Toward the end of May the Court of Appeal made another decision involving s21 notices. You might think that this is of diminishing interest but that would be wrong. This is because the decision was actually to do with whether or not the deposit protection regime had been correctly complied with. Therefore the decision will have ongoing importance as the changes made by the RRA mean that a possession order cannot be made if the deposit is not protected properly. Therefore deposit protection failures (or claimed ones) will continue to be a big part of the possession scene going forward.
his is also an interesting case because of the recent consideration of technical deposit failures. This case, as we shall see, mostly concerns minor issues with the documents rather than a fundamental failure to protect. The case of Lowe v Charterhouse, being heard by the Supreme Court later this year, also is more concerned with paperwork defects. This is not to say that these defects are of no importance. The legislation was enacted for a reason and if we are going to say that the requirements of protection do not matter then that is a big deal. But there must also be a balance. Defects should not be ignored but if they are truly minor and have not impacted a tenant in any way then landlords should not be kept out of their property for trivialities.
There is a lot of procedural aspects to this appeal which I am not going to discuss. They are of interest to lawyers dealing with appeal work and they may want to look at the comments of the Court of Appeal here, but my focus is more tightly on the deposit legislation aspects.
Ultimately, the four points that the Court of Appeal had to consider for this appeal were:
- The landlord’s telephone number in the Prescribed Information in the tenancy agreement was wrong by one digit;
- The corrected Prescribed Information sent later had the right telephone number for the landlord but then had the address wrong;
- The Prescribed Information referred to a clause in the tenancy agreement for the sum of the deposit, but it was the wrong clause;
- The landlord had not signed a certificate to confirm the accuracy of the information given.
The Court disposed of the first three points swiftly. They were “of no material consequence”. A reasonable recipient would identify the erroneous clause and correct it for themselves, the deposit amount was well known. The telephone number error was irrelevant as the landlord and tenant had communicated by email and the tenant clearly knew the address of the landlord as it was given correctly in the tenancy agreement. Therefore the statutory purpose had been achieved.
The lack of signature is an issue in which the court has hear gone even further down the road started by Lowe. In Lowe the certificate was not signed but the covering letter was signed. The Court there said that the signature on the letter was enough as someone had turned their mind to the issue. Here the Court said that the absence of a signature was irrelevant and provided that all the key information had been given then the signature was not that important. So the deposit was protected and the original s21 possession decision stood.
There is a definite turn at the moment from appellate courts that they are just not interested at all in these technical arguments. There has been a general refusal to accept such cases when they are fully considered. The funny thing is that County Courts do regularly accept these arguments and the Court of Appeal also allows the appeals to be heard so it is not as simple as there being a refusal to accept the argument.
I do wonder if this case will be appealed again. I could see an urgent application being made to the Supreme Court with a request to hear it alongside Lowe. In part this would be interesting because it was LJ Snowden (as he then was) who gave permission for this case at the Court of Appeal but he never heard the appeal because he had by then been elevated to the Supreme Court. So it would be interesting to see if Lord Snowden (as he now is) had other reasons for allowing the appeal and would overrule his former colleagues. I appreciate that I may be in a bit of a minority in finding this interesting.
David Smith is a Partner in our expert Landlord & Tenant team.
Contact David by emailing dsmith@bishopandsewell.co.uk or call on 020 7631 4141.
This blog was first posted on LinkedIn by David Smith on 15 June. You can subscribe to David’s updates here.
