Harvey v Bamforth – now with the benefit of a transcript

Harvey v Bamforth 8PA13344, HHJ Bullimore, Sheffield County Court, 8 Aug 2008

When we first commented on this case (here) we provoked quite a response. Thanks to to Mr Jones of Bury Walkers (who acted for Ms Harvey) we have now been provied with a transcript of the judgment. So – here is what it says.

Mr Bamforth was the assured shorthold tenant of a property owned by Ms Harvey. A deposit was paid to Ms Harvey via her letting agents. The deposit was lodged with TDS within 14 days of the start of the tenancy.

Rent arrears began to accumulate and, in January 2008 (the transcript says 2007, but I think that must be a typo) possession proceedings were issued. The proceedings were defended on the basis that the prescribed information (s.213(5) and (6), Housing Act 2004) had not been provided. It was accepted by the landlord that the prescribed information had not been provided within the time specified in s.213(5) and (6), but was said that it had been provided at a later date. However, it seems that the landlord withdrew the possession claim, leaving only a money claim for rent arrears.

Mr Bamforth then issued an application for the return of his deposit and for damages of three times the value of the deposit. His application was heard by a Deputy District Judge who ordered that the deposit to be returned pursuant to s.214(3)(b) HA 2004 and ordered damages of three times the value of the deposit pursuant to s.214(4) HA 2004. Both sums set off against agreed rent arrears. The DDJ granted permission to appeal.

Ms Harvey therefore appealed both the order for the return of the deposit and the damages award.

s.213 Housing Act 2004 provides (insofar as is material):

213 Requirements relating to tenancy deposits

(1) Any tenancy deposit paid to a person in connection with a shorthold tenancy must, as from the time when it is received, be dealt with in accordance with an authorised scheme.

(2) No person may require the payment of a tenancy deposit in connection with a shorthold tenancy which is not to be subject to the requirement in subsection (1).

(3) Where a landlord receives a tenancy deposit in connection with a shorthold tenancy, the initial requirements of an authorised scheme must be complied with by the landlord in relation to the deposit within the period of 14 days beginning with the date on which it is received.

(4) For the purposes of this section “the initial requirements” of an authorised scheme are such requirements imposed by the scheme as fall to be complied with by a landlord on receiving such a tenancy deposit.

(5) A landlord who has received such a tenancy deposit must give the tenant and any relevant person such information relating to—

(a) the authorised scheme applying to the deposit,

(b) compliance by the landlord with the initial requirements of the scheme in relation to the deposit, and

(c) the operation of provisions of this Chapter in relation to the deposit,

as may be prescribed.

(6) The information required by subsection (5) must be given to the tenant and any relevant person—

(a) in the prescribed form or in a form substantially to the same effect, and

(b) within the period of 14 days beginning with the date on which the deposit is received by the landlord.

Section 214 Housing Act 2004 provides (again, so far as it material):

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—

(a) that the initial requirements of an authorised scheme (see section 213(4)) have not, or section 213(6)(a) has not, been complied with in relation to the deposit; or

(b) that he has been notified by the landlord that a particular authorised scheme applies to the deposit but has been unable to obtain confirmation from the scheme administrator that the deposit is being held in accordance with the scheme.

(2) Subsections (3) and (4) apply if on such an application the court—

(a) is satisfied that those requirements have not, or section 213(6)(a) has not, been complied with in relation to the deposit, or

(b) is not satisfied that the deposit is being held in accordance with an authorised scheme,

as the case may be.

(3) The court must, as it thinks fit, either—

(a) order the person who appears to the court to be holding the deposit to repay it to the applicant, or

(b) order that person to pay the deposit into the designated account held by the scheme administrator under an authorised custodial scheme,

within the period of 14 days beginning with the date of the making of the order.

(4) The court must also order the landlord to pay to the applicant a sum of money equal to three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order.

Ms Harvey contended that the power to order the return of a deposit and damaged pursuant to s.214(3) and (4) only arose if the court was satisfied that s.213(6)(a) had not been satisfied and that compliance with s.213(6)(b) was irrelevant for these purposes. So – the power to order the return of the deposit and damages only arises if the landlord has failed to provide the prescribed information in the prescribed form (or one in similar effect). It is irrelevant, for the purposes of s.214(3) and (4) when that information is provided.

HHJ Bullimore accepted this argument. In his judgment:

[t]he failure on the landlord’s part was not that ‘the prescribed information was not given’ but that it was not given within the fourteen days. The district judge… took the view that [s.213(6)(a) and s.213(6)(b)] were so closely connected that they only made sense if they were read together but I think that was an error. I think that the draftsman in dealing with proceedings relating to tenancy deposits in Section 214 was very clear in differentiating between the requirements of giving information and giving the information after a specified period.

There were, to his mind, sound policy arguments for this conclusion:

… they are very serious powers to be exercised against a landlord… one can well see that in the minds of the legislators, it was one thing to deal with a landlord who had not provided the prescribed information at all and to deal with it in that way with a landlord who had provided the prescribed information but had not done it within that short period laid down by the Act.

Accordingly, as the information had been given before the tenant made his application, the application should have failed. The appeal was allowed and the order for the return of the deposit and the damages was overturned.

A final word of caution. This was only a decision of a county court and one that was only argued on one side (Mr Bamforth didn’t appear at the appeal). It is not a binding decision and other judges are perfectly free to come to other conclusions. As to whether or not it is right – I’ll leave that to you all to comment on!

[For all tenancy deposit case posts click here]

About J

J is a barrister in London. He loves service charges and all things leasehold law related. He also likes beating rogue landlords and mortgage companies.
Posted in Assured Shorthold tenancy, Deposits, Housing law - All and tagged , , , .

23 Comments

  1. Although HHJ Bullimore’s point is superficially attractive due to the hefty and indiscriminate sanction that is clearly consequent on the drafting of the legislation that cannot be remedied in such a manner.

    The duty is to provide the information in a prescribed form or a form to that effect – and a time limit has been set namely 14 days .

    There is only a breach of Section 213(6)(a) when the time limit is up . Thus (b) is an inextricable part of (a) .It would have been superfluous for Parliament to have referred to a breach of (b) separately.As there can be no breach of (a) without a breach of (b) !

    By setting a time limit it might well be thought that Parliament was seeking to prevent a situation like the toothless Section 48 Landlord and Tenant Act 1987 whereby a landlord can avoid the consequences of non-compliance simply by serving the information before the hearing.

    The provision of this information is vital to the tenant knowing his rights under the scheme . The construction proposed by HHJ Bullimore ignores the fact that it is almost as important for the tenant to be informed of their rights as for the deposit to be held under the scheme.

    Finally, if HHJ Bullimore is right it is a green light to never giving the information until it is demanded . That defeats the whole purpose of the information requirement of the legislation.

    A hard case on the landlord but it makes bad law and should not be followed .

  2. @JS: I agree that 214(1)(a) does not make sense as a standalone clause – it makes it technically possible to bring a claim during the first 14 days, when the tenant has not been notified. But practically that simply would fail as notification would be given before hearing. In addition 213(6)(a) has an ‘and’ to include (b) So I follow your view that 213(6)(b) should be implied into the mention of 213(6)(a) in 214(1)(a).

    But the counter argument is also clear. It would have been utterly open to Parliament to expressly state 213(6)(a) AND (b) in 214)1(a), but it didn’t. And one can’t wish away the express letter of the law.

    You argue that this view makes the legislation toothless, but the counter proposal is that a strict liability offence should demand clear culpability. What if a TDS computer goes down, should every landlord who failed to meet the 14 days as a result face a 3x payment? (Note I merely make the counter view as it might have floated through the mind of parliament).

    The argument then is that the possibility of a claim becomes the means of enforcing compliance – the landlord has to comply before hearing, (or arguably before claim – don’t forget that) – or face a strict liability penalty.

    Personally I think that the key issue is actually date of claim v date of hearing as the key date for compliance. Date of issue avoids landlords taking the mick by last minute compliance, while offering tenants the capability for effective enforcement of the deposit requirement when it is late by more than a moment or two.

    If it ends up being decided that the key date is the date of hearing – which the act does suggest – it would have been good to see some provision on costs of a claim that was frustrated by late compliance by the landlord – but this may simply be an argument for the point of claim being the determinative point, not the point of hearing.

    It is, without a doubt, badly drafted legislation, but these days that is hardly a surprise. By the way, as J mentioned, HHJ Bullimore’s judgment is that of a Circuit Judge in the county court, even if it was on appeal from a DJ, so it is not binding. I believe that a couple of Deputy DJs read the blog sometimes, so who knows, perhaps your exhortations might have some effect.

  3. Didn’t we think (at the time the Act was passed) that HHJ Bullimore’s construction would be the one that the courts would have to accept once the point was litigated? I seem to recall so. The penalty set by Parliament was deliberately draconian, pour encourager les autres. I would agree with JS that s.213(6)(b)is an inseparable part of (a) – until it comes to levying the sanction. The ill advised, tardy but basically decent landlord (a concept that does exist in reality) can remedy the situation by doing what Ms Harvey did, and escape the sort of arbitrary sanction that would have us righteously frothing at the mouth if it were an automatic fine due from Criminal defendants. There are still plenty of landlords around who won’t comply in time, and my sympathies definitely do not lie with them.

  4. Has anyone else noticed that no prescribed form has been made. The sanctions only bite, if either the ‘initial requirements’ of the scheme have not been adhered to (whatever they are, they are not readily defined by the schemes themselves); or there is a failure to provide the prescribed information on the prescribed form. As there is no prescribed form, it is impossible to comply. Either that latter default cannot result in the sanction or all landlords are liable.

  5. It must be given in the prescribed form or in a form substantially to the same effect. I accept your correction, but the point remains. There is no prescribed form.

    s213(5) details the prescribed information that must be given. An SI has provided that information. However, there is no sanction in s215 for not complying with 213(5). The sanction is for breaching s213(6)(a). The landlord has to give the information ‘in’ the prescribed form. There is no such form. It is therefore not possible to give it in that form, or in a form substantially to the same effect. This appears to be a hybrid of the sections 20 and 21 in HA88; i.e. s20 notices were in prescribed forms and allowed for minor deviations whilst s21 notices have no prescribed forms but must strictly adhere to the statutory requirements.

  6. I take your point, but not sure how far it goes. Arguably, part of s.2 of The Housing (Tenancy Deposits) (Prescribed Information) Order 2007 covers a prescribed form (2(g) for instance).

  7. Ah but NL that is the point this is the strict letter of the law – (b) does not need to be mentioned in Section 214- as it is superfluous to do so.

    As for the harshness of the sanction well that was the point – sharp teeth would prevent landlords desultorily failing to comply. If you get involved in letting property it is the landlord’s responsibility to find out what his statutory obligations are .

    As for the totally faultless landlord it is not beyond the wit of the courts to fashion an exceptional circumstances defence without statutory authority – by analogy they did that with the Ground 8 adjournment power despite the fact this is exceptional by circumstance rather than unfairness. Ground 8 can be used as a second analogy too . A tenant not at fault but tardy in rent payment due to HB delay can lose his home a rather more serious sanction than three times a deposit ?

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  10. JS alludes to the loss of the landlords home. If there is a dispute and an action has been brought yes, the landlord can not repossess the home but surely only until the situation has been rectified and due penalty applied.

    Another aspect of 213 and 214. If the landlord has engaged a letting agent who defaults on 214(1), against the landlord intentions, it seems the court has no alternative but to apply 214(4).

  11. @Alan: Not wholly sure what you are saying. But, for clarity, if a landlord has not put the funds into a TDS and/or supplied the relevant information, then the landlord cannot serve a valid s.21 notice. The landlord can still serve a valid s.8 notice (rent arrears, say).

    And the responsibility for putting the deposit in a scheme and providing the information is the landlord’s. The letting agents are agents for the landlord – their default is the landlord’s default. Look at it this way – it is the landlord’s responsibility to use competent and reliable letting agents. However, the landlord may have a breach of contract claim against the letting agents for their losses, if the letting agents had said that this was part of their service (but that is nothing to do with the tenant).

  12. NL. I beg your pardon, I misread JS who made reference to the tenant losing the home and not the landlord.

    Yes, a landlord is responsible for choosing a letting agent but that is the problem. If an agent does not follow 213(1)the agent’s actions are deemed to be the landlord’s. But a breach of contract is hardly going to save a landlord from paying the penalty of 3 times the deposit, if a relevant person makes an application to the court under 214(1) then 214(4) must apply, the court appears to have no discretion. A landlord must suffer even though his intentions were not to breach 213(1). Also, if the agency susequently goes into liquidation what hope is there for recovery of the losses. This is not a hypothetical case, it exists. Does this law penalise the naive; is that what was intended?

  13. @AMA – but there is an answer to that situation. A landlord needs to ensure that his agents are (a) competent and (b) fully insured. If the landlord appoints such agents and then something goes wrong with the deposit such that the tenant issues proceedings for an award of 3x the deposit, the landlord will simply apply to join the agents as a second defendant and require them to compensate him for any losses that were occasioned by their impropper actions.

    What the law does – and, to my mind, quite properly – is put the onus on landlords to either get up-to-speed with landlord and tenant law themselves or appoint competent agents. Those who do neither are not particularly deserving of sympathy.

  14. J.- I don’t think sympathy is the issue here, more one of justice. Should a landlord be penalised because he was unlucky enough to choose, at best, an incompetent agent or at worst a rogue? Sagacity is not shared out equally. Without allowing a court discretion in applying 214(4) I suggest that justice may be thwarted. By the way, your computer clock is still set to BST.

  15. There is potential here for a scam by rogues. When a landlord advertises a property for rent, such as in Gumtree or a local paper he is often approached by agents offering to let it for him, often with tenants ready to move in.
    What is to stop a crook to pose as an agent, put in his friend as tenant, fail to lodge the deposit, and then share the penalty proceeds ?

    I was appraoched by an agent, who took the deposit and rent, and failed to lodge it, and has now disappeared owing me, (and other landlords), rent.

    It is terrible that I could become liable for 3 times deposit, ahving lost both deposit and rent.

    Comments please.

    • John,
      Yes there is that potential. It would make no difference to the liability that the landlord had been defrauded by an agent or third party. As ever, landlords should chose letting agents with care.

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  18. Harvey v Bamforth appeal = very good law.

    See HMT’s webpages and Explanatory Memorandum, which provide:

    Housing Act applications are on “limited grounds” and the policy intent is to “safeguard deposits” and “failitate dispute resultion through ADR”. NOT to bully landlords.

    These worhty objectives are met (H v B) where Landlord complies any time before Tenant departs/seeks return of deposit. Deposit protected, ADR faciliated.

    It makes no difference to Tenant whether info arrives first 14 days or later in his tenancy term – he suffers no harm from either and is in exactly the same position either way!

    Above sources also state average UK deposit is £500. Multiplied by 3 that is not offensive. City residences taking higher deposits would find 3x deposit grossly punitive e.g. £6000? (potentially exceeding criminal fines) – very unfair to inadvertently unaware Landlords in these early years of the regime.

    • Sorry Landlord, but H v B is an arguable case, and one you find attractive but that doesn’t make it ‘good law’. It is a County Court decision, others have gone the other way.

      And the simple reply to your version of the ‘policy’ argument is what happens if the landlord goes bankrupt, or agent goes bust, during the time when you appear to think the deposit can remain comfortably unprotected? That is the point of protection – the deposit is not at the mercy of the landlord or the landlord’s own problems.

  19. I am a Landlord and have had some worries about this new law which has come into place. I rented my property in September 2007. After 5 months of hell with this tenant I decided that I will not be renewing the tenancy and started making enquiries about claiming for reposession of the property. Being new to all the landlord game, I was not really aware of the procedures that are in place and I was advised to contact the landlord support officer at my local council. When speaking to him, he mentioned if I had protected the deposit with a deposit protection scheme. I was totally unaware that the deposit needed to be protected and made arrangements for it to be done straight away. I supplied the tenant with all the relevant information and then left it at that. Over a year later i am looking to apply to the courts for possesion of the property, Does anyone know if the tenant is still able to make a claim against me for not protecting the deposit within 14 days and if the section 21a notice which i served will still be valid?

    • Juan, it is not a new law. And, at the risk of lecturing you, you should make sure you know the legal duties and rights of a landlord before you become one. It constantly astonishes me that people don’t do the research.

      On the 14 days issue, read the other posts on tenancy deposit cases on this blog and you will find the answer is, helpfully, ‘perhaps’.

      On the s.21 – I can’t tell because you don’t say when you served it.

      But don’t tell me when because we can’t give advice on individual cases on the blog, as the disclaimer says. For that, you will need to see a solicitor…

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