Potts v Densley
| Jurisdiction | England & Wales |
| Judge | Mrs Justice Sharp |
| Judgment Date | 06 May 2011 |
| Neutral Citation | [2011] EWHC 1144 (QB) |
| Court | Queen's Bench Division |
| Date | 06 May 2011 |
| Docket Number | Case No: QB/2010/0451 |
[2011] EWHC 1144 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE BROMLEY COUNTY COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Honourable Mrs Justice Sharp
Case No: QB/2010/0451
James Browne (instructed by PainSmith Solicitors) for the Appellant
David Giles (instructed under the Bar Council's Public Access Rules) for the Respondents
Hearing dates: 9 February 2011
Introduction
This is an appeal from the dismissal on 15 July 2010 by Her Honour Judge Hallon of an application made by Miss Karen Potts, as the tenant, against her landlords, Mr Robert Densley and Ms Shirley Pays, pursuant to sections 213 and 214 of Chapter 4 of Part 6 of the Housing Act 2004 (the Act) in which she asked they be ordered to pay to her three times the amount of the deposit she had paid to them in connection with a shorthold tenancy (£4,770). The parties were unrepresented below. Mr James Browne now appears for the Appellant and Mr David Giles appears for the Respondents. Permission to appeal was given by Griffiths Williams J on 21 December 2010.
The judge's decision pre-dated by several months the Court of Appeal's judgment in the conjoined appeals of Tiensia v Vision Enterprises Ltd (t/a Universal Estates) and Honeysuckle Properties v Fletcher and others [2010] EWCA Civ 1224 which was handed down in November 2010.
Chapter 4 of Part 6 of the Act is headed Tenancy Deposit Schemes. As explained in Tiensia, it set up tenancy deposit schemes to safeguard tenancy deposits paid in connection with assured shorthold tenancies, provided for the imposition of sanctions (that is the payment of three times the deposit under section 214(4)) for the failure to comply with the requirements of such schemes and set up structures to facilitate the resolution of disputes in connection with such deposits. The schemes are either custodial ones in which an amount representing the deposit is paid by the landlord into a designated account and held by the scheme administrator until it falls to be paid back (either wholly or in part) to the landlord or tenant; or insurance-based in which the landlord keeps the deposit but its return is protected by insurance cover maintained by the scheme administrator.
As well as safeguarding a deposit, it is provided by section 213(5) of the Act (see below) that a landlord who has received such a deposit must provide the tenant with certain prescribed information the particulars of which are set out in The Housing (Tenancy Deposits) (Prescribed Information) Order 2007.
The effect of the decision in Tiensia in short, is that the landlord has until the date of the hearing to comply with the dual obligations of safeguarding the deposit and providing the prescribed information. Provided by that date he has done so, no sanction can be imposed under section 214(4) of the Act.
Unusually in this case, the deposit was paid late, and after Miss Potts had given notice of termination of the tenancy. She then refused the Respondents' offer to pay the deposit back to her directly, required it to be paid into a custodial scheme, and then issued this claim shortly afterwards. In the result, the deposit was not paid into a custodial scheme until two days after the tenancy had come to an end, though nearly a year before the date of the hearing. The prescribed information was not provided to Miss Potts at all. The judge decided there had been a technical breach of the requirement to secure the deposit. She refused nonetheless to impose the sanction laid down by section 214(4) of the Act on the grounds that in the unusual circumstances of the case, it would not be in the interests of justice to do so. She did not deal with the issue of prescribed information at all.
Two main issues are raised by this appeal. First it is said by the Appellant that the judge was correct to conclude there had been a breach of the requirement to secure the deposit, because notwithstanding the decision in Tiensia even if a deposit is paid before the hearing, the initial requirements of the scheme cannot be complied with after a tenancy has come to an end. The judge however had no discretion to refuse to impose a sanction once she had decided there had been such a breach and it thus follows she was wrong to refuse the application for £4,770. It is not suggested by the Respondents that the statute permits the exercise of any such discretion as the judge purported to exercise. However the Respondents seek to uphold the judge's decision on a different ground, namely, that following the decision in Tiensia the Respondents had until the hearing of the application to secure the deposit: this they did, and therefore they had a complete defence to the section 214(4) application.
The second issue raised is whether the judge erred in failing to deal with the issue of prescribed information. The Appellant says she erred, because a claim was made in the court below that the prescribed information had not been provided to the Appellant: if the judge had addressed that issue, she would have been bound to impose a sanction on the Respondents for not providing it, as it is common ground they never did so. The Respondents dispute whether such a claim was made; and if it was not, they say it is too late to raise the issue now.
The statutory framework
Sections 212 to 215 of the Act provide as follows:
" 212 Tenancy deposit schemes
(1) The appropriate national authority must 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.
(2) For the purposes of this Chapter a "tenancy deposit scheme" is a scheme which–
(a) is made for the purpose of safeguarding tenancy deposits paid in connection with shorthold tenancies and facilitating the resolution of disputes arising in connection with such deposits, and
(b) complies with the requirements of Schedule 10.
(3) Arrangements under subsection (1) must be arrangements made with any body or person under which the body or person ("the scheme administrator") undertakes to establish and maintain a tenancy deposit scheme of a description specified in the arrangements.
(4) The appropriate national authority may–
(a) give financial assistance to the scheme administrator;
(b) make payments to the scheme administrator (otherwise than as financial assistance) in pursuance of arrangements under subsection (1).
(5) The appropriate national authority may, in such manner and on such terms as it thinks fit, guarantee the discharge of any financial obligation incurred by the scheme administrator in connection with arrangements under subsection (1).
(6) Arrangements under subsection (1) must require the scheme administrator to give the appropriate national authority, in such manner and at such times as it may specify, such information and facilities for obtaining information as it may specify.
(7) The appropriate national authority may make regulations conferring or imposing–
(a) on scheme administrators, or
(b) on scheme administrators of any description specified in the regulations,
such powers or duties in connection with arrangements under subsection (1) as are so specified.
(8) In this Chapter–
"authorised", in relation to a tenancy deposit scheme means that the scheme is in force in accordance with arrangements under subsection (1);
"custodial scheme" and "insurance scheme" have the meaning given by paragraph 1(2) and (3) of Schedule 10;
"money" means money in the form of cash or otherwise;
"shorthold tenancy" means an assured shorthold tenancy within the meaning of Chapter 2 of Part 1 of the Housing Act 1988 (c. 50)
"tenancy deposit", in relation to a shorthold tenancy, means any money 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) In this Chapter–
(a) references to a landlord or landlords in relation to any shorthold tenancy or tenancies include references to a person or persons acting on his or their behalf in relation to the tenancy or tenancies, and
(b) references to a tenancy deposit being held in accordance with a scheme include, in the case of a custodial scheme, references to an amount representing the deposit being held in accordance with the scheme.
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...
To continue reading
Request your trial
-
Suurpere v Nice
...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 't......