Swindells v Ayannuga: Is substantial compliance with the tenancy deposit requirements enough?

When the Localism Act 2011 brought in changes to the tenancy deposit framework many people thought that may be the end of the TDS litigation that had been coming before the courts for the last few years since they were introduced in 2007.  The changes in the Localism Act addressed some of the judicial criticisms levelled at the original statutory scheme and in particular gave the judiciary some flexibility in deciding how much of the statutory fine to award.

However, at the end of November 2012 the Court of Appeal heard another case in this long running litigation sage, Swindells v Ayannuga. 

A dispute arose between the landlord and the tenant in respect of an assured shorthold tenancy deposit.  The deposit had been into a custodial scheme by the landlord and the tenant alleged breaches of the tenancy deposit scheme under s 213 of the Housing Act 2004. These allegations were a failure by the landlord to provide the prescribed information. During the hearing, the landlord provided to the tenant a handwritten document that gave additional information regarding the deposit.  The Judge then found that, between the tenancy agreement and the additional handwritten document, the requirements of s 213 of the 2004 Act had been substantially complied with. The tenant appealed.

In the appeal the landlord accepted that it had not quite got the information correct but submitted that there had been no real prejudice suffered by the tenant. The landlord said that the judge was correct to consider substantial compliance with the statutory requirements and that the deposit had always been protected and the tenant knew where it was there was no prejudice.  However, the Court of Appeal disagreed that a substantial compliance test was appropriate.

Complete compliance was necessary as all areas of the statutory scheme were of importance to a tenant.  It was not a defence for a landlord to claim that the missing information could have been obtained by the tenant making its own investigations, as was said in the case.

The landlord was ordered to repay the deposit to the tenant and to pay three times the amount of the deposit as well.  So substantial compliance was not enough.

My understanding was that this case was decided under the unamended Housing Act 2004 provisions and so now a judge has a discretion whether to award the whole three times the deposit fine.  A landlord who has substantially complied in similar circumstances to this may now be able to argue for a small fine but I’m not sure whether just arguing that the tenant could have found the information out would get you very far!


About leaseholdlawyer

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