Practice and procedure – Possession – Appeal – Appellant tenant appealing against decision that tenancies validly excluded from protection of Landlord and Tenant Act 1954 – Appellant applying for automatic stay of appeal pursuant to PD 51Z – Whether stay extending to possession claim not initiated under CPR part 55 – Application granted
The appellant held leases of six retail outlet premises of which the respondents were the registered landlords. In each case, before entering into the lease agreement, the respondents purported to exclude the security of tenure protections in sections 24-28 of Part II of the Landlord and Tenant Act 1954. The respondents demanded possession of the premises following expiry of the leases.
The appellant brought proceedings under CPR part 7 claiming that the tenancies were not validly excluded from the protection of the 1954 Act. The respondents counterclaimed for a declaration that such protection had been excluded and for possession of those premises where the fixed term had expired (the first action). The respondents also brought proceedings under CPR part 7 in respect of other premises, seeking a declaration that the leases were not protected by the 1954 Act (the second action). When the second action was issued, the fixed term of the relevant leases had not expired and so the respondents could not claim possession. The judge ruled in the respondents’ favour in both actions: [2019] EWHC 1363 (Ch); [2019] EGLR 32. The leases in the second claim had by then expired and, by agreement, the court’s order included orders for possession of the properties in both claims, so that the respondents would not need to amend the second action to plead expressly a claim for possession.
The appellant was granted permission to appeal but, following Hackney London Borough Council v Okoro [2020] EWCA Civ 681; [2002] PLSCS 100, it argued that the appeal was automatically stayed under PD 51Z. The stay imposed by PD 51Z was due to expire on 25 June 2020 but the Civil Procedure (Amendment No 2) (Coronavirus) Rules 2020 introduced a new CPR part 55.29, which extended the stay until 23 August 2020.
The application was refused on paper on the grounds that PD 51Z only applied where proceedings were brought under CPR part 55. The court was asked to reconsider the application at the outset of the appeal.
Held: The application was granted.
(1) The first action for declarations as to whether or not the two tenancies were excluded from the protection of the 1954 Act and for an injunction to restrain the landlords from taking possession were not “proceedings for possession brought under CPR part 55” or “proceedings seeking to enforce an order for possession” within paragraph 2 of PD 51Z. However, the respondents’ counterclaims in the first action were such proceedings. Accordingly, at the very least, the counterclaim in the first action and the appeal from the orders for possession made by the judge in the first action were stayed automatically by PD 51Z.
As soon as the counterclaim for possession was brought by the respondents in the first action, the entire action became “proceedings for possession brought under CPR part 55” and was caught by the stay. Those words also encompassed any appeal from such proceedings. Any other conclusion would defeat the purposes of the stay explained in both Arkin v Marshall [2020] EWCA Civ 620; [2002] PLSCS 89 and Okoro. CPR part 55.2(1) was in mandatory terms. The counterclaim attracted all the rigours of CPR part 55 and PD 55A to the first action. That analysis fitted with the reality of the situation. The appellant started the first action to resolve the legal issue that underlay the question of whether or not it was entitled to remain in possession of the two properties. It was inevitable that the respondents would counterclaim for possession, which was the inevitable consequence of their position. That was the case in many types of landlord and tenant dispute. Underlying legal issues needed to be resolved, but their determination led to the conclusion that the landlord either would or would not be entitled to recover possession.
(2) The respondents’ claim in the second action for declarations that the ongoing tenancies were excluded from the protection of the 1954 Act, was clearly not affected by the automatic stay. The claim, as pleaded, was not a proceeding “for possession brought under CPR part 55” nor was it a proceeding “seeking to enforce an order for possession” within paragraph 2 of PD 51Z. As regards the orders for possession in the second action, CPR part 55 was mandatorily applicable to possession claims brought by landlords. Accordingly, even though the consensual approach employed a short cut that abrogated the need for a formal amendment of the respondents’ claim in the second action, the proceedings on which the judge made his order had properly to be regarded as “proceedings for possession brought under CPR part 55”. The judge could not otherwise properly have made the order. In addition, the position was confirmed when the appellant appealed against those possession orders. As Okoro made clear, an appeal from a possession order was regarded as proceedings under CPR part 55. Therefore, the automatic stay imposed by PD 51Z and the 2020 Rules operated to stay the appeals in both actions.
(3) Any approach that allowed claims or appeals that were part and parcel of possession claims to be continued despite the automatic stay was undesirable. It was clear that the policy intention expressed in the explanatory statement for the 2020 Rules was to extend the stay on possession proceedings, even though that might act to the detriment of some small businesses, such as the respondents. It would send the wrong message to hear an appeal in what had to be properly regarded as possession proceedings on the technical ground that a part of the claim was for a declaration as to the law underlying that claim for possession. It was not for the court to second guess the policy that lay behind either PD 51Z or the 2020 Rules. The blanket stay had to be given effect. Accordingly, the stay imposed by PD 51Z extended to any possession claim and any appeal therefrom, even where that claim was not actually initiated under CPR part 55. The hearing of the appeal would be vacated. Possession proceedings would resume once the stay was lifted.
Joanne Wicks QC and Mark Galtrey (instructed by DLA Piper) appeared for the appellant; Wayne Clark and Joseph Ollech (instructed by Shoosmiths LLP) appeared for the respondents.
Eileen O’Grady, barrister
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