Davies v Scott, 24 October 2019, Mayors & City County Court . HHJ Saggerson (Unreported, we’ve seen a note of judgment)
This was a county court appeal on a failure to protect deposit claim. We saw the first instance decision on this case here.
This was Mr Scott’s appeal on the award of a three times deposit penalty for failure to protect the deposit. There was no cross-appeal from the claimant on the issue of multiple breaches of deposit protection, so that aspect of the first instance decision was not challenged.
On appeal, HHJ Saggerson found that the District Judge at first instance had erred in the exercise of the penalty discretion.
Although the District Judge had been wholly entitled not to be much impressed with Mr Scott, she had not made a specific finding that he had not made a mistake in not protecting the deposit, and had apparently been prepared to accept that he had made a mistake from the landlord.
Although the landlord had later prevaricated, or as the DJ had found, misled the tenants about the status of the deposit, a mistake was not sufficient to place the case amongst “the worst cases of this sort” so as to merit a 3 x deposit award.
The District Judge had also placed an “inordinate amount of weight” on what was described as “misleading” the tenants. That did not elevate a careless mistake and prevaricating in attempting to brush his (the landlord’s) mistake under the carpet into the level of flagrant breaches of the scheme where funds had been deliberately and dishonestly dissipated.
The focus of the court should be on the culpability of the landlord in the context of the registration and protection of the deposit. The later conduct of the landlord in this case was a inordinate distorting weight on the first instance consideration of that culpability, That said the, at best, unedifying conduct of the landlord was a factor the District Judge was entitled to take into account, as was the landlord’s failure to repay or protect the deposit once the mistake was realised, although the tenancy was practically at an end. But the weight of those factors must be balanced.
The District Judge had also placed undue weight on describing Mr Scott as a ‘professional landlord’. While this may well be a term used to reference levels of experience and so therefore the culpability of a landlord, the District Judge had used that term without an analysis of the landlord’s professionalism, beyond noting the facts that he had let two properties at various times. ‘Professional landlord’ was not a label with any statutory force, and using the term required further analysis of why it was appropriate.
The deposit penalty was re-assessed at 1.5 times the amount of deposit, meaning £6,900, rather than £13,800.
I’m not entirely sure where that gets us, save that the label ‘professional landlord’ does require some analysis and justification in use in a judgment. That, at least, makes sense.
I’m not wholly sure that making a distinction between a ‘mistake’ and a knowing and deliberate failure to protect a deposit is entirely helpful. The evidential burden seems quite extreme – that a tenant must somehow prove the landlord’s intentions and state of mind in failing to protect a deposit. The tenant can’t, practically, know whether the landlord has dissipated the money or not, for example. Unless the landlord has sent an email going ‘Mwah-ha-ha, I’ve blown your deposit on a Caribbean cruise holiday’, they can probably always get away with ‘oops, a mistake’. (Agents, much much less so…)
But there we are. This is what happens with discretions, at first instance and on county court appeal.
Meanwhile the ‘claim for multiple breach’ issue still awaits its higher court resolution in some other matter.