Posted on 20th May 2020
By Laura Smallwood
The two appeals before the Court concerned mortgage possession proceedings brought by a receiver. The claims were allocated to the multi-track, with a case management conference listed for 26th March. The hearing did not take place, but the parties agreed directions which were incorporated in an order sealed on 27th March, the day on which PD 51Z came into effect. The respondents took the view that the practice direction discharged them of any obligation to take the steps contained in the agreed directions during the period of the stay. The receiver did not accept that the stay applied to the directions and contended that if it did, it could and should be lifted. At first instance it was held that PD 51Z effected a blanket stay, which there was no power to lift. When the receiver appealed, raising issues as to the validity of the practice direction as well as jurisdiction to lift the stay, the matter was transferred to the Court of Appeal.
The Court of Appeal’s decision
The Court held:
1. PD 51Z was not made ultra vires.
(In the unusual circumstances and given the strong public interest in an early and authoritative ruling on PD 51Z, the Court was content to consider the vires challenge, even though it had not been raised in the court below and was being made in private law proceedings, rather than by way of judicial review.)
● PD 51Z is a valid pilot scheme within the meaning of CPR Part 52.1, and this was clear from the terms of Paragraph 1 of the PD. Once the effectiveness of the stay has been assessed, the Master of the Rolls might consider putting in place a permanent rule or PD to take effect in the event of a second or subsequent peak of Covid-19.
● PD 51Z is not inconsistent with the Coronavirus Act 2020. The argument that the stay renders provisions such as the extended notice periods in Schedule 29 of the Act worthless, was rejected. The statute and the PD contain separate and distinct provisions; the Act changes the substantive law, whilst PD 51Z imposes a temporary stay during a peak phase of the pandemic.
● PD 51Z is not incompatible with Article 6 of the ECHR or the principle of access to justice. The Court considered that the short delay to possession litigation contained in the PD is ‘amply justified’ by the exceptional circumstances of the pandemic.
2. Paragraph 2A(c) of PD 51Z excludes from the blanket stay only an application for agreed case management directions; the stay will apply to the directions themselves. The parties may agree and obtain court endorsement of directions to take effect from the end of the stay so that when the stay is lifted, there is a ready-made timetable to follow.
3. There is power to lift the stay as a matter of jurisdiction, but in the light of the purpose of the stay, the power could only be exercised in the most exceptional circumstances.
● PD 51Z cannot be read as formally excluding the power under CPR Part 3.1 to impose (and necessarily therefore, to lift) a stay. Therefore there is a theoretical ability to lift the stay.
● However, the blanket nature of the stay, which is designed to protect public health and the administration of justice, would be fatally undermined if parties were entitled to rely on their particular circumstances as grounds for lifting it.
● Therefore no normal case management reasons will be sufficient to justify lifting of the stay and applications based on such reasons are ‘bound to fail’.
Points to note
● This judgment sends a message loud and clear that the prospect of the PD 51Z stay being lifted in any individual case is remote. The Court went so far as to say that it had ‘great difficulty in envisaging’ a case where it would be proper for a judge to make such an order, and that it would ‘almost always be wrong in principle’ to use the power to lift the stay.
● The Court did not elaborate on what might amount to ‘the most exceptional circumstances’ permitting the lifting of the stay, beyond suggesting possibly those where the stay would operate to defeat the express purposes of PD 51Z and endanger public health. A situation such as in the recent case of University College London Hospitals Foundation Trust v MB  EWHC 882 QB comes to mind as potentially appropriate. There, possession was sought (in fact by way of injunction due to the PD 51Z stay) against a patient considered suitable for discharge from hospital but refusing to leave, in the light of a desperate need for beds during the pandemic.
● The only potential mitigation of the rigour of the stay lies in the Court’s suggestion that interested persons could make representations to the Master of the Rolls asking for further amendment to PD 51Z, if it can be shown to be operating unfairly in a particular class of case.
● The ability to apply for agreed directions is unlikely to be widely used. On the whole defendants will have little motivation to agree to any step which, albeit in a very limited way, maintains the momentum of possession proceedings.
● Parties may agree to take procedural steps during the stay without seeking endorsement of the court, but any breach of such a voluntary arrangement cannot be enforced.
If you require advice, or representation, in a claim relating to land or property you can instruct Laura Smallwood by contacting her clerks on 01483 539131 or emailing them at email@example.com
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