England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE MEDWAY COUNTY COURT
(His Honour Judge Nash)

		Royal Courts of Justice London WC2 Thursday, 25 April 2002

1. LORD JUSTICE SEDLEY: Lord Justice Dyson will give the first judgment.
2. LORD JUSTICE DYSON:This is an appeal from the decision of His Honour Judge Nash, sitting at Medway County Court, whereby on 1 August 2001 he dismissed the appeal of Overseas and Commercial Developments Limited ("OC") from the refusal by District Judge Caddick on 31 January 2001 to lift the automatic stay imposed on these proceedings pursuant to paragraph 19 of the Practice Direction to Part 51 of the Civil Procedure Rules. In order to understand the short issue that arises on this appeal, it is necessary to set out some of the unusually complex history of these proceedings.
3. Mrs Lunnon was the registered freehold owner of plot 7, Strood Dock Terminal, Kent ("the premises"). She agreed to sell the premises, or part of them, to David John Cox for £68,000, and in early 1991, pending the exchange of contracts, she allowed him to enter into occupation and to conduct his business of the sale of oils and waste disposal. He paid her £38,000 over a period of time, but contracts were never exchanged. He did not pay the balance of the purchase price, nor did she return the sum that he had paid to her. In July 1993, anticipating his impending bankruptcy, Mr Cox purported to transfer his business assets to Deskbound Limited.
4. On 15 April 1994, Mrs Lunnon entered into a contract to sell the freehold of the premises to OC. A bankruptcy order was made against Mr Cox on 24 May 1994. In August 1994, Mrs Lunnon and OC started the proceedings in which the current appeal arises. They claimed possession and mesne profits from Mr Cox and Deskbound. Mr Cox did not serve a defence and, following his failure to comply with an "unless" order in relation to the service of a defence, he was debarred from defending the proceedings. Deskbound did, however, serve a comprehensive defence and counterclaim denying the plaintiffs' right to possession. It claimed relief arising from an alleged proprietary or equitable estoppel in favour of Mr Cox (which, it claimed, enured to its benefit as Mr Cox's successor in title), and an estoppel in its own favour on the grounds that the plaintiffs had stood by and allowed it to enter the premises in 1993 and carry out improvements. That relief included a claim for rectification of registered titles K376551 and K583371 so far as necessary to give effect to the other relief claimed.
5. Mrs Lunnon died on 1 April 1995, and her personal representatives were substituted as plaintiffs in her place. On 25 September 1995, the personal representatives and OC applied for an order striking out Deskbound's defence and counterclaim and for security for costs. On 8 March 1996, both applications were dismissed.
6. On 24 May 1997, Mr Cox was discharged from bankruptcy. On 20 November 1997, the plaintiffs applied to the court for directions. Directions were given on 9 January 1998. These were standard directions for disclosure of documents, witness statements, expert reports and setting down. The directions in relation to disclosure were complied with, although not before an unless order was made against Deskbound. The other directions were not complied with, and the action was never set down.
7. On 5 August 1998, a creditor's petition was presented by HM Customs and Excise against Deskbound, and a winding-up order was made on 15 September 1998. On 7 September 1998, Deskbound and Mr Cox had entered into a written agreement by which Deskbound purported to assign to Mr Cox "the sole right to continue the action in the courts at his own cost as successor in title to Deskbound". The claimants did not become aware of this assignment until some time in 2000. It is by virtue of this written agreement that Mr Cox now claims that he is entitled to defend the claim, since he is debarred from defending in his own right.
8. On 24 February 1999, the winding up of Deskbound was completed. Early in 2000, Mrs Lunnon's personal representatives transferred their interest in the premises to OC. On 24 March 2000, OC issued applications to the court (a) for the removal of the personal representatives as claimants, and (b) for an order striking out Deskbound's defence and counterclaim and for a possession order on the grounds that Deskbound had been wound up. In his turn, on 24 July 2000, Mr Cox applied for an order substituting himself as defendant for Deskbound by virtue of the agreement of 7 September 1998. These were the three applications that came before District Judge Caddick on 31 January 2001. On 26 January, Mr Cox made an application under section 127 of the Insolvency Act 1986 for an order authorising the disposition of property effected by the agreement of 7 September 1998. On 31 January, the Official Receiver indicated that he would not oppose the section 127 application. That application has not, however, yet been determined by the court.

The judgments below

9. When the three applications came before the district judge, he drew the attention of the parties to the fact that, since the proceedings had not come before a judge between 26 April 1999 and 25 April 2000, they were automatically stayed by virtue of paragraph 19(1) of the Practice Direction to CPR Part 51. Surprisingly, this point had been overlooked by both parties. It was suggested on behalf of OC that paragraph 19(1) did not apply, but the district judge held that it did, and there is no challenge to that part of his decision.
10. The district judge then considered whether to lift the stay. He applied the considerations set out at CPR 3.9(1), which provides: "On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order the court will consider all the circumstances including -

(a)the interests of the administration of justice;

(b)whether the application for relief has been made promptly;

(c)whether the failure to comply was intentional;

(d)whether there is a good explanation for the failure;

(e)the extent to which the party in default has complied with other rules, practice directions and court orders and any relevant pre-action protocol;

(f)whether the failure to comply was caused by the party or his legal representative;

(g)whether the trial date or the likely date can still be met if relief is granted;

(h)the effect which the failure to comply had on each party; and

(i)the effect which the granting of relief would have on each party."

11. In going through each of the considerations in turn, the district judge was applying the correct approach: see paragraph 42 of Woodhouse v Consignia (unreported decision of this court of 7 March 2002).
12. In relation to consideration (a), the district judge said this (page 13C):

"It is said that it would be wasteful of the resources of the parties and of the court if I were not to lift the stay, because all that they would do would be to issue again and incur lots of costs again. It may well be that they could issue again. Of course, it is not a foregone conclusion in view, as Mr Chapman rightly points out, of the growing body of case law dealing with the situation of re-issue when there has been a strike out or refusal to lift a stay. Arguments as to abuse and the disposal of any costs orders that have already been made in the previous proceedings, and matters of that kind, will come into play. The claim is not statute-barred, so of course the claimants could try again, subject to any application to block that. That would, I accept, mean further costs. Although, having said that, it would also involve, I would imagine, so far as I can see from the proceedings, something of a simplification: any fresh proceedings would be simply Overseas and Commercial v Mr Cox, claimants would proceed correctly in relation to pre-bankruptcy mesne profits, a defendant would then raise such defences as he could, particularly by then having been to the Companies Court and seen whether he can rely on that agreement with the company subject to the winding-up petition in September 1998.

The most important feature, however, under (a) to which I give weight is the delay on the part of the claimants. Extraordinary delay, and something which is the very kind of thing that the Woolf reforms were aimed against."

13. In relation to (b), the district judge made the point that the application to lift the stay was made nine months after the proceedings had become subject to the automatic stay. As for (c), the delay in making the application to lift the stay was not intentional. As for (d), the explanation that the automatic stay provisions had been overlooked was not a good explanation. As for (e), the district judge said that there was no evidence that, if the claimants had brought the proceedings before a judge during the one year period, they would have been in default. I think that he was generous to OC here, because the relevant consideration is the extent to which OC had complied with other rules etc, and there was plenty of evidence that OC had not so complied.
14. As regards (f), the district judge said that the failure to comply was caused by OC's legal representative, and not OC itself. As for (g), there was no trial date, nor was any likely trial date one which could not be met if the stay was lifted. As for (h), the effect of the failure to apply was further delay and expense on both sides, but no "particular prejudice" to the defendant. As regards (i), the effect of lifting the stay would be that the action would proceed, and the applications would be adjudicated upon. He concluded his judgment with these words (page 18E):

"But, stepping back, which one has to do, having gone through some of the detail, at the end of the day we have a claim which is very old, there has been the most enormous delay on the part of the claimants and, crucially, delay from March 1996, and then, focusing more, delay right through the transitional period 1999-2000. It seems to me that it is classically one of those cases that the CPR was designed to deal with and to avoid, and I have no doubt in my mind that the appropriate course is to refuse the relief, to refuse to lift the stay, and to leave the claimants to do as they may be advised. I appreciate that will no doubt be to issue proceedings afresh, subject to any interlocutory attempts to block that that may come from the first defendant. The first defendant can then defend it as he will on merits, subject of course to the permission of the Companies Court. That would at least, as I have already observed, have the advantage of the issues then being clear and simple rather than being the rather complex and convoluted proceedings we have at the moment. But I have no doubt that I should not lift the stay here, and this set of proceedings should, accordingly, be left as it is."

15. OC appealed. It was submitted on behalf of OC to the circuit judge, inter alia, that the refusal to lift the stay was disproportionate, and that in certain respects the district judge was mistaken as to the steps that had been taken in the proceedings between March 1996 and April 1999. The district judge had said (page 6B) that, from March 1996 until March 2001, OC had taken no steps in the litigation apart from serving an amended pleading in June 1996. As has been seen, the district judge was mistaken as to this. The true position is that, as the judge accepted (page 12B), the period of inactivity was two or two and a half years, not four or five years. Nevertheless, in dismissing the appeal, the judge said that he could see nothing wrong with the district judge's approach, and that he would have reached the same conclusion if he had been asked to rule on it. The district judge had exercised his discretion properly: he could not say that no reasonable judge could have made the decision that this district judge made.
16. In its notice of appeal to this court, OC advances two principal grounds of appeal: (a) the district judge did not consider the effect of refusing to lift the stay where there is a claim for possession of land and a counterclaim for rectification of the register, the result being that, without further litigation, the land is effectively sterilised; and (b) in circumstances where further litigation is inevitable, the refusal to lift the stay is draconian, grossly disproportionate and contrary to the overriding object of the CPR, since it involves further delay and increased costs where the court's disapproval could have been indicated by an order for costs.

The submissions

17. In considering the submissions made to this court, it is important to have in mind certain statutory provisions. First, the Limitation Act 1980, which, so far as material, provides:

"15(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it accrued to some person through whom he claims, to that person. ...

17Subject to -

...

(b)section 75 of the Land Registration Act 1925

at the expiration of the period prescribed by this Act for any person to bring an action to recover land ... the title of that person to the land shall be extinguished."

18. Secondly, section 75 of the Land Registration Act 1925, which, so far as material, provides:

"(1) The Limitation Acts shall apply to registered land in the same manner and to the same extent as those Acts apply to land not registered, except that where, if the land were not registered, the estate of the person registered as proprietor would be extinguished, such estate shall not be extinguished but shall be deemed to be held by the proprietor for the time being in trust for the person who, by virtue of the said Acts, has acquired title against any proprietor, but without prejudice to the estates and interests of any other person interested in the land whose estate or interest is not extinguished by those Acts.

(2)Any person claiming to have acquired a title under the Limitation Acts to a registered estate in the land may apply to be registered as proprietor thereof.

(3)The registrar shall, on being satisfied as to the applicant's title, enter the applicant as proprietor ..."

19. Further, reference has been made to the Land Registration Act 2002, which has gone through the committee stage in the House of Lords and we are told is likely to be enacted within 12 months. The effect of this Act will be to disapply sections 15 and 17 of the Limitation Act 1980 so far as registered land is concerned. It will provide that a person in adverse possession may apply to be registered as proprietor after 10 years from the date when he first took adverse possession. If such application is made, the registered proprietor may require the application to be dealt with under paragraph 5 of Schedule 6, which provides that there are only three circumstances in which an applicant is entitled to be registered. One of these is where the applicant makes out a proprietary estoppel which can only be satisfied by the transfer to the applicant of the land.
20. On behalf of OC, Ms Kennedy-McGregor submits as follows. The effect of the refusal to lift the stay in this case is that the land has become sterilised, and there is a serious risk that it may remain so for many years to come. OC, as the registered owner, cannot sell it because it cannot remove Mr Cox, and he cannot apply to be registered as a proprietor because he is a defendant in an action for possession. It is true that after 2006, when Mr Cox will have been in adverse possession for 12 years, he could, if so advised, apply to the registrar to become the registered proprietor of the land, but he may well decide not to do so. He may be content simply to remain in possession. Neither party can bring further proceedings, since to do so whilst the existing proceedings are in being, albeit stayed, would be an abuse of process and would result in such further proceedings being struck out: see Buckland v Palmer [1984] 1 WLR 1109. The appeal should therefore be allowed on the simple basis that the district judge did not consider the effect of his decision on the land itself, and that he was wrong to hold that OC could start a second action.
21. Moreover, the refusal to lift the stay was disproportionate and contrary to the overriding objective of dealing with cases justly: see CPR 1.1. Neither the district judge nor the judge appreciated that no further proceedings could be brought while the action was stayed. The stay would eventually have to be lifted or the action struck out. Thereafter, if fresh proceedings were instituted by OC to resolve the question of ownership of the land, that would involve further delay and costs, and probably an application by Mr Cox to strike out the proceedings as an abuse of process.
22. On behalf of Mr Cox, Mr Chapman submits that OC is seeking to raise a new point for the first time on appeal, and it should not be allowed to do so unless the point is one which would inevitably have led the district judge to exercise his discretion in favour of lifting the stay, and any unfairness to Mr Cox could be compensated in costs. Mr Chapman accepts that, if (as occurred in the present case) a claimant brings an action within the 12-year period and that action is stayed perpetually, his title is not extinguished by section 17 of the Limitation Act 1980, but the squatter's right to possession is still good against all the world. That is a result with which the squatter may well be quite happy.
23. If, however, a perpetual stay causes inconvenience, the squatter can apply to the court under CPR 3.1(2)(m) for an order dismissing the perpetually stayed claim. Once that claim has been dismissed, in the case of unregistered land section 17 of the Limitation Act 1980 would operate to extinguish the claimant's title at the end of the relevant 12-year period. If (as in the present case) the land is registered land, section 75 of the Land Registration Act 1925 takes effect instead of section 17 of the 1980 Act, and, in place of a statutory extinguishment of the claimant's title, he becomes the trustee for the squatter. So far as the squatter is concerned, he can continue to enjoy unimpeachable possession, since his possession is an overriding interest: see section 70(1)(g) of the 1925 Act. If he wishes to make an application for registered possessory title after 2006, Mr Cox is free to do so, since the automatic stay is tantamount to a dismissal or striking out of the action, such that, if the land were unregistered land, OC's title would be extinguished after 2006 and section 75 of the 1925 Act could be triggered. Alternatively, Mr Chapman submits that Mr Cox will need to make an application under CPR 3.1(2)(m) for an order dismissing the claim. Once that claim has been dismissed, section 75 can be triggered and Mr Cox can then apply for a registered possessory title. As regards the Land Registration Act 2002, Mr Chapman submits that it is wrong in principle to review the district judge's decision by reference to possible future legislation. If, however, that Act is a relevant consideration, then Mr Chapman argues that even if it is enacted, Mr Cox and his successors will be able to remain in occupation as against OC if the claim remains perpetually stayed. Moreover, Mr Cox will have a strong case for a registered possessory title in any event.
24. It follows that the refusal of the district judge to lift the automatic stay does not have the effect of sterilising the land. Under the existing law, Mr Cox can after 2006 apply for registration of a possessory title. The position would be more complicated but still practicable under the Land Registration Act 2002.
25. But for the sterilisation of land point, Mr Chapman submits that it could not seriously be argued that the district judge exercised his discretion in a way which is susceptible to challenge on appeal. If the sterilisation of land point had been argued before him, it cannot be said that he would inevitably have exercised his discretion in a different manner. On the contrary, he might have considered that the advantage to Mr Cox in retaining an unimpeachable right to possession and having a good prospect of securing registered possessory title in due course outweighed the disadvantage of the risk that a bare registered title might remain outstanding indefinitely in OC.

Conclusion

26. It is necessary to consider the effect of the refusal to lift the stay on OC's title and its claim to possession of the land. So long as the proceedings remain subject to a stay, the land is in my view sterilised in the sense that OC's title is subject to (a) the unresolved challenge by Mr Cox for rectification of the register, and (b) Mr Cox's disputed right to remain in occupation. Until (a) has been resolved, the land is truly sterilised. The sale of registered land in such circumstances will be extremely difficult to say the least. Until (b) is resolved, the saleability and value of the premises to OC will remain adversely affected. It is clear that the district judge did not appreciate these considerations, or take them into account when deciding whether to lift the stay. He is not to be criticised for this, since no arguments were addressed to him on this aspect of the matter. In my judgment, the so-called "sterilisation" point is one of great significance in this case. Unless OC can start a fresh action following the district judge's refusal to lift the stay, it is difficult to see how the question of title can be resolved. It is true that, assuming that his application under section 127 of the Insolvency Act 1986 is determined in his favour, Mr Cox could make an application to the registrar after 2006. But as to this, first, that involves sterilising the land for at least five years from the date of the district judge's order and, more fundamentally, Mr Cox may well decide that it is not in his interests to make such an application at all, and that he is better off with the status quo. It is far from obvious that the equity that he claims to enjoy by reason of any proprietary estoppel that he can establish will require him to be given registered title to the land. I am prepared to assume that Mr Cox could assert a claim to title after 2006 without necessarily applying to the court to strike out the stayed proceedings. Nevertheless, the consequences of the district judge's refusal to lift the stay, unless OC can start fresh proceedings, are extremely severe for OC. It seems to me, therefore, that a fundamental question that had to be considered by the district judge was whether it would be possible for OC to start a second action in which Mr Cox's right to possession and the competing claims by Mr Cox and OC to be registered owners could be determined. It is to that question that I now turn. I have already referred to the passage in the district judge's judgment where he dealt with it, albeit very briefly.
27. Ms Kennedy-McGregor relies on Buckland in support of the proposition that further proceedings by OC would inevitably be struck out as an abuse of process. In that case, a plaintiff claimed his uninsured excess following damage to his car caused by the alleged negligence of the defendant. The defendant paid money into court which was accepted, whereupon the action became automatically stayed. Subsequently, the plaintiff discovered that the defendant was uninsured, and he started a second action in which he claimed the balance of the cost of repairing the damage to his car. The defendant applied to strike out the second action as an abuse of process. This court decided that the second action should be struck out as an abuse of process. At p.1114H, Sir John Donaldson MR said:

"Whilst I dislike procedural technicality and, on the facts of the instant appeal, the defendant's argument might be thought to have no other justification, in reality there are wider issues involved. The public interest in avoiding any possibility of two courts reaching inconsistent decisions on the same issue is undoubted and this alone would suggest that two actions based upon the same cause of action should never be allowed. Equally clear is the public interest in there being finality in litigation and in protecting citizens from being `vexed' more than once by what is really the same claim. Against this must be set the public interest in seeing that justice is done. It will not be done if, for example, a plaintiff accepts payment of a small sum which is only part of his claim in the belief that the remainder is not in issue and will be paid in due course. These competing public interests will be differently reconciled on the differing facts of particular cases and this is best achieved if we hold on principle and on the authorities to which I have referred, that (1) it is an abuse of the process of the court to bring two actions in respect of the same cause of action but (2) where there has been no judgment in the first action, that action can, in appropriate circumstances, be revived and amended so as to enable there to be an adjudication upon the whole of the plaintiff's claim. Should the original claim be brought in the county court and the enlarged claim be outside its jurisdiction, that court has power to transfer the whole matter to the High Court."

28. Mr Chapman accepts that, in the light of Buckland, so long as the first proceedings remain subject to a stay, subsequent proceedings by OC for the same relief would be struck out as an abuse. But he submits that OC could overcome this difficulty by giving notice of discontinuance of the first proceedings. I accept this submission as correct. So let us suppose that the first proceedings were got rid of altogether either by OC giving notice of discontinuance or indeed by Mr Cox succeeding in an application to strike them out. Could OC start a second action in those circumstances? Considerable light is shed on the answer to this question by the judgment of Chadwick LJ in Securum Finance Ltd v Ashton [2001] 1 Ch 291. At paragraph 34, he said:

"For my part, I think that the time has come for this court to hold that the `change of culture' which has taken place in the last three years - and, in particular, the advent of the Civil Procedure Rules - has led to a position in which it is no longer open to a litigant whose action has been struck out on the grounds of inordinate and inexcusable delay to rely on the principle that a second action commenced within the limitation period will not be struck out save in exceptional cases. The position, now, is that the court must address the application to strike out the second action with the overriding objective of the Civil Procedure Rules in mind - and must consider whether the claimant's wish to have `a second bite at the cherry' outweighs the need to allot its own limited resources to other cases. The courts should now follow the guidance given by this court in the Arbuthnot Latham case [1998] 1 WLR 1426, 1436-1437:

`The question whether a fresh action can be commenced will then be a matter for the discretion of the court when considering any application to strike out that action, and any excuse given for the misconduct of the previous action: see Janov v Morris [1981] 1 WLR 1389. The position is the same as it is under the first limb of Birkett v James. In exercising its discretion as to whether to strike out the second action, that court should start with the assumption that if a party has had one action struck out for abuse of process some special reason has to be identified to justify a second action being allowed to proceed.'"

29. In Securum, a bank commenced proceedings against a debtor for the repayment of a loan, and against two guarantors of the loan who had granted the bank a legal charge over their property. In 1997, these proceedings were struck out for delay. In 1998, the bank's assignee brought a second action against the guarantors, claiming to enforce the bank's right to payment under the legal charge and to enforce its security by orders for possession and sale. The defendants applied to strike out the second action on the grounds of delay and abuse of process. On appeal, it was held that the claim to payment involved re-litigating an issue already raised in the earlier proceedings, and as such was an abuse of process; but that the claims to enforce the security, which were not (and did not need to be) raised in the earlier proceedings, could not be so categorised. At paragraph 52, Chadwick LJ said:

"In my view, for the reasons which I have sought to give, it is open to this court to strike out the claim for payment made in the present action. That is a claim which, in substance, is indistinguishable from the claim for payment made in the first action. If that claim stood alone it could be said with force that to seek to pursue it in a second action when it could and should have been pursued, properly and in compliance with the rules of court, in the first action is an abuse of process. It is an abuse because it is a misuse of the court's limited resources. Resources which could be used for the resolution of disputes between other parties will (if the second action proceeds) have to be used to allow the bank `a second bite at the cherry'. That is an unnecessary and wasteful use of those resources. The bank ought to have made proper use of the opportunity provided by the first action to resolve its dispute in relation to the claim for payment."

30. He went on, however, to say, at paragraph 53, that the claim for payment did not stand alone, and, at paragraph 56, that for that reason it would not be right to strike out even that part of the claim. There is, in my view, a clear, but imprecise, analogy between the dismissal of an action following the refusal to lift an automatic stay of proceedings under paragraph 19 of the Practice Direction to CPR 51, and the striking out of proceedings for want of prosecution. In the light of that analogy, and the decision in Securum, it seems to me that there was a very real risk, if not a probability, that if, following the dismissal of an action after the refusal to lift an automatic stay, OC started a fresh action for possession, that action would be struck out as an abuse of process.
31. In my view, it was essential as part of the exercise of considering the circumstances of the case under CPR 3.9 for the district judge to form a realistic appreciation of the extent of the risk that a second action by OC would be struck out as an abuse of process, and to take that into account when deciding what the interests of justice required, and what the effect would be on each party of his decision. It was all the more important because, for the reasons that I have given, if a second action were struck out, the consequences for OC of the sterilisation of its land were very serious indeed. The district judge recognised that "arguments as to abuse ... will come into play" (page 13F). But he did not indicate that he was taking into account the fact that, unless the stay was lifted, there was a very real risk that any subsequent action would be struck out as an abuse of process. Mr Chapman submits that the district judge did take into account the fact that there might be an application to strike out for abuse. This is true, but this was such an important aspect of the Part 3.9 balancing exercise that, in my judgment, the district judge should have made an assessment of the risk that an application to strike out a second action as an abuse would succeed, and then explained how that affected his ultimate decision. If Securum had been cited to him, he would have appreciated that the risk was substantial; and if the sterilisation point had been made on behalf of OC, he would have understood how grave were the consequences to OC of that risk eventuating. It is because of these shortcomings in the district judge's reasoning (for which I do not think he is to blame) that his consideration of the circumstances of the case under CPR 3.9 is flawed.
32. In these circumstances, it is open to this court to carry out the exercise under CPR 3.9 afresh. Mr Chapman submits that we should take the new points into account only if we are satisfied that the district judge would inevitably have reached a different decision if they had been deployed before him. I do not think that this is the right test. The question for the judge, and for this court, is whether the district judge exercised his power under CPR 3.9(1) properly. If he did not, then it is open to the appellate court to exercise that power afresh. If the court is satisfied that the new point or points would plainly have made no difference, then they are immaterial and that would be a very strong reason for not disturbing the decision of the district judge. But I am far from satisfied that, if the district judge had formed a proper appreciation of the consequences of a refusal to lift the stay, he would nevertheless have refused to lift it.
33. In my judgment, the consequences of the district judge's decision are probably to commit both parties to further proceedings, involving yet more delay and costs. These further proceedings will probably involve a second action by OC and an application by Mr Cox to strike them out as an abuse of process. For the reasons already mentioned, that application would have very real prospects of success. If such an application were to succeed, OC would almost certainly wish to appeal against it. If ultimately the second action were struck out, the consequences for OC would be extremely damaging, and, if in truth Mr Cox had no right to remain in possession of the premises, would give him a substantial and unwarranted benefit. At the very least, it would give Mr Cox the right to remain in possession indefinitely. It might eventually even lead to the registered title being vested in him. It seems to me that such a result would be a disproportionately heavy price for OC to pay for its failure to bring the proceedings before a judge between 26 April 1999 and 25 April 2000. Such an outcome would not further the overriding objective of enabling the court to deal with cases justly, nor would it necessarily reduce the call on the court's resources. I have in mind what Lord Woolf MR said in Biguzzi v Rank Leisure Plc [1999] 1 WLR 1926, 1933D:

"There are alternative powers which the courts have which they can exercise to make it clear that the courts will not tolerate delays other than striking out cases. In a great many situations those other powers will be the appropriate ones to adopt because they produce a more just result."

34. Those observations are of general application and should be borne in mind when deciding whether to lift an automatic stay. It seems to me that a proportionate and just response would have been to lift the stay, make appropriate orders for costs (possibly on an indemnity basis), impose a strict timetable for the future conduct of the proceedings, and perhaps also make a special order as to interest depriving OC of interest for a certain period on any money judgment that it is finally awarded.
35. If my Lord agrees, I would invite submissions from counsel as to the conditions on which the stay should be lifted. I would allow this appeal.
36. LORD JUSTICE SEDLEY: I agree.
37. I would add only my appreciation of the well-directed and lucid submissions of both counsel and my endorsement of Lord Justice Dyson's commendation of the quality of District Judge Caddick's initial decision. It is no criticism of him that it is only on this appeal that the critical issue has emerged. But it is, when examined, an issue of real importance capable of introduction by way of a second appeal once it has emerged that the district judge's approach was in some measure erroneous.
Order:appeal allowed with costs summarily assessed at £8,500 inclusive of VAT; costs order before the district judge to stand; no order for costs before HHJ Nash; stay lifted and action remitted for trial on condition that an application for an appointment is made by the claimant within 14 days for a case management conference before the Medway County Court; any question of deprivation of interest to be left to the trial court; permission to appeal to the House of Lords refused.