The Court of Appeal has today (11 May 2020) handed down judgment in Arkin (as fixed charge receiver) v Marshall and others. The Lord Chancellor was joined as an interested party and the Housing Law Practitioners Association intervened by way of written submissions. The appeal was from a decision of HHJ Parfitt in the County Court at Central London on 15 April 2020 and was transferred from the High Court to the Court of Appeal under CPR 52.23. Stephen Knafler QC appeared as leading counsel for the successful Respondents.
The Court of Appeal decided:
- The Court of Appeal had jurisdiction to consider the vires of Practice Direction 51Z (PD 51Z) and should do so even though the point was not raised in the county court below and the correct course would have been to seek a stay or transfer of the county court proceedings to the Administrative Court so that the vires challenge could be made by judicial review. There was a strong public interest in an early and authoritative ruling as to the validity of PD 51Z.
- The making of PD 51Z was properly authorised by CPR 51.2 as a pilot scheme “for assessing the use of new practices and procedures in connection with proceedings”. The pilot nature of PD 51Z was plain from its first paragraph that it was “intended to assess modifications to the rules and Practice Directions that may be necessary during the Coronavirus pandemic and the need to ensure that the administration of justice, including the enforcement of orders, is carried out so as not to endanger public health.” PD 51Z is a pilot because the Master of the Rolls may consider putting in place a permanent rule or PD imposing a limited stay on possession proceedings when and if the pandemic peaks again.
- PD 51Z does not conflict with the provisions in the Coronavirus Act 2020 as to new and/or longer notice requirements for tenancies.
- PD 51Z is not in breach of Article 6 of the European Convention on Human Rights or the fundamental common law principle of access to justice because the short delay to possession proceedings of 90 days is amply justified by the exceptional circumstances of the coronavirus pandemic and was clearly authorised by Parliament through CPR Part 51, which was made by primary legislation under the Constitutional Reform Act 2005 and the Civil Procedure Act 1997.
- Para 2A(c) of the amended PD51Z allows parties to apply, during the 90 day stay, to have agreed case management directions embodied in a court order, but those directions will be stayed.
- The Court has theoretical power to lift the stay under CPR 3.1, although it would almost always be wrong to exercise it. The Court had great difficulty in envisaging a suitable case for lifting the stay, which is blanket in character and does not allow for distinctions between cases. The Court strongly deprecated parties troubling the courts with applications to lift the stay on a case by case basis, which are bound to fail. In the most exceptional circumstances, the stay could be lifted, in particular, if it operated to defeat the expressed purposes of PD 51Z.
- Where parties have agreed directions, as in this case, the parties can carry out those directions during the stay, such as disclosure and exchange of witness statements, and a party may rely on another party’s failure to do so once the stay is lifted or expires. The Court disagreed with Coulson LJ in Grant v Dawn Meats UK  EWCA Civ 2212 at  that a party is not permitted to take a step in an action during a stay.
- HHJ Parfitt was wrong to revise his directions by order during the stay, although the Court would allow those directions to remain under para 2A(c) of PD 51Z, if the parties agreed.