The automatic stay operates where the possession claim was raised as a counterclaim and also where an appeal is of an order which includes an order for possession made by consent (where the possession claim was not pleaded).
This was the majority decision of the court of appeal in TFS Stores Ltd v The Designer Retail Outlet Centres and others [2020] EWCA Civ 833; [2020] PLSCS 131.
A tenant held six separate tenancies for properties where it traded as The Fragrance Shop. The landlords of the tenancies were not the same. The tenant issued proceedings (the first action) seeking a declaration that two of the tenancies had not been validly excluded from the Landlord and Tenant Act 1954 (the 1954 Act) and an injunction preventing the landlord from seeking possession. The landlord in that first action counterclaimed for possession.
The landlords commenced a second action (the second action) claiming a declaration that four ongoing tenancies were not protected by the 1954 Act. The terms of the tenancies had not expired at the date the second action was issued and so possession was not sought.
The first and second actions were heard by HHJ Davis White QC, whose order (the order) was sealed on 18 July 2019 (see TFS Stores Ltd v Designer Retail Outlet Centres and others [2019] EGLR 32). The judge declared that the six tenancies in issue in the two actions were properly excluded from the 1954 Act. By the time of the order the terms of three of the four tenancies that were the subject of the second action had expired and the parties agreed thereafter that there should be orders for possession to give effect to the decision that the judge had made. The landlords’ claim in the second action was never formally amended to claim possession..
On 8 November 2019, Arnold LJ granted the appellant tenant in both actions permission to appeal. On 10 June 2020, the tenant’s contention that the appeal was automatically stayed was rejected on paper by Lewison LJ as he did not accept that Practice Direction 51Z (PD 51Z) applied.
PD 51Z stays “proceedings for possession brought under CPR Part 55”. It has been extended by the Civil Procedure (Amendment No 2)(Coronavirus) Rules 2020 until 23 August 2020.
By majority, the Court of Appeal held that the tenant’s appeal of the first action was caught by the stay. Sir Geoffrey Vos, chancellor of the High Court, and Lady Justice Asplin held that as soon as the claim for possession was initiated in the counterclaim, the entire action became “proceedings for possession brought under CPR Part 55” and were stayed. This was in keeping with the purposes of the stay as explained in Arkin v Marshall [2020] EWCA Civ 620; [2020] PLSCS 89 and London Borough of Hackney v Okoro [2020] EWCA Civ 681; [2020] PLSCS 100. It also prevented an unsatisfactory “salami-slicing” of issues in litigation which would reduce the efficacy of the blanket stay that the master of the rolls and legislature have imposed.
Similarly, the appeal of the second action was stayed. The inclusion (by consent) of orders of possession relating to three of the four properties was in reality a shortcut abrogating the need to amend the pleadings in the second action. This lack of formal amendment did not mean that they should not be regarded as “proceedings for possession brought under CPR Part 55”. In addition, as Okoro made clear, an appeal from a possession order is still to be regarded as “proceedings for possession brought under CPR Part 55”. Further, the stay should not be lifted in this case.
It is interesting to note how unhappy the court was with approaches that could lead to some issues within litigation being stayed and others not. Sir Geoffrey Vos was clear that it would be undesirable for an approach to be taken that allows claims or appeals that are part and parcel of possession claims to be continued despite the automatic stay. Additionally, he did not consider Copeland v Bank of Scotland plc [2020]EHC 1441 (QB); [2020] PLSCS 114 to have been properly decided.
Elizabeth Haggerty is a barrister at Lamb Chambers
