Okadigbo & Anor v Chan & Anor

Where a landlord fails to comply with the tenancy-deposit requirements, the court must order payment of between one and three times the deposit under section 214(4) of the Housing Act 2004. The amount is discretionary within that statutory range. Culpability is a relevant, and potentially the most relevant, factor. A court may take account of limited experience, reliance on managing agents, subsequent compliance and admission of breach. An appellate court should not interfere merely because it might have imposed a different sum. The exercise will stand where the judge considered the relevant circumstances and reached a permissible conclusion.

The appeal concerned possession and rent arrears proceedings in the Willesden County Court. The tenants counterclaimed for the statutory penalty because the landlords had failed to protect the tenancy deposit within 30 days and had provided the prescribed information late. Liability was admitted. The county court awarded one times the deposit, £1,520, having found that the landlords were inexperienced, had relied on managing agents and fell at the lowest end of culpability. The landlords appealed, contending that the prolonged non-compliance warranted a higher award. The central issue was whether the judge had exercised the statutory discretion properly.

1. Appeal dismissed. The landlords were liable for a mandatory payment because they had failed to comply with the tenancy-deposit requirements. Section 214(4) of the Housing Act 2004 required an award of not less than the deposit and not more than three times its amount.
2. The amended statutory scheme introduced discretion within that range. The court was not required to impose the maximum penalty or any fixed multiple.
3. The county court judge was entitled to regard culpability as the most relevant factor. She was entitled to find that culpability was at the lowest end of the scale, having regard to the landlords’ lack of experience, their reliance on professional managing agents and the fact that the breach was ultimately corrected.
4. The delay remained relevant, but the breach had been admitted and the deposit had eventually been protected and the prescribed information provided. The appellate court could not say that the award of one times the deposit was outside the range of permissible decisions or that the discretion had been wrongly exercised.

• High Court (Queen’s Bench Division): The appeal from the Willesden County Court was dismissed. The award of £1,520 under section 214(4) of the Housing Act 2004 was upheld.