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Can the Covid 19 stay of possession proceedings be lifted? – Arkin v Marshall [2020] EWCA Civ 620

The Court of Appeal have released the judgment in the case of Arkin v Marshall which raised the issue as to whether or not the Covid 19 stay could be lifted.

Background

In September 2019 two claims for possession were issued by the receiver appointed by the mortgagees of property owned by Marshall.  The cases were allocated to the multi-track and a CMC listed for 26th March 2020.  The parties agreed directions, including a trial window, and that hearing did not take place.

On 27th March 2020 PD 51Z came into force.  PD 51Z had the impact of staying all proceedings for possession for a period of 90 days.  The Respondents took the view this meant that they did not have to comply with directions whilst the Appellant said that they did.  On 15th April 2020, Judge Parfitt determined the issue on paper.  He held that the proceedings were stayed, he had no power to lift the stay and amended the timetable to after the stay imposed by PD 51Z.

The decision of Judge Parfitt was appealed.  Whilst other arguments were raised I focus on the interpretation of PD51Z.  The Appellant’s case in this area were:

  1. 2A(c) should be construed so that any case management directions agreed by the parties should be carried into effect not withstanding the stay. That the court must have a general discretion to lift the stay for a variety of reasons.
  2. The judge should have lifted the stay in this case. The directions were agreed before PD51Z came into force.  The introduction of paragraph 2A(c) then validated those agreed directions.

On 20th April 2020, before the appeal was heard, PD 51Z was amended by the addition of paragraph 2A.  This paragraph provided that the stay did not apply to certain cases, in particular “2A(c) an application for case management directions which are agreed by all the parties”.

Decision

Sir Geoffrey Vos gave the judgment of the court.  There were two lines of argument relating to PD 51Z.

(1) Does the Court have jurisdiction to lift the stay?

  • [38] The construction of 2A(c) is simple. If the parties agree directions they can apply to the court for them to be embodied in an order.  The provision does not lift the stay.  “There is an obvious value in the parties agreeing, and obtaining the court’s endorsement of, directions which will take effect on a date or dates post-dating the end of the stay: they will 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”.  If the contrary were true then parties would be entitled to apply to the court to enforce directions that have not been complied with.  This is precisely the kind of behavior the stay intended to prevent.
  • [39 to 41] CPR Part 3.1 gives the court the power to impose a stay and also to lift it. However, practice directions must be binding on the courts to which they are directed and it was not open to a judge to ignore the practice direction.
  • [42] “In our view 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.  But the proper exercise of that power is informed by the nature of the stay and the purposes for which it was evidently imposed.  PD 51Z imposes a general stay on proceedings of the kind to which it applies, initially subject to no qualification at all, and subsequently qualified only in the limited and specific respects provided for in paragraph 2A.  The purpose was that during the 90-day period the burden on judges and staff in the County Court of having to deal with possession proceedings, which are an immense part of its workload, would be lifted, and also that the risk to public health of proceeding with evictions would be avoided.  That 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.  Thus, while we 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 in a particular case, we have great difficulty in envisaging such a case.”
  • [44] In normal case management there is unlikely to be reason to justify an individual judge lifting the stay. “The blanket stay has been imposed to protect public health and the administration of justice generally”.  Parties should not trouble the court with applications that are likely to fail.
  • [46] “We would, in these circumstances, hold that, although as a matter of strict jurisdiction a judge retains a theoretical power to lift any stay, it would almost always be wrong in principle to use it. We do 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.”

(2) Should the judge have lifted the stay?

  • [49 and 50] The circumstances of this case do not allow the court to lift the stay. The fact that directions were agreed before PD51Z does not point towards lifting the stay.  The parties are capable of complying with directions whether or not the stay is lifted or not.  If a party does not comply with directions then this will be relevant on any application to revisit directions after the stay is lifted.  A party cannot apply to the court to enforce compliance with agreed directions under the express exclusion of paragraph 2A(c).
  • Under PD 51Z the parties are at liberty to undertake any steps they agreed when an order was made pursuant to paragraph 2A(c).

Conclusion

This decision was one clearly based on supporting the public health and administration of justice policies put in place following the outbreak of Covid 19.  Whilst there may be cases where it would be appropriate to lift the stay imposed by PD51Z these cases will need to meet the high ‘standard of exceptionality’ envisaged by the Court of Appeal in this case.  Parties should work together to comply with directions already made or to agree directions to progress the case during the operation of the stay.  This co-operation should also extend to requests by an opposing party to extend the time for compliance of directions.

 

Jonathan Holsgrove

13th May 2020

 

Contact Jonathan’s clerks

Francine Kirk on 0113 202 8605