Evictions in the time of Covid-19 – The stay of possession proceedings under PD 51Z

Introduction

On 26 March 2020, the Master of the Rolls made the new Practice Direction (“PD”) 51Z to the Civil Procedure Rules (“CPR”), approved by the Lord Chancellor to come into force the following day, which provides:

1. This practice direction is made under rule 51.2 of the Civil Procedure Rules (“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 period of the stay

“90 days” means “90 clear days” (CPR r.2.8(2)) such that the stay will last until Friday 26 June 2020.

The effect of the stay

The Glossary to the CPR explains that: “A stay imposes a halt on proceedings, apart from taking any steps allowed by the Rules or the terms of the stay. Proceedings can be continued if a stay is lifted”.

In Grant v Dawn Meats [2018] EWCA Civ 2212, the Court of Appeal expanded (per Coulson LJ at para 18):

As the various citations at paragraphs 10 and 11 above make plain, a stay operates to ‘halt’ or ‘freeze’ the proceedings. In general terms, no steps in the action, by either side, are required or permitted during the period of the stay. When the stay is lifted, or the stay expires, the position as between the parties should be the same as it was at the moment that the stay was imposed. The parties (and the court) pick up where they left off at the time of the imposition of the stay.

In Grant, for example, a stay 13 days into the 4 month period for service of the claim form paused that period such that, at the end of the stay, the Claimant had 4-months-minus-13-days to serve the claim.

Of course, many deadlines are not defined by reference to a period of time that can continue to run at the end of the stay, but rather by reference to a fixed date. In respect of these, parties are likely to need to apply (preferably by consent) for an order setting new dates as the end of the stay approaches.

This may, however, present particular difficulties in relation to matters that are listed for trial shortly after the end of the stay, such that there would not be sufficient time for the necessary steps to be taken. In these cases, the parties will have to decide whether to seek that the trial be vacated or that the stay be lifted in the particular case, so as to allow the parties to continue to prepare for trial. In this regard, the Court of Appeal explained in Bovale Ltd v Secretary of State for Communities and Local Government [2009] EWCA Civ 171; [2009] 1 W.L.R. 2274 (per Waller LJ and Dyson LJ at para 70) that:

…parties are entitled to start from the position that the relevant rules and practice directions will apply to their case; the onus will be on the party seeking a different form of process and indeed on the judge who may of his own motion wish to exercise his case management powers in a particular case to demonstrate that the case is outside the norm…

However, any departure from the Practice Direction would be likely to require strong justification, given the Lord Chief Justice’s message to judges in the Civil and Family Courts on 19 March 2020, prior to the introduction of PD 51Z, which included the following in relation to possession proceedings:

Possession Proceedings

It is likely that the emergency legislation will affect this area of work. But it is obvious that particular sensitivity is needed irrespective of that. Applications to suspend warrants of possession should be prioritized.

Block listing of possession claims is inappropriate at this time because it would be difficult to maintain appropriate social distancing.

Judges dealing with any possession claim during the crisis must have in mind the public health guidance and should not make an order that risks impacting on public health.

On the other hand, there is nothing preventing the parties using the period of the stay to explore possibilities for settlement of the proceedings.

What is and is not covered

It is clear that the stay under PD 51Z applies, automatically, to all possession proceedings under CPR Part 55 (which includes claims brought by landlords, licensors and mortgagees, and claims against trespassers: CPR r.55.2(1)) and to all “proceedings seeking to enforce an order for possession by a warrant or writ of possession”.

This includes claims on mandatory grounds falling within section 89 of the Housing Act 1980, under which the court’s general power to postpone possession would usually be ousted. (One possible explanation is that the making of the Practice Direction, even though under the Constitutional Reform Act 2005, is an exercise of an inherent jurisdiction of the Master of the Rolls – see Bovale at para 28 – which is not ousted by section 89 of the 1980 Act: see Admiral Taverns (Cygnet) Ltd v Daniel [2008] EWCA Civ 1501; [2009] 1 W.L.R. 2192; see also, on the courts’ inherent powers to regulate their business, North British Housing v Matthews [2004] EWCA Civ 1736; [2005] 1 WLR 3133).

It is not absolutely clear, however, whether the execution of a writ or warrant already issued constitutes “proceedings” caught by the stay. It would seem at least arguably to be the case - it is clear that execution of writs and warrants can be “stayed” (CPR r.83.7) and a stay is defined as a “halt on proceedings” (see above) - and a stay of such clearly falls squarely within the intention of PD 51Z. However, it may be advisable for tenants or their advisers to contact the bailiffs’ office to confirm the position and, in the case of any doubt, to make an application.

It should be noted, however, that PD 51Z does not provide any protection to occupiers who are excluded from protection under the Protection from Eviction Act 1977, in relation to whom court proceedings for eviction are not required.

Further, as the Practice Direction makes clear, it does not affect applications for injunctive relief and it is likely that those advising tenants will see an increase in applications for injunctions, particularly in cases of alleged anti-social behaviour.

Costs incurred during the stay

“A stay of an action does not mean that costs recoverable between the parties necessarily cannot be incurred" (John v Pricewaterhouse [2003] EWCA Civ 1720, per Pill LJ at para 10, applying Pecheries Ostendaises v Merchant's Marine Insurance Company [1928] 1 KB 750).  Instead, it will be for the court to determine, on any assessment, "having regard to the stay and all other material factors, whether the costs were reasonably or prematurely incurred" (Pecheries Ostendaises, as summarised in the headnote). In John, for example, it was suggested that it might be reasonable to incur the costs of preparation for a hearing listed shortly after the end of the stay.

On the other hand, a degree of caution is required. In M&M Savant Ltd v Subhash Raja [2009] EWHC 90149 (Costs), it was suggested that: “Had it proved necessary to do … work during the stay, the Tenant's remedy to ensure that the cost of doing so was recoverable, was to apply to the Judge for an order lifting the stay” (per Master Campbell at para 43); although neither John nor Pecheries Ostendaises appears to have been cited and the costs were not recoverable for other reasons in any event. Nonetheless, it would certainly seem sensible for parties wishing to do substantive work to prepare for trial to explore the prospects of settlement before doing so: if, having done this, it appears that settlement is unlikely to be achieved, then it is more likely to be reasonable incur costs preparing for trial, particularly where that trial is listed shortly after the end of the stay.

As regards legal aid, work on possession cases will remain within the scope of LASPO Sch 1, para 33, still being “Civil legal services provided to an individual in relation to court orders for sale or possession of the individual’s home” even if the trial of the claim for the such an order is postponed by the stay. As regards the recoverability of specific items of work, the principles set out above in relation to inter partes assessment are likely equally to apply (given that legal aid costs are also assessed under the standard basis: see the LAA’s Costs Assessment Guidance 2018 at para 1.3)

This article was produced by Daniel Clarke. To contact Daniel's Practice Manager Rachel Finch, please email r.finch@doughtystreet.co.uk or call 020 7404 1313.