Arkin v Marshall (2020) EWCA Civ 620
This is the Court of Appeal judgment in the appellant’s challenge to the lawfulness, extent and effect of the stay of Part 55 possession proceedings until 25 June 2020 under Practice Direction 51Z.
The short version is that the appellant lost on all counts, and PD 51Z remains in full effect.
The longer version is more like this…
Arkin is a fixed charge receiver, seeking a possession order of the charged property. The parties had agreed directions, with a trial window of October 2020 to January 2021. Those directions were made into an order, ironically, on the day PD 51Z came into force, 26 March. The parties could not agree on the effect of PD 51Z – whether directions were stayed, or the PD was of no effect. This was determined on the papers by HHJ Parfitt in the judgment we noted before – holding that the PD 51Z stay was effective and he had no power to order otherwise.
And so, leapfrogging, to the Court of Appeal.
Argument 1 – was the Practice Direction ultra vires (outside the powers of the Master of the Rolls and Lord Chancellor to make).
From paragraph 1 of PD 51Z, it was clear that it was of a pilot nature:
we take the clear view that the pilot nature of PD 51Z is plain from its first paragraph. We can see no reason why it is not reasonable to envisage that the stay imposed by paragraph 2 may be shown to be effective: (a) to relieve pressures on the administration of justice during the pandemic, (b) to reduce the risks of spreading the virus occasioned by enforcing possession orders and thereby forcing citizens to move home rather than stay at home as the Government has advised, and/or (c) to abrogate court hearings, whether remotely or face to face, in possession proceedings, thereby avoiding the need for court staff and litigating parties to risk transmission of the virus. Once that has been assessed, we cannot see why it may not be appropriate for the Master of the Rolls to consider putting in place a permanent rule or PD that imposes a limited stay on possession proceedings when and if the pandemic peaks again.
It therefore fell squarely under the power in CPR 51.2
“Practice directions may modify or disapply any provision of these rules –
-
- (a) for specified periods; and
- (b) in relation to proceedings in specified courts,
during the operation of pilot schemes for assessing the use of new practices and procedures in connection with proceedings”.
It was vires – lawfully made.
Argument 2 – the Practice Direction was inconsistent and contradicted sections 81-2 and schedule 29 of the Coronavirus Act 2020 (the imposition of a three month notice period).
The Coronavirus Act allowed for the court to dispense with notice if ‘just and equitable’, but the stay prevented any such issue being determined. The Court of Appeal was less than impressed.
In our judgment, these submissions are not well founded. Imposing notice requirements and giving power to lift them are one thing; a blanket stay of all possession proceedings is another. They are not inconsistent.
Argument 3 – Article 6 and access to justice.
The Court of Appeal found:
In our judgment, the short delay to possession litigation enshrined in PD 51Z is amply justified by the exceptional circumstances of the coronavirus pandemic. As paragraph 1 makes clear, there is a need to ensure that neither the administration of justice nor the enforcement of possession orders endanger public health by the unnecessary transmission of the virus. PD 51Z creates no risk that persons will “effectively be prevented from having access to justice”. Moreover, it was not seriously suggested that PD 51Z did not have the clear authorisation of Parliament, provided, of course, CPR Part 51.2 was properly applicable to it, as we have held it is.
Argument 4 – does the court have the power to lift the stay?
Arkin (via Philip Rainey QC) argued that the new (via amend) paragraph 2A(c) that any case management directions agreed by the parties should be carried into effect notwithstanding the stay.
(Para 2A(c) reads Paragraph 2 does not apply to-
(…)
(c) An application for case management directions which are agreed by all the parties. )
Secondly, Arkin argued that the court must have to power to lift the stay as CPR Part 3.1(1) and (2)(f) were not disapplied, and if the parties can agree to disapply the stay by agreeing directions, the court must be able to do so too.
The Court of Appeal disagreed:
The construction point is easily dealt with. In our view when paragraph 2A(c) says that paragraph 2 does not apply to “an application for” agreed case management directions, it means what it says – that is, that if the parties agree directions, they can apply to the court to have the directions in question embodied in an order. Mr Rainey submitted that that would be an empty right if the agreed directions themselves remained subject to the stay, and that the provision should be construed as lifting the stay so far as agreed directions are concerned. We do not agree. In the first place, that is not what paragraph 2A(c) says. Secondly, giving the words used their literal meaning does not produce an empty result. 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. Thirdly, there is also value in the parties agreeing, and obtaining the court’s endorsement of, directions which take effect during the stay albeit they cannot be enforced during its currency: we see no reason why parties cannot for example, get on with agreed directions for disclosure on a voluntary basis during the stay, and thereafter, seek to adjust any post-stay case management timetable by reference to steps agreed to be taken during the period of the stay. Fourthly, if Mr Rainey’s construction were to be of value parties would presumably have to be entitled to apply to the court during the currency of the stay if the agreed directions were not complied with; but that is precisely the kind of activity which the stay is evidently intended to prevent. Finally, as to the construction of paragraph 2A(c), we note that the drafters could easily have said that “paragraph 2 does not apply to case management directions agreed by the parties”, but they did not do so. The carve out, as drafted, is obviously directed at allowing the court to embody agreed directions in a court order notwithstanding the stay, and nothing more.
And on the CPR 3 point
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. The only possible such case canvassed before us was where the stay would operate in such a way as to defeat the purposes of PD 51Z and endanger public health.
No normal case management reasons could be enough to justify an individual judge lifting the stay imposed by PD 51Z.
Argument 5. Should the stay have applied in this case?
Arkin argued that the directions were agreed before the stay came into effect. The Court of Appeal found that that was not enough.
The fact that the parties agreed directions before PD 51Z came into force does not point towards the need to lift the stay. The parties are capable of complying with the directions they agreed whether or not the stay is lifted. The stay simply means that neither party will be able to apply to the court to enforce compliance with the agreed directions whilst it remains in place. If either party fails to do what it agreed to do during the period of the stay, the other party will, no doubt, be able to rely on that circumstance once the stay is lifted. It will be able to ask the court, at that stage, to take the conduct of the other party into account in making revised directions. A party to a claim that has been stayed under PD 51Z cannot, however, as we have said, apply to the court to enforce compliance with agreed directions, even if those directions have been made under the express exclusion in paragraph 2A(c).
This did not mean that parties could not take any steps that they had agreed, eg, under an order made under PD 51Z 2A(c). They weren’t prevented from doing so.
However, HHJ Parfitt should not have made an order delaying a case management hearing and the start of the trial window. That order pre-dated Para 2A(c), so even if those directions were agreed at that time, they should not have stood. A stay meant a stay.
Comment
The challenge to PD 51Z was not, I think it has to be said, not very strong. And not on the most attractive of individual cases either. But that said, the Court of Appeal’s decision does contain some things to chew over, as well as the strong and clear upholding of the effect of the PD.
The position following on paragraph 2A(c) ) on agreed directions is left somewhat unclear.
On the one hand, the parties can apply for agreed directions during the stay, and that directions order can indeed be made, but the stay continues to apply. So the parties are anticipated to apply for directions that take effect after the stay.
But at the same time, if the parties have agreed directions that require steps during the stay, they are apparently expected to keep to those directions (albeit that the court can’t enforce them during the stay) and a failure to follow agreed directions during the stay can be taken into account by the court on any future, post stay, order:
If either party fails to do what it agreed to do during the period of the stay, the other party will, no doubt, be able to rely on that circumstance once the stay is lifted. It will be able to ask the court, at that stage, to take the conduct of the other party into account in making revised directions.
This also appears to apply to directions agreed prior to the stay. So if you have agreed directions, you should probably see them through (save for any action required by the court, obviously, as that is stayed).
I’m not sure where that leaves people tactically. Should one agree directions, and then carry them out during the stay or otherwise face being rubbished to the court at a post stay hearing? Or refuse to agree directions, on the basis that there is a stay in effect? Or would that also result in being rubbished to the court for being unreasonable despite the express terms of PD 51Z (unless there is a valid dispute on directions, of course)?
Of course, in practice, the post stay backlog may make this fairly academic. Having complied with agreed directions, there will still be a delay, potentially a substantial one, in progressing to trial. And there can be little harm in working through disclosure and witness statements in the meantime, for either side.
While I agree with you that the judgment is not the clearest on what to do with previously made or agreed directions I’m not satisfied that representatives should probably see them through or any implicit suggestion that they would be subject to criticism if they didn’t. In talking about the Court taking into account any inaction from a party during the stay the Court of Appeal expressly envisages that “revised directions” would be made after the stay and makes no discussion of sanctions or penalties in this regard. Further, and most importantly, the Court of Appeal does re-affirm the principles of David Grant v. Dawn Meats UK [2018] EWCA Civ 2212 which expressly provide that a stay operates so as to operate as to ‘halt’ or ‘freeze’ proceedings and that no steps in the action, by either party, are required during the period of the stay. They also go on to indicate the specific parties (i.e. Arkin and Marshall) are at liberty to agree directions but level no obligation or criticism at them in the event they refuse to do so. There may well be benefits to complying with directions or agreeing varied directions during the stay and the Courts are likely to view any action during the stay positively but given these findings there ought not to be any conversely negative assessments by the Courts once the stay is lifted against parties who have refused to take any action as a consequence of the same. Clearly such decisions as to what to do will be a highly subjective decision based on what is in the best interests of the client in each case.