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Lawbite: Stay where you are - PD51Z stay extends to possession claims even if not issued under rule 55 of the Civil Procedure Rules

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate litigation - LawBite

16-07-2020

TFS Stores Ltd v (1) Designer Retail Outlet Centres (Mansfield) General Partner Ltd (2) British Overseas Bank Nominees Ltd (3) WGTC Nominees LTD: BMG (Ashford) LTD & 5 Ors v TFS Stores LTD [2020] EWCA Civ 833

The Court of Appeal has decided by a majority of 2:1 that the stay on possession proceedings imposed by PD51Z and extended by the Civil Procedure (Amendment No. 2) (Coronavirus) Rules 2020, applies even if the possession proceedings are not commenced under rule 55 of the Civil Procedure Rules.

The case consisted of two claims joined together for case management and trial.  The claims related to the procedures followed when contracting a number of leases out of the security of tenure protection of the Landlord and Tenant Act 1954 (the “1954 Act”).

The first (tenant’s) claim sought a declaration that certain leases retained 1954 Act protection as they were not properly contracted-out.  To this claim the landlords counterclaimed requesting an order for possession. The second (landlords’) claim sought a declaration that certain other leases with the tenant were properly contracted out but did not seek possession as at the time of issuance those leases had not yet come to an end.

The landlord was successful in the High Court last year. When it came to the form of the order the tenant agreed that a possession order could be made in relation to all the premises (as the leases had by then all come to an end) without the landlord needing to amend its claim to include a claim for possession. The tenant appealed.

Since the trial various measures have been put in place as a result of the pandemic, one of which is PD51Z which stayed all possession proceedings commenced under rule 55 subject to limited exceptions.  Whilst these claims were not brought under rule 55, shortly before the appeal hearing the tenant argued that these proceedings should be captured by the stay and the majority of the court agreed. 

In his Judgment, Sir Geoffrey Vos, Chancellor of the High Court, stated that whilst the first claim was not a claim for possession the counterclaim was and, in his view, once it was made it brought the entire claim within CPR 55. As such that claim was captured by the stay.

The order for possession made by the High Court, albeit with the tenant’s consent, could only have been made if there were first proceedings for possession in that claim.  On that analysis, the second claim was also captured by the stay.

Key points

  • In delivering the judgment Sir Geoffrey Vos referred to the decision in Arkin v Marshall in which it was said that whilst lifting the stay was not impossible the court could not envisage a situation where that would be proper to do.  He also mentioned, in passing, that he believed the stay should not have been lifted in order to deliver reserved judgment in the later decision of Copeland v Bank of Scotland
  • Dissenting, Lord Justice Arnold made it clear that in his view the stay does not apply to all proceedings in which a claim to possession is made.  If that had been the intention Parliament could easily have said so.  Further, if the stay did not apply to the counterclaim to the first claim and the second claim then he still believed that the fact that the first claim was not captured would constitute exceptional circumstances to justify lifting the stay, particularly given that both parties were prepared for the appeal hearing, “…justice delayed is justice gained…”
  • The stay is in place until 23 August, unless extended