[Update 26/11/204. Rather gloriously and hilariously rudely, the RLA have replied. Their response and an explanation of why they are shooting themselves in the foot is now at the end of this post]

As the second reading of the Teather bill on retaliatory eviction approaches, some Landlord organisations have been in a bit of a tizzy. Notably getting their knickers in a twist are the RLA. They have a campaign page linking to a briefing paper that they have sent to MPs. Remarkably, this briefing paper asserts that retaliatory evictions are already illegal and tenants have a defence to s.21 possession proceedings accordingly. So, the RLA assert, no more legislation is required.

How exciting! The RLA have apparently found a defence to s.21 possession claims! I was agog.

So, how do they reach this conclusion? One that has escaped housing lawyers everywhere? From the briefing paper:

In June, the Competition and Markets Authority issued guidance on the relationship between landlords and tenants. This guidance makes clear that under the terms of the 2008 Unfair Trading Regulations, coming from the Consumer Protection Act, it is a breach of these where “any commercial practice that, in the context of the particular circumstances, intimidates or exploits consumers such as to restrict (or be likely to restrict) their ability to make free or informed choices in relation to a product, and which cause or are likely to cause the average consumer to take a different transactional decision. These are known as aggressive practices.”

• In the examples of what could constitute aggressive practices, it includes, “Threatening the tenant with eviction to dissuade them from exercising rights they have under the tenancy agreement or in law, for example where they wish to make a complaint to a local authority about the condition of the property, or seek damages for disrepair.”

• There is also a body of legislation that protects tenants from harassment by their landlords. As Shelter itself has noted in a paper published in September 2011, “The Protection from Eviction Act 1977, the Criminal Law Act 1977 and the Protection from Harassment Act 1997 make harassment and illegal eviction criminal offences. Harassment includes threatening or intimidating tenants. Illegal eviction involves forcing tenants from their home without having followed due process.”

• If a section 21 notice is given and Court proceedings are taken to evict a tenant in retaliation for a complaint about the property the landlord would be committing a criminal offence by pursuing the claim. As the landlord is acting illegally, they can defend the claim. The Courts should not help a landlord who would be committing a criminal offence by evicting the tenant. This is known as the common law defence of illegality.

Oh dear.

As far as I can see, the argument runs something like this. Threatening a tenant with eviction for complaining is a breach of The Consumer Protection from Unfair Trading Regulations 2008 according to CMA guidance (see page 27 of the Guidance [pdf]), which gives as an example of aggressive practice:

And there are potential civil and criminal offences for aggressive practice. What the RLA don’t tell you (or MPs) is what can happen about a breach. From Chapter 10 of the Guidance.

10.1  If you do not comply with the legislation you may face enforcement action.

10.2  Local authority trading standards services, the Department of Enterprise, Trade and Investment in Northern Ireland (DETI) and the CMA all have powers to enforce the consumer protection legislation referred to in this guidance.

So, the tenant can’t enforce a breach.

But in any event, what is given as an example is threatening the tenant with eviction. Not actually serving notice. There is a good reason for that. Serving a s.21 in a way permitted by statute cannot be “the use of harassment, coercion or undue influence”, which is at the centre of the definition in the regulation.  So the Unfair Trading Regs don’t do what the RLA suggest they do. Threats, yes. Service of a notice, no.

No matter, let us press on. It seems that what they go on to say is that evicting a tenant for complaining about repairs is harassment. What they don’t mention is that harassment under the Protection from Harassment Act requires a course of conduct – at least two acts – to be a breach. Service of a s.21 per se wouldn’t be harassment.

However, there is actually a kind of precedent for possession claims as harassment.  Carlos Allen v London Borough of Southwark  [2008] EWCA Civ 1478 [our note] established that issuing possession claims may amount to harassment. In that case, Southwark had issued 5 claims over 8 years, each on the same ground and each failing for the same specific reason, which they did not correct. Crucially, the first claim was not capable of being harassment, it was that the subsequent 4 were issued without correcting the error so that they were bound to fail. But, while the Court of Appeal found that conduct may amount to harassment, in the end, Mr Allen lost.

What there isn’t is any precedent that a claim of harassment would amount to a defence to a private sector possession claim via s.21.  In fact, as we will see, quite the reverse.

I’m not entirely sure why RLA have thrown in mention of the Protection from Eviction Act 1977. S.3 PEA doesn’t apply to assured shorthold tenancies and s.1 applies to unlawfully depriving the tenant of occupation. A possession claim following s.21 notice is, of course, lawful. So PEA is completely irrelevant to what they are on about. The ‘acts calculated to interfere with peace or comfort of occupier’ in s.1(3) can’t extend to the exercise of a contractual and statutory right in service of a notice.

But, for the sake of argument, let us assume that bringing a retaliatory eviction possession claim could be part of a course of action amounting to harassment for the purposes of the Protection from Harassment Act 1997. Let us assume that this would be a criminal offence. What then?

What RLA appear to be saying is the Court would not assist the landlord  to carry out an unlawful act. Well yes, that is a fairly trite point. The trouble is that serving a s.21 notice and bringing the possession claim is not solely a criminal act, even if we accept that it might be part of a course of conduct amounting to harassment. It is also a contractual and statutory right. So the landlord would not have to rely on the unlawful act for the possession claim.

Thus Chapman v Honig [1963] 2 Q.B. 502 in which the tenant had given evidence in another tenant’s claim for trespass against the landlord. The landlord served notice to quit on the tenant the next day. The tenant brought a claim alleging that the landlord’s action in serving notice was in contempt of court for victimising a witness. The tenant was successful at first instance, but the Court of Appeal held

the notice to quit was a valid exercise of the landlord’s contractual rights vis-à-vis the tenant and effective to terminate the tenancy, and his vindictive motive for serving it was irrelevant

and

The same act cannot at the same time as between the same parties be both a lawful exercise of a contractual right and a tortious act giving rise to a claim for damages.

For good measure, and assuming the RLA are thinking of ex turpi causa, we could throw in Tinsley v Milligan [1993] 3 All ER 65, [1994] 1 AC, a property rights case, which broadly held that a claimant will fail on grounds of illegality only if his claim requires him to rely upon or plead an illegal act. Service of a notice which the landlord is contractually and statutorily able to serve is not an illegal act.

There is, then, a good reason why the courts aren’t full of tenants relying on their landlord’s harassment in evicting them as a defence to s.21 possession proceedings. It can’t be done and isn’t a defence.

Of course, some MPs might actually believe their briefing paper. So it might be an idea for people to make sure MPs are aware that the RLA assertions are legally nonsense.

And who on earth came up with that stuff?

Update: I’ve been putting this to the RLA on twitter. I don’t think they want to respond really. So far it looks like this…

In which @RLA_News tell MPs there is an existing defence to retaliatory eviction via s.21, but, well, there isn't. http://t.co/j54hJL3VaM

— Nearly Legal (@nearlylegal) November 17, 2014

@nearlylegal We oppose retaliatory eviction but better ways than Teather – stronger consumer protection is good for tenants & landlords

— RLA Landlord News (@RLA_News) November 17, 2014

.@RLA_News Not answering the point. You said there is an existing defence. There isn't. Will you continue to mislead in your briefing?

— Nearly Legal (@nearlylegal) November 17, 2014

But answer came there none. And the page and the briefing are still up.

Making a mistake is one thing. Not correcting it is another…

[Update. After a week, on 25 November 2014, the RLA responded. And though I don’t like to use the blog to do the feuding and the fighting, their response is simply too gloriously entertaining not to include here. With commentary by me.

We see it clearly, Nearly!

Shurely it is Nearly Legal not the RLA who are mistaken:

Nearly Legal challenges the RLA Briefing which argues that, as retaliatory eviction is already unlawful as an aggressive practice under the Consumer Protection Regulations (CPRs), so a Section 21 notice should not be upheld by the Courts where served by a landlord because a tenant has raised a complaint. We can see where Nearly Legal’s sympathies lie. First of all Nearly Legal thinks we are in a “tizzy”. This is wrong – we are rightly extremely concerned that under Sarah Teather’s Bill there would be a presumption that any landlord serving a Section 21 notice after a complaint about disrepair is guilty of retaliatory eviction. This means that the landlord has to allow the tenant to remain for a further six months at least. Where is the justice if there is to be no opportunity for a landlord to demonstrate legitimate reasons for serving the Section 21 notice? The Bill’s approach is fundamentally wrong, so our concerns are hardly something that should be condescendingly dismissed.

This is an extremely interesting approach. If the RLA are seriously arguing that the validity of a s.21 notice should be based on the landlord’s intentions – whether they have a ‘legitimate reason’ for seeking a s.21 based possession, perhaps we should encourage them. Because there are a whole host of defences to a s.21 possession claim that could arise once the validity of the landlord’s purpose is an issue for whether possession should be granted. Alternatively, they really haven’t thought this through. i suspect the latter.

Nearly Legal makes much of our suggestion that retaliatory eviction could amount to harassment under the Protection from Harassment Legislation. We are fully aware of the need for a minimum of three incidents but a landlord engaged in the unacceptable practice of retaliatory eviction may well make repeated threats so it is quite possible that that landlord could also be guilty of harassment, giving rise to a further potential defence.

That is two incidents, not three, suggesting not fully aware. Still completely missing the point that serving a s.21 that the landlord is contractually and statutorily entitled to serve cannot be at the same time an act of harassment as far as the lawfulness of the service is concerned. Chapman v Honig (a case that this response completely ignores. Unsurprisingly, as it is completely fatal to their argument).

As the RLA’s separate technical briefing demonstrates, based on Competition and Markets Authority Guidance, threatening retaliatory eviction is an aggressive practice and serving a Section 21 notice, even without threats in these circumstances, is an unfair practice because the landlord serving the notice on a consumer would be in breach of the requirement for professional diligence. Both are criminal offences under CPRs.

Let us take this step by step.

1. The guidance is merely guidance. It actually says so, right at the start. it is not a guide to the law and has no weight at all in what a court might decide.  Waving it around as if it was statute is just nonsense.

2. So what if – a very, very big if – we agree with the RLA’s interpretation that serving a s.21 notice ‘in response to a tenant or tenants raising legitimate complaints about the state of the property’ is an ‘aggressive act’ under the meaning of Regulation 7 (which it probably isn’t, because it isn’t “the use of harassment, coercion or undue influence” required, regardless of what the guidance-which-isn’t-law says). If they were right (which they aren’t) it might be a criminal breach of the Regs. But the tenant can’t prosecute it. And it is not, unlike, say, the Equality Act, a statutory basis for a defence to possession – see below.

So, the tenant can’t prosecute and it is not a civil defence. The tenant therefore can’t prove that the service of a s.21 was an unlawful act (to the criminal burden of proof, of course, not the civil one) and thus there is no defence.

1. That is even before we get back to the absolutely fatal point for the RLA’s argument. Chapman v Honig. How to do they avoid it?

Nearly Legal says that despite this the Court would still uphold a Section 21 notice and evict the tenant. Wrong again. The Blog relies on a House of Lords decision in Tinsley v Milligan. This case is about a completely different situation dealing with ownership of a property under equitable principles. The decision addresses the impact of illegal conduct when it comes to rebutting the presumptions of advancement or the existence of a resulting trust. It has nothing directly to do with a landlord who commits a criminal offence when pursuing a Section 21 possession claim.

Why yes, they avoid it by ignoring it completely. pretending it doesn’t exist as good law by the Court of Appeal. The point of Chapman v Honig is quite simple. If an act is both potentially an unlawful (even criminal) act, and at the same time an act which is contractually and/or statutorily legitimate, then it cannot be both at the same time, and the statutory and/or contractual right will prevail. That case involved someone whose defence to possession was that the notice to quit was harassment of a witness and contempt of court – a serious criminal offence.  (Not a made up maybe offence via guidance to Regulations).  Tinsley involved a similar point – if the claimant doesn’t have to rely on an unlawful act, because it is also a lawful one in a different way, then the unlawful part is disregarded.

Nearly Legal conveniently omits to mention the analogous situation of disability related discrimination as it affects Section 21 notices. Surprising, when Nearly Legal have a detailed blog on this very subject. In Malcolm v London Borough of Lewisham the majority of the Judges in the House of Lords stated that a disabled tenant served with a Section 21 notice could successfully defend a Section 21 notice where it was served due to a disability related reason. Thus, as a landlord guilty of the statutory tort of disability related discrimination would fail, so surely it is even more likely where the landlord is guilty of a criminal offence under CPRs? The Court would be carrying out the landlord’s criminal conduct for him.

Oh where to start! First, when correcting me on something I have written about, it helps to actually get it right. So, Malcolm v Lewisham in the House of Lords:

1. It was not a s.21 case, but a loss of security of secure tenure and NTQ case

2. Malcolm lost and was evicted.

3. The House of Lords judgment did such damage to disability discrimination and discrimination as a whole that it brought about the Equality Act 2010 to fix it.

Now, it is, as I said above, trite law that the courts will not assist an unlawful act. The question is whether the act is wholly unlawful – per Chapman v Honig and Tinsley v Milligan.

The Equality Act does indeed provide a defence of disability discrimination to possession proceedings, including s.21. This is because there is primary legislation that says so. It says so at s.35(1)(b).  This is an unlawful act which cannot be covered by other lawfulness, because the statute says so.

But – and this is key again – for a discrimination defence to a s.21 possession case,  the tenant would have to prove either that the landlord had served a s.21 because of their disability (or other protected characteristic) or for a reason arising in consequence to their disability, and that it could not be a proportionate means of achieving a legitimate aim.

To the best of my knowledge, there have been no defences to s.21 possession proceedings on the basis of disability discrimination under the Equality Act that have succeeded at Court. Of course many may have settled, but there has been no judgment that I know of. And one reason is that it requires the tenant to prove the landlord’s reasons for serving the notice. And of course the landlords lie.

All the risk, the expense and the effort is placed upon the tenant in defending proceedings, and they are required to establish something close to impossible to evidence, the landlord’s state of mind, unless the landlord is so bloody stupid as to admit it.

So this is a)  not a good model and b) invites changing s.21 to require the landlord to show grounds. Oddly, the RLA seem to agree (though I don’t think they realise it).

Nearly Legal sneeringly conclude by asking where we get this stuff from. Answer – no less eminent figures than the former Senior Law Lord, Lord Bingham and the current President of the Supreme Court Lord Neuberger. Lord Bingham says in Malcolm “The Courts cannot be required to give legal effect to acts proscribed as unlawful”. Lord Neuberger says in the context of disability discrimination “if the service of the Notice to Quit… was unlawful… then the Court could not give effect to it. If, by seeking an order for possession, a landlord has acted in a way the legislature has held to be unlawful then again the Court cannot make such an order. In either case the Court would be permitting, indeed facilitating, an unlawful act”. Both are supported by Lady Hale.

Trite law. And not the point, as even a simple minded reading of the post above should have made clear. What I asked was where and whom the cloud cuckoo land ‘existing defence to s.21′ came from.

Nearly Legal argue that we rely on this to suggest that the Bill is not necessary at all. Wrong yet again. Nearly Legal really should read our briefing properly.

Oh don’t make me quote your briefing at you. What I said was virtually word for word.

We argue that to put matters beyond doubt the Teather Bill could be used to put the illegality defence on a statutory footing. This would establish a targeted defence to deal with actual cases of retaliatory eviction on a case by case basis; rather than treating all landlords, good and bad alike, as automatically guilty of retaliatory eviction. The Teather Bill seeks to replace one injustice with another. This must be seen for what it is; an attempt to undermine Section 21 and give unscrupulous tenants an opportunity to delay an eviction, even if they are guilty of serious anti social behaviour or major breaches of their tenancy obligations.

And back to my first point. Do the RLA really want a defence to s.21 based upon the landlord’s intention in serving it placed on the statute book? Do they really want to open up the arena of the validity of a s.21 notice depending on the landlord’s intention in serving it?

Because if they were worried about tenants ‘misusing’ the provisions of the Teather Bill, the scope for defending a s.21 claim (even if not necessarily successfully) on the basis of the landlord’s bad illegitimate intentions in serving the s.21 is much, much wider.

The experience of the Equality Act is that any such statutory defence to s.21 should require the landlord to demonstrate their reason for seeking eviction. After all, if as the RLA argue, landlords who have failed to carry out required repairs still may have ‘legitimate reasons’ for serving a s.21, can there be any harm in insisting that the landlord prove those reasons in order to get possession?

It remains the case that the RLA’s argument on an ‘existing defence’ to s.21 proceedings does not stand up. But what is thoroughly entertaining is that they really haven’t thought through what their proposal means. Because it means considering the landlord’s intention, and whether it is valid, in serving a s.21 notice.

@Nearlylegal You say change S21, we say stronger consumer protection http://t.co/FXADOnuhDV 2/2

— RLA Landlord News (@RLA_News) November 26, 2014

@RLA_News Do you really want to open up the LL's intentions in serving a s.21 as a question in possession proceedings? That is your proposal

— Nearly Legal (@nearlylegal) November 26, 2014

Charalambous & Anor v Maureen Rosairie Ng & Anor [2014] EWCA Civ 1604

The Court of Appeal has again thrown the cat among the tenancy deposit protection pigeons.

In Charalambous it had to grapple with the, admittedly fairly rare scenario, of a deposit taken entirely before the tenancy deposit protection schemes came into force where the tenancy had become periodic also prior to the protection schemes coming into force. To be clear in Superstrike v Rodrigues the deposit had been taken before the schemes came into force but the tenancy had then become periodic after the schemes came into force. Following Superstrike most commentators, me included, took the view that as there had been no receipt of the deposit during the time in which the tenancy deposit protection rules were in force there was no issue. Clearly we were wrong, at least LJ Lewiston who gave the sole decision thinks so.

Facts
Here N had given a tenancy which commenced in August 2002 for a fixed terms of one year. It was renewed for a further year in 2003 and 2004 then from 2005 became a statutory periodic tenancy and remained so. A notification under s21, Housing Act 1988 was served in October 2012. It was held valid at first instance and the tenants appealed.

Financial Penalties
There was no suggestion by the Court that the landlord was liable for any of the financial penalties. It was argued for N that she was not liable for the penalties under s213 and s214 and that the law should not be interpreted in such a way as to suggest that Parliament had intended that those penalties should apply to N immediately on the legislation coming into force. There was a fair bit of discussion here as to the nature of retrospective legislation. The upshot of this is that the Court made clear that retrospective legislation is possible but it must be clear that this is what Parliament intended.

S213 or S215
The Court resolved this issue by agreeing that s213 did not apply here as the deposit had not been received by the landlord at a time when the legislation applied. Accordingly, Parliament had not applied any form of retrospective penalty. However, the Court did not accept the follow on argument that s213 and s215 were inextricably linked such that a landlord could only be liable for penalties under s215 if they had fallen foul of s213. This is an interesting point. It is accepted that a landlord can be liable for penalties under s213 where they are not liable under s215 if they have acted to rectify their mistake in one of the ways permitted by s215. However, the Court has now created the converse situation. It looked closely at s215 which now reads:

215 Sanctions for non-compliance

(1) Subject to subsection (2A), if a tenancy deposit has been paid in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy at a time when–

(a) the deposit is not being held in accordance with an authorised scheme, or
(b) section 213 (3) has not been complied with in relation to the deposit.

(2) Subject to subsection (2A), if section 213 (6) is not complied with in relation to a deposit given in connection with a shorthold tenancy, no section 21 notice may be given in relation to the tenancy until such time as section 213 (6) (a) is complied with.

(2A) Subsections (1) and (2) do not apply in a case where—

(a) the deposit has been returned to the tenant in full or with such deductions as are agreed between the landlord and tenant, or
(b) an application to the county court has been made under section 214 (1) and has been determined by the court, withdrawn or settled by agreement between the parties.

The Court made much of the phrase “at a time” in s215(1). It held that this phrase meant that there might be “a time” when the requirements of s215(a) or (b) had not been complied with even if there was a previous time when they had been. Additionally, it held that the two obligations in s215(a) and s215(b) were disjunctive. A landlord had to meet both of them to avoid the penalty applying. There was some discussion about whether the landlord had met the requirement in s215(b) but the Court declined to rule on this definitively as it was not required. It indicated that if it had to rule it would probably have concluded that the requirement in s215(b) had not been breached as N was not obligated to protect the deposit under s213. However, the Court ruled that the requirement in s215(a) was breached because the deposit was not being held within an authorised scheme. Accordingly, therefore it took the view that the notification served by the landlord under s21 could not be valid because of the clear restriction in s215(1) and the fact that the landlord had not been able to rely on any of the savings found in s215(2A).

Retrospection and the Order
The Court drew further support for its conclusion on the main point and on the retrospective penalty argument from the wording of the Localism Act 2011 (Commencement No. 4 and Transitional, Transitory and Saving Provisions) Order 2012. This brought the amended tenancy deposit provisions provided by the Localism Act into force on 6 April 2012. However, a provision contained in Article 16 of that Order which held that the amendments would apply to any assured shorthold tenancy “in effect on or after 6th April 2012″. The Court found that it was clear from this provision that Parliament fully intended at the time of the Localism Act being introduced, if it did not before, that there should be a degree of retrospection about this matter and that the penalties should bite to some degree on all tenancies then in existence. It gained yet more support from this because the Article gave a “grace period” for landlords to resurrect their position of 30 days from 6 April 2012 when they could place a tenancy deposit into an authorised scheme.

I should mention that the Court appeared to indicate that it would have taken the same view irrespective of whether it was considering the law under s213 and s215 as originally enacted or whether it was considering the law, as it was, after amendment by the Localism Act 2011.

Deregulation and Amendment
Interestingly, the deposit legislation is in the process of being amended (again) by way of s30 of the Deregulation Bill which has recently finished its committee stage in the Lords. This inserts new sections 215A to 215C into the Housing Act 2004 primarily to resolve issues caused by Superstrike. Initially I though that this might also resolve the problems in this case. Unfortunately it doesn’t. As the Court of Appeal itself noted the Deregulation Bill changes do not fix this situation. S215A which has the potential to resolve the issue does not resolve this issue because it only protects landlords where a deposit was taken prior to the introduction of the tenancy deposit legislation (s215A(1)(a)) and the tenancy became periodic “on or after” 6 April 2007 (s215A(1)(b)). The Court of Appeal has pointed out that the vehicle is there to fix the issue. From my reading of the Deregulation Bill changes the fix is actually easy. If the wording of s215A(1)(b) is altered so that instead of beginning “on or after” it begins “before or after” that would resolve the issue immediately. Whether the government will do this remains to be seen. I don’t doubt that there will be lobby groups encouraging them strongly to do so.

Comments
One other side point worth noting is that in the past there has been some doubt as to what the situation is if a landlord protects a deposit with a scheme but, due to the landlord no longer paying he scheme membership fee for example, that protection terminates. Arguably the penalties under s213 and s214 do not bite because at the trigger event, the receipt, the landlord had dealt properly with the deposit and there does not immediately appear to be an ongoing obligation in those sections. However, it is clear from this decision that the penalties under s215 would bite and a landlord would not in that case be able to serve a notification under s21.

For those (relatively) few landlords breathing a sigh of relief because they see themselves as not being captured by Superstrike this will be a worrying decision. They will not be caught by the financial penalties but they will now have to return the deposit or protect it in order to avoid being unable to recover possession of their properties using the powers provided by s21, Housing Act 1988.

As a final aside this decision also means that the decision in R(Tummond) v Reading County Court must be incorrect.

Appeal allowed, possession on notification under s21 set aside as the notification is invalidly served.

With grateful thanks to Jan Luba QC and HHJ Madge’s housing update in the December 2014/January 2015 Legal Action, here are a few recent County Court cases on unlawful eviction and harassment.

Alabbas v Uppelle. Leicester County Court, 8 October 2014
Mr Alabbas was Ms Uppelle’s assured shorthold tenant from April 2008. In April 2009, Mr A complained to Ms U that water was leaking through to the kitchen from the bathroom. The ceiling partially collapsed as a result. Ms U did nothing.

Mr A complained to the local council’s environmental health department. When the EHO contacted Ms U about the issue, Ms U served a purported notice on Mr A. He had this checked and found it was not valid notice. Ms U than rang Mr A several times telling him to leave, including two calls in which she swore at him and made threats down the phone that his legs would be broken if he did not go. Mr A stayed put.

In September 2009, Mr A was thrown out of the property by four men, found to be acting at the instigation of Ms U. They let themselves in using a key. One man had a knife. They shouted racist abuse, punched and beat Mr Alabbas and threatened to kill him. They told Mr A that the reason he was being evicted was that he owed rent.

Mr A went to hospital, where he then stayed overnight. He sustained soft tissue injuries to his nose with a lasting small scar. He was treated for PTSD over the next two months.

He spent the next 16 days street homeless, sleeping in the doorway of a local mosque, before then moving into unsuitable hostel accommodation (his own room but shared facilities with at least 10 others) for a further 160 days.

At trial, Miss Recorder McNeil QC awarded damages in the total sum of £34,209, made up of:
£1,000 for the pre-eviction harassment;
£4,950 for the first 16 days post-eviction, during which time he was street homeless, calculated at £330 per night (being at the top end of the usual scale and with the addition of a further ten per cent – Simmons v Castle;
£17,600 for the 160 days during which he was in a hostel, calculated on the basis of £110 per night for the whole of that period (for the whole period as Mr A had attempted to mitigate his losses by searching for alternative accommodation).
The Recorder was also satisfied that it would have taken Ms U a significant period of time to evict Mr A lawfully given that no valid s.21 notice had been served as at the date of the unlawful eviction;
£300 for the disrepair;
£3,000 for the personal injuries;
£3,000 aggravated damages;
£2,500 exemplary damages [The basis for this presumably being the cost of a lawful eviction – NL];
£230 special damages; and
£1,629 interest.

Bitan v Holme, Stockport County Court, 14 April 2014
Ms Holme was Mr Bitan’s assured shorthold tenant. In about 2012, Ms H complained of disrepair. There was water leaking from the bathroom into the property’s dining room, and draughts through a hole in an exterior wall and a defective window. The ceiling in the dining room began to perish, and Ms H became anxious about her family’s safety. A later surveyor’s report identified many other items of minor disrepair.

Mr B did nothing and Ms H threatened to withhold rent. Mr B then became difficult and abusive, regularly telephoning and knocking on the door of the property. On several occasions, two large men attended the property and told Ms H she would be evicted and made homeless with her children.

Mr B claimed possession against Ms Holme. Ms H counterclaimed for breach of covenant for quiet enjoyment, harassment, housing disrepair and breach of statutory tenancy deposit provisions. The possession claim was struck out [Possibly because of the failure to serve the deposit prescribed information – NL] and the counterclaim proceeded to trial.

Deputy District Judge Buckley awarded damages of:

£2,592.94 for a course of conduct of harassment in breach of Protection from Harassment Act 1997 s1. (Updating the figure recorded in Fakhari v Newman June 2010 Legal Action 35 and a ten per cent uplift (Simmons v Castle));
£1,525.38 exemplary damages, including interest [It is not at all clear on what basis exemplary damages were awarded. See below – NL];
£5,783.22 were awarded for the disrepair, based on a diminution of the monthly rent of £550 by 40 per cent over a period of 23.5 months, plus an uplift of ten per cent (Simmons v Castle), and an award of interest. An order for specific performance was also made.
£1,000 for breach of HA 2004 s213(6) (failure to provide information about the tenancy deposit).

Comment

It is good to see the Simmons v Castle uplift being applied to unlawful eviction and harassment damages, as well as disrepair. Also good to see the top end daily rate of £300 (plus 10%) being applied for unlawful eviction.

The basis for exemplary damages in Bitan v Holme is not clear. If it is on the harassment claim, it is hard to see how this could be considered ‘profit-seeking’ conduct, unless there was unlawful eviction or threatened unlawful eviction included. Given the absence of aggravated damages, maybe this is another case of confusion between aggravated and exemplary damages? If anyone involved can shed some light, I’d be grateful.

With very grateful thanks to Beatrice Prevatt’s annual disrepair update in the December 2014/January 2015 Legal Action, here is a bumper pack of County Court cases and settled cases on damages for disrepair.

Armes v Wheel Property Co Ltd, Clerkenwell and Shoreditch County Court, 17 May 2013
Claimant had been the protected tenant of a two bed flat in a Victorian terrace conversion for 30 years. Current rent was £191 per week.

There was dampness to walls and floors in the living room, kitchen, bathroom and one of the bedrooms for many years. This had caused some plaster to ‘blow’. The housing file recorded a number of leaks into the property from various sources and the tenant asserted that she had notified her landlord about these.

Following the tenant starting a claim, dehumidifiers were installed at the property in August 2012 to confirm that the damp found in April 2012 was not caused by a flood, which took place in August 2011. The parties’ experts subsequently agreed that the property suffered from disrepair caused by penetrating/ rising dampness and agreed a schedule of remedial works.
The matter went to trial where the landlord disputed notice, but lost on that point.
The judge awarded £18,161 and ordered specific performance of the schedule of works.
Damages were:
General damages of £15,701 (6 years x 30 per cent rental liability reduction).
Special damages of £2,460.

Nzau v Gani, Croydon County Court, 21 November 2013
Private tenancy commencing in late 2006. The Claimant tenant was evicted in August 2012. Monthly rent of £1,150.

The Claimant alleged damp and water penetration from the start of the tenancy to the kitchen and bathroom (partly situated under a balcony). There were also historic issues with a defective boiler, and other more minor issues. In February 2011 the Council had served an abatement notice (s.80 EPA 1990) requiring the water penetration to be addressed.

At trial of the claim, Deputy District Judge McCloskey found the landlord liable for the water penetration into the kitchen and bathroom as well as the heating defects, from January 2007 [allowing a reasonable period to remedy, presumably. Though if the defects preceded the tenancy, this is surely questionable. – NL].

Damages for the water penetration were discounted by 50 per cent because there was no conclusive evidence from either side about whether the damp at the property was a mixture of condensation damp and penetration damp.

Damages: Water penetration: Over the 24-month period from January 2007 to December 2008, general damages were assessed at ten per cent of rent (following the 50 per cent discount), making an award of £975. For the period from January 2009 to March 2012, when there was more disrepair at the property, damages were assessed at 50 per cent, which was reduced to 25 per cent to account for condensation, giving damages of £7,717.
For the period from April 2012 to August 2012, damages were assessed at five per cent, which was discounted to 2.5 per cent, giving a figure of £101.
Total award of £8,793 for water penetration.
Defective boiler awarded damages of £10 per week from November 2006 to October 2009.
(Averaged over the year). Total: £1,560.
Special damages claim, (reduced by a third) in the light of the condensation: £550.
Overall total £10,903.

Clark v Affinity Sutton Homes Ltd, Barnet County Court, 28 March 20146
Claimant was the tenant of a one-bedroom flat from 29 November 2004 until 10 February 2014 when he was decanted. The tenant brought a claim alleging damp penetration from January 2007. The Defendant had carried out remedial works in 2008 and again in January 2013, but without resolving the issue.

The expert evidence found water penetration to the bathroom with condensation dampness and mould growth to the living room, bedroom and kitchen. However, following the claimant’s decant (and shortly before trial) it was found that the damp problems had been caused by a defective damp proof course.

The claimant suffered from poor health. He had had chronic obstructive pulmonary disease since 2006, rheumatoid arthritis since 2007 and also had bladder cancer.

A default judgment was obtained against the defendant on 14 October 2013. Remedial works were carried out in 2008 and again in January 2013. The expert evidence records water penetration to the bathroom with condensation dampness and mould growth to the living room, bedroom and kitchen. However, following the claimant’s decant it was found that the damp problems had been caused by a defective damp proof course.

Deputy District Judge Gillman awarded damages for the period 1 April 2007 to 31 August 2008 at 30 per cent of the rent and for the period from 1 January 2012 to 10 February 2014 at 45 per cent of rent. No award for the period from September 2008 to January 2012, as the Court found that on the balance of probabilities it was unlikely that there were any significant problems in this period. There were no complaints logged during this period and not a single e-mail, although there had been extensive e-mail correspondence in 2007 and again in 2012/13.

General damages were £6,779.88, which was uplifted by ten per cent (Simmons v Castle) to give a total general damages award of £7,457.86.
Special damages £2,667.60 (discounted the figures claimed by 25 per cent for depreciation, save in respect of the carpet, which was allowed in full as it would be difficult, if not impossible, to purchase second-hand carpets).
Plus £20 per week for the use of a dehumidifier 24 hours a day for eight weeks (having received details of average running costs).
Plus £5 per week for additional heating costs for 183 weeks in the six years claimed.
Total special damages £3,742.60.
Total award: £11,200.46.

Wade v Dormeuil, West London County Court, 8 August 20148
Private tenant of a two-bedroom flat, from 19 October 2010 until 12 October 2013. Rent £18,000 pa (£1500 per month). Landlord brought possession proceedings and tenant counterclaimed in respect of disrepair.

The tenant sought damages for a defective roof/gutters causing water penetration to the rear bedroom and hallway, with some intermittent penetration to the main bedroom and some current dampness to the living room, a defective flush to the toilet, two gas leaks resulting in the lack of hot water for five days, a slow water flow into the water tank, defective and cracked plaster, defective windows to the living room, a defective radiator and some external defects, namely, defective gutters, cracks to the render and rot to the joinery.

The defence to the counterclaim was struck out and the case proceeded solely on the basis of the tenant’s evidence.

District Judge Rowlands found all the claims made out and identified the three main claims as follows:
The damp and cold to the living room, which meant the tenant had to buy additional covers to sit underneath.
The problem with the toilet, which did not flush to the extent that the tenant had to use plastic gloves to clear the toilet for approximately two years.
The damp to the second bedroom, which could not be used for any purpose.

He took account of the fact that the tenant had moved in with her autistic son, who was then aged four, to give him more space, and had been distressed at not being able to give him the experience she wanted. He questioned why the tenant had not given up the tenancy [this is surely nonsense, no requirement to give up tenancy as mitigation] but accepted that she was unable to raise a deposit, would have had difficulty finding other accommodation, and was realistic in her hope that taking proceedings would have caused the disrepair to be rectified.

Damages:
General damages: 40 per cent of the rent for the first two years when all the problems existed, and 25 per cent of the rent for the third year when the toilet had been fixed. This amounted to a total award of £18,900, plus an additional ten per cent (Simmons v Castle), making a total of £20,790.
This was substantially in excess of a Part 36 offer that had been made, meaning an additional ten per cent in damages, plus 5.5 per cent interest, making a total award
of £24,203.35.
Costs up to the expiry of the Part 36 offer on a standard basis and from the expiry of the Part 36 offer onwards on an indemnity basis, and interest on those costs at 5.5 per cent.

Whittingdon v Uddin, Clerkenwell and Shoreditch County Court, 14 August 2014
Private tenant. Claim for three years of disrepair, breach of quiet enjoyment and harassment. For a period of three years the premises suffered from defective windows throughout, water penetration in the bedroom, some internal leaks in the kitchen and WC, and some external disrepair. The landlord failed to carry out any repairs despite repeated complaints.

At trial, District Judge Sterlini awarded:
General damages of £1,800, being a 100 per cent reduction in the rent for a six-week period in November and December 2013 when the claimant had to move out because the premises were uninhabitable and a global award of £7,500 to reflect the other items of disrepair over a period of three years (including a 17 per cent reduction in rent during this period);
£1,000 for defective chattels that were provided under the terms of the tenancy agreement and that were broken but not repaired/replaced
£350 for the cost of plumbing repairs paid for by the tenant.
£16,000 was awarded in respect of the harassment claim.

Holmes v Lambeth LBC, Lambeth County Court
Leaseholder of a two-bedroom maisonette complained of disrepair from 2008. There had been a number of external defects including an excessive gap between the brickwork and window frame to one of the bathroom windows and fungal decay to two other windows. There was also spalled brickwork over the main structure at the front of the premises, missing and defective pointing to the right of the chimney stack, cracking to the chimney stack itself, missing slates to the roof covering at the rear and cracked areas of concrete to the rear concrete staircase. For a period of three years there was water penetration through the roof causing cosmetic damage to the plaster in the eaves storage area and relatively minor staining to the plaster and decorations on the stairs.

The defects mainly affected the exterior of the premises and therefore the inconvenience caused to the leaseholder was minimal. The cost of repairs was estimated to be £9,000.

The claim settled in October 2014 at the point after which listing questionnaires were filed. Special damages were claimed in the region of £1,400. The second-hand value of the special damages was worth in the region of £500. Settlement negotiations were entered into on the basis of Earle v Charalambous [2006] EWCA Civ 1090, 28 July 2006, by using the starting point for calculating damages for leasehold premises as a percentage of the market rental value. The average market rental value for a comparable property in the area was in the region of £19,500 per annum (£1625 per month).

The local authority made a global offer in the sum of £15,000 and also agreed not to seek to recover the leaseholder’s share of service charges in respect of the works (these would have been approximately 50% of the £9000). Taking special damages at full value, this amounts to some 12% of rent for the full period of claim).

As part of the settlement Lambeth also agreed to pay for an inspection by the single joint expert and carry out any works found to be incomplete.

Comment
Always worth remembering that leaseholder claims can go back 12 years, not 6. And the measure of quantum is the notional open market rent, which can be substantial. However, the leaseholder may well be liable for a proportion of the cost of works through the service charge, and, as in this claim, that should be dealt with.

Coleman v Peabody Trust, Lambeth County Court
A tenant’s two-bedroom flat had cracked and defective windows throughout the premises (five in total), which were draughty, from end of 2009 to August 2014. The claim settled in August 2014 for £7,500. The rent was £124.17 per week (£6,456.84 per annum) so this settlement equates to approximately 23 per cent of the rent.

Lawrence v Lambeth LBC, Lambeth County Court
Secure tenant of four bedroom flat brought a disrepair claim, limitation took effect from May 2007.

Disrepair alleged was that the windows at the premises were in poor condition with four of the windows rotting away, letting in water and with mould growth around them. Patch repairs to the windows were carried out in June 2012. The central heating was defective for several years. The claimant could only use the heating and hot water together and was unable to use the services independently of each other. It also took quite a while for the water to heat up and none of the radiators heated up properly. Some of the radiators did not heat up at all and some of them only heated at the bottom. The heating was remedied by the Defendant in December 2011. There was an intermittent leak under the sink and from behind the toilet. The premises were infested with mice for around four years, possibly coming from underneath the floorboards.

The tenant suffered from constitutional asthma and recurrent bronchitis, which had been exacerbated by the cold and damp conditions at the premises, and was admitted to hospital with shortness of breath on two occasions and thereafter experienced symptoms of central chest pain, poor respiratory function and nocturnal coughing.

Post issue, the landlord agreed that some of the internal works could not be done with the tenant in occupation. The tenant was prioritised for a permanent transfer but no suitable properties became available and so the landlord started works in or around late August 2013 with the tenant still in occupation.

Lambeth defended on the basis that the standard of repair was commensurate with the property’s age, condition and status as public sector housing and that works were carried out as required when notified to the landlord. It was also alleged that the tenant neglected the garden to the extent that overgrown ivy had caused damage to the windows.

The claim settled within a few weeks of the trial date, in June 2014, for a global figure of £12,500.
Components of damages:
£1,500 for exacerbation of asthma due to the damp conditions;
£9,500 general damages, amounting to £1,583 per annum for six years, where the rent was
£144 per week. This equates to approximately 20 per cent of the rent for the full period of the claim;
£1,500 special damages, most of which was a contribution towards the tenant’s care costs.

A substantial discount was agreed in respect of the special damages as the tenant had smoked for most of her adult life. The defendant also agreed to carry out additional works, above the repairing obligations, as part of the settlement including decorating throughout, dry lining of walls, repair to the boundary fences and insulation of the loft.

Thomas v AJ Bradburn (acting as receiver for Adelphi Properties Ltd), Manchester County Court, 17 October 20134
Private shorthold tenant of a two-bedroom mid-terrace house from 5 November 2007. His rent was £85 per week until April 2009, when it went up to £95 per week.

There were problems with the hot water system and the storage heaters from the start of the tenancy. Central heating was installed in March 2008 but that did not work properly and the landlord failed to repair it satisfactorily until May 2011.

From late 2008 the roof had a hole in it, which allowed water to leak through on to the ceilings upstairs. Damp patches developed and water leaked into the bathroom. Patch repairs by the landlord were inadequate. The roof problems had worsened by late 2009 such that water leaked in through the ceilings and the claimant’s bedroom ceiling collapsed. The claimant had to sleep downstairs for a period of a year because of the leaks and dampness and state of his bedroom ceiling. The claimant had a pre-existing diagnosis of asthma, which he complained had been aggravated by the condition of the property.

At trial, District Judge Moss found the landlord liable.

Damages found:
£750 for the defective storage heaters and faulty hot water system for the period November 2007 to the end of March 2008 (equating to around 40 per cent of the rent for that period).
£3,750 for the intermittently functioning heating and hot water system from November 2008 to May 2011 (equating to approximately 30 per cent of the rent for that two-and-a-half year period);
£1,500 for the disrepair to the roof and the associated state of the ceilings upstairs and of the damp from late 2008 to late 2009 (equating to approximately 30 per cent of the rent for that year).
£2,500 for the leaks and dampness between the end of 2009 until the end of 2010 when the position worsened significantly and the claimant had to sleep downstairs and was unable to use the upstairs of the property (equating to approximately 50 per cent of the rent for that year).
(In total, between the end of 2008 and the end of 2009 general damages of approximately 60 per cent of rent. For the period from the end of 2009 to the end of 2010 general damages of approximately 80 per cent of rent).
£850 for the aggravation of asthma by the conditions of the property, the aggravation being to the extent of 20 per cent.
£1,250 in special damages.

Comment
it is good to see a greater adoption of the English Churches v Shine approach of a notional reduction of rent. For social tenants, whose rents have risen considerably, this makes more sense than the old Wallace tariff, as well as making sense in law.

There also seems to be a greater consistency of awards than in previous years, though as Wade v Dormeuil shows, there are District Judges willing to entertain nonsense arguments – not giving up a tenancy cannot be a failure to mitigate loss.

Leasehold disrepair will be a growing trend, certainly I have quite a few case, but there are uniqoe issues. While the damages will be higher, based on notional open market rental value (Earle v Charalambous) and potentially for a 12 year period, there will be the potential for a proportion of the costs of work to be recharged to the leaseholder. This needs to be dealt with, and I suspect many practitioners won’t know how.

Legal aid is all but unavailable, except for counterclaims to rent arrears possession claims. Legal Aid will only cover an order for works for urgent, health threatening, defects, not a damages claim. The flip side of this, for defendants, is that they should be aware that a claim funded by a CFA means that the Claimant’s solicitors are pretty confident about their case.

Another Court of Appeal disrepair judgment! I can barely contain myself. And on a fairly important issue too. So..

Edwards v Kumarasamy [2015] EWCA Civ 20

Mr Edwards rented a second floor flat from Mr Kumarasamy. Mr K was the leaseholder of that flat, but did not own any other part of the property. Mr K’s lease granted him “the right to use on foot the entrance hall, lift and staircases giving access to the flat; the right to use an access road and parking space and the right to use the Bin Store (which is part of the Communal Areas as defined) and other facilities provided by the landlord. Regulations forming part of the lease in fact require all domestic rubbish to be placed in the Bin Store.”

While the freeholders of the block covenanted under Mr K’s lease to “keep the Communal Areas in good and substantial repair, and to keep passageways and footpaths forming part of the building in good order and condition”, but the lease also contained a clause limiting the freeholder’s liability for any defect unless the tenant (Mr K) had given notice of it and freeholder had had a reasonable time to carry out repairs.

Mr E was taking rubbish out to the Bin Store when he tripped over an uneven paving stone in the pathway between the front door of the block and the communal bins in the car park and injured his knee. It is worth noting that this paved path was the principal means of access to the whole block of flats. It was common ground that Mr E had not given previous notice of the uneven slab to Mr K, nor had Mr K to the freeholder.

Mr E brought a claim under s.11 Landlord and Tenant Act 1985 against Mr K.

At first instance, the DDJ found that the path was part of the structure and exterior of the flat, so fell under Section 11(1). Damages of £3750 were awarded. This was overturned on appeal to a Circuit Judge, who found it was not part of the structure and exterior. However, a new argument was raised by Mr E before the CJ, that Mr K’s liability for the path fell under s.11(1A). The CJ found that this liability was not engaged because there had been no notice of the defect.

Hence to the Court of Appeal.

S.11 Landlord and Tenant Act 1985 (as amended) provides – as far as relevant:

(1) In a lease to which this section applies …there is implied a covenant by the lessor—
(a) to keep in repair the structure and exterior of the dwelling-house (including drains, gutters and external pipes)…
(1A) If a lease to which this section applies is a lease of a dwelling-house which forms part only of a building, then, subject to subsection (1B), the covenant implied by subsection (1) shall have effect as if—
(a) the reference in paragraph (a) of that subsection to the dwelling-house included a reference to any part of the building in which the lessor has an estate or interest…
…
(1B) Nothing in subsection (1A) shall be construed as requiring the lessor to carry out any works or repairs unless the disrepair (or failure to maintain in working order) is such as to affect the lessee’s enjoyment of the dwelling-house or of any common parts, as defined in section 60(1) of the Landlord and Tenant Act 1987, which the lessee, as such, is entitled to use.
(3A) In any case where—
(a) the lessor’s repairing covenant has effect as mentioned in subsection (1A), and
(b) in order to comply with the covenant the lessor needs to carry out works or repairs otherwise than in, or to an installation in, the dwelling-house, and
(c) the lessor does not have a sufficient right in the part of the building or the installation concerned to enable him to carry out the required works or repairs,
then, in any proceedings relating to a failure to comply with the lessor’s repairing covenant, so far as it requires the lessor to carry out the works or repairs in question, it shall be a defence for the lessor to prove that he used all reasonable endeavours to obtain, but was unable to obtain, such rights as would be adequate to enable him to carry out the works or repairs

There were two key issues before the Court of Appeal.

i) Were the paving stones part of the ‘building’ for the purposes of s.11(1A)?
ii) Did liability under s.11(1A) arise only on notice of the defect?

Firstly – and very interestingly – the Court of Appeal found that Mr K’s “right to use the front hall, the car parking space and Bin Store and other facilities provided by the landlord take effect as legal easements. He therefore has an estate or interest in the paved area where Mr Edwards sustained his accident”. This will be of wider effect, as any leaseholder landlord in a block will usually have similar rights to common parts, access ways etc.. So s.11(1A) will apply in respect of those areas, given that a right to use them is to be taken to be equivalent to ‘an interest’ in those parts.

The answer to i) was fairly brief. The ‘building’ in s.11(1A) must be understood as ‘structure and exterior of the building’ (Niazi Services Ltd v van der Loo [2004] EWCA Civ 53). The paved path, as the entrance way to the building, should be considered as part of the exterior (Brown v Liverpool Corporation (1983) 13 HLR 1). It was the ‘exterior of the front hall’.

On ii) the Court of Appeal (rightly) observed that the common law position was that liability for lack of repair commenced as soon as the defect arose. “The general rule is that a covenant to keep premises in repair obliges the covenantor to keep them in repair at all times, so that there is a breach of the obligation immediately a defect occurs”. The exception to this rule is where the defect arises in the demised premises themselves, in which case liability arises only when the landlord “has information about the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair are needed and he has failed to carry out the necessary works with reasonable expedition thereafter” (British Telecommunications plc v Sun Life Assurance Society plc [1996] Ch 69).

In terms of this case, there is also a common law principle on easements, where “there has been an express grant of an easement the grant will carry with it an ancillary right on the part of the dominant owner to carry out repairs on the servient owner’s land in order to make the easement effective. Thus in the case of the grant of a right of way the dominant owner is entitled to repair the way.” On this principle, Mr K did have the right to repair the path, something that the Judge below had considered that he did not.

The interrelation of common law and s.11(1A) had been dealt with by the Court of Appeal in Passley v Wandsworth LBC (1998) 30 HLR 165, where pipes on the roof of a block had fractured in a cold snap, flooding Mr P’s flat. Wandsworth were found to be liable under the covenant irrespective of notice.

The landlord’s covenant to repair under the statutory covenant depended on the facts, whether the defect was part of ‘the structure or exterior’. This was regardless of the extent of the demise (Campden Hill Towers Ltd v Gardner [1977] QB 823). [Though this was a pre 1985 Act case, and how does it sit with Lucie Marie-Antoinette Campbell v Daejan Properties Ltd [2012] EWCA Civ 1503 – though that lease did distinguish between ‘house'(building) and ‘premises'(demise) – NL]

Campden Hill was decided after O’Brien v Robinson [1973] AC 912, which concerned the predecessor to s.11 had had found that the repairing obligation only arose on notice (but was a case concerned with the interior of the demise). The lack of any reference in Campden Hill to O’Brien should be taken to mean that the principle that notice requirements only applied to the demised premises, not the broader ‘structure and exterior’ was approved, at least tacitly.

Lastly, there was no provision for notice in, or attached to s.11(1A) in statute, despite the pre-existing common law position.

S.11(1A) did not only apply to defects that in the structure and exterior of the building that affected the demise:

Although this might be a pragmatic way of limiting the landlord’s liability I cannot find it in the words of the statute. An argument of this nature would have been equally applicable to the landlord’s covenant considered in Sun Life, and indeed a similar argument was advanced on the landlord’s behalf. But in Sun Life, as we have seen, the critical division was between what was demised and what was not. Moreover, as I have said we are in the territory of implied terms, and necessity rather than mere reasonableness is the touchstone.

S.11(3A) was not rendered useless by immediate liability, contra Mr K’s argument. While the landlord might not have have the chance to use ‘reasonable endeavours’ to get the superior landlord to carry out works without notice, it would still operate to limit liability over an extended period:

I acknowledge that a conclusion that liability arises without notice does mean that section 11 (3A) has a lesser effect than it might otherwise have had. But it is by no means useless. It is a commonplace that a liability to repair is frequently a continuing liability and many tenants make claims for loss and discomfort sustained over lengthy periods. In the Niazi case, for instance the complaint lasted for the best part of three years. In such a case section 11 (3A) would enable the landlord to stop liability from continuing to accrue.

With a brief, polite disagreement with Dowding & Reynolds (5th ed para 20-37) on notice being required for the extended covenant, the Court of Appeal concludes. A last ditch argument by Mr K that the paving stones were uneven, not in disrepair had not been raised below and could not be considered now.

Appeal allowed.

Comment

In some part, this is simply a confirmation of Passley v Wandsworth principles on immediate liability on the defect arising, without notice. But there are some very interesting additions.

The disrepair to ‘structure and exterior’ under the extended S.11(1A) covenant does not have to directly affect the tenant’s demised property.

The landlord’s ‘interest’ in the part of the ‘building’ – construed as ‘structure and exterior’ – can be a right of use or passage granted under the lease, in effect an easement.

The common law right of the dominant owner of an easement to carry out repairs to the subservient owner’s property – in situations where the claimant’s landlord is a leaseholder, this could well be of significance.

There is a lot worth thinking about here in respect of disrepair claims, both under section 11, and, in respect of the easement right to repair point, perhaps some disrepair claims by leaseholders too, where there is an intermediate head leaseholder (as s.11 doesn’t apply).

After the Teather ‘revenge eviction’ member’s bill was talked out by a couple of Tory MPs, (Chope and Davis), the question was would the proposals survive in another form before the election.

Well today, the DCLG announced the Government’s proposed amendments to the Deregulation Bill – just headed to the Lords before Third reading in the Commons. We assume that Chope and Davis won’t pull silly games with Govt amendments…

The proposals aren’t wholly the same as the Teather version. There are some distinct problems, both practically and legally, but also some additional amendments around s.21 that are of interest.

The substance of the retaliatory eviction amendments are:

Preventing Retaliatory eviction

(1) Where a relevant notice is served in relation to a dwelling-house in
England, a section 21 notice may not be given in relation to an assured shorthold tenancy of the dwelling-house-
(a) within six months beginning with the day of service of the relevant notice, or (b) where the operation of the relevant notice has been suspended, within six months beginning with the day on which the suspension ends.

(2) A section 21 notice given in relation to an assured shorthold tenancy of a dwelling-house in England is invalid where-
(a) before the section 21 notice was given, the tenant made a complaint in writing to the landlord regarding the condition of the dwelling-house at the time of the complaint,
(b) the landlord-
(i) did not provide a response to the complaint within 14 days beginning with the day on which the complaint was given,
(ii) provided a response to the complaint that was not an adequate response, or
(iii) gave a section 21 notice in relation to the dwelling-house following the complaint,
(c) the tenant then made a complaint to the relevant local housing authority about the same, or substantially the same, subject matter as the complaint to the landlord, (d) the relevant local housing authority served a relevant notice in relation to the dwelling-house in response to the complaint, and
(e) if the section 21 notice was not given before the tenant’s complaint to the local housing authority, it was given before the service of the relevant notice.

(3) The reference in subsection (2) to an adequate response by the landlord is to a response in writing which-

(a) provides a description of the action that the landlord proposes to take to address the complaint, and
(b) sets out a reasonable timescale within which that action will be taken.

(4) Subsection (2) applies despite the requirement in paragraph (a) for a complaint to be in writing not having been met where the tenant does not know the landlord’s postal or e-mail address.

(5) Subsection (2) applies despite the requirements in paragraphs (a) and (b) not having been met where the tenant made reasonable efforts to contact the landlord to complain about the condition of the dwelling-house but was unable to do so.

(6) The court must strike out proceedings for an order for possession under section 21 of the Housing Act 1988 in relation to a dwelling-house in England if, before the order is made, the section 21 notice that would otherwise require the court to make an order for possession in relation to the dwelling-house has become invalid under subsection (2).

(7) An order for possession of a dwelling-house in England made under section 21 of the Housing Act 1988 must not be set aside on the ground that a relevant notice was served in relation to the dwelling-house after the order for possession was made.

A ‘Relevant Notice’ is

(a) a notice served under section 11 of the Housing Act 2004 (improvement notices relating to category 1 hazards),
(b) a notice served under section 12 of that Act (improvement notices relating to category 2 hazards), or

(c) a notice served under section 40(7) of that Act (emergency remedial action);

“section 21 notice” means a notice given under section 21(1)(b) or (4)(a) of the Housing Act 1988 (recovery of possession on termination of shorthold tenancy).

Note, not a hazard warning, or an EPA s.80 notice. Nor an early notification letter from a legal representative, or service of an expert’s report under the pre-action protocol, or anything else one might reasonably regard as a trigger event for the landlord having failed to carry out repairs.

So, the process is: tenant writes to landlord or agent (assuming either can be found) giving notice of problem. landlord has reasonable time to sort. If not, tenant complains to Council. EHO inspects. Improvement/remedial action notice issued. At that point, any s.21 issued after the tenant’s written notice becomes invalid, including in ongoing possession proceedings (see (6)).

What this means is not only that an Improvement/Remedial notice is the only way to trigger the ‘invalid s.21′, but that there is a definite timescale – if a possession order has already been made, a subsequent notice by the Council is of no effect in overturning the possession order.

There is an exception for the defect/issue being caused by untenant-like behaviour (which will be fun with mould issues), or where the property is up for sale (with restrictions).

The whole shebang is utterly reliant on Council EHOs reacting and serving notice within the ‘section 21 notice period and possession proceedings before possession order’ timescale. Say 3 months – but could be less, depending on ‘reasonable period from tenant’s notice and date of service of s.21. This action by the council is crucial.

And of course, tenants will have to know to go to the Council EHOs (and persevere in doing so).

Also, Housing Associations are excepted (why?) and this will, for the first three years, only apply to new ASTs after the Act to be is in force. This latter puzzles me, as service of a s.21 after the commencement date would not be retrospective legislation. Does the DCLG want to give landlord a chance to retaliatorily evict their existing tenants?

The other interesting bits are a ban on service of a s.21 with the first 4 months of an AST and a provision that:

21A Compliance with prescribed legal requirements

(1) A notice under subsection (1) or (4) of section 21 may not be given in relation to an assured shorthold tenancy of a dwelling-house in England at a time when the landlord is in breach of a prescribed requirement.

(2) The requirements that may be prescribed are requirements imposed on landlords by any enactment and which relate to-
(a) the condition of dwelling-houses or their common parts,
(b) the health and safety of occupiers of dwelling-houses, or
(c) the energy performance of dwelling-houses.

(3) In subsection (2) “enactment” includes an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978.

(4) For the purposes of subsection (2)(a) “.common parts” has the same meaning as in Ground 13 in Part 2 of Schedule 2.

(5) A statutory instrument containing regulations made under this section is subject to annulment in pursuance of a resolution of either House of Parliament.

So, we shall see what, if anything, turn out to be prescribed requirements.

There is a further provision for a requirement for provision of information to the tenant by the landlord, such as may be prescribed by regulation. Again, we shall see.

And I can’t resist – given that the RLA maintain their ridiculous claim about already existing defences to a s.21 possession claim, despite it being dismantled – pointing that the RLA put out a press release claiming that the Govt amends meant that a s.21 notice was invalid if served after a tenant had made a repair complaint. The RLA really do have an interesting approach to legal analysis.

As well as the clauses introducing the retaliatory eviction proposals, the Government’s proposed amendments to the Deregulation Bill would make some other changes to s.21. The effects would be:

No s.21 notice can be served within the first 4 months of the shorthold tenancy, thus ending the all too widespread practice of serving a s.21 at the time the tenancy agreement is signed (though I’d still say that was probably caught by the deposit rules). The proposals also make clear that possession proceedings cannot be begun before 6 months from the start of the tenancy (that disposes of an idea some bright spark landlords had, that it was OK to start proceedings before 6 months so long as the possession order was made after the 6 month date).

The codification of Spencer v Taylor in removing the need for a s.21 notice to specify the exact date of the end of a period of the tenancy (not, as the DCLG notes wrongly have it ‘the exact date a tenancy comes to an end’).

A prescribed form of s.21 notice which must be used, with an information pack for the tenants.

A ban on serving a s.21 notice when the landlord is in breach of ‘a prescribed requirement’. The ‘requirements':

I recently found myself reading and writing about the Court of Appeal judgement in Edwards v Kurasamy (our report here). Doing so made me think about the recent spate of judgements given by Lewison LJ that have touched on the private rental sector. I am thinking here of Spencer v Taylor (which we analysed here), Charalambous v Ng, and now Edwards v Kumarasamy. (our report). All of these are cases that touch primarily on the Private Rented Sector and all of them feature leading judgements by Lewison LJ. These are not of course the only big PRS cases to come from the CoA recently so I am not suggesting that Lewison LJ is the only CoA judge dealing with the PRS (see McDonald v McDonald for example) but he does seem to be getting a healthy majority right now.

There are notable parallels in these judgements:

• They were fairly controversial
• They all involved a return to the statute and a tight reading of it
• They upset received wisdom about what the provision meant.

To throw in my own piece of controversy I also think every one of these decisions was absolutely correct. Not correct in a moral sense or even correct on the sense that this is what was intended all along but undoubtedly correct in that they give a precise reading of the statue and must therefore be seen as an accurate reflection of the will of Parliament. The fact that they caused surprise and upset is perhaps more a reflection of the manner in which housing lawyers (and I include myself in this critique) have become complacent in their reading of the law.

Consider the evidence more carefully.
In Spencer Lewison engaged in a close reading of s21(1) and 21(2), Housing Act 1988. He concluded that s21(2) used the word “may” and therefore must on a plain English reading be seen as permitting the service of a notice under s21(1)(b) rather than directing it. He then looked at s21(1)(b) and again reading it plainly concluded that it in no way prevented the service of a notice provided that there had previously been a fixed term tenancy of some sort. Notably this was not how the case had been argued before him and differed somewhat from previous readings but he drew support from this material and used it to bolster the essential close reading of the Act. This decision has been criticised but notably primarily on the basis of policy and on what Parliament is assumed to have intended more than on the actual wording of the Act.
In Charalambous we had a close reading of s213 and particularly s215, Housing Act 2004. Here a diasctintion was drawn between the financial penalties fund under s213 and the s21 penalties under s215. Lewison LJ made clear that the penalties under s215 bite on this case because they plainly state that they required the registration of a deposit before service of a notice under s21. Again the intention of Parliament was raised but dismissed as a point in the face of the cold wording of the Act. It is worth noting paragraph 17 of this decision in which Lewison LJ begins:

Let me begin by looking at what section 215 (1) actually says.

No clearer statement of his approach to these cases could be made by me.
In Edwards Lewison’s attention was turned to s11, Landlord & Tenant Act 1985. By this stage we should have been expecting it. But actually Lewison LJ tells us again how he is reading these statutes. In dismissing an argument put to him he states that he “cannot find it in the words of the statute”. Again, no clearer statement of his approach is required. And so we find that a landlord’s repairing obligations extend beyond that which he has demised to the tenant and into any part in which he has a property right and further that outside the ambit of the demised property a tenant is not obliged to give notice to the landlord of a want of repair.

Lewison LJ appears not to be the only judge doing this. Consider Superstrike v Rodrigues (our report here) in which Lloyd LJ gave the leading decision (although Lewison LJ was on that panel too and may well have had an influence). There the word “received” in s213(1) of the Housing Act 2004 was given a very plain reading. Lloyd LJ concluded that this meant any receipt of money in respect of security whether as a direct payment or by way of transfer from one contract to another. Not as clear an example as those given above and without the very direct flags given by Lewison LJ but still with a similarity of approach.

So what does this mean for housing law?
It is a concern that these cases have come up recently. It leads me to the conclusion that I have been lazy! Essentially residential landlord and tenant lawyers have stopped looking closely at the legislation and simply become parrots of received wisdom. In the terms of an Americanism that I heard recently we have been “drinking the Kool Aid”. If there are three or four areas in which we are wrong as to what the law says then there are likely to be more. The second point is that the CoA here appears to be looking at the legislation without considering the policy issues and largely avoiding the Hansard as an aid to interpretation unless the wording of the Act is very unclear. Is this the start of a new trend in the CoA? If so then lawyers approaching them had best make sure they know what the relevant Act really says rather than what they think or want it to say.

I expect there will be more surprises to come in 2015. I know I will be looking at the core legislation that I previously thought I knew to make sure I am right!

Two quite different sets of secondary legislation.

First: there is a new prescribed form for section 6(2), section 8 and section 13(2) notices for assured (including shorthold) tenancies from 6 April 2015. The regulations are here and the prescribed forms are in the schedules.  Section 6(2) is terms for a periodic tenancy. Section 8, of course, is notice seeking possession on Schedule 2 Housing Act 1988 grounds, and section 13(2) is the notice for proposing a new rent.

These notices are obligatory, so a failure to comply with the precise required notice format could be significant.

Second: Following on from the quashing as unlawful of the MoJ regulations on legal aid for judicial review on Monday 23 March, today – Thursday 26 March and the last day of the present parliament – the Government, (Grayling and MoJ) laid new regulations, to come into force tomorrow, 27 March. The regulations are here. At a first read through, they have exactly the same effect as the previous ones – no legal aid payments for judicial review claims that do not get (or reach) permission, save that sections 2(c), (d) and (e) are designed to address the grounds on which the High Court found the previous regulations unlawful (and just, barely, those reasons).

I will restrain my language and simply call this a shoddy, cynical, petulant act, and as such entirely fitting as the last action of the present Lord Chancellor in this Parliament.

With the relevant parts of the Deregulation Act 2015 having come into force on 26 March 2015, time for a quick outline of what the changes mean for deposit protection and section 21 notices.

Deposit taken pre 6 April 2007 which became statutory periodic after April 2007.
Superstrike [our note] found that any pre 2007 deposit had to be protected if the tenancy became a statutory periodic after April 2007. This decision is shortly to be redundant.

For all pre-April 2007 tenancies which became statutory periodic after 6 April 2007, any deposit must be protected and prescribed information served by 23 June 2015. The deposit will then be treated as if it has always been protected (no retrospective claims). If they are not, then the usual s.214 and s.215 penalties for failure to protect will apply.

Deposits taken pre 6 April 2007 and tenancy became statutory periodic before 6 April 2007
The Court of Appeal, in Charalambous v Ng, [our note] had found that while deposits taken before 2007, where the tenancy had also become a statutory periodic before 6 April 2007, did not have to be protected, no s.21 notice could be served until the deposit was protected or returned.

The Deregulation Act makes no change to this. The deposit doesn’t have to be protected, but no s.21 notice can be served until it is either protected or returned. No penalty claims are possible.

Post 6 April 2007 tenancies
Where a deposit was taken, protected and the prescribed information served within the fixed term, this will be held to count for service of the prescribed information on any subsequent new tenancy (or statutory periodic) arising, so long as the deposit is with the same scheme.

There are a couple of points to note here.

This does mean that the Superstrike position on re-service of prescribed information on new tenancy or statutory periodic arising no longer applies.

But only if the deposit was protected and prescribed information served within the initial fixed term,

The original protection of deposit and service of prescribed info may have been late (after the 30 days). The Deregulation Act will still deem the prescribed information served for any subsequent ‘new’ tenancies (replacement or statutory periodic).

This will not prevent a penalty claim in respect of the original late protection and/or service of PI, as far as I can see, at any time. And even more oddly, it will still be impossible for a landlord to serve a s.21 notice if a deposit has been protected late – after the 30 days – before returning the deposit, unless the tenancy has since been renewed or become a statutory periodic, at which point the new s.215B will apply and the deposit and PI will be deemed to be compliant for the purposes of serving a s.21.

Any ongoing failure to protect and/or serve the prescribed information is wholly outside the provisions of the Deregulation Act. For these, Superstrike principles will continue to apply, so cases like Gardner v McClusker would still be possible.

Retrospective and transitional provisions
The new s.215A and s.215B are treated as having had effect from 6 April 2007, with some exceptions.

Any past possession claims, or penalty claims which have had a final order, and the time for any appeal has expired, cannot be re-opened even if the outcome would have been different had s.215A or s.215B been in force.

Any current s.21 possession claims or s.214 penalty claims, issued before 26 March 2015 will be determined on the basis of s.215A or s.215B. So what had been an invalid s.21 notice will become valid if those sections apply. What had been a valid s.214 penalty claim will be dismissed if the only basis for the penalty claim was the Superstrike failure to serve the prescribed information on a statutory periodic arising. However, the landlord will not be awarded the costs of the possession claim, or defending the s.214 claim (New s.215C(5) ).

In all other situations covered above, what had been a breach is now as if it never was, so there can be no claims for a past Superstrike failing.

As a last detail, the prescribed information requirements have been amended to allow for an agent’s details to be given where the agent is dealing with the deposit.

Okadigbo & Anor v Chan & Anor [2014] EWHC 4729 (QB)

When awarding a penalty for breach of the Section 213 Housing Act 204 requirements for tenancy deposits, the court has a discretion over the amount of penalty under section 214

“(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.”

There are no statutory factors set out for the exercise of that ‘between 1 and 3 times the amount of the deposit’ discretion.

So, what factors can, or should, a Court consider?

This was a counterclaim for a deposit penalty in a claim for possession and arrears of rent. At first instance, the Circuit Judge had found a breach of s.213 and had awarded the tenants, Mr O and another, a penalty of one times the deposit.

The tenancy had started and the deposit received on 1 August 2012, for a 12 month term. The deposit was protected, but not until 5 March 2013, and the prescribed information was provided later still, on 8 July 2013. The breach by way of late protection and late service of the prescribed information was admitted.

The Circuit Judge’s reasoning for the size of the penalty was:

“the Defendant seeks a penalty pursuant to Sections 213 to 215 of the Housing Act 2004. Section 214(4) provides that in the event of a breach, and here the breach is admitted, I must award the Defendant a sum of money not less than the amount of the deposit and not more than three times the deposit. The Defendant contends for the maximum sum which would be three times £1,520, a sum of £4,560. The Claimant contends for one month’s rent in the sum of £1,520. I find that the Claimants are not experienced landlords, that this is the first time that they had let out any property and that they were letting out their home. That they quite properly put the matter in the hands of professional managing agents who let them down by not complying with the terms of the Act. I find this case to be at the lowest end of the scale of culpability for non-compliance. And for those reasons I award the sum of £1,520.”

The tenants appealed to the High Court. Their argument was that the Judge exercised the discretion wrongly, placing undue weight on the inexperience of the landlords when set against a serious failure to comply with the deposit requirements for a considerable period of time.

“He [Counsel for the appellants] recognised realistically that there was a degree of mitigation in that the breach had been admitted and that there was in the event full compliance, albeit only after a period of delay. He contended that the discretion of the judge should, therefore, be set aside and that the appropriate order would be a multiple of twice the appropriate amount of rent.”

The High Court dismissed the appeal.

“The judge was entitled to regard the question of culpability as the most relevant factor in determining what order to make and was entitled to find that the culpability in this case fell at the lowest end of the scale for the reasons which she gave. It is not as if the breach was uncorrected and therefore, although the appellants were lacking the protection for a period of some months, in the end matters were put right.”

Comment

I suspect this will not come as a surprise to any of us, except possibly the appellants in this case. There is effectively an unconstrained discretion for the court, within the 1 to 3 times penalty, and culpability of the landlord (or agent), together with protection prior to the tenant raising the issue, was always going to be a factor.

Though if it was the agents handling the deposit, I would have though that the tenants could also have brought a claim against them, as ‘the person who appears to be holding the deposit’. (Draycott & Draycott -v- Hannells Letting Limited [2010] EWHC 217 (QB) ).  And professional agents messing up in this way could surely expect far less generosity in the exercise of the discretion. Likewise, experienced landlords.

That said, it may be that the High Court places too much emphasis on the deposit having been eventually protected. As we noted back in the pre Localism Act days of Gladehurst v Hashemi, the purpose of the legislation was indeed to punish landlords who did not comply. The Localism Act amendments made clear that late protection was not adequate. But it is, clearly, open to the court to decide that the punishment could be restricted to a 1x deposit penalty on the basis of findings on culpability.

Williamson v Khan. Birmingham County Court. Claim No: 3YS66585 (12 March 2015).

Disrepair claims against private landlords are often interesting. Not least because said landlords have a tendency to take ridiculous positions and stick with them to trial, even when represented. This case is a glorious example of that. (A full copy of the judgment can be downloaded here, if interested.)

Ms Williamson had been the assured shorthold tenant of Mr Adalat Khan since October 2002. She was evicted in April 2013 after Mr Adalat Khan brought a possession claim for rent arrears – of which more later on, including the money judgment for £1,237.75 involved.

Ms W subsequently brought a claim for disrepair (damages only, due to the eviction. It is worth noting that legal aid funding was granted pre LASPO. it would no longer be possible to get legal aid funding for such a case).

The property was a one bedroom flat on the ground floor of a detached house converted into 5 flats. The claimant’s case was that there had been disrepair throughout the tenancy:
i) No hot water between February 2004 – October 2007 and January 2011 – April 2013
ii) Inadequate and defective heating throughout the tenancy
iii) Rising and penetrating damp
iv) leaks from kitchen waste pipe, bathroom basin and defective rainwater goods
v) infestations of rats due to defects in the structure
vi) Perished and defective plasterwork
vii) Holes in floorboards
viii) External brickwork, rendering and boundary wall in disrepair
ix) External paving damaged
x) Drainage problems resulting in offensive odours in the property.

This was largely supported by an expert report from 8 March 2013 and photographs taken by Ms W’s solicitor at the time.

Much of the case rested on the Claimant’s evidence. This can be tricky (I am still smarting from a recent trial, even though successful in the end), and here the Defendant’s approach was to attack the Claimant in every way possible.

Ms W was open that she suffered from poor mental health, with bi-polar disorder, depression, agoraphobia, extreme anxiety and insomnia. She had had a heroin addiction and remained on a prescribed substitute.

The Defendant’s case was basically that there was no disrepair, or if there was he wasn’t told about it, except on two occasions when works were done in a couple of days. The boundary wall and paving weren’t covered by section 11 Landlord and Tenant Act 1985. Any other defects had been caused by the Claimant – she had failed to pay gas and electric bills because of her drug habit, and this caused condensation. He further alleged that the Claimant hadn’t contacted him because other tenants had complained about her behaviour and her visitors, who had also caused damage to the property.

The Defendant also counterclaimed for rent arrears of £4293.52 and bailiff’s fees of £210, over and above the arrears in the previous money judgment.

The trouble for the Defendant was that he could not substantiate any of this (apart from the other troubles, which we’ll come on to).

The Defendant alleged that the original rent was £89.50 pw (not £89 as asserted by the Claimant) and that on 1 October 2008, the rent rose to £110 pw, which the Claimant denied. But the Defendant could produce absolutely no paperwork about this at all, apart from a retrospective rent schedule. An HB award of full rent of £89 pw was the only real record. As the court found

“Even after extensive cross examination of the point it was clear that not only did the Defendant have no idea what sums he alleged were outstanding but neither did both counsel or the Court. Despite repeated efforts to understand the Defendant’s case on the point I was, even by the end of the case, still unclear as to how he alleged he had calculated the alleged arrears. Indeed, by the end of the case both the Defendant and his own counsel accepted that they did not understand how the Defendant’s counterclaim had been calculated”. In fact, the Defendant admitted he couldn’t even be certain how the sum of arrears in the judgment debt had been calculated.”

It should not be a surprise after that that the counterclaim failed entirely. But the problems did not end there for Mr Khan. The assessment of the reliability of witness evidence was clearly going to be key to the case. This was not least because while the Claimant had permission to rely on her expert evidence, the Defendant had done nothing in that regard until applying shortly before trial to rely on an expert report obtained a whole year before. That application had been refused.

Mr Khan’s credibility went out of the window when it became clear that he was lying about the number of properties he owned, which was between 71-81, not the 25 he stated in evidence. He also lied about leaving the Midland Landlord Accreditation Scheme, when he had actually been expelled. He then went on to say he ‘couldn’t recall’ being prosecuted in relation to any of his properties, but had to accept that he had been, twice, for failure to provide fire safety precautions and for failing to conduct gas safety checks.

Mr Khan asserted that his lack of documentary evidence about, well, everything, was because he had lost his files, and the lack of any receipts from workmen was because he didn’t bother to set them against tax. The court did not believe this.

Mr Khan made a last minute – on the first day of trial – application to amend to plead limitation. This despite having had representation, and the claim being some 17 months old. This application was refused, the Defendant ‘having failed to discharge the heavy onus upon him to justify the lateness of the application to amend’.

The Court accepted the Claimant’s evidence in whole, apparently particularly impressed by her returning from a lunch adjournment to voluntarily correct what she had said immediately before the break. She was ‘persuasive, plausible and truthful’.

On the other hand

“As to the Defendant’s evidence, I found him to be a thoroughly unimpressive witness. he was evasive in his answers. he often pretended not to understand even the most basic questions and was extremely reluctant to make any concession on any point. Even when confronted with incontrovertible evidence such as the extent of his property portfolio, his convictions, the notice by the Health and Safety Executive in respect of his failings as a landlord and his expulsion from the Midland Landlord Accreditation Scheme he would repeatedly claim he did not know or had forgotten and only agreed after intensive and thorough cross examination. Obtaining a straight and honest answer by the Defendant was, sadly, as difficult as pulling teeth”“His evidence was unconvincing, implausible and untruthful. I have no hesitation in reaching the view that the Defendant not only gave a false account of events but did so quite deliberately with the clear intention of deceiving the Court.”

“Further, it is clear he sought to challenge the truthful account of the Claimant, who remains by any account vulnerable, by a vicious and sustained attack on her character”.

So, the Claimant’s claim upheld in full, including the outside wall and paving – under section 11(1A) L&TA 1985.

On damages, a diminution of rent approach was used, as per Shine v English Churches, for a period of 10.5 years. The award was 80% of rent.

Total damages, £39,093.60, plus the 10% Simmons v Castle uplift, giving a total of £43,002.96.

Costs to the Claimant at the standard rate.

In a speech timed to hide the release of the latest figures on net migration, the Prime Minister made an assortment of announcements on forthcoming policies.

The part that concern us here, went as follows:

There are other ways we can identify those who shouldn’t be here, for example through housing. For the first time we’ve had landlords checking whether their tenants are here legally. The Liberal Democrats only wanted us to run a pilot on that one. But now we’ve got a majority, we will roll it out nationwide, and we’ll change the rules so landlords can evict illegal immigrants more quickly.

We’ll also crack down on the unscrupulous landlords who cram houses full of illegal migrants, by introducing a new mandatory licensing regime. And, a bit like ending jobs when visas expire, we’ll consult on cancelling tenancies automatically at the same point.

The unsurprising part is the commitment to roll out the ‘right to rent’ nationally from the West Midlands pilot (even though no evaluation of the pilot has yet taken place). We originally called this legislation ‘odious and badly thought out‘. Now it is to be a national, odious and badly thought out scheme.

The rest, however, contains some bombshells and some incredibly stupid ideas.

No-one, least of all the landlord organisations, foresaw the introduction of mandatory licensing for landlords. Nor, it appears, did the housing minister, Brandon Lewis, who just the day before rejected ‘unnecessary and expensive regulation on the private rented sector‘. Obviously, a lot will depend on the detail, but in itself, this is not an odious plan.

And what to make of ‘quicker’ evictions? Let alone a proposed complete rewriting of the fundamental tenets of landlord and tenant law by creating ‘conditional’ tenancies, that automatically end on a condition being met (or not met)? It may be that these bright ideas quietly wither and die once someone figures out what an utter mess implementing them would turn out to be.

Still, anyone expecting housing law to be relatively quiet in this parliament has just been disabused of the idea.

Khuja v Chowdhury [2015] EW Misc B18 (CC)

A County Court deposit protection case, and an illustration of some of the ways in which landlords still haven’t figured out how the deposit rules work.

Ms C was the assured shorthold tenant of Mr K, allegedly a ‘major landlord in Oxford’. The tenancy started on 7 July 2011. Ms C paid a deposit in June 2011 of £800, though there was then some confusion about rent payments not being recorded to the account, or not received. Mr K tried to argue that this meant a deposit was not received until some time later, but the Court found otherwise. The deposit was protected but not until June 2013. It was then re-registered in February 2014.

In 2014, Mr K got Ms C to come to his office to sign a deposit protection certificate. He then  apparently immediately served a section 21 notice and issued possession proceedings. Those proceedings were dismissed on the ground that the s.21 was invalid due to Mr K’s failure to serve the prescribed information before service of the notice. The judgment in that case recorded that Mr K had subsequently served the prescribed information, annexed to a witness statement.

Mr K then served a section 21 and issued the present proceedings. Ms C defended on the basis that the deposit had been protected out of time – outside the 30 days from receipt – and the deposit had not been returned, so the s.21 was invalid under s.215(1) Housing Act 2004. Ms C also counterclaimed for a penalty under s.214.

Mr K raised two initial issues, both of which do rather give away that Mr K was acting in person:

the Defendant could not raise the Defence she had because matters had already been dealt with by Deputy District Judge Drayson [the 2014 case]. I rejected this argument, because the issue in that case concerned the giving of prescribed information, which it was accepted had not been given. But in this case, the Court is concerned with whether or not the section 21 procedure can be used where the deposit was not protected within the relevant time period.

 Secondly the Claimant said that I could not hear the counterclaim, because the Defendant ought to have made a separate application to the Court. I considered the relevant rules, and noted that District Judge Payne had the Defence before him when he directed the matter to be listed for hearing. It was open to the Claimant when he received that order to apply to the Court to strike out the Defence, or otherwise vary the order so that the Counterclaim be heard separately, but he did not do so. He had been invited by District Judge Payne’s order to file evidence, which could have responded to the Counterclaim, but he did not do so. He was not taken surprise by its contents. The arguments in respect of the Counterclaim are very closely connected to the arguments in respect of the Claim. For all those reasons I concluded that it was appropriate and proportionate to hear the Counterclaim at the same time as the claim for possession.

The Court found that the deposit had been received in June 2011 and protected in June 2013, so outside the 30 days. The deposit had not been returned as per s.215(2A)(a).

Mr K argued that:

he had offered to pay £800 at the last hearing (which is not disputed) and the tenant had refused to accept it (also not disputed). However, I do not accept this is equivalent to the money having been paid within the meaning of the statute. On behalf of the Defendant it was said that she did not have the opportunity to take legal advice and the basis upon which the money was being offered at that time was not clear. Had the money been offered to her subsequently, she says that she would have accepted, but it has not. Between then and the hearing before me, the Claimant did not make any further offer to pay the deposit back, or send a cheque to the Defendant. He did reiterate the offer in Court.

There is no evidence that the Defendant unreasonably refused the money at the hearing, or that that she has since deliberately refused to accept the return of her deposit in order to avoid possession proceedings.

So the deposit had not been repaid. The s.21 notice was therefore invalid as it could not have been served and the possession claim failed.

On the counterclaim, being a post Localism Act claim, it did not matter that the deposit had belatedly been protected. S.214(2) required the court to make an order, but an order that the deposit continue to be protected was not one of the options (either pay the deposit into a scheme or return). Therefore the court must order the return of the deposit.

So far as the payment of a sum between one and three times the amount of the deposit is concerned, there is only one reported case about how the discretion should be exercised; Qkadigbo [Okadigbo v Chan [2014] EWHC 4729 (QB) – our report. Incorrect case reference number in this judgment]. The conduct of the Claimant is to be assessed. At one end of the scale will be cases where there has been a failure to protect a deposit through no fault of the landlord, and the time limit has been missed by a very small amount. At the other end of the scale will be cases where there has been a flagrant disregard for the rules, and the deposit has been dissipated in some way.

This case in my judgment falls somewhere between the two. The landlord is a professional landlord and the rules about deposit protection have been in force for many years now, including the changes incorporated by the Localism Act. He has no good reason not to be fully aware of his responsibilities. His own company manages the property, so he cannot blame an agent. Although he has sought to suggest that he did not know he had the deposit until June 2013, and is being punished for his own leniency in giving his tenant the benefit of the doubt, I do not find that position to be consistent with the evidence. It is clear that he did receive a deposit before his tenant moved in, and it was his responsibility to have the systems in place to ensure that it was protected within the relevant time. On the other hand, the deposit did become protected eventually, the prescribed information was given, and he is in a position to pay it back. I am satisfied there has been no dishonesty.

In the circumstances, in my judgment this case falls in the middle of the range, and I therefore make an award based on twice the amount of the deposit and shall give judgment on the counterclaim for £1600.

And with a reminder that the previous s.21 was not retrospectively review by the return of the deposit, that was that.

It is worth noting that as the deposit was protected after the ‘initial term’ of the tenancy, the Deregulation Act 2015 changes would make no difference to the scenario in this case.

It is interesting, if perhaps unsurprising, to see a view emerging that the 3x penalty requires ‘dishonesty’ or perhaps a continued failure to protect. A 2x penalty would look to be the most likely outcome for most landlords who ‘ought to have know’ the deposit should be protected.

Thanks to Caroline Crawford of Shelter, who was Ms C’s McKenzie friend for pointing us to this case.