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Possession Proceedings
13 Aug 2020, 15:20 by Wayne Smith
Labels: barrister, barristers, civil, coronavirus, court, courts, covid-19, landlord, possession, possessions, proceedings, residential, tenant
INTRODUCTION:
As any whose work includes possession proceedings can tell you, the emergence of Covid 19 has turned this area of practice on its head. However, if the raft of (sometimes confusing/seemingly contradictory) statutory and procedural changes had not been enough to cope with, the Government (together with the Master of the Rolls) has now published an additional Practice Direction, requiring yet further adaptation on the part of the industry. Whilst perhaps providing some much-needed clarity as to the latest ‘new normal’, is this latest edition simply a harbinger of a very long road ahead?
BACKGROUND:
First came the Coronavirus Act 2020 (enacted on the 25th March 2020); the relevant provisions of which are s81 and Schedule 29, which make temporary amendments to the various Acts relating to different tenancy types. In summary, these provided that – from the 26th March 2020 until the 30th September 2020 - no proceedings could be commenced, in most cases, for possession of a rented dwelling house, unless a notice period of at least 3 months had expired.
These provisions were accompanied by 51ZPD (coming into force on the 26th March 2020, amended on the 20th April 2020 and stating that it will be in force until the 30th October 2020). The Practice Direction – arguably goes further than the Act - stating that all residential possession proceedings (save those brought against trespassers) are stayed for 90 days from the date of the Direction. This includes new and existing claims and both rent and mortgage repossession cases.
Next came the Civil Procedure (Amendment No.2) (Coronavirus) Rules 2020 (enacted on the 25th June 2020) which created a new rule – r55.29 - extending the stay, on all possession proceedings, until the 23rd August 2020.
Regardless of any seeming conflict between the provisions, the intention of the legislative/procedural changes was clear: people should not face eviction during the lockdown.
If anyone had thought that these moratoria might lead to an absence of litigation, they were soon to be disappointed with no less than 3 significant decisions from the Court of Appeal:
- Arkin v Marshall had, at first instance, been before the Court on the day that 51ZPD came into force. At that hearing, the Judge had approved a list of agreed directions. Following the publication of the Practice Direction, the Respondents took the view that they did not need to comply with the agreed directions within the 90 day period. The Appellants disagreed and the matter returned to the first instance Judge, who ruled that proceedings were indeed stayed. This then took the matter to the Court of Appeal, which (amongst other things) ruled that whilst there was a power to lift the stay, it was difficult to envisage when this might be justified in the current circumstances;
- London Borough of Hackney v Okoro - the Court of Appeal confirmed that the stay also applies to appeals from orders for possession;
- TFS Stores Ltd v Designer Retail Outlet Centres - in a majority judgment, the Court of Appeal held that a counterclaim that seeks possession brings those proceedings within the ambit of 51ZPD and is therefore also stayed by the effect of the rule and Practice Direction.
THE LATEST DEVELOPMENTS:
With the end of the stay fast approaching (on the 23rd August 2020…for those who missed it), on the 17th July 2020 the Civil Procedure (Amendment No.4) (Coronavirus) Rules 2020 were laid before Parliament. A further new rule was created – r55.A1 - cross referencing to a new Practice Direction – 55CPD – which will take effect in cases that come under the scope of r55.29/51ZPD, from the expiry of the stay until the 28th March 2021.
55CPD provides that:
- any case that was stayed, prior to the 03rd August 2020 (save cases in which a final order for possession had been made), shall not – in effect – be restored until ‘one of the parties’ (one presumes this will usually be the claimant) serves a ‘reactivation notice’;
- such a notice must:
o be in writing;
o confirm that the party serving it wishes for the matter to be listed, relisted, heard or referred to a Judge under r55.15 (possession in default of a defence);
o unless the case is subject to appeal, set out the party’s (again, usually presumably the claimant’s) knowledge as to how the defendant (and any dependants) was affected by the Covid-19 pandemic;
- the party must also file/serve:
o unless the case is subject to appeal (when the notice is served by a claimant) an updated rent account for the preceding two years;
o the last directions order (if any) made prior to the stay, together with a draft order proposing new dates, or a statement that no further directions are considered necessary;
o a statement setting out whether the hearing is suitable to be heard remotely; whether by video link or telephone;
- in default of compliance with the aforesaid requirements, any trial date fixed prior to the 27th March 2020 will be automatically vacated and the claim will be automatically stayed (unless the Court orders otherwise);
- if no reactivation notice is filed and served by the 29th January 2021 and/or if the aforesaid case management steps have not been taken by that date, the case will be automatically stayed.
The Practice Direction does however go on to state that any automatic stay thereunder is not a procedural sanction from which relief is required under r3.9.
A party (one presumes, usually the defendant) receiving the any revised proposals as to case management/evidence stating that no further directions are required/how the hearing should be heard, must serve a response within 14 days of service, if they disagree.
When listing a matter, the Court must give at least 21 days’ notice to the parties.
What is more – clearly envisaging the deluge of possession proceedings to follow – 55CPD disapplies the standard 8 week time period from issue to hearing.
In respect of any claim brought after the 03rd August 2020, the claimant must:
- serve on the defendant (not less than 14 days prior to the hearing) and bring to the hearing two copies of a notice:
o that/how they have complied with the Pre-Action Protocol for Possession Claims by Social Landlords (when applicable);
o setting out their knowledge as to how the defendant (or their dependents) have been affected by the pandemic.
-
in any claim for accelerated possession in
assured shorthold tenancy cases, the notice as to the claimant’s knowledge of
the impact on the defendant is to be served with the claim form.
THE FALL OUT:
The first thing to note is of course the fact that 55CPD procedurally creates 2 kinds of post-stay case, each with its own procedure:
1. those that were issued prior to the stay and up until the 02nd August 2020;
2. those that have been issued on or after the 03rd August 2020 and until the 28th March 2021 (unless extended).
Practitioners will need to be alert as to which provisions apply to any given kind of case, if they seek to minimise any additional/unnecessary delay.
Secondly – as the Court of Appeal
reminded us in Okoro – circa 138,000 possession claims are brought in
the County Court each year, in a process that is already criticised by landlord
representatives/groups as being too lengthy and costly for landlords, who are
most often not receiving rent payments.
The impact of the loss of almost half a year’s worth of litigation cannot
be overstated and the none too subtle further disapplication of time periods
will be worrying to many. Whilst the Practice
Direction itself is relatively time limited, it seems almost fanciful to
imagine that the backlog will be cleared before its expiry. Inevitably this
will have to lead to a question on the part of landlords as to whether it would
be preferable to settle whenever possible, whilst perhaps improving the
negotiating position of some defendants.
Thirdly – there is no requirement to reactivate a post-03rd August 2020 case; though, if the distinction was not very clearly communicated to HMCTS, it remains to be seen whether these cases have been actively separated within busy Court Offices and those acting in such matters may nevertheless wish to at least email the Court following the stay asking as to when the matter will be listed.
Fourthly:
- in the pre-02nd August cases, if the claimant is reactivating the claim, they have to file/serve notice of their knowledge of the impact of Covid 19 on the defendant;
-
this is a must in all post-03rd
August cases.
Conversely, whilst the claimant has to serve this knowledge, there is no active duty to seek it; therefore defendant/s/practitioners may wish to ensure that this information is provided to claimants/representatives as a matter of some urgency.
The question then turns to what ‘impacted’ means and what the Court will actually do with that information. In the absence of any authority on the point, one can expect there to be disagreement:
- claimants will undoubtedly wish to interpret this quite narrowly:
o has the defendant or their dependents contracted the virus?
o has this impacted on their income?
o the Court should do no more than take it into consideration when addressing any discretionary ground for eviction.
- conversely, defendants will likely wish to construe the provision widely:
o was the defendant furloughed/made redundant?
o did they have to take any period of unpaid leave to provide schooling/childcare?
o are they, or someone in their household, in a shielding category? Did that impact on income?
o has there being any disruption to transport links that has affected their income?
o is the crisis causing the defendant any difficulty in terms of complying with the Court’s directions?
o did they lose loved ones?
o should these factors be considered when applying the Overriding Objective and deciding the date from which any reactivation takes effect/what further directions/timetable should be set/whether the case should be further stayed?
If not addressed swiftly and decisively by the Higher Courts, it is all too easy to see the potential for significant disruption in the near future – by way of satellite litigation – and then, inevitably, further delay for those cases that are incapable of settlement.
Wayne Smith
New Walk Chambers
13.08.20
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