[2016] SC EDIN 25




In the Summary Application under the Tenancy Deposit Schemes (Scotland) Regulations 2011














Act: Ridley, Blacklocks, Edinburgh

Alt: Ms Skinner, Lay Representative, Edinburgh


Edinburgh, 30 March 2016

[1]        This case called for proof on the 21 March 2016. The applicant was the tenant, at Flat 11, 19 Albion Place, Edinburgh, for 2 years, between June 2013 and July 2015.  The respondent was his landlord. On 9th June 2013, a few days before his occupation of the property, the applicant paid to the landlord a tenancy deposit of £550. It is not disputed that the deposit was never paid into an approved tenancy deposit scheme, as it should have been. That is in clear contravention of regulation 3 of the Tenancy Deposit Schemes (Scotland) Regulations 2011. The contravention has triggered Regulation 9 which entitles the tenant to make an application to the sheriff for an award of an amount of money as a sanction against the landlord for his failure to comply with his obligation under the regulations. Put shortly, I am asked to decide in terms of regulation 10 how much, if at all, the landlord must pay the tenant, by way of sanction, for his regulatory noncompliance. The tenant claims the sum of £1650 which amounts to three times the deposit and represents the maximum sanction. However, the landlord, a party litigant, has entered a defence to the application and through his lay representative, Ms Skinner, asserts, as I understand the defence:

  1. The tenancy was not protected by the 2011 regulations at all in this case, because the property was not ‘the principal home’ of the tenant during the duration of the lease, in terms of s12(1)(b) of the Housing (Scotland) Act 1988.
  2. Further, even if the tenancy was protected by the regulations the present application is time barred in terms of regulation 9(2) because a new tenancy was created in June 2014 in respect of which no deposit was made.
  3. Further, even if the application is not time barred and is competently before the court, the sanction provision in the regulations is unenforceable, at the instance of the tenant, by reason of his own dishonesty and illegality.

The tenant was represented by Ms Ridley.


The Evidence

[2]        Ms Ridley invited me to hear this case solely on the basis of submissions, as there was no dispute that the tenancy deposit had not been lodged in an approved scheme, in breach of the regulations.  Ms Skinner appeared and submitted form 1A.2 in terms of rule 1A.1 of the Summary Applications, Statutory Applications and Appeals etc. Rules 1999, seeking permission to make oral submissions on behalf of the respondent. There was no objection and I allowed the application. However, given the nature of the defence then explained to me, I declined the invitation to restrict the proof to one based on submissions only, as I considered the respondent, as a party litigant, was entitled to put his defence in full, leading and challenging whatever evidence he considered appropriate, in consultation with Ms Skinner.


The Applicant’s Proof (This note is not intended to be comprehensive)

[3]        Ross Cooper, 43, gave evidence in chief. He is a lecturer in modern ballet and contemporary dance. He took occupancy of the tenancy at Flat 11, 19 Albion Place, Edinburgh, on 14 June 2013. On 9 June 2013 he paid the landlord £550 deposit and got a receipt (PP2). He spoke to the tenancy agreement (PP1) which bore to be a short assured tenancy within the meaning of s32 of the Housing (Scotland) Act 1988. He said he handed over the deposit, in cash, to the landlord in the presence of the landlord’s partner, Ms Skinner, who is his lay representative. The tenancy was Mr Cooper’s home base for 2 years. For a period of 6 months in 2014 he worked three and a half days each week on Skye, with a dance company. He came back to Edinburgh at the weekends. The tenancy was originally for 12 months. In June 2014 it continued monthly until 17 June 2015, when he received a 30 day notice to quit from the landlord, who said he intended to sell the property. The tenancy terminated on 17 July 2015.  In June 2014 when it was agreed the tenancy would continue there was a problem about the water supply to the flat. The landlord dropped the rent by £50, to £500 a month.

Mr Cooper was cross-examined by Ms Skinner in consultation with Mr Marriott.  Shortly into the cross-examination, Ms Ridley objected to certain documents being put to her witness. These were personal bank statements, correspondence from the Department of Work and Pensions (DWP) about Universal Credit payments to Mr Cooper and correspondence from Edinburgh Council about Council Tax due on the property. It was said by Ms Ridley that these must have been opened illegally by the landlord as they were addressed to the tenant. They were inadmissible. Ms Skinner informed me these documents were found lying opened in the flat and that there had been various tradesmen working there at various times after the tenant vacated in July 2015. They must have opened the applicant’s mail. No authority was cited. I repelled the objection and allowed Ms Skinner to continue. It was put to Mr Cooper that he had falsely made a declaration to Edinburgh Council that the flat was unoccupied and unfurnished for a part of the let in 2014 and thereby dishonestly secured a reduction of his council tax. This was denied. It was also put to Mr Cooper that the flat was not his principal home during the tenancy and that he was staying on Skye. This was denied. Mr Cooper said he considered the let as his principal home though he did stay in hotels and temporary accommodation while working on Skye. It was suggested Mr Cooper was lying and that he had acted fraudulently. This was denied. Ms Skinner made reference to documents from DWP relating to Universal Credit received by Mr Cooper. It was suggested he had dishonestly inflated his declared rental payments to the DWP, to increase his entitlement to Universal Credit. This was also denied. It was put to the witness he left the flat owing thousands of pounds in tax and utility bills. This was denied.

Mr Cooper was re-examined briefly. He accepted that he was responsible for damage to a table amounting to £50 during the tenancy.

[4]        The respondent led no evidence.


Findings in Fact

[5]        From the evidence led I made the following findings in fact:

  1. The applicant entered into a short assured tenancy agreement with the respondent which commenced on 15 June 2013 for a period of 12 months until 14 June 2014. Thereafter the tenancy continued, by consent of the parties, until 17 July 2015 when it terminated.
  2. The applicant put a deposit down on the tenancy of £550 on 9 June 2013. This was never placed in an approved scheme.
  3. The tenancy agreement at article 6 states:


    6. DEPOSIT

    At the date of entry or before, a deposit of £550 will be paid by the Tenant to the Landlord or his agent. The Landlord will issue a Receipt for the deposit to the Tenant. No interest shall be paid by the Landlord to the tenant for the deposit.

    6.1 The Landlord will be entitled at the expiry or end of the lease to use the deposit to meet any outstanding sums or accounts due by the Tenant, the cost of repairing or replacing any of the fittings and fixtures which have been broken, damaged or lost and the expense of making good any failure by the tenant to fulfil any of the conditions of this lease.

    6.2 The deposit or part of the deposit, if any, will be refunded to the Tenant within the timescales as laid out in the Tenancy Deposit Schemes (Scotland) Regulations 2011.


  4. The applicant was responsible for damage to a side table during the tenancy which was estimated at £50 to repair.




[5]        Ms Ridley invited me to accept her client as an honest and reliable witness. She asked that I find that the tenancy was a short assured tenancy for a period of 1 year which had been continued by operation of tacit relocation in June 2014 until July 2015. She stated the applicant had made a tenancy deposit of £550 with the landlord that had not been placed in an approved scheme, nor returned. From the respondent’s productions it appeared there was a dispute about dilapidations but this ought to have been heard by the arbitration service provided under the approved scheme. She made reference to Marcus Jenson v Giuseppe Fappiano 2015 GWD 4-89;  Fraser v Meehan 2013 SLT (Sh Ct) 119;  Stuart Russell and Laura Clark v Samdup Tenzin 20 December 2013; Keshia Cordiner v Armando Rodriguez Barcenas 2015;  Hamish James Kirk v Dilbagh Singh 2015. With regard to sanction Ms Ridley stated the respondent must have known of the existence of the regulations as these are mentioned in article 6 of the tenancy agreement. The respondent simply ignored them. That was an aggravation which justified sanction at the upper end of the scale. She moved for the expenses of the action as taxed. Ms Ridley said the various collateral issues raised in the defence in this case were irrelevant and that no mitigation for the failure to protect the deposit in terms of the regulations had been advanced.



[6]        Ms Skinner addressed me in relation to the defence put forward in this case. Firstly, she explained that the Housing (Scotland) Act 1988 s12(1)(B) provides:

“12.— Assured tenancies.

(1) A tenancy under which a house is let as a separate dwelling is for the purposes of this Act an assured tenancy if and so long as—


(a) the tenant or, as the case may be, at least one of the joint tenants is an individual; and


(b) the tenant or, as the case may be, at least one of the joint tenants occupies the house as his only or principal home; and….”


In this case the tenant was not using the property as his principal home after December 2013 because he was on Skye working for a dance company, therefore the tenancy was not covered by the 1988 Act or the 2011 Regulations. Secondly, it was argued that the original tenancy between 15 June 2013 and 14 June 2014 was not continued by operation of tacit relocation. In fact a new tenancy was created in June 2014 which did not have a deposit. For that reason the present application was time barred and the Regulations do not apply. Finally Ms Skinner made reference to a production lodged from the internet which relates to the illegality defence. This is consultation paper No 189 2009 from the English and Welsh Law Commission reviewing the operation and application of the principle of ex turpi causa non oritur actio, in that jurisdiction. As I understood the point being advanced, I was invited to disbelieve the applicant, on account of his alleged dishonesty and fraud and hold, for that reason, that he cannot therefor apply to the court for sanction against the landlord on the basis of the principle of ex turpi causa.

Ms Skinner continued that if on the other hand I did find for the applicant she said the landlord had been a good and honest landlord who did not understand the regulations. He was ‘an amateur landlord’. The flat was his only investment and he was not a professional landlord. Any sanction should be at the lower end of the scale. She invited me to restrict the expenses awarded because the respondent had offered to pay £500 to the applicant on the eve of the proof to settle the case but this had been refused.



[7]        I am grateful to parties for their submissions. With regard to the arguments of Ms Skinner:

  1. I am not persuaded s12 of the Housing Scotland Act 1988 is relevant to this case, as it deals with ‘assured tenancies’. I am dealing here with ‘a short assured tenancy’ which is regulated by s32 of the 1988 Act. I do not consider the question of the tenant’s ‘principal home’ to have any bearing on the case. Accordingly, I consider the 2011 regulations apply to the tenancy and that it is a relevant tenancy within the meaning of regulation 3(3).
  2. I consider that the applicant’s tenancy was continued after 14 June 2014 on the principle of tacit relocation. After that date the parties to the contract were the same. The property was the same. The only change was that the landlord abated the rent by £50 because of a problem with the water supply. I have no reason to think this was anything other than an extension of the original lease. I am satisfied the lease terminated on 17 July 2015. The present application is date stamped as being received by the court on 5 October 2015 which is within the 3 months for applications to be made in terms of regulation 9(1). Accordingly, the case is not time barred.
  3. I found the applicant to be honest and reliable in his evidence. I saw him answering the questions and allegations put to him by Ms Skinner. He was spontaneous and firm in his denials of dishonesty and fraud. Furthermore I considered this line of defence as advanced by the party litigant to be irrelevant to the issue I have to decide. The principle of illegality referred to by Ms Skinner has no application to this case. I was not persuaded on the information presented in the form of letters from Edinburgh Council about Council Tax and from the DWP about Universal Credit, that the tenant in this case is dishonest or fraudulent.In any event his probity or otherwise in relation to collateral issues was something of a side show given that the respondent admits the tenancy deposit was never lodged with an approved scheme in terms of the 2011 regulations. The English and Welsh Law Commission Consultation Paper No 189 of 2009 lodged, from the internet, has no application to Scots Law. Ms Skinner in my judgment fundamentally misunderstands how and in what circumstances the principle she refers to applies to a contract.The principle, if relevant, applies to a contractual term which is rendered by law unenforceable because its purpose is tainted by immorality or otherwise struck at as contrary to public policy. I am not persuaded that the tenant in this case is barred from raising this action seeking enforcement of a regulation on the basis of unsubstantiated collateral allegations made against him by the landlord. See generally, Gloag and Henderson, 13th Ed, Chapter 9.



[8]        In my opinion the landlord in this case fundamentally misunderstands the nature of the remedy introduced which is a regulatory sanction to punish the landlord for non-compliance with the rules. It is not a scheme principally introduced to compensate the tenant for harm done, although the net result of the application of sanction may seem like the tenant is being compensated. The scheme is intended to regulate and control by rules and sanctions important aspects of the property rental market.

[9]        Landlords who are in flagrant and blatant breach of the deposit scheme regulations, in my opinion, can never mitigate their own conduct and failing by reference to the character or conduct of the tenant. I fail to see how the character and conduct of a tenant could ever mitigate flagrant and blatant breach by a landlord over a period of two years. In some cases of partial breach by the landlord (e.g Jenson v Fappiano, op cit above) the conduct of the tenant could be relevant to sanction, if the deposit was ultimately protected and became subject to the regulatory scheme, with or without dispute resolution in terms of regulation 33. But where the landlord is in flagrant breach of his duty to protect the deposit and the result has been catastrophic, in that the deposit has never been lodged and the chance of independent dispute resolution over dilapidations lost, I fail to see how the tenant’s conduct or character could ever mitigate the breach.  If I am wrong as a matter of principle and the tenant’s collateral conduct or character is in some way relevant to the assessment of the landlord’s sanction, I did not in the circumstances of this case believe that the landlord had proved the fraud or dishonesty alleged in respect of the tenant. In the circumstances of this case I did not consider there to be any conclusive basis upon which I can hold the allegations made by the landlord against the tenant were substantiated. They were all denied and the somewhat radical inference I was invited to draw from the presence of the tenant’s illegally opened mail before me I am not prepared to make having heard the owner of the mail in person before me explain that he had made no false claims for Council Tax rebate or Universal Credit. The landlord did not cite any witnesses from DWP or Edinburgh Council to speak to the truth or accuracy of the information contained in the correspondence. It is not beyond peradventure that many citizens receive correspondence from Government agencies and local authorities that are inaccurate or disputed.

[10]      I can find no mitigation in this case. The landlord must have known of the tenancy deposit scheme because it is mentioned in article 6 of the lease agreement. Accordingly I am of the opinion that this is not a case in which the landlord can claim, in mitigation, to have been genuinely ignorant of the obligations created by the regulations, even although ignorance is not an excuse. The specific terms of article 6 of the lease appear to be incorporated into the tenancy agreement, in flagrant disregard of the scheme purpose which includes protecting the tenant’s deposit by placing it in an approved scheme. If anything this is an aggravation of the breach. The fact remains that the deposit was held by the landlord, unprotected by the regulations, for a full 2 years. As a consequence of the landlord’s breach the tenant was deprived of his right to invoke the dispute resolution service provided under Part 6 (Regs 33-39) of the regulations to settle issues about dilapidations at the end of the tenancy. In mitigation, I do however accept that this is not a case which lies at the upper end of the sanction range but I cannot ignore the landlord’s blatant disregard for the scheme for a period of 2 years. In the circumstances I will order the landlord to pay the tenant double the deposit less the estimated damage to the table (£50) which amounts to £1050, by way of sanction for flagrant and wilful disregard of the terms and purpose of the regulations for 2 years. Furthermore, I should add the regulations do not recognise the status of ‘amateur landlord’.  Landlords who rent to the public are covered by the regulations whether they are large commercial concerns or single property, buy to let landlords.



[11]      Had the landlord come to court and admitted his breach I might have been persuaded to assuage the additional costs involved, marginally. On the contrary, the landlord mounted a full blown irrelevant defence targeted at the integrity of the tenant on the basis that he was a scoundrel who did not deserve the benefit of the protection of the regulations.  The defence was unfounded, in my opinion. I can see no reason why the normal rule regarding expenses should not apply. I will award the applicant his expenses as taxed by the auditor of court.

[12]      Finally, I should like to pay tribute to the clear and concise way in which the lay representative presented the case for the landlord.