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Court of Appeal rejects challenge to Covid-19 stay

Vos: Great difficulty in envisaging circumstances where stay would be lifted

The Court of Appeal has rejected a challenge to the emergency practice direction issued by the Master of the Rolls to stay all possession proceedings for three months in response to Covid-19.

A receiver appointed by a lender challenge PD 51Z on various grounds, including that the Master of the Rolls, Sir Terence Etherton, was acting ultra vires by introducing the stay from the end of March. It was dismissed at first instance [1].

The court in Arkin v Marshall – with Sir Geoffrey Vos, Chancellor of the High Court, giving the ruling – held that PD 51Z was lawful, applied throughout possession proceedings, and in all but the most exceptional cases should not be lifted. The Lord Chancellor was an interested party in the case.

The Housing Law Practitioners Association (HLPA), which intervened to support the respondents, said Sir Geoffrey had “little difficulty” in finding that PD 51Z was lawful on its own term and not inconsistent with the Coronavirus Act 2020. Article 6 of the European Convention on Human Rights – the right to a fair hearing – was of no assistance to the appellant.

The appellant argued that the stay did not apply once a claim had been allocated to the multi-track, but the court found that it applied throughout the duration of a part 55 case.

The issue that took up most consideration was whether a judge could lift the stay on the application of one of the parties.

Though the practice direction was subject to the court’s general case management powers, its purpose was key to understanding in which circumstances a judge could properly lift the stay.

Sir Geoffrey said: “That purpose is of its nature blanket in character and does not allow for distinctions between cases where the stay may operate more or less harshly on (typically) the claimant.

“It would be fatally undermined if parties affected by the stay were entitled 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.

“Thus, while we would not go so far as to say that there could be no circumstances in which it would be proper for a judge to order that the stay imposed by PD 51Z should be lifted in a particular case, we have great difficulty in envisaging such a case.”

But Sir Geoffrey said the court did not rule out that there might be “the most exceptional circumstances” in which such a stay could be lifted, in particular if it operated to defeat the expressed purposes of the practice direction.

He also warned: “The approach of a blanket stay reflects the balance struck by the Master of the Rolls, and makes clear that possession claims are not to be dealt with on a normal case by case basis during the stay.

“We would strongly deprecate parties troubling the court with applications that are based only on such reasons and which are in truth bound to fail.”

In a statement, the HLPA welcomed the “clear and unequivocal” judgment.

It said: “The appellant in this case had strong arguments to suggest that the respondents would not have particular difficulty in complying with directions but the Court of Appeal nevertheless found that the judge was correct not to lift the stay.

“Our members provided vital evidence of the difficulty we and our clients would have faced in meeting not only case management directions but also the many applications for the stay to be lifted that may have followed, absent the clear judgment of the Court of Appeal.

“We therefore welcome the fact that following this judgment our clients and our members can be confident that we retain the proper protection of PD51Z and applications to lift the stay, based on the individual facts of the case, are unlikely to succeed.”