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ARKIN- v- MARSHALL: PD51Z HERE TO STAY
28 May 2020
Those practising or interested in housing law have likely been keeping their eyes peeled for the outcome of Arkin v Marshall & Anr  EWCA Civ 620.
On Monday 11th May 2020, an approved judgment was handed down by the Court of Appeal (remotely due to the COVID-19 pandemic). In essence, the appeal was a challenge to the validity of PD 51Z and/or an attempt to water down the effectiveness of this Practice Direction by trying to carve out scope for the discretion of judges to approach lifting the stay on possession proceedings on a case by case basis.
What is PD 51Z?
PD 51Z is otherwise known as “Practice Direction 51Z: Stay of Possession Proceedings, Coronavirus”. This Practice Direction was made on the 26th March 2020 (and came into force the next day), its aim being to respond to the COVID-19 pandemic in England & Wales.
PD 51Z was amended to include paragraph 2A, which excludes from the general stay of possession proceedings the making of orders regarding trespassers and allowing parties to apply to the court to make orders for agreed case management directions. This amended version came into force on the 20th April 2020 and is still in force at the time of writing this article. PD 51Z states as follows:
- 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.
- Subject to paragraph 2A, 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.
2A. Paragraph 2 does not apply to—
(a) a claim against trespassers to which rule 55.6 applies;
(b) an application for an interim possession order under Section III of Part 55, including the making of such an order, the hearing required by rule 55.25(4), and any application made under rule 55.28(1); or
(c) an application for case management directions which are agreed by all the parties.
- For the avoidance of doubt, claims for injunctive relief are not subject to the stay in paragraph 2, and the fact that a claim to which paragraph 2 applies will be stayed does not preclude the issue of such a claim.
What is the background to the case of Arkin v Marshall?
In short, it is not so much the background facts to this case which are of chief importance, but rather the comments of Sir Geoffrey Vos in giving the judgment of the Court.
The appeal itself regarded two sets of possession proceedings in Hertford County Court under Part 55 of the CPR, regarding properties in Welwyn, which are the subject of a mortgage securing a loan to the Defendant, Mr Marshall. The lenders brought these claims on the basis that the monies due under the loan agreement are in arrears and that Mr Marshall had also breached other terms of this agreement. The Appellant in this case had been appointed as a receiver for the mortgagees in this case. The claim itself is contested by Mr Marshall (and the additional Defendants, who are also members of Mr Marshall’s family).
The case was placed onto the multi-track and transferred to the Central London County Court. The parties in this case were able to agree directions on the 26th March 2020, which were then incorporated into an order sealed by Judge Parfitt the next day- the 27th March 2020- which was fortuitously the same day that PD 51Z came into force.
Following written submissions to Judge Parfitt by the parties, he held that the possession proceedings were stayed and that he lacked the power to lift the stay. Judge Parfitt then went on to push back the dates for the directions previously agreed between the parties.
The appeal before the Court of Appeal was against Judge Parfitt’s decisions.
A public law challenge outside of the High Court- a fatal error?
The Appellant argued that the making of PD 51Z was in fact ultra vires. The Respondent argued that as this issue had not been raised in the lower court and that this appeal was properly brought before the High Court by way of a claim for judicial review, the Court of Appeal should not consider this ground of appeal. The appropriate approach, in line with those authorities, was to determine whether the Appellant’s approach to the case amounted to an abuse of the Court’s procedure.
The Court of Appeal found that it could consider the vires of PD 51Z, but only given the very particular circumstances of this appeal . Though a challenge in the High Court would normally be the appropriate procedure, particularly where there has been a challenge to the validity of secondary legislation, the Court of Appeal found that in certain cases, the “considerations of justice and pragmatism” may make it appropriate for such a challenge to be dealt with in private law proceedings (citing the line of reasoning which authorities housing practitioners will be well aware of as per Wandsworth London Borough Council v. Winder  AC 461) .
However, this was case very much turned on its timing (and secondly by its procedural facts, particularly given the coming into force of the novel PD 51Z on the day of Parfitt J’s decision and the need for urgent submissions to be made.)
The Court of Appeal in this case found no real unfairness in the Appellant bypassing the High Court, as the Lord Chancellor was later added as an Interested Party to this appeal. Furthermore, it appears clear from the judgment that the Court of Appeal was very keen to be given the opportunity to comment on the scope and meaning of PD 51Z., so much so that they were able to sidestep the procedural irregularity in this matter being before them without a reasoned High Court judgment, noting that: “…there is a strong public interest in an early and authoritative ruling as to the validity of PD 51Z” .
Can PD 51Z properly be called a pilot scheme?
The Appellant argued that PD 51Z was ultra vires, I.e. that there was no power to make it, as Part 51.2 only refers to pilot schemes. The Court of Appeal gave this argument short shrift.
It is correct that Part 51.2 does only refer to changing the Civil Procedure Rules during the operation of pilot schemes, as CPR Part 51.2 states the following:
“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”.
The question for the Court of Appeal was therefore whether what is currently occurring in the Courts can be deemed a scheme for assessing new practices and procedures. The Respondent and the Lord Chancellor submitted that PD 51Z is a pilot scheme, to consider future practices and procedures which may be introduced as the Covid-19 pandemic continues (or for future potential pandemics or emergencies).
The Court of Appeal looked at the intention set out in paragraph 1 of PD 51Z, which states that 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.” Given that there was no evidence before the Court of Appeal to the contrary of this stated intention, it was held that PD 51Z is a plainly a pilot scheme . The scheme’s purpose is therefore to assess (i) future modifications to be made to the CPR during the current epidemic (which could last months or years)  and (ii) whether possession proceedings/enforcing possession orders during a pandemic endangers public health .
The Court of Appeal used this opportunity to comment on why it is reasonable to envisage that the stay imposed in paragraph 2 may be effective in:
- Relieving pressures on the administration of justice during the Covid-19 pandemic;
- Lowering the risks of transmission of the virus during the enforcement of possession order, which forces citizens to move home rather than follow the government’s advice to stay home; and/or
- Stopping court hearings, avoiding the need for staff and relevant parties to risk spreading the virus .
It is noteworthy that although the current stay on possession proceedings is to last for 90 days from the coming into force of PD 51Z (I.e. to conclude by the 25th June 2020), the PD itself states in paragraph 1 that it “… makes provision to stay proceedings for, and to enforce, possession… [and] ceases to have effect on 30 October 2020.” It may therefore be that the life of PD 51Z is extended beyond the end of the 90-day prescribed period or that indeed that (as was suggested by the Respondent and Lord Chancellor) a permanent rule is made by Master of the Rolls, following an assessment of the impacts of PD 51Z. Such a permanent rule could provide for stays or other measures during future crises. The rationale for the Master of the Rolls doing so was considered by the Court of Appeal, who stated in no unclear terms: “we cannot see why it may not be appropriate… 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” [emphasis added] .
Is PD 51Z at odds with the Coronavirus Act 2020?
The Appellant further argued in this case that PD 51Z is unlawful because the Coronavirus Act 2020 came into force after the commencement of PD 51Z and the two are inconsistent with one another. Specifically, one example given by the Appellant was section 81 and schedule 29 of the Coronavirus Act 2020, which adds to the Rent Act 1977 the requirement of three months’ notice to begin proceedings against statutory tenants, as well as the right to landlords to apply to the court to dispense with this new requirement if the court finds it “just and equitable to do so” (Paragraphs 2(3) and 2(3)(4B) of Schedule 29) . The Appellant submitted that the right for a landlord to apply to the court to dispense with this notice period would be in effect worthless if any possession proceedings would be immediately stayed by the operation of PD 51Z .
The Court of Appeal however found that the Coronavirus Act 2020 and PD 51Z are not mutually exclusive. Rather, they are two separate provisions: one which changes the substantive law, the other being a temporary stay for the purposes of managing court capacity and avoiding the endangerment of public health . The reasoning that the Coronavirus Act 2020 and PD 51Z are separate provisions and not in conflict with one another is supported by the fact that the Coronavirus Act 2020 is to be in force for a two-year period, whereas the current pilot for staying possession proceedings is 90 days .
Staying possession proceedings- compatible with Article 6?
Another question put before the Court was whether PD 51Z was ultra vires in that it denied access to justice in breach of Article 6 of the European Convention on Human Rights.
Article 6 provides that “[I]n the determination of his civil rights and obligations… everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law…”
However, the Court of Appeal found that this stay was compatible with the Appellant’s Article 6 rights. Although ample case law regarding Article 6 was discussed in this judgment, the Court of Appeal found that the delay to possession proceedings contained within PD 51Z is “amply justified by the exceptional circumstances of the coronavirus pandemic” [emphasis added] and that there is “no risk” that people will be prevented from having access to justice .
Does the Court have the power to lift the stay imposed in PD 51Z?
In considering the powers of courts generally with respect to their own case management, Part 3.1(1) of the CPR states that “[t]he list of powers in this rule is in addition to any powers given to the court by any other rule or practice direction or by any other enactment or any powers it may otherwise have.” The Court of Appeal was clear that “[t]he power to impose a stay necessarily includes the power to lift it” .
Although a judge retains the power to lift the stay which it imposes , the Court of Appeal has made it very clear that this is a blanket stay, and that it will seldom be lawful for an individual judge to lift it. PD 51Z imposes its only qualifications in very limited circumstances in paragraph 2A. The Court of Appeal emphasised that the stay contained in PD 51Z:
“… [I]s 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- lifted in their particular case. Thus, while we would not go so far as to say that there would 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 would have great difficulties in envisaging such a case” [emphasis added] .
Although a case was mentioned with respect to lifting the stay, namely Bernicia Group v. Mark Mann (17 April 2020; D4PP284A; County Court at Newcastle), the Court of Appeal declined to comment on it, as they felt that they did not know enough about this case . The only theoretical example which the Court of Appeal considered could lead to a judge exercising their discretion and lifting to stay would be when the stay in a particular case would defeat the very purpose of PD 51Z itself and endanger public health . The Court of Appeal was keen to emphasise that this stay should not be watered down by stating that “it would almost always be wrong in principle to use it” [emphasis added] .
The Court of Appeal took this opportunity to strongly lay out that possession proceedings are not to continue in a business as usual manner during the operation of the stay, and even went so far as to comment that where applications are sought for normal case management purposes, they “…would strongly deprecate parties troubling the court with applications that are based only on such reasons and which are in truth bound to fail” [emphasis added] .
What teeth do case management directions have during the stay?
The Court of Appeal was furthermore asked to consider whether PD 51Z stopped the effectiveness of any case management directions agreed between the parties. Although the substantive appeal was dismissed, the Court of Appeal was of the view that Judge Parfitt should not have postponed the directions agreed between the parties due to the provisions of PD 51Z .
Parties can therefore of course still apply to the court to have any agreed directions embodied in an order, as is provided by paragraph 2A(c) of PD 51Z.
However, the Appellant argued before the Court of Appeal that this right to agree directions would be empty unless the stay was lifted where agreed directions are concerned. The Court again disagreed, noting the “obvious value” in agreeing directions which are then endorsed and placed into an order with deadlines post-dating the end of the stay. Agreed directions provides clarity and lessens the pressure on the courts once the stay is eventually lifted . But to seek to apply to the court during the stay where directions are not followed by another party (and therefore having hearings) would defeat the chief purposes of PD 51Z . Parties can still comply with agreed directions during the stay on a voluntary basis and then adjust the timetable, taking into account the steps undertaken during the stay, but the Court of Appeal found that to go further than this would be anathema to the purposive nature of this pilot scheme.
It was emphasised by the Court of Appeal that normal case management reasons could not themselves justify a judge lifting the stay imposed by PD 51Z .
In relation to parties complying with directions during the period of the stay the Court was not entirely clear. Importantly the Court of Appeal did re-affirm the principles of David Grant v. Dawn Meats UK  EWCA Civ 2212, which expressly provide that a stay operates so as to ‘halt’ or ‘freeze’ proceedings and that no steps in the action, by either party, are required, or indeed permitted, during the period of the stay. The only distinction given by the Court of Appeal is that a party is permitted to take a step during the period of this stay precisely because parties are able to agree to the same under the provisions of the practice direction. However the indication that a court in making any revised directions post-stay may take a party’s conduct during the stay into account  has led some to believe that a party may be subject to criticism for failing to comply with directions subject of the stay. While the Court of Appeal does not provide much detail on this point, it is our opinion that the Court of Appeal does not go so far as to suggest this. Reading the judgment as a whole, this comment logically refers to assessing where the parties are in the process of case preparation for trial with an eye to effective case management. Indeed the Court expressly envisages that it is likely that revised directions will be necessary in most cases and goes on to indicate the specific parties (i.e. Arkin and Marshall) are at liberty to agree directions but levels no obligation or criticism at them in the event they refuse to do so. Most likely the Court of Appeal has endeavoured to walk a delicate tightrope: enabling parties to exercise their rights under the stay by treating matters as frozen while at the same time trying their best to encourage parties to progress matters as best possible with another eye on the likely chaos that will ensue when the stay is eventually lifted. In the circumstances it is likely that any conduct during the period of the stay to progress matters will be viewed positively but, there should not be any contrary criticism in the event no steps are taken.
The Court of Appeal has made clear that they are not seeking to make it precedent that challenges of this nature should be raised elsewhere than in the High Court by way of judicial review. The Court of Appeal was at pains to emphasise that they should not be taken to be endorsing any departure from previous case-law about the circumstances in which a challenge of this kind can be raised otherwise than by way of judicial review . However this case provides another useful example of where the Courts are increasingly more willing to consider public law challenges in private law proceedings.
This case solidifies the impact of the blanket stay of possession proceedings contained in PD 51Z. Although it was held that individual judges have the power to lift the stay as part of their general powers of case management, it would be wrong in principle in nearly all cases to do so.
The generous scope of the application of stays in possession proceedings is further reflected in the recent judgment handed down on the 27th May 2020 in the case of London Borough of Hackney v. Okoro  EWCA Civ 681, which clarified that PD 51Z also applies to appeals from those possession orders in place when the stay began (apart from those appeals which have reached the Supreme Court over which the Master of the Roles in making Practice Directions under Part 51 has no jurisdiction).
Any aggrieved by this PD are unlikely to find success in seeking the lifting of the stay in individual cases. However they may find some limited success by making representations to the Master of the Rolls asking for another amendment to PD 51Z . This was successfully done by the Property Bar Association and the Property Litigation Association and is the reason for the earlier referenced amendment to the PD.
Once the stay is lifted, the conduct of the parties during the stay is likely to be taken into account and positive acts to progress matters are likely to be viewed favourably. It is unclear whether parties will be criticised if matters are not progressed, but it is our opinion for the reasons detailed above that this would be unjust and the Court of Appeal certainly did not endorse such an approach. Further, any tenant representative that may be criticised by either a landlord or- at a later stage, the Courts- would do well to remind both that Government Guidance currently provides that landlords should not commence or continue possession proceedings without a very good reason to do so (Coronavirus (COVID-19) Guidance for Landlords and Tenants; Coronavirus Act 2020 and renting [at Annex A]).
Lastly, this pilot scheme which stays possession proceedings until the 25th June 2020 should not be viewed as solely a “one-off”. Although the Government’s advice on the 14th May 2020 shifted from “Stay at Home, Protect Lives, Save the NHS” to the more nebulous “Stay Alert”, staying at home as much as possible is still part of the Government’s advice (https://www.gov.uk/coronavirus). PD 51Z remains in place until the 30th October 2020, and therefore it is not out of the realms of possibility that this scheme will be extended in one form or another. including if a second peak in the Covid-19 outbreak occurs or if further public health crises (or other emergencies) occur in future.
One Pump Court Chambers
27 May 2020