Appellant bank applying for possession order — Respondents issuing counterclaim — Possession order granted — Subsequent enforcement hearings — Respondents failing to progress counterclaim — Whether enforcement hearings sufficient to prevent automatic stay of counterclaim
In 1998, the appellant bank commenced proceedings for possession of a property owned by the respondents; the respondents counterclaimed. Possession was granted in March 1999, and, after a number of enforcement hearings over the following 18 months, the action was settled by consent in 2001. The outstanding issues on the counterclaim were not dealt with at any of the hearings. In August 2002, the respondents applied to the court for directions on the counterclaim.
The appellant argued that once the original action had been settled, the counterclaim took effect as a separate issue. It claimed that since no action had been taken on the counterclaim between March 1999 and August 2002, it had been automatically stayed by virtue of para 19(1) of Practice Direction 51 of the Civil Procedure Rules. Paragraph 19(1) stated: “If any existing proceedings have not come before a judge at a hearing or on paper between 26 April 1999 and 25 April 2000, those proceedings shall be stayed.”
The respondents contended that the counterclaim formed an integral part of the proceedings. Thus, although the counterclaim had not been directly considered at any of the enforcement hearings, those hearings were sufficient to keep the claim alive during the relevant period. They also maintained that, since the counterclaim constituted an integral part of the proceedings, “final judgment”, for the purposes of Practice Direction 51, could not be said to have been given until such time as the counterclaim had been decided.
The questions for the court, therefore, were: (i) what constituted “final proceedings” for the purposes of Practice Direction 51?; and (ii) did the counterclaim form part of the “existing proceedings”? A district judge ordered a stay of the counterclaim. His order was overturned on appeal, and the appellant appealed.
Held: The appeal was allowed.
The wording of Practice Direction 51 did suggest that the claim and the counterclaim were bound together so that the hearing of one gave life to the other. Even if this were the case, however, the purpose of para 19 was to distinguish between the judgment on the claim and the enforcement process. The key was to be found in para 19(4), which stated that “for the purposes of this paragraph, proceedings will not be ‘existing proceedings’ once final judgment has been given”. Proceedings to enforce a judgment were not, therefore, a continuation of the original claim. So even if the counterclaim had been an integral and dependant part of the original claim, enforcement proceedings were not sufficient to save the counterclaim from being stayed if it had not been advanced within the relevant time period.
It was clear from various provisions within the CPR that counterclaims had a life of their own: for instance under CPR 20.3, where a counterclaim was to be treated as a claim for the purposes of the rules, and CPR 20.2(3), where default judgment could be granted in respect of a counterclaim.
The order of March 1999 was a final possession order and was conclusive of the possession proceedings. The fact that there were subsequent applications to suspend the possession warrant did not have any relevance to the counterclaim. Accordingly, the counterclaim was independent of the main proceedings, had not come before the judge within the relevant period and was therefore stayed.
Rosalind Phelps (instructed by Osborne Clarke, of Bristol) appeared for the appellant; Peter Leighton (instructed by Sebastians) appeared for the respondents.
Vivienne Lane, barrister
