On 11th May 2020, the Court of Appeal handed down judgment in Arkin (as fixed charge receiver) v Marshall and others [2020] EWCA Civ 620. A copy of the full judgment can be found here.
This case is important as it was a challenge to Practice Direction 51Z (“PD 51Z”). PD 51Z came into effect on 27 March 2020 and imposed a stay of 90 days on all possession proceedings under CPR 55 and a stay on all residential eviction action until 25th June 2020 with an option to extend that period.
Background
A fixed charge receiver (A) had brought possession proceedings under CPR 55. Directions were agreed and incorporated into an order made on the day that PD 51Z came into force. The deadline for complying with certain directions fell during or immediately after the stay imposed by PD 51Z. The county court held that the proceedings were subject to PD 51Z and it had no discretion to lift the stay. A appealed.
Court of Appeal
The Court of Appeal dismissed A’s appeal. In dismissing the appeal the Court held that:
- Due to the unusual circumstance in which the case arose, it had jurisdiction to consider the lawfulness of PD 51Z. It was not necessary to bring a separate claim for Judicial Review.
- The making of PD 51Z was properly authorised by CPR 51.2 as a pilot scheme “…for assessing the use of new practices and procedures in connection with proceedings”. PD 51Z is a pilot because the Master of the Rolls may well wish to consider putting in place a permanent rule or PD that imposes a limited stay on possession proceedings when or if the pandemic peaks again.
- The Coronavirus Act will last for two years (subject to extension) but the pilot stay will only last 90 days. PD 51Z does not conflict with the provisions in the Coronavirus Act 2020
- PD 51Z is not a breach of Article 6 of the European Convention on Human Rights or the fundamental common law principle of access to justice. The short delay to possession proceedings (90 days) is amply justified by the exceptional circumstances of the coronavirus pandemic and was authorised by Parliament through CPR 51.2.
- Para 2A(c) of the amended PD 51Z allows parties to apply, during the 90 day stay, to have agreed case management directions embodied in a court order, but those directions will be stayed. During the stay, neither party can apply to the court to enforce compliance with case management directions, even where those directions are agreed under paragraph 2A(c). The parties are, however, free to undertake, voluntarily, any agreed steps during the stay and, if they do not, their conduct may be taken into account when setting revised directions.
- The Court has theoretical power to lift the stay under CPR 3.1. However, the Court had great difficulty in envisaging a suitable case for lifting the stay and stated “We would strongly deprecate parties troubling the court with applications that are based only on such reasons and which are in truth bound to fail.” The Court added that “…a judge retains a theoretical power to lift any stay, it would almost always be wrong in principal to use it.” The Court suggested that the only exception might be where the stay would operate in such a way as to defeat the purposes of PD 51Z and endanger public health.
- Where parties have agreed directions, the parties can carry out those directions during the stay, such as disclosure and exchange of witness evidence. A party cannot however, apply to the court to enforce compliance with agreed directions, even if the directions were made under the express exclusion in paragraph 2(A)(c). If either party fails to do what is agreed during the stay, the other party will be able to rely on the conduct of that party once the stay is lifted or expires.
Comments
The appeal lost in its entirety and PD 51Z remains fully in force as drafted.
This decision does however confirm that the court has the power to lift the stay, but the bar for applying to lift the stay in possession proceedings is very high and is unlikely to be reached in the vast majority (if not all) claims for possession. In cases where parties have agreed directions, the parties can and should carry out those directions during the stay, such as disclosure and exchange of witness statements. A party that fails to take any steps to progress a case during the stay may face sanctions but only when the stay is lifted or expires.
It is important for landlords to remember that tenants are still obliged to pay their rent and comply with the terms of their tenancy agreement. Whilst seeking possession may not be a viable option at this current time, landlords can still take action against tenants. Landlords can still seek money judgments for outstanding rent arrears or injunctions to address any anti-social behaviour or breaches of tenancy.
If you have any questions in relation to the above, please do not hesitate to contact a member of the Housing & Regeneration team.
