A party seeking to restrict another's commercial activities must consider whether such terms are normal in similar, factual and contractual circumstances.
In response to the Covid-19 pandemic, a court rule known as a Practice Direction 51Z (or PD51Z) was made on 26 March 2020 and came into force on the following day. It effectively put a blanket stay on all possession claims until at least 25 June 2020. (It is not yet known whether the stay will be extended beyond this date, but the Labour Party have called for an extension.)
In the case of Marshall (Arkin) -v- Marshall & Another, the Court of Appeal was asked to consider the lawfulness of PD 51Z. The judgment was released on 11 May 2020. In short – the blanket stay is lawful, and there is minimal scope for it to be lifted in individual cases.
The Court of Appeal concluded that the PD 51Z was lawful because:
- other court rules (CPR 51.2) permit this sort of Practice Direction to be made;
- it is not inconsistent with primary legislation such as the Coronavirus Act 2020; and
- it is not inconsistent with Article 6 of the European Convention on Human Rights or the principle of access to justice.
The Court of Appeal also concluded that a Judge does have inherent power to lift the stay in individual cases. However, there will be almost no circumstances where the use of this inherent power would be justified. The nature and purpose of the stay are on the grounds of public health. It is a blanket stay and so does not distinguish between particular circumstances. Therefore, it would not be right to “allow a party to rely on their particular circumstances – however special they might be said to be – as the basis on which the stay should be lifted in their particular case”.
The Court of Appeal said that, whilst there may be circumstances in which it would be proper for a judge to lift the stay, this is only likely to be if the stay itself poses a danger to public health. The Judges said they would be very critical of any party making an application to lift the stay for anything other than “exceptional circumstances where there is a danger to public health”.
Issuing possession claims against trespassers – any change?
Since its initial draft in March 2020, PD51Z was amended slightly on 20 04 2020. It is now clear that new possessions claims can be issued, but they will immediately be subject to the blanket stay.
Separate government guidance does, however, also state that all landlords should have a “very good reason” to issue a new possession claim during the stay (e.g. anti-social behaviour is arguably a very good reason; only certain types of rent arrears might be). Ensure you actively consider and record your decision as to what a “very good reason” is in each possession case sent for issue whilst this guidance is in force.
From 20 April 2020, the stay now excludes:
- trespass cases against persons unknown (“pure” squatter cases)
- applications for interim possession orders (used to remove squatters who never had permission to enter a premises, with limited criteria of applicability)
- court approval of case management directions that are agreed between the parties
What remains is whether trespass possession claims against named defendants (e.g. persons left behind or licensees in hostels after the tenant/licensee has either served or been served with a Notice to Quit) can be pursued and different views are circulating.
However, our view is that unless the trespassers are truly “unknown persons”, the possession claim would probably still be subject to the blanket stay. The only way to find out is to issue a claim and see what your local Judge rules. Either
- they find it is covered by the stay - the case is then issued but immediately stayed and will not be listed until after the 25 June 2020, or
- the Judge finds the trespass claim can proceed and it will be issued and then fixed for a hearing.
There is little to lose by issuing as long as the landlord can show (whilst the 28 03 2020 Government guidance remains in force) a “very good reason” for doing so (e.g. ongoing ASB).
Do note it is almost certainly an abuse of process to describe a Defendant as “unknown” in order to get a case heard during the stay when in fact their identity is known to the landlord, e.g. the trespasser was a licensee whose licence has been ended by an NTQ.
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