Court of Appeal Judgment on Practice Direction 51(z)

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Introduction

On 27 March 2020, Practice Direction 51(z) was introduced, staying all possession proceedings and proceedings to enforce Possession Orders by Warrant or Writ of Possession for 90 days (i.e. until 24 June 2020). It was amended on 18 April 2020 to clarify that it did not apply to claims against trespassers within 55.6 CPR, application for interim possession orders or applications for case management directions agreed by all of the parties.

The issue of whether the stay under Practice Direction 51(z) can be lifted was raised in the case of Arkin (As Fixed Charge Receiver) v. Marshall).

Facts of Arkin v. Marshall

This was a possession claim issued in September 2019 by Arkin to enforce rights pursuant to a mortgage. On 18 November 2019, the claim was allocated to the Multi-Track and a CCMC was listed for 26 March 2020. Case management directions (i.e. disclosure, witness statements) were agreed by both parties and the court agreed the terms of the order on 26 March 2020. The order was sealed on 27 March 2020, the date that Practice Direction 51(z) came into force.

The Marshalls wrote to Arkin's solicitors asserting that the newly agreed directions were stayed by Practice Direction 51(z) and they no longer needed to comply with directions falling within the period of the stay. Arkin applied for the stay to be lifted on the basis that the directions had been agreed by consent and could be followed notwithstanding Practice Direction 51(z).

On 15 April 2020, the court refused to lift the stay, relying on the position in Sec. State for Communities v. Bovale Ltd [2009]where the Court of Appeal concluded that a judge's case management powers did not afford them the general power to vary the rules or practice directions. Here, the court explained that: "The Proceedings were started as Part 55 claims and accordingly come within the PD51(z). Bovale requires any court to give effect to the practice direction … this is not a discretion but a requirement arising out of the nature of this particular practice direction." Practice Direction 51(z) imposed a blanket stay which the court does not have discretion to lift using its case management powers under CPR Part 3.

Arkin appealed and the case was transferred to the Court of Appeal. The grounds of appeal were:

  • Practice Direction 51(z) was ultra vires;
  • in the alternative, Practice Direction 51(z) was intended to apply to all proceedings under Part 55, save for those that were allocated to the Multi-Track and given case management directions;
  • the Court has the power to lift the stay on a case-by-case basis.

The Court of Appeal's decision

Although it was permissible to raise the ultra vires of Practice Direction 51(z) for the first time on appeal, Practice Direction 51(z) was not made ultra vires and is valid.  It falls within Rule 51.2 CPR of the pilot scheme for assessing new practices and procedures. The court explained that it "intended to assess modifications to the rules and that it 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". The amendment was also found to be consistent with the Coronavirus Act 2020, Article 6 European Convention and Human Rights, and/or the principle of access to justice.

Arkin argued that, as parties had agreed directions where an application was made under paragraph 2A(c) of Practice Direction 51(z), the stay did not apply to those proceedings. The court noted the practicality in parties agreeing directions that were endorsed by the court, to avoid the rush of applications to agree case management directions once the stay is lifted. Although parties can comply with directions, during the stay, neither party is able to apply to the court to enforce compliance with agreed directions whilst Practice Direction 51(z) remains in place.

The court acknowledged that Practice Direction 51(z) does not remove general case management powers to lift a stay and concluded that: "We do not … rule out that there might be the most exceptional circumstances in which a stay could be lifted, in particular it is operated to defeat the depressed purposes of PD51(z) itself."

Conclusion/analysis

Practice Direction 51(z) has now been held to be lawful and must be applied. It is hard to imagine the circumstances in which an application to lift the stay would be successful. Any available judicial discretion is very limited.

Whilst the stay remains in place, it seems no possession hearings or case management directions will be enforced. However, there is value in agreeing directions to avoid the immediate rush, once the stay is lifted. 

From experience, case management conferences in possession claims are not all being vacated and the courts still want to give directions if agreed to avoid an enormous backlog of cases at case management stage once the stay is lifted.

This ruling makes it abundantly clear that the interests of public health is the priority and the rationale for upholding the stay imposed by Practice Direction 51(z). Courts are unlikely to lift the stay unless the facts of the individual case give rise to "exceptional circumstances". Notwithstanding the high bar for lifting the stay, parties would be well advised to comply with any agreed directions throughout the length of the stay to avoid the court using its discretion to impose sanctions for non-compliance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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