Saad v Hogan Brentford County Court, 16 February 2009 (appeal heard in the County Court)

Mr Saad (landlord) entered into a tenancy with Ms Hogan (tenant). The tenancy was for one year at a rent of £1,000 per calendar month. A deposit of £1,000 was paid. In November 2007, after the tenancy deposit legislation came into effect, Mr Saad granted another AST for a further year. This tenancy agreement stated there was a deposit of £1,000 but no money was actually handed over.

Mr Saad served a section 8 notice in June 2008 on rent arrears grounds. The proceedings were defended on the basis that Mr Saad had failed to protect the deposit and claimed the three times compensation to off set against the rent arrears. At the time of the hearing, there were four months arrears. DDJ Rowley ordered possession under ground 8 because no money was actually paid over under the new tenancy agreement.

The tenant appealed. HHJ Oppenheimer noted that ‘extraordinarily’ there were no transitional provisions to provide for the situation where a deposit was not physically paid over because money was retained under an earlier agreement. ‘The draftsman . . . has lamentably failed to deal with this obvious point.’ In the absence of guidance in the legislation, he adopted a purposive construction. Having regard to s212, ‘the purpose of the statutory provisions is very clear, namely to safeguard such deposits and to facilitate the resolution of disputes’. In one respect, there had been a payment by the tenant under the 2007 agreement even though there was no physical or electronic transfer of money.

The appeal was allowed and she ordered Mr Saad to pay £3,000 for failure to protect the deposit but subject to set off from the rent arrears