On 11 May 2020 the Court of Appeal handed down its decision in Arkin v Marshall [2020] EWCA Civ 620 in which the appellant challenged the 90 stay of Part 55 possession proceedings under Practice Direction 51Z. Trinity Housing Law Barrister Alice Richardson examines the decision.
PD 51Z was issued, as the 117th Practice Direction Update, on 27 March 2020. It was made by the Master of the Rolls, with the approval of the Lord Chancellor. The original version read:
“This Practice Direction supplements Part 51
1. This practice direction is made under rule 51.2 of the [CPR]. It is intended to assess modifications to the rules and Practice Directions that may be necessary during the Coronavirus pandemic and the need to ensure that the administration of justice, including the enforcement of orders, is carried out so as not to endanger public health. As such it makes provision to stay proceedings for, and to enforce, possession. It ceases to have effect on 30 October 2020.
2. All proceedings for possession brought under CPR Part 55 and all proceedings seeking to enforce an order for possession by a warrant or writ of possession are stayed for a period of 90 days from the date this Direction comes into force.
3. For the avoidance of doubt, claims for injunctive relief are not subject to the stay in paragraph 2”.
My colleague Helen Greatorex considered the impact of PD51Z in her article on 24 April 2020. By that time the PD had been updated. The amended version came into effect on 20 April 2020. Para 2A was inserted, which reads:
“2A. Paragraph 2 does not apply to—
(a) a claim against trespassers to which rule 55.6 applies;
(b) an application for an interim possession order under Section III of Part 55, including the making of such an order, the hearing required by rule 55.25(4), and any application made under rule 55.28(1); or
(c) an application for case management directions which are agreed by all the parties.”
Paragraph 2 was amended so as to start with the words “subject to paragraph 2A”, and the words “and the fact that a claim to which paragraph 2 applies will be stayed does not preclude the issue of such a claim” were added at the end of paragraph 3.
The Facts
The underlying claims related to three adjacent properties in Hertfordshire. The properties were the subject of a mortgage securing a loan to the Respondent. The mortgagees assert that sums due under the loan agreement are in arrears and/or that the Respondent was in breach of other terms of the agreement. The Appellant was appointed as receiver by the mortgagees. On 24 September 2019 he commenced two sets of possession proceedings in the County Court. The claims were contested on various grounds.
The parties agreed directions on 26 March 2020. Those directions were incorporated in an order sealed by His Honour Judge Parfitt on 27 March 2020 – the day that PD 51Z came into force. They required various procedural steps including disclosure by 1 May 2020, inspection by 15 May 2020 and exchange of witness statements by 26 June 2020. The trial window was between 5 October 2020 and 8 January 2021. There was provision for a telephone listing appointment, on a date to be notified to the parties in due course.
The Respondents took the view that the effect of paragraph 2 of PD 51Z was to discharge the parties of the obligation to take any of the steps required by the agreed directions within the 90-day period. The Appellant did not accept that the stay applied to the proceedings at all, but he contended that if it did it could and should be lifted.
On 15 April 2020 HHJ Parfitt held that the proceedings were stayed and that he had no power to lift the stay. The Appellant appealed and the case ‘leapfrogged’ to the Court of Appeal. The Lord Chancellor and the Housing Law Practitioners Association (“HLPA”) were granted permission to intervene in the appeal.
The Appeal
The issues for the Court were:
(1) Did the Court of Appeal have jurisdiction to consider the vires of PD 51Z, and should it do so?
(2) If so:
(a) Was the making of PD 51Z properly authorised by CPR Part 51.2 as a pilot scheme “for assessing the use of new practices and procedures in connection with proceedings”?
(b) Was PD 51Z inconsistent with or rendered unlawful by the provisions of the Coronavirus Act 2020?
(c) Was PD 51Z inconsistent with article 6 of the European Convention on Human Rights or the principle of access to justice?
(3) Did PD 51Z apply to cases allocated to the multi-track in which case management directions had been given before it was introduced?
(4) Did the court have jurisdiction to lift the stay imposed by paragraph 2 of PD 51Z?
(5) If so, should the Judge have lifted the stay in this case?
(1) Did the Court of Appeal have jurisdiction to consider the vires of PD 51Z, and should it do so?
This issue was raised because of the unusual procedural history of the case. The Respondent argued that a challenge to the vires of PD 51Z should not be entertained both because it had not been raised below and, more fundamentally, because it should have been advanced by way of judicial review. The Court held that in the circumstances of this case those issues had not produced any real unfairness nor created any insuperable difficulty. It was inevitable that permission to apply for judicial review would have been granted and there was a strong public interest in an early and authoritative ruling as to the validity of PD 51Z. Having had full argument on the issue the Court was in a position to give such a ruling despite the imperfections in the procedural history, and should do so.
(2)(a) Was the making of PD 51Z properly authorised by CPR Part 51.2 as a pilot scheme “for assessing the use of new practices and procedures in connection with proceedings”?
CPR Part 51.2 provides that “Practice directions may modify or disapply any provision of these rules –
(a) for specified periods; and
(b) in relation to proceedings in specified courts,
during the operation of pilot schemes for assessing the use of new practices and procedures in connection with proceedings”.
The fundamental question for the Court was whether there was any scheme or any “new practices and procedures” for which PD 51Z could properly be said to facilitate assessment. Paragraph 1 of the PD provided that it “is intended to assess modifications to the rules and [PDs] that may be necessary during the Coronavirus pandemic and the need to ensure that the administration of justice, including the enforcement of orders, is carried out so as not to endanger public health”.
It was not suggested that the pandemic was likely to have concluded by 25 June 2020, which was the last day of the 90-day period of stay imposed by paragraph 2. In those circumstances, the Court held that it may reasonably be assumed that the intention was to assess future modifications that might need to be made to the CPR during an epidemic that might last months or even years. Further, PD 51Z stated on its face that it is intended to assess the need to ensure that the administration of justice, including the enforcement of orders, is carried out so as not to endanger public health. The meaning of that language was plain. A stay of possession proceedings was being trialled in order to assess whether it was effective to ensure that the administration of justice, specifically the ongoing conduct of possession proceedings in a pandemic, and the enforcement of possession orders in a pandemic, does not endanger public health.
PD51Z was to be properly regarded as a pilot scheme.
(2)(b) Was PD 51Z inconsistent with or rendered unlawful by the provisions of the Coronavirus Act 2020?
The Appellant’s submission was that s.81-2 and schedule 29 of the Coronavirus Act 2020, (the new three-month notice periods) were inconsistent with the PD. The Court did not agree, holding that “these submissions are not well founded. Imposing notice requirements and giving power to lift them are one thing; a blanket stay of all possession proceedings is another. They are not inconsistent."
(2)(c) Was PD 51Z inconsistent with article 6 of the European Convention on Human Rights or the principle of access to justice?
Having considered the authorities the Court of Appeal held that the short delay to possession litigation enshrined in PD 51Z was amply justified by the exceptional circumstances of the coronavirus pandemic. There was a need to ensure that neither the administration of justice nor the enforcement of possession orders endanger public health by the unnecessary transmission of the virus. PD 51Z created no risk that persons will “effectively be prevented from having access to justice”. Moreover, it was not seriously suggested that PD 51Z did not have the clear authorisation of Parliament, CPR Part 51.2 was authorised by primary legislation in the form of Part 1 of Schedule 2 to the Constitutional Reform Act 2005 and section 5 of the Civil Procedure Act 1997.
(3) Did PD 51Z apply to cases allocated to the multi-track in which case management directions had been given before it was introduced?
This issue was not pursued in the light of the amendment to PD 51Z on 30 April 2020. Paragraph 2A(c) now provided that paragraph 2 was not to apply to an application for agreed case management directions.
(4) Did the court have jurisdiction to lift the stay imposed by paragraph 2 of PD 51Z?
There were two main issues under this head. First, whether paragraph 2A(c) was to be construed as meaning that any case management directions agreed by the parties should be carried into effect notwithstanding the stay.
As to that issue the Court held that when paragraph 2A(c) says that paragraph 2 does not apply to “an application for” agreed case management directions, it meant what it said – that is, that if the parties agreed directions, they could apply to the court to have the directions in question embodied in an order. There was an obvious value in the parties agreeing, and obtaining the court’s endorsement of, directions which would take effect on a date or dates post-dating the end of the stay: they would come out of the end of the stay with an already-established timetable, and avoid a potential rush to make applications immediately the stay is lifted.
Further there was also value in the parties agreeing, and obtaining the court’s endorsement of, directions which took effect during the stay albeit they could not be enforced during its currency.
The second issue was whether the courts had a general discretion to lift the stay imposed by paragraph 2 taking into account: (a) the impossibility of implicitly disapplying CPR Part 3.1(1) and (2)(f) and section 49(3) of the Senior Courts Act 1981, (b) the cases that show that other pilot schemes have been disapplied in particular cases, and (c) the fact that, if the parties could agree to disapply the stay by agreeing directions, the court must be able to do so too.
CPR Part 3.1 sets out the court’s general powers of case management. Part 3.1(1) provides that “[t]he list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have”. CPR Part 3.1(2)(f) provides that “[e]xcept where these Rules provide otherwise, the court may… (f) stay the whole or part of any proceedings or judgment either generally or until a specified date or event”.
In Bovale v. Secretary of State for Communities and Local Government [2009] EWCA Civ 171, [2009] 1 WLR 2274, the Court of Appeal had held that a judge had wide powers in an individual case to depart from the CPR and PDs in the exercise of general case management powers and to further the overriding objective. Nonetheless, it also held that the wide powers in CPR Part 3.1 could not “be construed … as giving the power to individual judges or any court simply to vary the rules or practice directions generally” [26].
The Court held that PD 51Z cannot be read as formally excluding the operation of CPR 3.1. As a matter of strict jurisdiction, therefore, a judge retains the power to lift the stay which it imposes. However, the proper exercise of that power is informed by the nature of the stay and the purposes for which it was evidently imposed.
Thus, while the Court would not go so far as to say that there could be no circumstances in which it would be proper for a judge to order that the stay imposed by PD 51Z should be lifted the Court had great difficulty in envisaging such a case.
The only possible such case canvassed before the Court was where the stay would operate in such a way as to defeat the purposes of PD 51Z and endanger public health.
The Court concluded that, although a judge retains a theoretical power to lift any stay, it would almost always be wrong in principle to use it. The Court did not, however, rule out that there might be the most exceptional circumstances in which such a stay could be lifted, in particular if it operated to defeat the expressed purposes of PD 51Z itself.
The Court noted that the decision of Judge Freedman in Bernicia Group v. Mark Mann (17 April 2020; D4PP284A; County Court at Newcastle), in which the stay was lifted and a possession order granted, may have been of that character, but the Court did not know enough about the circumstances of the case to say so definitively.
[NB. Myself and my colleague Helen Greatorex were counsel in that case, which concerned extremely serious anti-social behaviour. The tenant was no longer residing at the Property and had agreed to a possession order being made prior to the coming into effect of PD51Z. It was agreed that the aims of PD51Z were not met by the imposition of a stay in that case. The property could be used to provide safe accommodation for another person or family in need of housing. In any event the tenant had effectively surrendered the tenancy].
(5) If so, should the Judge have lifted the stay in this case?
The Court held that the circumstances of the instant case did not allow the court to lift the stay imposed by PD 51Z.
The appeal was dismissed.
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