A very interesting case report and article by James Stark of Garden Court North in the current Legal Action (March 2008) presents a possible solution to the permanent trespasser problem, at least in part.
Permanent trespassers are those who have paid off the arrears and court costs of an old style form N28 suspended possession order, so have no chance to apply to vary the terms of the possession order under s.85 HA 1985 (or the HA 1988 equivalents). Marshall v Bradford  EWCA Civ 594, Swindon BC v Aston  EWCA Civ 1850 and London & Quadrant v Ansell  EWCA Civ 326 (see below for previous posts) established this position – no new tenancy created, no possibility of revival of old tenancy.
Now in a Liverpool County Court Circuit Judge decision in Helena Housing Ltd v Mower and Molyneux gives an alternative argument.
The N28 in this case contained the term ‘when you have paid the total amount mentioned, the plaintiff will not be able to take any steps to evict you as a result of this order’.
Payne v Cooper  1 QB 74 was a Court of Appeal decision. It addressed the extended discretion given to the courts under the precursors to the Rent Acts, which was in terms identical to s.85 HA 1985. Payne held that the effect of a term in an order – that the plaintiff could not evict the defendant as a result of the order if the arrears were paid off – was that the order for possession was discharged, there being no other source of power to make such an order other than the discharge power in the section.
Now that is a very nice and shiny precedent, and the line of descent of the extended discretion through the Rent Acts to HA 1985 is clear enough (see James Stark’s article for precedent decisions on this issue). But what to do about the conflict with the more recent line of Court of Appeal cases above?
At first sight, a County Court case would have to be referred up to the Court of Appeal or possibly the Lords to resolve it one way or another. But, in a nifty piece of footwork, Baker v R  AC 774 sets out that where an inferior court is confronted by two directly conflicting decisions of a higher court, the inferior court was entitled to chose the decision that appeared the most logical. In Mower and Molyneux, the Circuit Judge decided that, given the surely unintended effects of the legislation as interpreted by Marshall v Bradford et al, and the obvious injustice that may result, Payne was the most logical decision.
Helena Housing apparently aren’t appealing and are treating paid up tolerated trespassers accordingly.
Now, whether this provides a satisfactory or widely deployable answer to the permanent trespasser problem is, of course, open to question. To some extent, until the Court of Appeal or HoL get their hands on such a case, it will be down to the individual District or Circuit judges at individual hearings, and that variability is not desirable.
But may I just say Wow.
That is a seriously impressive piece of footwork and James Stark (and his sadly un-named instructing solicitors – do speak up if it was you) have a fanboy in Nearly Legal.