Our thanks for this county court possession and deposit appeal case note to Josephine Henderson of Five Paper Chambers and Dambudzo Tenner of Duncan Lewis
Amak Property Investments (London) Ltd v Laura Sonny B01CL657. 15 September 2016, The County Court at Central London
This was an appeal of the dismissal of a set aside application following a possession order being made under the accelerated procedure without a hearing. Although it was accepted by both parties that Ms Sonny had filed a defence that the court had not considered, Ms Sonny’s application was dismissed as the DDJ felt there was no reasonable prospect of success in her defence. He had made a finding of fact on a disputed issue of whether or not the prescribed information had been served prior to the service of the s.21 notice. Having found that it had, he considered that Ms Sonny’s defence would fail. The appeal was heard at Central London before Recorder Klein.
Ms Sonny’s defence which had initially been found not to have a reasonable prospect of success, was based on the MyDeposits scheme rules (7th Edition) specifying that service of the prescribed information constituted an “initial requirement” of the scheme for the purposes of s.213(4) – Clause C1.5. The landlord had failed to serve the prescribed information within 30 days.
The landlord sought to rely on s.215(2) of the HA 2004 in that as the prescribed information had been served by the time the s.21 notice had been, the notice was valid and a possession order should have been made. Ms Sonny’s defence had no reasonable prospects of success.
Ms Sonny’s case was that per the scheme rules at clause C1.5, service of the prescribed information was an initial requirement of the MyDeposits scheme and the failure to comply with this initial requirement, within 30 days meant s.215(1A) applied and a s.21 notice could not be served other than if s.215(2A) applied – the return of deposit.
The appeal was allowed and Recorder Klein found that the application to set aside should have been allowed.
The claim itself was also considered and Ms Sonny’s defence was accepted; in that the MyDeposits scheme makes service of the prescribed information an initial requirement and so failure to comply attracted the sanction at s.215(1A) not s.215(2) – the landlord needed to first return the deposit (with agreed deductions) or have a claim in relation to it settled, before a valid s.21 could be served.
This is a first appeal to a Circuit Judge, and as such non-binding though possibly persuasive for District Judges. Nevertheless, I’m in two minds on this argument.
While s.213(4) states:
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.
and this would seem to catch service of the prescribed info under MyDeposits rules, it is also arguable that service of the prescribed info is not a requirement imposed by the scheme, but rather by s.213(5) and s.213(6) and as such is distinct from the scheme specific requirements, such that non compliance in 30 days falls under s.215(2), not s.215(1A).
But, as I’ve always thought, compliance with ‘initial requirements’ of a scheme was going to be more of a minefield than Tiensia made it seem, before the Localism Act changes.