Owens & Anor v Grose & Anor [2015] EWHC 839 (QB)

As if tenancy deposits weren’t complicated enough, now we can add libel claims to the consequences of a heated deposit dispute. It turns out that sending potentially libellous accusations to the deposit scheme adjudication service is possibly covered by qualified privilege.

Mr & Mrs Grose let a property to Mr & Mrs Owens on a 6 month tenancy, with a deposit of £1575. The let was managed by the G’s agents, Goadsby, who held the deposit. The deposit was protected with TDS.

There were special conditions of the tenancy to the effect that Mr & Mrs Owens could keep a cat and 2 dogs at the property. The Owens would have the property, carpets and soft furnishings professionally cleaned at the conclusion of the tenancy. It was also set out that Mr & Mrs Owens only had access to the garage nearest the front door of the property.

Alas, at the end of the tenancy, things did not go smoothly. As the appeal judgment puts it:

“A check out inventory was performed in late August 2013 and by email dated 27 August 2013 Mrs Grose complained to Goadsby “deposit queries” by an email, copied to Simon Whitlock who was the person at Goadsby with whom Mr and Mrs Grose had had most contact, complaining that there were dog scratches on the door which had not been there before, and that it did not look like the property had not been professionally cleaned and asking to see any invoice. By email dated 30 August 2013 Charlotte Old, property administrator at Goadsby, forwarded the email to Mr and Mrs Owens.

On 5 September 2013 Janine O’Hara, a senior supervisor at Goadsby, emailed Mr and Mrs Grose noting that the price of a new door would be £100, and recording that there had been no reply about the cleaning invoice.

By letter dated 10 September 2013, emailed to Charlotte Old, Mr and Mrs Owens replied. An invoice for cleaning the carpet in the lounge was enclosed, but it was reported that the “carpet cleaner deemed that the other carpets were too clean to need cleaning and we left them in abeyance”. Complaints were made about the condition of the property at the beginning of the tenancy. Mr and Mrs Owens also complained that there had been “illegal use of the parking bays” and blocking of access to the garage, for which a sum of £500 was demanded. It was contended that the landlord was not allowed to use the garage. Complaint was made about the state of the bathroom and the need to use a jug in the bathroom. It was said that to allege that the property was in a worse condition than before was “blatantly untrue”. Photographs of the oven were attached. The letter concluded noting that if the deposit was not received Mr and Mrs Owens were more than happy to proceed to Court and suggesting that Goadsby should inform Mr and Mrs Grose about the rules and regulations relating to landlords.

By letter dated 12 September 2013 Louise Rankin, a manager at Goadsby, wrote to Mr and Mrs Owens proposing a deduction of £100 and VAT for the door and asking again for an invoice from the cleaning company. By letter dated 16 September 2013 Ms Rankin wrote to Mr and Mrs Grose enclosing the letter dated 10 September 2013 and asking “how you wish us to respond”.

By letter dated 21 September 2013 Mr and Mrs Grose wrote a letter to Goadsby. This is the letter in respect of which the claim for defamation is brought. The letter responded to the letter dated 10 September 2013. It started “to address the Owens letter in the first instance … who are the carpet cleaning company to decide the carpets did not need cleaning” reporting the finding of white dog hairs. Reference was made to the photographic record and the fact that the Owens’ dog had left large scratches on the door. Mr and Mrs Grose raised other complaints about the behaviour of Mr and Mrs Owens’ dog and cat (faeces in the garden and fights between cats). There was a discussion about the claim for £500 being a diversionary tactic, and the fact that Mr and Mrs Owens had parked in front of the garage which had been excluded from the tenancy, and failed to permit anyone to view the property until 20th August, which was in breach of express conditions in the contract.

In relation to the points about the shower and jug comments were made about the bathroom suite. Mr and Mrs Grose wrote that they had offered Mr Owens to have a power shower fitted “but he said he would get a plumber who worked for his company Owens and Porters to come and fit a shower on the company account”. Mr Grose reported that he had offered to pay for the capital cost but that had not been accepted. The letter continued noting “this does raise the question though regarding Mr Owens using his company resources” noting that it would not be permissible in a private home, and that Mr Grose’s sister, who was an accountant, said that would be illegal. Reference was made to other work being charged to Mr Owens’ company and the dim view HMRC might take. The letter went on pointing out that Mr and Mrs Grose had not wanted Mr and Mrs Owens as tenants because of the animals, and commenting again on the lack of cleaning. Mr and Mrs Grose wrote stating “we too would be more than happy to proceed to court for the sum of £3700 based on their instigating after the fact charges, plus the outstanding amount incurred for the damaged door and the caveat of the cleaning of the house after the pets. Indeed we would welcome the chance to bring these facts … to a wider audience …”.”

This last letter was apparently also sent to the TDS adjudicators – DSL – when Goadsby opened a deposit dispute case.

In April 2014, the Owens issued their claims for libel.

“The publications of the letter dated 21 September 2013 to both Goadsby and to DSL were complained of. The defamatory meanings were pleaded to be that: (a) the Claimants were bad tenants; (b) the Claimants had fabricated dishonest objections to the Defendants’ dilapidations claim with the intention of avoiding liability; (c) the Claimants failed to care for their pets; (d) the First Claimant had illegally used the sources of his company to pay for personal expenses; and (e) the First Claimant, as a prominent local managing agents, was a hypocrite because he did not comply with standards of good behaviour by tenants.”

After some to-ings and fro-ings, the Groses applied for the claims to be struck out because (1) The Groses were not responsible for the publication to DSL; (2) the publications were on the occasion of qualified privilege; and (3) the claim was a Jameel abuse of process.

At first instance, the application was dismissed, the Judge finding:

“(1) the letter contained material which impugned the probity of Mr Owens; (2) the extent of publication was a matter for trial; (3) much of the letter to Goadsby was subject to qualified privilege however whether qualified privilege would be a defence to the imputations of lack of probity was “a matter of mixed fact and law which needs to be decided”; (4) malice “is also a matter which should be decided at trial”; (5) having regard to issues about real and fanciful prospects, the matter should be determined at trial; (6) in relation to Jameel the references to Mr Grose’s probity were sufficient to warrant this being considered a substantive tort which might have a deleterious effect on his professional reputation. There were doubts about the other matters but that would be for the trial judge.”

On appeal, the High Court took a different view.

Clearly the publication to Goadsby was an occasion of qualified privilege and the whole letter was “in any way related to or connected with” the deposit dispute.

The further publication to DSL was also an occasion of qualified privilege.

“DSL had a duty or interest in receiving the whole of the letter dated 21 September 2013 because DSL were providing a dispute resolution service relating to the deposit. The letter dated 21 September 2013 was a response to a letter denying that sums from the deposit should be retained. The whole of the letter was “in any way related to or connected with” the dispute about the deposit because it was a response to a letter contesting the claim for retention of the deposit.”

As qualified privilege applied, the only remaining issue was whether parts of the letter could be considered to be evidence of malice.

It was clear that the correspondence about the deposit had got heated on both sides. The Owens had talked about ‘illegal use of parking bays’ and demanded £500 in a way unlikely to calm matters, while failing to deal with the breach of express cleaning covenant. On the other hand, the Groses had leapt from the discussion about the shower to conclusions of wrongful use of company resources. But while this latter assertion was false, there was no evidence that it was made maliciously.

“The circumstances of a heated dispute about the return of a deposit might be thought to be classic territory for the making on both sides of illogical, false, but honestly intended claims and statements to persons who had a duty or interest in receiving them. The fact that Mr Grose had spoken to his sister about the legality of company payments is not evidence of anything other than a genuine, but completely mistaken, belief in the honesty of the charge being made against Mr Owens.”

A late attempt by Mr Owens to deny that there had ever been a conversation with Mr Grose abut a plumber was undone by his own solicitors’ pre-action letter to Mr Owens, which set out the content of that conversation.

There was no evidence to show that the Groses had made “defamatory statements which they knew to be untrue; dragged in irrelevant defamatory matter to vent their spite; or acted for any improper purpose”, so no evidence of malice to be tried.

The appeal was allowed and the libel claims dismissed.