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Court of Appeal clarifies important aspects of the Covid-19 possession hearings stay and encourages parties to be pro-active

15.05.2020

By Dr Christina Lienen

Earlier this week, in Arkin v Marshall [2020] EWCA Civ 620, the Court of Appeal determined important issues about the validity and effect of Practice Direction 51Z, "Stay of Possession Proceedings - Coronavirus" ("PD 51Z"). PD 51Z was issued on 26 March 2020 in response to the Covid-19 pandemic by the Master of the Rolls, with the approval of the Lord Chancellor. Imposing an initial 90-day stay on all possession proceedings, it came into force on 27 March 2020 (and was amended on 20 April 2020 ("the April Amendment")).

It originally 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."

The proceedings

The appellant had issued possession proceedings pursuant to CPR Part 55 (the underlying claims are irrelevant for present purposes). The parties agreed directions on 26 March 2020, dealing with various procedural steps, including disclosure by 1 May 2020, inspection by 15 May 2020 and exchange of witness statements by 26 June 2020. Those directions were incorporated in an order sealed by HHJ Parfitt on 27 March 2020, the day that PD 51Z entered into force.
On 15 April 2020 HHJ Parfitt handed down judgment after receiving submissions on the impact of PD 51Z and held that he could not lift the stay, ordering the agreed dates to be pushed back to the corresponding dates after the lifting of the stay. This included a telephone listing appointment, which he ordered to be listed for the first open date after that date.

The Court's determinations

In summary, the Court determined the issues raised in the following way:

Issue 1: Does this court have jurisdiction to consider the vires of PD 51Z, and should it do so?

Yes, and yes. The correct course would probably have been to seek a stay or transfer of the County Court proceedings so that the vires challenge could have been raised by judicial review. However, the issue arose in unusual circumstances in which considerations of justice and pragmatism make it appropriate for a public law challenge - including a challenge to the validity of secondary legislation - to be determined in the context of private law proceedings.

Issue 2: 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"?

Yes. This is evident from what PD 51Z says on its face.

Issue 3: Is PD 51Z inconsistent with or rendered unlawful by the provisions of the Coronavirus Act 2020?

No. There is no conflict between them. The Coronavirus Act changes the substantive law, whereas PD 51Z imposes a temporary stay to protect and manage County Court capacity, and to ensure the effective administration of justice without endangering public health during a peak phase of the pandemic.

Issue 4: Is PD 51Z inconsistent with article 6 of the European Convention on Human Rights or the principle of access to justice?

No. The short delay to possession litigation enshrined in PD 51Z is amply justified by the exceptional circumstances of the coronavirus pandemic. PD 51Z creates no risk that persons will "effectively be prevented from having access to justice" (R (Unison) v Lord Chancellor [2017] UKSC 51, at [87]). In any case, CPR r. 51.2, which is applicable to PD 51Z, is 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.

Issue 5: Does 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 April Amendment to PD 51Z which provided, by a new paragraph 2A(c), that paragraph 2 was not to apply to certain matters, including an "application for case management directions which are agreed by all the parties".

Issue 6: Does the court have jurisdiction to lift the stay imposed by paragraph 2 of PD 51Z?

Yes and no. Yes - because as a matter of strict jurisdiction, PD 51Z cannot be read as formally excluding the operation of CPR r. 3.1; a judge retains a theoretical power to lift any stay. No - because it would almost always be wrong in principle to use it. This does not mean that one can 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 and endanger public health. However, any normal case management reasons would not be enough to justify an individual judge lifting the stay imposed by PD 51Z.

Issue 7: If so, should the Judge have lifted the stay in this case?

No. The case does not meet the standard of exceptionality, and the fact that the parties agreed directions before PD 51Z came into force does not point towards the need to lift the stay.

The Court held that the judge should not have positively postponed the agreed directions on 15 April 2020 (before PD 51Z was amended) until after the expiry of the stay. This is because he should not have countenanced any application at all in contradiction of the stay. Instead, he should simply have dismissed the application for a declaration and lifting of the stay. The parties had, at that stage, to wait until the end of the stay to make any application to the court, because there was no paragraph 2A(c) in force. Had the parties applied for agreed case management directions after paragraph 2A(c) came into force, the judge could have made them, even if they envisaged steps being taken by agreement during the stay. But, in the absence of agreement, no directions could or should be made.

Comment

There are four main lessons to take away from this judgment.

  • First, while the judgment does not expressly tell us anything about pre-stay directions that require action during the stay, the Court's emphasis on PD 51Z's purpose and the use of the term "blanket stay" suggests that these have also been stayed; in other words, as far as enforcement is concerned, no distinction appears to be made on the basis of whether directions were made pre- or post-the original PD 51Z.

  • Second, it confirms what is clear from the language of the April Amendment: the stay does not prevent parties from agreeing and obtaining the court's endorsement of directions which will be enforceable on a date or dates postdating the end of the stay. Benefits of doing this include that parties will come out of the end of the stay with an already-established timetable, and avoid a potential rush to make applications immediately after the stay is lifted.

  • Third, and relatedly, any such directions can take effect during the stay; the only limitation is that they cannot be enforced during its duration. As the Court noted, there is no reason why parties cannot, for example, get on with agreed directions for disclosure on a voluntary basis during the stay, and thereafter seek to adjust any post-stay case management timetable by reference to steps agreed to be taken during the period of the stay. Those involved in affected possession proceedings should note that the Court appeared to suggest that parties' non-compliance may be detrimental to them once the stay is lifted: "If either party fails to do what it agreed to do during the period of the stay, the other party will, no doubt, be able to rely on that circumstance once the stay is lifted. It will be able to ask the court, at that stage, to take the conduct of the other party into account in making revised directions" [50]. This is, at the very least, a clear judicial encouragement to comply with directions despite the stay on enforcement.

  • Fourth, it remains possible, if the Practice Direction can be shown to be operating unfairly in a particular class of cases, for interested persons to make representations to the Master of the Rolls asking him to make a further amendment to PD 51Z. The Court noted they were told that it was representations by the Property Bar Association and the Property Litigation Association which led to the April Amendment. Similar sensible amendments could therefore be pursued that way.