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Social Housing Speed Read – A challenge to the blanket stay in possession proceedings

An appeal – heard on 11 May 2020 – challenged a decision that the general 90 day stay on possession proceedings (introduced by new Practice Direction 51Z in March) cannot be lifted, varied or shortened by the Court.

Arkin v Marshall (2020) EWCA Civ 620

Arkin, a Receiver appointed to enforce a legal charge over property, had applied for possession of the that property. In the course of proceedings, directions (which had previously been agreed) were made on 26 March 2020 – the same day that PD 51Z came into force. The parties could not agree between them whether or not these directions would be stayed as a result of the new coronavirus-induced practice direction.

The matter was first considered on the papers, with the Judge determining that PD 51Z was indeed effective. Arkin appealed and argued a number of points.

Firstly, Arkin questioned the authority regarding the implementation of the Practice Direction in the first place.

This argument, however, was quickly quashed as the Civil Procedure Rules clearly state that practice directions may modify or disapply any provision for a specified period. Similarly, the Court of Appeal quickly disregarded Arkin’s view that allowing the stay to remain in force breached Article 6 of the European Convention on Human Rights – the right to justice. The Court stated that the current circumstances resulting from the COVID-19 outbreak are exceptional and, as such, a relatively short delay in possession proceedings is just and reasonable.

Secondly, Arkin challenged whether or not the Court could lift the stay itself if the parties could do so by agreement, particularly where the legislation itself says that paragraph 2A(c) does not apply to “an application for” agreed case management directions.

The Court acknowledged this, but said that such an application merely requested directions to be set out in an order only. The Court’s view was that there is a clear value to parties agreeing and then complying with directions, particularly if it meant that an established timetable was in place once the stay ended and which would only help to save time.

The Court highlighted that PD 51Z has been implemented in order to alleviate the burden on  Judges and County Court staff and to reduce the risk to public health that proceeding with evictions would inevitably create. It is not possible to distinguish between cases based on individual circumstances and that doing so would undermine the legislation. The Court neglected to rule out the possibility of lifting a stay altogether, but stated that the only instance in which this would occur is if a stay operated in a way which defeated the purpose of PD 51Z and endangered public health.

The final argument – that the directions were agreed before PD 51Z came into effect – also failed to satisfy the Court.

The Court took the view that parties are capable of complying with the directions they agreed whether or not the stay is lifted, and that those directions could run in tandem with the stay. However, neither party would be able to apply to the Court to enforce compliance with the directions whilst the stay remains in effect – although any non-compliance could clearly be taken into account in any order made once the stay is lifted.

In all, and unsurprisingly, the effect of PD 51Z was upheld.

In summary, it appears that parties can apply for directions that take effect after the stay, but it is clear that the Court intends to give full effect to the stay imposed by PD 51Z. However, it also seems that the Court expects parties to comply with directions (for example, in relation to disclosure and witness evidence) as they continue to run, if non-compliance can be punished at a later date. If your compliance with directions is affected by the COVID-19 outbreak, it will clearly be better to deal with this sooner rather than later.

If you have any questions on the above and how it will affect social housing providers, or any other questions as a social housing provider, please do not hesitate to contact John Murray or a member of our expert Social Housing Team.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

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