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leigh123
18-04-2008, 15:32 PM
Hello all,

Well I can put this case to bed now, the hearing was this afternoon and this is what happened and what can be inferred from the judges comments.

The summarise - my situation was that I paid a deposit in April 06, for a 12 month AST. Then signed a new 12 month AST in April 07 for 12 months. The deposit was continued to be held against the new tenancy. The LL didn't protect it, but subsequently did on receipt of the court papers with mydeposits.co.uk (an insurance based scheme). I used N208 based on Planner's wording.

The judge made the following comments:

1. As it was a part 8 claim, a letter before action would not have made any difference as it's an absolute matter and no room for negotiation (in response to defendant's complaint about no LBA).

2. The fact that the LL had subsequently protected the deposit made no difference to the case. It would still lead to judgement for either return or protection + x3 penalty.

3. It was an absolute matter, with no case for morals or discretion on a penalty, it was all or nothing.


HOWEVER!

I lost the case :(

The Housing Act 2004 says that a deposit falls under the new legislation if it is paid and received after April 6th 2007. The judge said that she had to consider whether the fact that the deposit was already in the defendant's possession and that it was agreed it would be a new deposit for the new 12 month AST, it was not in the traditional sense paid by me and received by the LL. She ruled that the deposit was paid by me and received by the LL in April 2006, hence the deposit had to requirement for protection. She said that that was her personal interpretation of paid and received and that the HA 2004 was not detailed as to the definition of both. She said that she may be wrong but without the guidance of a higher court ruling and with regret that that was her stance.

So that is that - a big surprise to me. I didn't really ever question this point as from the online research and relevant leaflets etc from various sources that the vast concensus was that it didn't apply to renewals or periodics but it would apply for new ASTs where a deposit was continued to be held.

I put forward about as many arguments as I could but was getting nowhere. I feel that appealing at this point would not get me any further. So I live with the knowledge that issuing the court papers when I did and then getting my Section 21 shortly after, forced me to find and move into a beautiful new flat which would now be on the market for £200 more per month so I've made back my court fee already... my way of justifying the loss.

This should be of great help to those who signed and paid after April 2007, whose LL protected the deposit outside of the 14 days. On this point the judge agreed that the ruling would be absolutely clear and it was purely the 'paid and received' point on which I failed.

Make of that what you will and thank you all for your assistance with making my case. It was an interesting process and I learnt a lot, as a tenant and as a landlord!

Colincbayley
18-04-2008, 15:37 PM
Thanks for the update, I think the judge is wrong, but as you have said, that would be a matter for a higher court.
:(

agent46
18-04-2008, 15:59 PM
Thanks for the update, I think the judge is wrong, but as you have said, that would be a matter for a higher court.
:(

I think the judge is absolutely correct.

Interestingly, by deciding as she did, the judge must believe that the Govt guidance on the matter is wrong. I've been arguing this point for a year. My reasoning along the same lines is set out in a couple of posts on HPC where I had a bit of a ding-dong with someone who claimed inside departmental knowledge on the subject: here it is http://www.housepricecrash.co.uk/forum/index.php?showtopic=72916&pid=1063734&st=0&#entry1063734

My argument in summary:

1) The deposit paid in respect of a tenancy commenced before 6th April 2007 is held on trust by either by the landlord or the agent.

2) On the renewal of that tenancy post 6th April 2007, the deposit remains held by either the landlord or the agent in a bank account and is not, in any meaningful way, "paid" to them by the tenant.

3) The effect of signing a new tenancy when the deposit remains in the LL or LA's bank account is NOT that the money is "paid" to the LA/LL (in the sense that legal and equitable title in the money passes on delivery), but that instead, there is a declaration of new trusts over the deposit money on the terms of the new tenancy agreement.

4) The TDP provisions of HA 2004 only apply to deposits "paid" or "received" after 6th April 2007 and so do not apply to the above type of transaction, which is, as argued above, a declaration of new trusts over the deposit.

5) As such, the HA 2004 is of no application to deposits paid pursuant to pre-Apr 07 tenancies which are then renewed after Apr 07.

Sorry you lost your case, but subject to reversal by the appellate courts, I think this is the correct decision.

Planner
18-04-2008, 16:20 PM
Damn!!!!

If you read the TDS scheme rules im sure they all say that a new/renewed ast means the depsoit must be protected. I think there is definatley a case for appeal here!

agent46
18-04-2008, 16:28 PM
Damn!!!!

If you read the TDS scheme rules im sure they all say that a new/renewed ast means the depsoit must be protected. I think there is definatley a case for appeal here!

The TDS guidance doesn't have the force of law. The guidance does exactly what it says on the tin (ie: guides), and without appearing to crow about the matter, I've been arguing with anyone who would listen for the past year that the guidance was wrong for the same reasons relied on by the learned judge.

The judge appears, entirely correctly in my view, to have based her reasoning on the wording of s.213 and the meaning of the words "paid" and "received" and not on TDS guidance that was probably written by some departmental lackey lay-person civil servant on the orders of the Housing Minister.

Colincbayley
18-04-2008, 16:38 PM
We have another case due for hearing 30th April, along the same lines as this one ( renewed/new AST ) Be interesting if they come to a different judgement!
Only one downside, the tenant bringing the case ( With my guidence ) is getting the jitters about the court hearing, and due to my arrangements I can't be there with her!
Any advice? Other than a stiff brandy beforehand?

agent46
18-04-2008, 16:49 PM
Any advice? Other than a stiff brandy beforehand?

Instruct the best chancery silk you can find at short notice who'll do the case for 20 Bensons and a lift home afterwards?

Colincbayley
18-04-2008, 16:54 PM
Instruct the best chancery silk you can find at short notice who'll do the case for 20 Bensons and a lift home afterwards?

Nice thought! :cool:

Mars Mug
18-04-2008, 19:05 PM
So if on the day of renewal of the AST in 2007, had the landlord handed back the original deposit, and the tenant then handed it to the landlord as a new deposit (for the same amount I assume), then the judgment would have been different?

Planner
18-04-2008, 19:17 PM
The TDS guidance doesn't have the force of law. The guidance does exactly what it says on the tin (ie: guides), and without appearing to crow about the matter, I've been arguing with anyone who would listen for the past year that the guidance was wrong for the same reasons relied on by the learned judge.

The judge appears, entirely correctly in my view, to have based her reasoning on the wording of s.213 and the meaning of the words "paid" and "received" and not on TDS guidance that was probably written by some departmental lackey lay-person civil servant on the orders of the Housing Minister.

Intresting discussion on the guidance there, however I didnt say the TDS guidance, I said the TDS scheme rules.

http://www.depositprotection.com/default.aspx?bhjs=1&fla=1 says;

Deposits taken before 6 April 2007 do not need to be protected by a scheme such as The DPS. However, as an existing tenancy is renewed and a landlord agrees a new fixed-term tenancy, the initial deposit taken must then be lodged with a tenancy deposit protection scheme.


http://www.mydeposits.co.uk/ says;

Do you take deposits from Tenants?
Do you use Assured Shorthold Tenancy (AST) agreements for your tenants?
Do you take a Deposit from your tenants?
Does the Tenancy Agreement start on or after 6th April 2007?
Is the property in England or Wales?
If you answer YES to all of these questions, your Tenant's deposit must be protected by a government-approved tenancy deposit scheme, such as mydeposits.

And http://www.thedisputeservice.co.uk/index.php?p=2 says;


Where pre-existing ASTs are formally extended or renewed after theMember
has joinedTDS,the newtenancy agreementmust include the relevant clauses
(please see section 16),unless the landlord has decided that the depositwill be
protected by another designated scheme.That tenancywill then be considered
a newtenancy for the purposes of adjudication under theTDS.



So on one hand we have the TDS guidance and three schemes saying one thing and a single judge saying another. I know where my money lies at the moment.

agent46
18-04-2008, 19:53 PM
Intresting discussion on the guidance there, however I didnt say the TDS guidance, I said the TDS scheme rules.


So on one hand we have the TDS guidance and three schemes saying one thing and a single judge saying another. I know where my money lies at the moment.

Well, first of all, force of numbers in support of an argument is never an indication of the correctness of that position. If you want an example, just remember that quite a few people attended the Nuremburg Rallies......

Re: rules/guidance: Sorry, you were talking about the TDS scheme rules, but that doesn't advance your argument at all. In fact, on the contrary, your position is significantly weakened because it means that as well as the Govt guidance being incorrect, the TDS rules are ultra vires, and thus invalid.

Why not just accept that the Govt and the TDS Schemes (who almost certainly acted on Govt guidance) have apparently got it a bit wrong? Given this Govt's obsession with legislating and their propensity for interference in more aspects of our lives than ever before, it's only natural that they're a bit busy and have seemingly forgotten to dot the "i"s and cross the "t"s of the HA 2004 s.213.

The Govt and their agencies make an unholy legal dog's breakfast of things all the time, and that is precisely why we have a system of Judicial Review under the jurisdiction of the administrative court; don't be too downhearted - it's not like you've discovered there's no such thing as Santa Claus or something.

EDIT 1: here's the relevant section of the Act - HA 2004 s.213(1) "Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

EDIT 2: I've just remembered something. From whom did "The Dispute Service" seek clarification of the legality of their rules relating to fixed term renewals? Did they perhaps seek advice from the Treasury Solicitor? Or did they instead take an opinion from learned counsel? No! In fact they asked that well-known organisation consisting of the finest legal minds in the UK, the National Association of Estate Agents!!!! I kid you not - I distinctly remember that the question about whether renewal deposits needed to be protected, until fairly recently used to be on the home page of the TDS website with the words "with thanks to the NAEA" underneath the answer. :D

Mars Mug
18-04-2008, 20:01 PM
it's not like you've discovered there's no such thing as Santa Claus or something.

NOOOOOOOOOO :eek:

Colincbayley
18-04-2008, 20:06 PM
it's not like you've discovered there's no such thing as Santa Claus or something.

Thanks, my six year old is crying now !! :p

Dear Santa,
We all know you are real, and in the nicest possible way, please let agent46 be wrong on this matter.
We all promise to be very, very good for the rest of the year.

Regards,
LLZ.

Planner
18-04-2008, 21:05 PM
Well Im not got to base the scheme rules AND the government guidance being wrong on one county court outcome and your latin. That would be ridiculum and precox!!

Oh well it will all come out in the wash!!.

Agent, why we have you here there was a "discussion" on here a while a go where one of our respected members was insisting that it was impossible to take a landlord to court for non-complaince after the end of the AST. Putting aside the fact that we have knowledge of a judgement to the contary, whats your view? in particular I think it was this bit of the act;

214 Proceedings relating to tenancy deposits (1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds—

House
18-04-2008, 21:06 PM
Until this is sorted out, perhaps if you're not sure about your landlord ask for the deposit back and then pay it in regard to your new tenancy. If your landlord refuses one would wonder why.

House
18-04-2008, 21:11 PM
section 213 (10)

“relevant person” means any person who, in accordance with arrangements made with the tenant, paid the deposit on behalf of the tenant

This perhaps implies that you don't have to be the tenant at the time to make an application because the relevant person is never a tenant and no time limits are stated. Not overly clear though.

These cases remind me of beta testing computer games in order to iron out all the faults.

Planner
18-04-2008, 21:12 PM
Yeah thats what I argued, wondered what Agent thought though cause he/she seems very familar with the legislation.

agent46
18-04-2008, 21:43 PM
Well Im not got to base the scheme rules AND the government guidance being wrong on one county court outcome and your latin. That would be ridiculum and precox!!

Oh well it will all come out in the wash!!.

Agent, why we have you here there was a "discussion" on here a while a go where one of our respected members was insisting that it was impossible to take a landlord to court for non-complaince after the end of the AST. Putting aside the fact that we have knowledge of a judgement to the contary, whats your view? in particular I think it was this bit of the act;

214 Proceedings relating to tenancy deposits (1) Where a tenancy deposit has been paid in connection with a shorthold tenancy, the tenant or any relevant person (as defined by section 213(10)) may make an application to a county court on the grounds—

I'd agree with you there - a single District Judge coming to a conclusion on one side of the argument may be a bit of a false dawn. However, it is very interesting indeed that she used almost the exactly the same reasoning with which I have been boring everyone rigid for the past 12 months. I'm quite prepared to be proved wrong on the issue, but as yet, nobody has provided any arguments to the contrary other than "well the Govt guidance must be correct".

On the other question - I've not looked into it in any detail, but I don't think the fact that the applicant would, strictly speaking, be a former tenant (rather than a tenant) would have any bearing on the issue. That would be an over-technical and casuistic line of argument and as such, probably wouldn't succeed (although I'm prepared to accept that it could possibly go the other way). An analogy would be cases where a tenant is evicted on s.21 grounds under APP (in which the LL cannot claim rent arrears), but the LL then brings debt proceedings for rent arrears, which the former tenant then successfully defends on disrepair grounds.

I once tried to run a similar argument when defending a tenant in s.21 proceedings. The LL had served the tenant with the s.21 notice several days before the tenancy began and I submitted that the notice was invalid because HA 1988 s.21 states that the LL may give to the tenant 2 months notice etc and at the time the notice was served, the parties were not in a relationship of LL and tenant with respect to each other, as that relationship is a very special one defined by their repsective obligations following the transfer of an estate in land and when the notice was served, no such transfer had taken place. That defence did not succeed. The tenant was initially going to appeal, but they never did because, IIRC, they were rehoused by the local authority. The judge wasn't entirely clear why he had rejected the argument, but thinking about it now "on the fly", on the basis that the parties had entered into what amounted to a contract to create a lease, which, under the rule in Walsh v. Lonsdale would be treated as an equitable lease, they could be said to be in a relationship of landlord and tenant with each other. However, I later became aware of a County Court decision where the judge had approved precisely the defence I had unsuccessfully advanced (Turpitt v. Elizabeth August 1998 Legal Action 21, Edmonton County Court). So there you go - a bit different perhaps to the situation where the applicant is a former tenant, because I was considering a similar question arising before the lease began, but still, it shows that the courts are not that sympathetic to overly clever arguments on such matters.....

On balance, I believe the tenant's right of action with respect to a claim for 3X the deposit would survive their giving up of possession of the premises.

cas84_utd2
19-04-2008, 10:31 AM
Bad luck leigh, sorry that you didn't win your case. I guess everything went well apart from this paid and received wording technicality... thats something I hadnt even thought of to be honest!

Going forwards with my case... I'm pretty similar, new tenancy June 2007 (not renewed, brand new), N208 claim, LL subsequently protected (10 months after receiving)... I have the Gloucester County Court case law... can I also use this case as well? With regards to the judges comments that you have listed (1, 2 and 3)? My LL has made the exact same complaints/defences - no LBA from us, and he has subsequently protected. Can I use these judges comments and quote this case to my advantage?

How can I obtain paperwork for these 2 cases to support my hearing? Do you have the exact title of your case? xx v. xx etc....

Cheers!

Planner
20-04-2008, 10:40 AM
I'd agree with you there - a single District Judge coming to a conclusion on one side of the argument may be a bit of a false dawn. However, it is very interesting indeed that she used almost the exactly the same reasoning with which I have been boring everyone rigid for the past 12 months. I'm quite prepared to be proved wrong on the issue, but as yet, nobody has provided any arguments to the contrary other than "well the Govt guidance must be correct".

On the other question - I've not looked into it in any detail, but I don't think the fact that the applicant would, strictly speaking, be a former tenant (rather than a tenant) would have any bearing on the issue. That would be an over-technical and casuistic line of argument and as such, probably wouldn't succeed (although I'm prepared to accept that it could possibly go the other way). An analogy would be cases where a tenant is evicted on s.21 grounds under APP (in which the LL cannot claim rent arrears), but the LL then brings debt proceedings for rent arrears, which the former tenant then successfully defends on disrepair grounds.

I once tried to run a similar argument when defending a tenant in s.21 proceedings. The LL had served the tenant with the s.21 notice several days before the tenancy began and I submitted that the notice was invalid because HA 1988 s.21 states that the LL may give to the tenant 2 months notice etc and at the time the notice was served, the parties were not in a relationship of LL and tenant with respect to each other, as that relationship is a very special one defined by their repsective obligations following the transfer of an estate in land and when the notice was served, no such transfer had taken place. That defence did not succeed. The tenant was initially going to appeal, but they never did because, IIRC, they were rehoused by the local authority. The judge wasn't entirely clear why he had rejected the argument, but thinking about it now "on the fly", on the basis that the parties had entered into what amounted to a contract to create a lease, which, under the rule in Walsh v. Lonsdale would be treated as an equitable lease, they could be said to be in a relationship of landlord and tenant with each other. However, I later became aware of a County Court decision where the judge had approved precisely the defence I had unsuccessfully advanced (Turpitt v. Elizabeth August 1998 Legal Action 21, Edmonton County Court). So there you go - a bit different perhaps to the situation where the applicant is a former tenant, because I was considering a similar question arising before the lease began, but still, it shows that the courts are not that sympathetic to overly clever arguments on such matters.....

On balance, I believe the tenant's right of action with respect to a claim for 3X the deposit would survive their giving up of possession of the premises.

Cheers agent. Your a very useful addition to the forum!

agent46
20-04-2008, 13:49 PM
Cheers agent. Your a very useful addition to the forum!

No problem.

Thinking a bit further about it though, the million dollar question is - if the tenant's right of action can survive them giving up possession, when does their right of action expire?

a) Is it, like an ordinary contractual debt action, limitation barred after 6 years?

or

b) Does the right of action end when the tenant accepts the return of the deposit, which implies that there is no dispute between the LL and the tenant relating to the deposit? If so, any subsequent proceedings issued by the tenant would probably be an abuse of process and would be struck out.

If the right of action survived the tenant having received the refund of the deposit, then, as he no longer has the money in his possession, the LL would not be able to "remedial comply" by protecting the deposit retrospectively. As I've argued elsewhere in this forum, I think such remedial compliance is probably possible (as the penalty provisions in s.214 appear to disapply the time limits set out in s.213), but we won't know for certain until someone takes the point to appeal.

My money is on (b), but I'm happy to be persuaded by arguments to the contrary.

leigh123
21-04-2008, 07:25 AM
So on one hand we have the TDS guidance and three schemes saying one thing and a single judge saying another. I know where my money lies at the moment.

She debated for a while over the 'paid and received' argument and to be honest I believe that because she was so unsure of what to do, having printouts of those sites and paragraphs you refer to could have made all the difference, but unfortunately this issue really wasn't something I had thought of as it seemed like it was a given considering the amount of publication regarding new tenancies with the initial deposit held on as security.

Just to add another interesting point in the case (I'll request the transcript and post it up here ASAP):

The judge said that she couldn't apply S214(4) without applying 214(3). This was not an issue for me because I'm still in tenancy but if I had moved out, got deposit back and was just going for x3 penalty, she said that this would not be possible because 214(3) wouldn't be able to be applied and 'unlock' 214(4). I think this is also incorrect!

A question which someone might be able to answer - if I don't appeal this but say in 6 months there are 2 or 3 successful cases to refer to, is it possible to initiate a new claim based on the same parameters or is there a double jeopardy type thing to prevent it? I'm not sure that going back at this point with the multiple TDS guidance would be enough to change the interpretation of the 'paid and received' in the HA.

Planner
21-04-2008, 09:03 AM
The judge said that she couldn't apply S214(4) without applying 214(3). This was not an issue for me because I'm still in tenancy but if I had moved out, got deposit back and was just going for x3 penalty, she said that this would not be possible because 214(3) wouldn't be able to be applied and 'unlock' 214(4). I think this is also incorrect!



Thats is interesting. That would imply that even if TDS isnt complied with and court action is launched, as long as the deposit is returned in full before the court date then the landlord is in the clear and cant be stung for the x3 "compensation". To my mind whats the point of TDS. A landlord/agent might as well not protect the deposit until court action is started (if ever). That turns a pretty toothy piece of legislation into a worthless bit of paper!

agent46
21-04-2008, 09:33 AM
A question which someone might be able to answer - if I don't appeal this but say in 6 months there are 2 or 3 successful cases to refer to, is it possible to initiate a new claim based on the same parameters or is there a double jeopardy type thing to prevent it? I'm not sure that going back at this point with the multiple TDS guidance would be enough to change the interpretation of the 'paid and received' in the HA.

If you want to appeal, you need to do so now. You won't be able to re-litigate the case if decisions in your favour are reported at a later date because the issue between you and your LL is (stand by for latin) res judicata (the thing is already judged) and any new claim based on the same facts would be struck out as an abuse of process.

Planner - I don't know whether you read my post in another thread where I had a crack at reasoning how a LL can avoid the 3X the deposit penalty on other grounds. http://www.landlordzone.co.uk/forums/showpost.php?p=71398&postcount=19

The s.214(4) and s.213(3) comments are interesting. However, I'm not convinced by that line of argument, as it would completely defeat the purpose of the Act, unless of course the slightly more nuanced reasoning I employ in post # 19, above, applies. In which case, I'd suggest that if a LL tries to scupper a 3X the deposit claim by puportedly repaying the deposit, then the tenant should immediately return the money with a covering letter stating that there is still an outstanding dispute relating to the deposit.

Sorry to go on about it, but as I've been saying for ages, altogether, the HA 2004 (certainly the bits I've read and used) is an absolutely appallingly drafted piece of legislation.

p_cas
21-04-2008, 11:14 AM
Thats is interesting. That would imply that even if TDS isnt complied with and court action is launched, as long as the deposit is returned in full before the court date then the landlord is in the clear and cant be stung for the x3 "compensation". To my mind whats the point of TDS. A landlord/agent might as well not protect the deposit until court action is started (if ever). That turns a pretty toothy piece of legislation into a worthless bit of paper!


Surely the point is that the tenant would get their deposit back in full in these circumstances - even if they had left the property damaged or owed rent? I thought that was the point of the legislation, to stop unscrupulous landlords holding on to deposits? So the legislation would have worked even though the tenant doesn't get the 3x payout they may have liked.

swanman
01-09-2008, 19:08 PM
Dear Leigh

I ahve a case going to Court and would be pleased to know to which Court your case went and the name of the Judge.If at all possible I would be most grateful to hear from you by 8 September?

Regards

swanman

swanman
01-09-2008, 19:23 PM
Dear Leigh 123

This is a second reply sent straight after my previous one but I forgot to mention the "123" in your title! so I'm sending this in case i got your title wrong.
My ? is what was the name of the Court and the Judge who heard your case? If a reply can be sent ot me by 8 Sept I would be most grateful?

Swanman

thomas12
12-02-2009, 16:19 PM
Does anyone know the case reference for this case?

Many thanks