COVID-19: Won’t you stay (possession proceedings), just a little bit longer?

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A new Court of Appeal judgment has held that the temporary stay on possession proceedings has force and should rarely be departed from.

As landlords and lenders will no doubt be aware, on 27 March 2020 Practice Direction 51Z: Stay of Possession Proceedings, Coronavirus (“PD51Z”) came into force.  This effectively paused possession proceedings (including enforcement of possession orders) for a period of 90 days, subject to limited exceptions introduced on 20 April 2020.

Since the stay was imposed, a number of applications have been made seeking to lift the stay in specific cases, and occasionally some County Court judges have been persuaded to do so.  However, the application in the case of Arkin –v- Marshall[1] was rejected in the Central London County Court, promptly appealed, and heard by the Court of Appeal on 30 April 2020.  On 11 May 2020 the Court handed down judgment[2] dismissing the appeal.  Points of interest in the judgment:

  1. The Court rejected arguments that PD51Z was not properly authorised, that it was inconsistent with the Coronavirus Act 2020, and that PD51Z is incompatible with the principle of access to justice.
  2. The Court held that although a judge retains a theoretical power to lift any stay, and there might be exceptional circumstances to justify this, it would almost always be wrong in principle to use the power.
  3. If the stay was operating against the goal of protecting public health or preserving the Court’s resources, this is one exceptional circumstance that would likely justify lifting the stay – but no specific example of how this would arise was given.
  4. The fact that parties may have agreed directions for the conduct of litigation before PD51Z came into force (as the parties had in this case), does not justify lifting the stay. This means that even if the parties agree to exchange disclosure or evidence during the stay, they cannot apply to enforce compliance with that direction until after the stay expires.
  5. The Court also rejected the slightly technical argument, holding that even though parties are still allowed to make applications for agreed case management directions (under the exceptions to the stay introduced on 20 April), the making of such an application did not mean that the stay was lifted generally.
  6. The Court did say that if either party fails to do what it agreed to do during the period of the stay, the other party will be able to ask the Court to take that conduct into account. However the Court also noted that no step is required during the stay, and when a stay is lifted or expires, the parties (and the court) will pick up where they left off at the time the stay began.  We would be surprised if a Court seriously punished anyone for failing to progress the litigation during the period of the stay

So, although there might be cases where exceptional circumstances apply, for the vast majority of possession proceedings it is clear that this stay means to stay, at least until it lifts in late June (if not extended).

Welcome to the new normal.

[1] County Court claims numbered F00HF362 and F00HF363
[2] Mehmet Arkin (As Fixed Charge Receiver Of Lodge Farm) -v- Gary Ronald Marshall, [2020] EWCA Civ 620