England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		23 October 2014

MR JUSTICE MALES:

1. This is an appeal by Mr Michael Ogadigbo and Ms Teri Karuki(?) against a decision by Her Honour Judge Carr in the Willesden County Court in an action which was brought against the appellants for possession and arrears of rent. There was a counterclaim for a penalty payment pursuant to section 214(4) of the Housing Act 2004 for a failure by the respondents to the appeal, Dr (inaudible) Chan and Dr Georgia Chan to place a rent deposit in an appropriate scheme and to provide the information prescribed by the Act at the proper time.
2. The tenancy agreement commenced on 1 August 2012 and the deposit was required to be protected within 30 days thereafter; that is by 31 August.
3. The respondents admitted liability for the breach of that requirement and were therefore liable for a mandatory penalty payment. In fact, the deposit was protected before the tenancy came to an end, but not until 5 March 2013, and the relevant information was provided on 8 July 2013. However, both of those things were done late.
4. Section 214(4) provides that where there has been a failure to comply with the requirements relating to tenancy deposits:

"The court must order the landlord to pay to the applicant a sum of money, not less than the amount of the deposit and not more than three times the amount of the deposit within the period of 14 days beginning with the date of the making of the order."

5. That provision is an amendment of the regime which previously applied. The previous rule was that the payment was to be three time the amount of the deposit with no discretion to order any different amount. The effect of the changes made by the amendment was to introduce a discretion for the court to order the landlord to pay part to give not less than the amount of the deposit and not more than three times the amount of the deposit.
6. In exercising her discretion under the Act as amended in that way the judge said this at paragraph 18 of her judgment:

"Finally, the Defendant seeks a penalty pursuant to Sections 213 to 215 of the Housing Act 2004. Section 214(4) provides that in the event of a breach, and here the breach is admitted, I must award the Defendant a sum of money not less than the amount of the deposit and not more than three times the deposit. The Defendant contends for the maximum sum which would be three times £1,520, a sum of £4,560. The Claimant contends for one month's rent in the sum of £1,520. I find that the Claimants are not experienced landlords, that this is the first time that they had let out any property and that they were letting out their home. That they quite properly put the matter in the hands of professional managing agents who let them down by not complying with the terms of the Act. I find this case to be at the lowest end of the scale of culpability for non-compliance. And for those reasons I award the sum of £1,520."

7. Mr Wellings for the appellants says that this was a wrong exercise of discretion. He submits that the lack of experience as landlords to which the judge referred and the fact that they put the matter in the hands of agents were matters of little weight when set against what he described as a serious failure to comply with the requirements of the Act for a considerable period of time. He recognised realistically that there was a degree of mitigation in that the breach had been admitted and that there was in the event full compliance, albeit only after a period of delay. He contended that the discretion of the judge should, therefore, be set aside and that the appropriate order would be a multiple of twice the appropriate amount of rent.
8. In my judgment, however, the judge was entitled to regard the question of culpability as the most relevant factor in determining what order to make and was entitled to find that the culpability in this case fell at the lowest end of the scale for the reasons which she gave. It is not as if the breach was uncorrected and therefore, although the appellants were lacking the protection for a period of some months, in the end matters were put right.
9. It seems to me to be impossible to say that that was an exercise of discretion by the judge and I therefore dismiss this appeal.