[2015] CSIH 8A



Lord Drummond Young

Lord Malcolm

Sheriff Principal Pyle



in the cause



Pursuer and Respondent;



Defenders and Appellants:

Act:  Party

Alt:  Party

28 January 2015

[1]        The parties entered into a tenancy agreement relating to a house at 4/6 Admiralty Street, Edinburgh, the pursuer being the tenant and the defenders the landlords.  The duration of the lease was from 1 May 2012 to 17 December 2012.  A deposit of £750 was specified and the monthly rent was £630.  The present proceedings, which were made by way of summary application in Edinburgh Sheriff Court, relate to the deposit.  The pursuer’s first crave is for declarator that he is entitled to payment of £2,250, a sum equivalent to three times the amount of the tenancy deposit, in terms of reg 3 of the Tenancy Deposit Schemes (Scotland) Regulations 2011 (SSI 176/2011).  The pursuer’s second crave, which was added by amendment intimated before the proof before the sheriff and granted by the sheriff in his judgment, is for an order for payment of the sum of £2,250 in terms of reg 9 of the 2011 Regulations.  The defence to the action was threefold.  First, it was said that the pursuer had not made payment of a tenancy deposit and thus lacked title and interest to make a summary application in terms of reg 9.  Secondly, it was said that the pursuer did not initially seek payment in terms of reg 10, with the result that the court had no jurisdictional competence to hear the summary application.  Thirdly, it was said that setting the amount at three times the deposit is excessive, and any decree should accordingly be for a lesser sum.

[2]        The summary application was heard by Sheriff Holligan who granted declarator that the pursuer was entitled to payment of £2,250, that being three times the amount of the tenancy deposit, and granted decree for payment of that sum against the defenders.  The defenders appealed to the Sheriff Principal who refused the appeal and adhered to the sheriff’s interlocutor.  The defenders have now appealed to the Court of Session.

[3]        The sheriff heard evidence but, as he noted, many of the material facts were not in dispute.  The pursuer and his partner, Miss Lhamo, occupied the property pursuant to a lease between the defenders and Miss Lhamo dated 22 April 2011.  Under that lease, the rent was £630 per month and a deposit of £750 was paid and held by the defenders.  For reasons which are not material, a new lease was entered into between the pursuer and the defenders in respect of the property.  As under the first lease, the rent was £630 and the deposit was £750.  Miss Lhamo gave evidence that during a meeting involving her, the pursuer and the first defender it was agreed that the deposit held by the defenders in respect of the first lease would be used as the deposit in the second lease.  No evidence was led to the contrary, and there was no dispute that the defenders did hold the sum of £750 in respect of the second lease and that that sum was the deposit required by that lease.  The sheriff noted that the defenders later purported to make deductions from the deposit and return the balance to the pursuer.  It was likewise not in dispute that the defenders had failed to pay the deposit to the scheme administrator of an approved scheme as required by reg 3.

[4]        The second lease began on 1 May 2012 and the pursuer gave notice that he would vacate the property on 6 December 2012, that period being later extended until 17 December 2012.  The balance of the deposit, amounting to £327.77, was not returned to the pursuer until 9 January 2013, 22 days after the expiry of the lease.  The lease had required the defenders as landlords to pay the pursuer as tenant the deposit or the balance of the deposit within 21 days of termination.

[5]        The material parts of the 2011 Regulations are as follows.  First, reg 3 provides:

“(1) A landlord who has received a tenancy deposit in connection with the relevant tenancy must, within 30 working days of the beginning of the tenancy –

(a) pay the deposit to the scheme administrator of an approved scheme; and

(b) provide the tenant with the information required under regulation 42”.


It is a matter of agreement that the parties’ tenancy was a relevant tenancy.  Reg 9 provides:

“(1) A tenant who has paid a tenancy deposit may apply to the sheriff for an order under regulation 10 where the landlord did not comply with any duty in regulation 3 in respect of that tenancy deposit.


(2) An application under paragraph (1) must be made by summary application and must be made no later than 3 months after the tenancy has ended”.


The present proceedings have been raised under reg 9(1).

[6]        Reg 10 provides:

“If satisfied that the landlord did not comply with any duty in regulation 3 the sheriff –

(a) must order the landlord to pay the tenant an amount not exceeding three times the amount of the tenancy deposit; and

(b) may, as the sheriff considers appropriate in the circumstances of the application, order the landlord to –

(i) pay the tenancy deposit to an approved scheme; or

(ii) provide the tenant with the information required under regulation 42”.


[7]        Before this court, the defenders’ written grounds of appeal are twelve in number, but in essence there are three grounds: 1, that the crave for declarator was incompetent; 2, that the sheriff erred in allowing the application to be amended by adding a crave for payment; and, 3, that the amount awarded was excessive.  We deal with each ground in turn.

[8]        The defenders submitted that as the declarator was based exclusively upon reg 3 there was no statutory basis for the court to make an award of payment under regs 9 or 10.  Moreover, as reg 3 had no legal consequences for the pursuer it was incompetent to seek a declarator.  He had no interest to have a fact declared which was therefore academic.  Reference was made to Macphail, Sheriff Court Practice (3rd edition) para 20.01 and Simpson v Downie 2013 SLT 178.  In our opinion, that is to take an over technical view of the application before its amendment.  While we accept that the lack of a crave for payment was likely to cause the pursuer difficulty in moving the sheriff to make an order for payment (a problem which he eventually recognised and sought to resolve), there could have been no doubt in the mind of the defenders and the court as to the purpose of the application.  Indeed, the pursuer expressly avers in Article 4 of Condescendence that he seeks payment in terms of reg 10.  The circumstances in Simpson v Downie were quite different, in that the issue before the court was not that a competent step had been purported to be done within the statutory time limit (the situation in this appeal), but that the first and only step taken was after the time limit had expired.  In order competently to be able to seek remedies under regs 9 and 10 it was necessary for the pursuer to aver and prove a breach by the defenders of their obligations under reg 3.  By seeking the declarator and making relevant averments in the condescendence, the regulations were timeously engaged in the application.  All that was missing within it was a mechanism for the court to grant the order which was always intended to be sought.

[9]        The second ground of appeal was predicated upon the sheriff accepting that the application in its unamended form was incompetent.  The defenders referred to a number of authorities dealing with the question of whether a fundamental defect in an action could be cured by amendment.  We do not find it necessary in this appeal to consider these authorities in detail.  In our opinion, the sheriff was well entitled in the exercise of his discretion to allow the application to be amended.  The purpose of the amendment was simply to cure a technical defect.  The circumstances are similar to those which arose in Wilson v Lothian Regional Council 1995 SLT 991 where the pursuer had failed in an action of damages to include a conclusion for payment and where the Lord Ordinary allowed amendment to cure the defect after the record had been closed.  His reasons for coming to that view apply equally to the present case (at p995):

“From the outset of this action, it was perfectly plain that both parties were under no misapprehension as to the nature of the claim which the pursuer was seeking to assert. In addition, no considerations were mentioned to show that the defenders would be in any way prejudiced, if the conclusion were to be reached that the action was not a fundamental nullity, other than, of course, the loss of the windfall benefit of its dismissal.”


[10]      In support of their third ground of appeal, the defenders submitted that the sheriff had taken into account irrelevant considerations.  The defenders had admitted the breach.  They were in breach for only 34 days but the sheriff placed weight upon the fact that the defenders had held the deposit for several months prior to the tenancy deposit protection deadline.  The defenders were entitled to defend the action at the very least until the court had allowed the application to be amended, which occurred only in the sheriff’s judgment after proof.  In any event, the sheriff had ignored the fact that reg 10 provided that the amount to be paid should be an amount “not exceeding” an amount equal to three times the deposit.  The sheriff ought to have taken into account that the breach was for only 34 days, that the regulations were new and complex, the breach having occurred during the transitional period of the regulations coming into force, and that the breach occurred during a period in which the pursuer had given notice under the lease.  The largest awards should be reserved for the most serious of cases, such as where the landlord takes the deposit without any intention of protecting it or where he has no intention of returning any part of it at any time.  The sheriff should have taken into account the objectives of the regulations which were to reduce the number of unfairly withheld tenancy deposits, to ensure that deposits are safeguarded throughout the duration of the tenancy, and to ensure that deposits are returned quickly and fairly, particularly where there is a dispute.

[11]      For the benefit of the parties, all of whom are party litigants, it is as well that we emphasise the limited role of an appellate court in considering the exercise of a discretion held by the court below.  The appellate court will interfere only, for example, where the court below has not exercised its discretion at all, taken into account irrelevant considerations, or failed to take into account relevant ones.  It is not sufficient merely that the appellate court might have come to a different decision on the facts. It is in the nature of discretionary decisions that two different minds might reach different decisions without it being the case that either decision can be categorised as wrong.  In para [13] of his judgment the sheriff sets out in careful detail his reasons for deciding that the maximum amount ought to be paid.  We can find no fault with his reasoning. He had the benefit of hearing evidence under oath at the proof.  It is plain that he reached the conclusion that the breach by the defenders in this case was indeed a serious one.  There is, in our opinion, no basis upon which we would be entitled to interfere with the decision he reached.  It is not insignificant that the defenders had until 30 November 2012 to register the pursuer’s deposit with one of the approved schemes.  That was over four months after the regulations had first come into force.  They chose not to do so.  The present time limit, now that the transitional arrangements no longer apply, is only 30 days.

[12]      The overall result is that the court has identified no flaws in the decisions of the sheriff and the sheriff principal.  The appeal falls to be refused.