than money.

(8) In subsection (7) ‘deposit’ means a transfer of property intended to be held (by the landlord or otherwise) as security for- (a) the performance of any obligations of the tenant, or (b) the discharge of any liability of his, arising under or in connection with the tenancy.

(9) The provisions of this section apply despite any agreement to the contrary.

(10) In this section ‘prescribed’ means prescribed by an order made by the appropriate national authority; ‘property’ means moveable property; ‘relevant person’ means any person who, in accordance with arrangements made with the tenant, paid the deposit on behalf of the tenant. 214 Proceedings relating to tenancy deposits (1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds- (a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) 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. (2) Subsections (3) and (4) apply if on such an application the court- (a) is satisfied that those requirements have not, or section 213(6)(a) 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. (3) The court must, as it thinks fit, either (a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or (b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme, within the period of 14 days beginning with the date of the making of the order. (4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order. (5) Where any deposit given in connection with a shorthold tenancy could not be lawfully required as a result of section 213(7), the property in question is recoverable from the person holding it by the person by whom it was given as a deposit. (6) In subsection (5) ‘deposit’ has the meaning given by section 213(8).” (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, (a) in the prescribed form or in a form substantially to the same effect, and (b) within the period of 14 days beginning with the date on which the deposit is received by the landlord. (a) the performance of any obligations of the tenant, or (b) the discharge of any liability of his, ‘prescribed’ means prescribed by an order made by the appropriate national authority; ‘property’ means moveable property; ‘relevant person’ means any person who, in accordance with arrangements made with the tenant, paid the deposit on behalf of the tenant. (a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) 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. (a) is satisfied that those requirements have not, or section 213(6)(a) 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, (a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or (b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme,

[26]There is no dispute that the deposit paid in this case fell to be dealt with under these provisions.

[27]On behalf of the Appellant, Mr Butler does not contend that there was a failure to comply with s. 213(3) and (4). Although the 14-day period was not adhered to, the deposit was actually transferred to the protection scheme on 20 July 2009. It had therefore been transferred by the date of the hearing of the Appellant’s claim.

[28]He submits, however, that the Respondents were in breach of s. 213(5) and (6)(a), in that they failed to provide the Appellant with the information required by subsection (5) in the prescribed form. Pursuant to s. 213(10) “prescribed” means prescribed by an order made by the appropriate national authority. That is the Housing (Tenancy Deposits) (Prescribed Information) Order 2007, Article 2 of which provides as follows:

“2. Prescribed information relating to tenancy deposits (1) The following is prescribed information for the purposes of section 213(5) of the Housing Act 2004 (‘the Act’)- (a) the name, address, telephone number, e-mail address and any fax number of the scheme administrator of the authorised tenancy deposit scheme applying to the deposit; (b) any information contained in a leaflet supplied by the scheme administrator to the landlord which explains the operation of the provisions contained in sections 212 to 215 of, and Schedule 10 to, the Act; (c) the procedures that apply under the scheme by which an amount in respect of a deposit may be paid or repaid to the tenant at the end of the shorthold tenancy (‘the tenancy’); (d) the procedures that apply under the scheme where either the landlord or the tenant is not contactable at the end of the tenancy; (e) the procedures that apply under the scheme where the landlord and the tenant dispute the amount to be paid or repaid to the tenant in respect of the deposit; (f) the facilities available under the scheme for enabling a dispute relating to the deposit to be resolved without recourse to litigation; and (g) the following information in connection with the tenancy in respect of which the deposit has been paid- (i) the amount of the deposit paid; (ii) the address of the property to which the tenancy relates; (iii) the name, address, telephone number, and any e-mail address or fax number of the landlord; (iv) the name, address, telephone number, and any e-mail address or fax number of the tenant, including such details that should be used by the landlord or scheme administrator for the purpose of contacting the tenant at the end of the tenancy; (v) the name, address, telephone number and any e-mail address or fax number of any relevant person; (vi) the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy; and (vii) confirmation (in the form of a certificate signed by the landlord) that- (aa) the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and (bb) he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge and belief.” (a) the name, address, telephone number, e-mail address and any fax number of the scheme administrator of the authorised tenancy deposit scheme applying to the deposit; (b) any information contained in a leaflet supplied by the scheme administrator to the landlord which explains the operation of the provisions contained in sections 212 to 215 of, and Schedule 10 to, the Act; (c) the procedures that apply under the scheme by which an amount in respect of a deposit may be paid or repaid to the tenant at the end of the shorthold tenancy (‘the tenancy’); (d) the procedures that apply under the scheme where either the landlord or the tenant is not contactable at the end of the tenancy; (e) the procedures that apply under the scheme where the landlord and the tenant dispute the amount to be paid or repaid to the tenant in respect of the deposit; (f) the facilities available under the scheme for enabling a dispute relating to the deposit to be resolved without recourse to litigation; and (g) the following information in connection with the tenancy in respect of which the deposit has been paid- (i) the amount of the deposit paid; (ii) the address of the property to which the tenancy relates; (iii) the name, address, telephone number, and any e-mail address or fax number of the landlord; (iv) the name, address, telephone number, and any e-mail address or fax number of the tenant, including such details that should be used by the landlord or scheme administrator for the purpose of contacting the tenant at the end of the tenancy; (v) the name, address, telephone number and any e-mail address or fax number of any relevant person; (vi) the circumstances when all or part of the deposit may be retained by the landlord, by reference to the terms of the tenancy; and (vii) confirmation (in the form of a certificate signed by the landlord) that- (aa) the information he provides under this sub-paragraph is accurate to the best of his knowledge and belief; and (bb) he has given the tenant the opportunity to sign any document containing the information provided by the landlord under this article by way of confirmation that the information is accurate to the best of his knowledge and belief.”

[29]In this case Mr Butler accepts that the information in paragraph (a) was provided. However, he submits that the evidence does not demonstrate compliance with paragraph (b), and there was clearly no compliance with paragraphs (c) or (d). Further, whilst paragraphs (g) (i) to (iv) and, arguably, paragraphs (e) and (f) were complied with, there was no compliance with paragraph (g) (vi) or, importantly, with paragraph (g) (vii).

[30]In the present case he submits that the Appellant brought proceedings complaining, pursuant to s. 214(1)(a), that s. 213(6)(a) had not been complied with in relation to the deposit. On the evidence that claim was made out. By virtue of s. 214(2)(a) the Court should therefore have ordered the Respondents, pursuant to s. 214(4), to pay to the Appellant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.

[31]In support of these submissions Mr Butler relies on the recent decision of the Court of Appeal in the case of Tiensia v. Vision Enterprises Limited(Trading as Universal Estates): Honeysuckle Properties v. Fletcher and Others

[2010] EWCA Civ. 1224

, dated 11 November 2010. This case was obviously not available to Judge Reid at the time he was considering this issue.

[32]Giving the decision of the majority of the Court (Rimer and Thorpe LJJ, Sedley LJ dissenting), Rimer LJ said this at paragraph 37 of his judgment:

“37. Section 214(1)(a) entitles the tenant to apply to the court in a case in which `the initial requirements of an authorised scheme (see section 213(4))) have not, or section 213(6)(a) has not, been complied with in relation to the deposit; ...'. In the case of both alternatives the focus is, apparently deliberately, not on whether there was compliance within the 14-day period but on whether there has been compliance at all. Had the time for compliance been in section 214's sights, ‘the initial requirements' reference would have been to section 213(3) rather than to 213(4); and the notification reference would have been either to section 213(6)(b), or else to section 213(6) as a whole, rather than simply to section 213(6)(a).

(a) ”

[33]Mr Butler submits that, since there was a failure by the Respondents to comply with the requirements of the 2007 Order, it follows that there had been non-compliance with the provisions of s. 213(6)(a) as at the date of the hearing.

[34]At paragraphs 40-42 Rimer LJ continued:

“40. That interpretation of the legislation means that late, but nevertheless due, compliance by the landlord with his dual obligations under section 213(3) and (6) will furnish him with a complete defence to any claim by the tenant under section 214. Such interpretation appears to me to be not only firmly supported by what I would regard as the carefully chosen statutory language, it is also a properly precise, or strict, one to apply to legislation such as section 214 that is manifestly penal in intent. Moreover, it is an interpretation that is consistent with the purpose of the legislation. That purpose is to achieve the due protection of deposits paid by tenants, ideally within the 14-day period but, if not, then later. It cannot be its purpose to punish landlords who may for example, for innocent reasons, be just a day late in securing such protection. 41. The other question raised by the arguments is whether (as Judge Ellis held and Mr Hutchings and Mr Manning submitted) the landlord has until the hearing of the tenant's section 214 application to comply with his section 213 `initial requirements' and notification requirements. If he has until then to remedy any prior section 213 default, and does so, it must follow that the tenant's section 214 application will fail although no-one suggested that in such a case the tenant would not ordinarily be entitled to recover from the landlord the costs of his claim. The contrary case advanced by Mr Bowen, was that the cut off point for section 213 compliance is not the hearing date but the issue of the tenant's section 214 claim or counterclaim. The theory is presumably that at that point the tenant's cause of action under section 214 has accrued and cannot be defeated by the landlord's subsequent compliance with his section 213 obligations by the time of the hearing. It would, it is said, be unjust if the claim could be so defeated and the tenant then left with at most a right to a probably less than full indemnity for his costs from the landlord. 42. I agree with Judge Ellis, Mr Hutchings and Mr Manning that the date of the hearing is the relevant date and do not accept Mr Bowen's contrary argument. First, there is in my view nothing in the legislation that points to any date earlier than the date of the hearing date. On the contrary, the use of the present tense -`is satisfied' - in section 214(2)(a) appears to me to support the case for the hearing date; and, consistently with that (albeit in relation to the different breach with which it is concerned), I consider that section 214(2)(b) shows unambiguously that the relevant date for its own purposes is the hearing date. If that is the relevant date for section 214(2)(b) purposes, would be odd if it were not also the relevant one for section 214(2)(a) purposes.”

[35]Thus, Mr Butler submits that the Respondents’ failure to comply with s. 213(6)(a) by the date of the hearing entitled this Appellant to an award of a sum of money equal to three times the amount of the deposit, and that Judge Reid erred in concluding that, once the deposit had been transferred under the scheme, s. 214(4) no longer applied.

[36]In their skeleton argument and in their oral submissions the Respondents contend that they transferred the deposit on 20 July 2009; that they gave the Appellant full details of registration of the deposit on 21 July, confirming the deposit reference number and providing details of the DPS website; and that they had complied with their duty to provide information as required by the Act and the 2007 Order. Alternatively, if they are wrong about that and they did not comply, then they contend that they were not required to supply the Appellant with the prescribed information after they had returned the deposit to her on 1 September. They state that the purpose of these statutory provisions is to protect tenants from unscrupulous landlords. They argue that a tenant who has had information provided about the deposit and has then had the deposit returned in full does not require protection. It would have been futile for them to have given particulars of the scheme to the Appellant between 1 September 2009 and 1 June 2010, the date of the hearing of the Appellant’s claim under s. 214, by which time the deposit was no longer in the scheme. They therefore contend that Judge Reid was right to rule as he did and that the appeal should be dismissed.

Discussion and Conclusion

[37]As the Court of Appeal explained in Tiensia, Chapter 4 of Part 6 of the Housing Act 2004 established schemes to protect deposits paid by tenants to their landlords in connection with assured shorthold tenancies. The schemes apply generally to all landlords, including those in the position of the Respondents, who decide to let properties in the private letting market. It is clearly important that all landlords are aware of the requirements of these statutory provisions.

[38]The schemes require landlords to do one of the following:(1) To pay an amount representing the deposit into a designated account, which is then held by the scheme administrator until it falls to be repaid, in whole or in part, to the landlord or tenant; or

(2) To keep the deposit, but to have its return protected by insurance cover maintained by the scheme administrator.

[39]The legislation set up structures to facilitate the resolution of disputes relating to tenancy deposits. It also provides for the imposition of sanctions for non-compliance with the requirements of such schemes, namely the payment to the tenant of a sum equal to three times the deposit pursuant to s. 214(4).

[40]In addition to this protection for deposits, s. 213(5) requires every landlord who has received such a deposit to provide the tenant with certain prescribed information, the particulars of which are set out in the 2007 Order. By s. 213(6)(a) that information must be provided in the prescribed form, or in a form substantially to the same effect.

[41]Whilst the primary focus in the cases involving these statutory provisions has so far been on the deposit, it is clear that a landlord’s obligations under this part of the 2004 Act are two-fold. Parliament regards the landlord’s obligation to provide the prescribed information as being of equal importance to his duty to safeguard the tenant’s deposit. Judges who have to determine the extent of a landlord’s compliance with these provisions will always need to consider whether the prescribed information has been supplied to the tenant, in addition to the question of protection of the deposit. The list of particulars to be provided is detailed and specific. The requirement for landlords to provide such detailed information, together with the sanction for non-compliance, demonstrate the importance attached to the giving of particulars, certified as accurate by the landlord, which will enable tenants to understand how the scheme works and how they may seek the return of their deposit.

[42]The objective of the legislation, however, is not to punish landlords, but to achieve proper protection of tenant’s deposits. Thus, as the majority of the Court of Appeal held in Tiensia, where a tenant claims or, more usually, counterclaims for a breach of these statutory provisions, the landlord has until the date of the hearing to comply with his dual obligations of safeguarding the tenant’s deposit and providing the requisite information in the prescribed form.

[43]Further, in my judgment, it will make no difference to the landlord’s statutory obligation to provide the prescribed information if, by the date of the hearing, the tenant’s deposit has been repaid. As Sharp J. held recently in Potts v Densley and Pays

[2011] EWHC 1144 (QB)

(at paragraph 53) the natural and consistent reading of these statutory provisions is that:

“… a party's position as ‘the landlord’ or ‘the tenant’ for the purposes of these provisions crystallises when a deposit is paid in connection with shorthold tenancy. Thereafter, ‘the landlord’ (i.e. the person receiving the deposit paid in connection with a shorthold tenancy) continues to be ‘the landlord’ for the purposes of the statute whether the tenancy has been determined or not and remains under a continuing obligation to comply with the initial requirements of the scheme and to provide the prescribed information. Moreover, it remains the case that the landlord will still be subject to sanction if he has not complied with the initial requirements of the scheme or provided the prescribed information by the time of hearing of the section 214(4) application (following Tiensia). I recognise this has the considerable disadvantage that the landlord might then not protect the deposit during the tenancy itself as I have indicated; but at least then he can be pursued thereafter by ‘the tenant’ and subject to sanction in the event he is unable … to protect the deposit appropriately before the hearing. … ”

[44]The Respondents query the sense of such an obligation in these circumstances and suggest that Sharp J.’s interpretation of these provisions is incorrect. In my judgment, however, this is precisely the effect of the legislative requirements. The landlords’ dual obligations are continuing obligations once a deposit has been paid. The obligation to give the prescribed information therefore continues, irrespective of the return of the deposit before the date of the hearing.

[45]The potentially harsh effects of this requirement in some cases are alleviated by the opportunity a defaulting landlord has to put his house in order and fulfil his obligations before the date of the hearing of the tenant’s claim or counterclaim, thereby avoiding the sanction imposed by s.214(4). The “penalty” for late compliance by the landlord will then be restricted to the tenant’s ability to recover the costs of her claim or counterclaim, rather than an order for payment of the sum of three times the deposit. The preferable course, however, would obviously be for landlords to comply with their statutory obligations promptly, upon receipt of the tenant’s deposit.

[46]In the present case the Judge below did not have the benefit of the judgments in either Tiensia or Potts, his decision pre-dating the judgments in these cases.

[47]Plainly, however, he did not address the Respondents’ obligation to give the Appellant prescribed information, despite the fact that she had pleaded this breach specifically in her Particulars of Claim. In considering only the deposit obligation and failing to deal with the question of prescribed information, I consider that the Judge fell into error.

[48]On the facts of this case, the Respondents had failed by the date of the hearing to comply with s. 213(6)(a), in that they had failed to provide the Appellant with the prescribed information.

[49]The Respondents contend that they did comply with their obligation in this respect, through the information that was provided to the Appellant by the Deposit Protection Service in their letter of 21 July 2009, informing the Appellant that the Respondents had submitted a deposit of £500.

[50]There are two difficulties with this argument, however. First, the obligation under this legislation is that of the landlord personally. The provision of information to a tenant by the Deposit Protection Service in this way does not, in my view, amount to compliance by the landlord personally with his obligation under s. 213(5) and (6)(a).

[51]Secondly, the information provided in the letter of 21 July did not in any event include all those particulars which must be provided pursuant to the 2007 Order and which must, importantly, be certified by the landlord as accurate particulars. As Mr Butler correctly pointed out, the information provided included only some of the particulars listed in Article 2.

[52]Nor is it open to the Respondents to suggest that further information would have been available to the Appellant on the Deposit Protection Service website, as their letter pointed out, in order to plug any gaps in the information provided by the Respondents. Firstly, there is no evidence as to what information is actually provided on that website. Secondly, it will not in any event be information which has been certified as accurate by the landlord personally. Thirdly, a high number of tenants in social housing are unlikely to have easy access to computers, in order for them to discover this information. The obligation to provide it is in any event the landlord’s.

[53]It is necessary at this point to refer to some further developments since the hearing in this case. Following the oral hearing of the appeal, judgment was reserved. On 19 May 2011, before judgment was handed down, the Court of Appeal handed down their judgment in Gladehurst Properties Ltd v Farid Hashemi (on behalf of himself and Matthew Johnson

[2011] EWCA Civ 604

, a case which is also concerned with the statutory provisions relating to the tenancy deposit scheme.

[54]On behalf of the Appellant, Mr Butler presented further written submissions, dated 30 May, on the effect of this decision on the present appeal. Neither party sought a further oral hearing in this matter and, in accordance with the Court’s directions, Mr Butler’s submissions were sent to Mr and Mrs Nice, who responded in writing on 21 June. Some short, further submissions in reply were provided by Mr Butler on 23 June. I have considered the judgment in Gladehurst, together with the further submissions received, before arriving at my decision in the present case.

[55]The facts in that case were, essentially, that Gladehurst let property to the two named tenants under an assured shorthold tenancy dated 8 August 2007. The tenants paid a deposit, which was retained by Gladehurst in its bank account and never paid into the deposit scheme. It was common ground in that case that the tenancy came to an end when the tenants vacated the property in October 2008, after which deductions from the deposit were made for breaches of the cleaning and repairing covenants, with the balance then being repaid to the tenants via a bank transfer. Subsequently, on 16 February 2009 the tenants brought a s.214(4) claim for payment of the penal sum, the landlord having failed to comply with the relevant statutory provisions in respect of their deposit.

[56]The tenants’ claim was struck out by the District Judge on the basis that it had been made after the tenancy had come to an end and that the provisions of s.214(4) no longer applied. HH Judge Cryan allowed their appeal and restored the claim. Gladehurst appealed against Judge Cryan’s decision.

[57]The principal issue on appeal was therefore whether, in those circumstances, the tenants were entitled to an order for payment of the penal sum under s.214(4) following the landlord’s failure to register their deposit or to pay it into the deposit scheme.

[58]Giving the judgment of the court, Patten LJ concluded that the power of the Court to make an order under s.214(3) and (4) is no longer exercisable once the tenancy has come to an end, and that the District Judge was right to reject the tenants’ s.214(4) claim.

[59]At paragraphs 37-42 of his judgment, he stated as follows:

“37. The point is not an easy one but I have come to the conclusion that the power of the Court to make an order under s.214(3) and (4) is no longer exercisable once the tenancy has come to an end. Although s.213 makes it unlawful for a landlord to require the payment of a deposit which is not to be dealt with in accordance with an authorised scheme and requires the landlord within 14 days of receipt of a deposit to comply with the initial requirements of such a scheme, it is important to note that no criminal penalty is imposed for non-compliance with these provisions. Instead, they are made enforceable at the option of the tenant under s.214. It is entirely a matter for him as to whether he chooses to take advantage of the provisions in s.213 which were created for his benefit. 38. The answer therefore to the argument that the construction of s.214 contended for by Gladehurst will encourage landlords not to comply with their legal obligations under s.213 is the same as applies to any breach by a landlord of its covenants or other obligations under the lease. The tenant always has it within his hands to secure their enforcement by the taking of proceedings. That is the remedy prescribed by s.214 of the Act and it is up to the tenant to make use of it. 39. Looked at in this way it is entirely understandable if some temporal limits apply to the exercise of the right of enforcement under s.214. The initial requirements of an authorised scheme are, as Mr Gannon submitted, matters to be dealt with at the inception of the lease and not later than the expiry of the term. Section 214(1), as interpreted in Tiensia, speaks in terms of these requirements not yet having been complied with and therefore carries the strong implication that the default can still be remedied. This impression is confirmed by s.214(3) which requires the Court either to order the repayment of the deposit to the applicant or to order the landlord to pay it into an authorised scheme. For the Court to have a genuine discretion to exercise both alternatives must be available. On the facts of this case, neither was. Although Judge Cryan treated the £618 as part of the deposit retained by Gladehurst, it was artificial to do so. The tenants had agreed to Galdehurst retaining the £618 pending the prosecution of their claim for its return which it was for them to pursue and make out. The retention was therefore consensual. 40. The issue raised by the landlord has also to be resolved in a case where the landlord has returned the entirety of the deposit on the termination of the lease. Mr Gannon accepted that if this were the case then no s.214 claim could be made. Section 214 envisages that it must still be open to the Court to make both a s.214(3) and a s.214(4) order. Where this is not the case neither applies. 41. But that argument would mean that a defaulting landlord who nevertheless was scrupulous in dealing with the deposit at the end of the lease would be in a worse position with a defaulting tenant than he would be with a tenant who observed his own covenants to the letter. If the landlord was able to refund the deposit in its entirety he would escape the consequences of s.214(4) but not if he had legitimate grounds for retaining part of it to pay for repairs. 42. Anomalies of this kind are avoided by reading s.214(1)(a) as meaning that the initial requirements of an authorised scheme have not been but are still capable of being complied with. This is consistent with the decision in Tiensia and is the only meaning which ties in with the two alternatives in s.214(3) continuing to be available. In practice, this means that the grounds for a s.214 application will cease to exist once the lease expires and no order under either s.214(3) or (4) can therefore be made after that date. From that moment on the application will cease to be ‘such an application’ as is described in s.214(2).”

[60]In the present case Mr and Mrs Nice submit that “It is clear that Ms Suurperes’ tenancy terminated on 14 August 2009 when she vacated.” They suggest that she accepted that her tenancy had ended; that she abandoned the premises and paid no further rent; and that she demanded the return of her deposit, which was returned to her in full. Relying on the decision in Gladehurst they argue that the Court had no power to make an order under s. 214(4) because the tenancy had come to an end on 14 August 2009, when the Appellant vacated the premises.

[61]The difficulty with this argument however is that, in the present case, there is no evidence to support the submission that the tenancy came to an end when the Appellant left. It was not in dispute in Gladehurst that the tenancy had terminated. However, the Appellant in the present case did not accept that her tenancy had been determined because she brought a claim for wrongful eviction, claiming that she was forced to vacate as a result of the Respondents’ harassment.

[62]Nor is there any evidence to show that she had surrendered the tenancy. The Respondents issued and pursued a claim for possession, which was stayed by Judge Reid pending determination of the Appellant’s claim for damages, and which therefore remained outstanding as at the date of the hearing. In fact, Judge Reid found that the Notice to Quit was defective in this case because it did not provide the Appellant with two months’ notice, as required by s.21(1) of the Housing Act 1988. It is perhaps unfortunate in the circumstances that he did not deal with both claims together and decide the issue of determination of the tenancy before going on to consider the Appellant’s claim in respect of the deposit.

[63]In these circumstances, however, it would appear that the Appellant’s tenancy had not been lawfully determined as at the date of the hearing and that the Respondents cannot therefore rely upon the decision of the Court of Appeal in Gladehurst. The principles established in Tiensia and Potts, to which I have already referred, therefore apply in this case.

[64]The Judge ought therefore to have asked himself, firstly, whether by the date of the hearing the Respondents had complied with their duty under s. 213(6)(a). On the evidence, the answer to that question was clear. The Respondents had not complied, notwithstanding an opportunity for them to do so once the Appellant had issued her claim.

[65]The Judge should then have considered whether to make an order under s. 214(3)(a) or (b). Since the deposit had by then been returned to the Appellant he should have concluded that he would have ordered the Respondents to return the deposit had they not already done so.

[66]Finally and pursuant to s. 214(4), the Judge should have ordered the Respondents to pay a sum of money equal to three times the amount of the deposit, namely £1,500.00, within 14 days of the making of the order.

[67]For these reasons this appeal must be allowed and the consequential orders made below set aside. The Respondents are ordered to pay to the Appellant the sum of £1,500.00 within 14 days of this order. The parties have liberty to apply on written submissions as to the appropriate order for costs, failing agreement, this appeal having been allowed.

[68]Finally, I add the following observations, in the hope that they may be of some general assistance.

[69]The Respondents in this case were plainly unaware of the nature and extent of their obligation to give prescribed information to their tenant; and unaware of where the prescribed form could be found. There is no question of their failure to comply being in any way deliberate or contumelious.

[70]There was some discussion before me as to the availability of information for landlords in the private sector and where it might be found. I am therefore grateful to Mr Butler and to his instructing solicitor for submitting a short note, after judgment was reserved, following enquiries as to the existence of a prescribed information template for landlords.

[71]Such a template was located using the following website address:

“http://www.depositprotection.com/documents/prescribed-information-template.pdf”

A copy of the template was attached to the note. It is unclear whether this template would have been available to the Respondents in 2009, when the Appellant’s deposit was placed with the scheme administrator, but in the circumstances it clearly deserves wider dissemination.