Court of Appeal rules that three month stay on possession proceedings due to COVID-19 is not unlawful

Marshall (Acting by Mehmet Arkin as fixed charge receiver) v Marshall & Another [2020] EWCA Civ 620

In a new judgment, the Court of Appeal has ruled that the three month stay on possession proceedings imposed due to the coronavirus (COVID-19) pandemic is not unlawful.

In Marshall (Acting by Mehmet Arkin as fixed charge receiver) v Marshall & Another [2020] EWCA Civ 620, the respondents had three properties which were the subject of a mortgage securing a loan to Gary Marshall. The mortgagees claimed that sums due under the loan agreement were in arrears and appointed the appellant as receiver who, on 24 September 2019, commenced two sets of possession proceedings in the County Court. A case management conference was listed on 26 March 2020 which did not take place, but the parties nevertheless agreed directions. Those directions were incorporated in an order sealed by Judge Parfitt on 27 March 2020, the same day that Practice Direction 51Z (PD 51Z) - which introduced a three month stay on possession proceedings during the COVID-19 pandemic - came into force.

In a judgment handed down on 15 April 2020, Judge Parfitt held that the proceedings were stayed and that he had no power to lift the stay.

The receiver appealed the decision and, while the case would normally have been heard by the High Court, it was granted leapfrog permission to go to the Court of Appeal. The Housing Law Practitioners Association intervened and the Lord Chancellor was included as an interested party.

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Giving lead judgment, Sir Geoffrey Vos, Chancellor of the High Court, addresses the key issues raised by the grounds of appeal in turn. 

Does the court have jurisdiction to consider the 'vires' of PD 51Z, and should it do so?

Counsel for the respondent argued that a challenge to the vires of PD 51Z should not be permitted in this Court because it had not been raised in the Court below and because it should have been advanced by way of judicial review. While acknowledging that in a perfect world the vires challenge should have been identified at the start, Sir Geoffrey finds that the failure to do so was venial and he adds - 

'... in the circumstances of this case the appellant’s failure to take that course has not produced any real unfairness nor created any insuperable difficulty for this court. It is inevitable that permission to apply for judicial review would have been granted, so the appellant has not stolen a procedural march ... what is in our view conclusive is that there is a strong public interest in an early and authoritative ruling as to the validity of PD 51Z. Having had full argument on that issue we believe that we are in a position to give such a ruling despite the imperfections in the procedural history, and we should do so.' (paragraph 17)

Was PD 51Z properly authorised as a pilot scheme?

Sir Geoffrey considers whether PD 51Z was properly authorised as a pilot scheme 'for assessing the use of new practices and procedures in connection with proceedings' and rules, as required by Civil Procedure Rules (CPR) Part 51.2 - 

'... 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 ... 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.' (paragraph 25)

The Coronavirus Act 2020

Addressing whether PD 51Z is inconsistent with, or rendered unlawful by, the Coronavirus Act 2020, Sir Geoffrey concludes - 

'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. The Coronavirus Act 2020 will last for two years (subject to extensions), but the pilot stay only lasts for 90 days. It is true that some of the provisions of schedule 29 will have greater significance once the pilot stay comes to an end, but the argument that the Coronavirus Act 2020 renders PD 51Z unlawful is not tenable. There is simply no conflict between them. They make separate and different provisions. The Act changes the substantive law, and PD 51Z imposes a temporary stay to protect and manage County Court capacity, and to ensure the effective administration of justice without endangering public health during a peak phase of the pandemic.' (paragraph 28)

Article 6 and the principle of access to justice

Rejecting the argument that PD 51Z is incompatible with either Article 6 or the fundamental principle of access to justice, Sir Geoffrey highlights that 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, and that the short delay to possession litigation enshrined in PD 51Z is amply justified by the exceptional circumstances of the coronavirus pandemic.

Does the court have jurisdiction to lift the stay?

While paragraph 2A(c) of PD 51 Z provides that the stay on proceedings does not apply to 'an application for case management directions which are agreed by all the parties', Sir Geoffrey draws attention to the phrase 'an application for'. The meaning, he therefore rules, is that there is no stay on the directions in question being embodied in an order. However, the directions themselves remain subject to the stay, but are in place to take effect on a date or dates once it is over.

Turning to the power to lift the stay, Sir Geoffrey acknowledges that PD 51Z cannot exclude the operation of CPR 3.1- which gives the court the power to impose or lift a stay - but clarifies that - 

'... 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.' (paragraph 42)

Should the judge have lifted the stay in this case?

Finally, although the directions were agreed before PD 51Z came into force, Sir Geoffrey rules that this case does not meet the standard of exceptionality required, as set out above, for the stay to be lifted.

Accordingly, Sir Geoffrey dismisses the appeal.