Under some circumstances it may be possible for a deposit to be returned by an uncashed cheque.
In Richworth Ltd v Billingham [2023] EW Misc 8 (CC), HHJ Luba KC considered the appeal of a possession order made in relation to Flat G 94 Hornsey Lane, London, N6.
As the tenant’s deposit had not been protected in accordance with Housing Act 2004, it was necessary for the landlord to return it in order to rely on a notice seeking possession served under s21 Housing Act 1988.
On 26 April 2022, the landlord wrote a letter to the tenant enclosing a cheque (drawn on the landlord’s account) for the sum of the deposit. Under cover of a letter dated 5 May, the landlord sent a s21 notice. The cheque was not cashed by the tenant. The district judge found that the deposit had been returned and this was the issue considered on the appeal.
The landlord had been wrong to contend that “returned“ meant something different to “repaid”, “given back” or “reimbursed”.
Having considered the authorities, there may be circumstances where a landlord can be found to have returned the deposit by delivery of a cheque for the full amount even though (a) the cheque has not been presented to a bank by the tenant before a section 21 notice is served; and (b) the cheque is not presented by the date by which it would have been honoured. However, whether there was an effective return by an uncashed cheque cannot be known until the facts of the case (including the previous course of dealings and what happened to the cheque after it was received) have been considered.
Whether a failure to reject a cheque will be taken as an implied acceptance of satisfaction with payment by it is similarly fact dependent. Although failure to reject a cheque reasonably promptly may (depending on the facts and circumstances of the case) be taken as an implied acceptance of satisfaction with payments by it, in the present case there had not been the evidence before the district judge for her to decide that the tenant had impliedly accepted payment by cheque, given the expiry of a reasonable period after it had come to his attention. The appeal was allowed with directions to be given.
Practitioners will note that the possession claim had been a procedural mess and the appeal was noted to be as bad, if not worse. HHJ Luba KC also observed that it may serve to encourage caution in the pursuit of interesting points of law through an appeal process in circumstances dissociated from the factual matrix against which they are said to arise.
Elizabeth Haggerty is a barrister
