Possession Claims – the stay is here to stay! Arkin v Marshall & Anr [2020] EWCA Civ 620

May 13, 2020

By Brynmor Adams and Steven Fennell

Practice Direction 51Z provides for an automatic stay of possession proceedings for 90 days from the date it came into force (26 March 2020). In Arkin v Marshall, handed down on 11 May 2020, the Court of Appeal held that the practice direction is lawful and not ultra vires.  That outcome is probably unsurprising. Of perhaps more interest is the short shrift the Court of Appeal gave to the Appellant’s efforts to identify exceptions to the apparently blanket nature of the stay as originally imposed. This note focuses on the practical significance of the judgment for practitioners.

The Practice Direction

 Paragraph 2 of PD 51Z states that:

“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.”

The PD was amended on 20 April 2020 (after the first instance decision in Arkin) to exclude additional types of case from the stay. The exceptions now include:

• Claims for injunctive relief;
• Claims against trespassers to which rule 55.6 applies (ie claims against persons unknown);
• Applications for an interim possession order under Section III of Part 55 (claims against trespassers seeking only the recovery of the property); and
• An application for case management directions which are agreed by all the parties.

PD51Z ceases to have effect on 30 October 2020.

Why the PD was lawful

PD 51Z was made under CPR 51.2, which allows a practice direction to modify or disapply any provision of the CPR during the operation of pilot schemes for assessing the use of new practices and procedures in connection with proceedings.

On the face of it, PD51Z might not look like a pilot scheme.  It is not described as such, and there is no indication of what might be piloted beyond the court simply not progressing possession proceedings.  The Court of Appeal answered this objection by deciding that “it might reasonably be assumed” that the intention was to assess future modification that might need to be made to the CPR during an epidemic that might last months or even years, testing whether the stay will reduce pressure on the courts, avoid people moving home and potentially spreading the virus, and avoid transmission of the virus at hearings in person.

A cynic might suggest that the effect of an automatic stay is so obvious that it does not need to be piloted.  Nobody will be able to obtain or enforce a possession order and cases will back up.  There is no suggestion of any steps being taken by anyone to assess the reduction in virus transmission by a wholesale ban on evictions.  Neither is there any suggestion of any assessment of the prejudice to claimants in being unable to enforce their rights.

The Court of Appeal also rejected, in relatively brief terms, the Appellant’s argument that PD51Z was unlawful because it contradicted primary legislation, namely the Coronavirus Act 2020. The Coronavirus Act imposes extended notice periods for certain types of residential tenancy, but the Court was unconvinced that this was meaningfully related to the stay imposed by PD51Z. The further argument that PD51Z was contrary to Article 6 of the ECHR was similarly rejected – a short delay in proceedings during a pandemic did not amount to an effective deprivation of claimants’ access to justice. The Court of Appeal had little difficulty rejecting the various challenges to the lawfulness of the practice direction.

Applications for agreed case management directions

Having established that PD51Z was properly made, the Court then considered its extent. The Appellant sought to establish two key exceptions: the enforceability of case management directions and the ability of the Court to lift the stay in appropriate circumstances.

The first exception is found in PD51Z and means that if the parties agree directions, they can apply now to the court to have those directions embodied in an order.  The Court however made clear that those directions cannot be enforced during the stay.  Instead, the parties can agree, and obtain the court’s endorsement of, directions which will take effect after the stay.  They will come out of the stay with an already-established timetable, and avoid the inevitable rush to make applications when the stay is lifted. Insofar as the parties agree to take steps during the stay period, they are able to do so, but there can be no enforcement in respect of a breach of such a voluntary arrangement.

We anticipate that cases where the parties agree directions are likely to be rare, particularly in the residential context. A tenant with a good defence to a possession claim has little incentive to risk an early possession hearing; a tenant without an arguable defence has all the more reason to put off the evil day when the claim is resolved. It would appear that there would only be an incentive  to agree directions where there is some advantage for the defendant in resolving the claim sooner. The might be the case where the tenant has a significant counterclaim, the early resolution of which would be beneficial.

The conduct of parties’ during the stay and the reasonableness or otherwise of decisions not to agree to directions might well affect decisions that the Court takes after the stay ends when further directions are required. Uncooperative parties might find that the Court imposes stricter directions than might otherwise have been the case. However, this may be of limited weight as the Court is likely to be sympathetic to the difficulties faced by litigants during the Coronavirus crisis. Moreover, substantial delays are likely to affect all possession work (and indeed all County Court cases) following the lifting of the stay. Any advantage gained by the reasonable litigant might well be lost in the more general delays facing the court system.

Can a judge lift the stay on a case by case basis?

At para 42 of the judgment, the Court of Appeal held that individual judges have the power under CPR 3.1 to lift the stay in an individual case, but they should probably never do so.

“The purpose is of its nature blanket in character and does not allow for distinctions between cases where the stay may operate more or less harshly on (typically) the claimant.  It would be fatally undermined if parties affected by the stay were entitled to rely on their particular circumstances – however special they might be said to be – as the basis on which the stay should be lifted in their particular case… The only possible case canvassed before us was where the stay would operate in such a way as to defeat the purposes of PD 51Z and endanger public health.”

It is is difficult to envisage circumstances of sufficient gravity to justify the lifting of the stay. The circumstances of the parties, however compelling, are unlikely to suffice. A party seeking to lift the stay would have to appeal to a broader public interest argument. One case where there might well have been such a public health ground for lifting the stay was University College London Hospitals NHS Foundation Trust v MB (Rev 1) [2020] EWHC 882 (QB), where the hospital sought possession in order to facilitate the treatment of Coronavirus patients. Chamberlain J used injunctive relief to bypass the stay, but there might have been sufficient grounds in that case to lift the stay and to make a possession order.

Conclusion

The Court of Appeal’s judgment confirms the blanket nature of stay imposed by PD51Z. PD51Z does not simply prevent the making and enforcement of a possession order, but means that possession proceedings cannot be progressed by way of directions during the stay.  It would take a very brave judge and very extreme facts for the stay to be lifted, no matter the consequences for the individual litigants. It would appear that only a compelling public health or a consideration of equal weight will suffice.

There is currently no indication of what measures might follow when the 90 day stay expires. However, given that PD51Z is characterised as a pilot scheme, it is reasonable to assume that further similar stays might follow in the future. It is also notable that the Coronavirus Act 2020 gives the Secretary of State power to extend the period during which extended notice periods apply. The PD51Z stay is here to stay and it might not be the last one that property practitioners have to navigate.