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Coronavirus and Possession Proceedings

on Wednesday, 20 May 2020.

Is the current stay on possession proceedings lawful and do the courts have power to lift it?

In Arkin v Marshall & Anr, the Court of Appeal considered the lawfulness of Practice Direction 51Z (PD51Z) which introduced a 90-day stay on possession proceedings in response to the coronavirus (COVID-19) pandemic. The Court also considered whether and in what circumstances the courts have power to lift it.

Practice Direction 51Z

PD 51Z initially sought to stay all possession proceedings for a period of 90 days from 27 March 2020. It was purportedly made under powers conferred by Rule 51.2 of the Civil Procedure Rules (CPR) which is concerned with modifying the CPR during pilot schemes.

PD 51Z was amended on 20 April 2020. This included a new exception - that the stay does not apply where there is an application for case management directions which are agreed by all parties.

Background

In this case, mortgagees appointed a receiver to commence possession proceedings against Mr Marshall and other occupants of several properties. The parties agreed directions which were incorporated in an order sealed by the judge on 27 March 2020 (the same day that PD 51Z came into force).

Mr Marshall then argued that PD 51Z stayed the claim automatically and that it did not need to comply with the agreed directions. The County Court agreed, and held that it had no power to lift the stay. The receiver appealed to the Court of Appeal.

The Arguments Raised

The parties raised a number of arguments in favour of, and against, the effect of PD 51Z:

  1. No Jurisdiction

Mr Marshall and the other occupants argued that issues about lawfulness of PD 51Z should properly be raised under separate judicial review, allowing interested parties such as the Lord Chancellor to submit evidence in a timely manner. Therefore, it was not for the Court of Appeal to decide this issue now.

However, the Court considered that the receiver would be granted permission for judicial review in any case and the issues did not require factual evidence. Therefore, due to the unusual circumstances surrounding the introduction of PD 51Z, the Court decided it could rule on the validity of PD 51Z.

1. Not a Pilot Scheme

In order to be lawful, PD 51Z had to be a pilot scheme under Rule 51.2. The receiver argued it was not. However, as the stay could be shown to alleviate pressures on administration of justice and reduce the spread of the Coronavirus by preventing evictions and court hearings, the Court held that a provision could appropriately be put in place to cover a possible second peak of the pandemic. Therefore, PD 51Z could be properly regarded as a pilot scheme.

2. Incompatibility with Coronavirus Act 2020

The Appellant also argued that PD 51Z was inconsistent with certain provisions of the Coronavirus Act 2020 which changed the statutory notice periods for bringing possession claims. The Court found no inconsistency - the Act changed substantive law, while PD 51Z imposed a temporary stay to ensure effective administration of justice without endangering public health.

3. Breach of Human Rights

The Court also rejected any notion that PD 51Z was incompatible with Article 6 of the European Convention on Humans Rights and the fundamental principle of access to justice. It held that the exceptional nature of the pandemic justified the short delay to possession proceedings.

4. Discretion to Lift the Stay

The Appellant argued that the subsequent amendment to PD 51Z meant that any agreed case management directions should be effected notwithstanding the stay. The Court disagreed with this interpretation as the amendment applies to 'an application for' agreed case management directions.The benefit of the amendment is that it enables parties to:

  • have an established timetable and avoid a rush to make applications once the stay is lifted
  • voluntarily comply with agreed directions and seek necessary adjustments after the stay is lifted

The Court agreed with the Appellant that the courts must have general discretion to lift the stay under Rule 3.1 of CPR, but said that the exercise of this power is informed by the nature and purpose of the stay introduced by PD 51Z. Though the Court did not say the stay could never be lifted, it only envisaged this happening where the stay would work against the purpose of PD 51Z by endangering public health. The circumstances in this case were not exceptional enough for the Court to lift the stay.

Coronavirus real estate 2

Possession Proceedings in the Immediate Future

Although the ongoing stay prevents parties from enforcing breaches of agreed directions, parties may continue to apply for agreed case management directions, and it may help the parties to have a timetable in place.

Parties should then attempt to comply with any agreed directions. Although compliance cannot be enforced, if a party does not comply, the other party may rely on this conduct in seeking revised directions once the stay is lifted.

The stay will only be lifted in exceptional circumstances, most likely where the existing stay poses a risk to public health.  Nevertheless, where it can be shown that PD 51Z operates unfairly in a particular class of case, representations can be made to the Master of Rolls which may result in further amendments to PD 51Z.


If you would like advice in relation to current or prospective possession proceedings, please contact Michelle Bendall in our Property Litigation team at mbendall@vwv.co.uk, or complete the form below.

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