Local authority – Secure tenancy – Possession – Court making possession order in absence of tenant – Court granting tenant’s application to set aside order and permitting re-entry – Whether court erring in law in exercising discretion to set aside order – Appeal allowed
In 1999, the appellant local authority granted the respondent a secure tenancy of one of their properties. The respondent’s housing benefit was stopped for a period and he went into arrears with his rent. The appellants took possession proceedings against him. They informed the respondent of the date for the court hearing but he did not attend and an order for possession was granted in his absence.
The respondent was subsequently evicted, at which point the powers of the court to stay or suspend the execution of the order or to postpone the date of possession under section 85(2) of the Housing Act 1985 came to and end. However, it was common ground that if the judgment on which the execution was based set aside, the execution would have to be set aside, in which case the court would have another opportunity to exercise its section 85(2) powers. The respondent applied for re-entry and the setting aside or variation of the possession order. The district judge set aside the order and ordered that the respondent could re-enter the property. The appellants’ appeal was dismissed by the county court.
The appellants appealed against that decision. An issue arose as to whether, following Forcelux Ltd v Binnie [2009] EWCA Civ 854; [2010] HLR 20, the matters listed in CPR 39.3(5) should be taken into account when a tenant asked the court was to set aside a possession order made in his absence. In Forcelux, it was held that where the court made a possession order in the tenant’s absence, following forfeiture of a lease for the non-payment of ground rent, and the tenant subsequently applied to have that order set aside, the court had a wide discretion under CPR 3.1(2)(m), to set it aside if the interests of justice demanded it.
The appellants contended that, as a matter of policy, the test for setting aside a possession order should be tougher than that adopted in Forcelux to enable social housing to be more effectively managed.
Held: The appeal was allowed.
The judge had erred in the exercise of his discretion and the case would be remitted for reconsideration.
The facts of Forcelux were unusual and differed from the instant case. The factor that convinced the court that the discretion should be exercised in favour of the tenant was that he would otherwise lose a valuable asset sum and the landlord would receive a windfall. That was a compelling factor for setting aside the order.
Section 85(2) indicated that parliament had contemplated that, save in unusual circumstances, the execution of a possession order should terminate the tenant’s rights, including his right to apply for an order under that subsection, which expressly limited the court’s powers so that they were exercisable only before the execution of the order. As a principle of public policy, a possession order once made would form a proper basis for execution unless the tenant made a section 85(2) application within the period allowed. As a corollary of that principle, challenges to orders should be by way of appeal. In the interests of the proper administration of justice and the system of appeals, judges ought not to sit in judgment on their own orders. Furthermore, CPR 39.3 made it clear that where a final order was made, the defendant should have to: (i) explain why he had not attended the hearing; (ii) show that he acted promptly on becoming aware of the order; and (iii) show that he had a real prospect of success.
Thus, in the absence of some unusual and highly compelling factor as in Forcelux, a court that was asked to set aside a possession order under CPR 3.1 should in general apply the requirements of CPR 39.3(5) by analogy, in addition to, and not in derogation of, applying CPR 3.9 by analogy, because that provision required the court to have regard to all the circumstances in any event. However, in the absence of such compelling factors, the court should give precedence to the provisions of CPR 39.3(5) above those of CPR 3.9. Even that was subject to a qualification in the case of a secure tenant. Parliament had clearly contemplated in section 85(2) that the tenant should have the opportunity to persuade a court to modify an outright possession order. It followed that the requirements of CPR 39.3(5) need not be applied in such a case with the same rigour as in the case of a final order that does not have that characteristic.
The court should not decline to exercise its power to set aside a possession order if, in doing so, the statutory purpose in section 85(2) would be defeated. Moreover, the court could have regard to the wider social context in which those cases came before the courts. Accordingly, in deciding whether the tenant had a good reason for non-attendance, the court could have regard to the provisions of the Rent Arrears Pre-Action Protocol and to best practice among social landlords, which might lead to the conclusion that a tenant was able to provide an appropriate explanation.
The fact that a possession order had been executed would also constitute a relevant circumstance that the court should take into account on an application to set it aside. The weight to be given to it would depend on the particular circumstances of the case. However, it was difficult to think of a case in which, in the absence of some compelling factor, execution would not be relevant if the landlord had properly allocated the property to another tenant or had incurred expense in refurbishing the property so that it could be so allocated.
Kerry Bretherton (instructed by the legal department of Hackney London Borough Council) appeared for the appellants; Sylvester Carrott (instructed by Hodge Jones & Allen LLP) appeared for the respondent.
Eileen O’Grady, barrister
