England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH DIVISION
(MR JUSTICE TEARE)

		Royal Courts of Justice Strand, London, WC2A 2LL
		25th November 2008

Lord Justice Aldous:

1. The appellant, Admiral Taverns (Cygnet) Ltd, is the head lessee of a property called Castle Tavern. That property was sub-let to a Mr Stephen Shaw, who it is believed has gone to Canada. In any case his lease expired on 21 December 2007. The appellants had decided to assign the head lease. To protect the property, they entered into a caretaking agreement with the second respondent, Tracy Daly. Tracy Daly is the partner of the other respondent, Craig Daniel. Clause  4 of that agreement stated:

"The Company appoints the caretaker to provide a caretaking service in respect of the above premises for the term in return for the payment. It is the intention of this agreement that a contract for service is created and no employee status between the parties exists."

Clause 6.6 was in these terms:

"The Caretaker will open the premises to allow potential purchasers or any agent of the Company requiring access to view the premises on being given 24 hours notice."

2. Mr Williams, who is the business development manager of the appellants, explained in his witness statement what happened and what led to these proceedings. He said that in February 2008 he notified the respondents that the appellants intended to sell the property and that completion of the sale was set for 4 April 2008. He advised them that they would be required to give up vacant possession of the property on that date. On 12 April he visited the site to take back vacant possession. He met several colleagues of the proposed purchasers who had already arrived at the property. When they got there they found it was locked. He called the second respondent on his mobile phone to ask him to open up the property and let them in. The second respondent refused and said that he was not going to give up possession as he had been promised the grant of a lease.
3. On 14 April 2008 solicitors acting for the appellants wrote to Tracy Daly, confirming termination of the caretaking agreement and requiring possession. Possession was not given up and proceedings were issued in the London County Court on 16 April 2008. The hearing was fixed for 29 April 2008. Craig Daniel rang the court saying he was going to be late. By 11.00 neither defendant had arrived and HHJ Gibson proceeded to hear the claim. He went on to make an order for possession forthwith. At that stage Mr Daniel arrived at court. He presented to the court a lease of the property purportedly granted to him and a defence asserting that he was a lessee. The judge declined to vary the order. He described the lease as "as genuine as a four-pound note".
4. A warrant of possession was issued on the same day. It was due to be executed on 18 June 2008. A Notice of Appeal was lodged out of time on 21 May. Included with it was an application for a stay pending appeal. Teare J granted the stay without a hearing on 17 June 2008. His reasons were:

"The decision of HHJ Gibson was taken in the absence of the Defendant/Applicant notwithstanding that the Defendant/Applicant had informed the Court Office of his likely late arrival and had been reassured by the Court staff the case would not be called on before he arrived.

2. There is evidence that the Defendant/Applicant had the possession of the property under some form of agreement since 7 January 2008 and had spent money refurbishing the property. The Claimant/Respondent appears to say that the form of agreement relied upon is a forgery. However, there does not appear to have been a judicial determination of that issue, notwithstanding the comments made by the judge after he made his ruling and the Defendant/Applicant had arrived at court.

3. I consider that there should be a stay of execution and a warrant for possession pending the determination of the application for permission to appeal. Whether it is continued thereafter would be a matter for the Judge deciding the application for permission to appeal."

I need not read the other reasons.

5. The appellant sought to set aside the stay and that application came before the judge on 10 July 2008. The respondents did not appear. The judge, after hearing counsel for the appellants, set aside the stay. The respondents contacted the court to explain why they had not attended. That resulted in Teare J giving them an opportunity to make submissions. The result was that on 21 July Teare J set aside his order and reinstated the stay until the appeal was determined. The issue before this court is as to whether that order was correct.
6. Before coming to the judgment of the judge it is appropriate to look at the law, starting with the Housing Act 1980. That was an act which inter alia was to :

"Restrict the discretion of the court in making orders for possession of land"

7. Section 89 is in this form:

"89. Restriction on discretion of the court in making orders for possession of land.

(1) Where a court makes an order for the possession of any land in a case not falling within the exceptions mentioned in subsection (2) below, the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution) to a date later than 14 days after the making of the order, unless it appears to the court that exceptional hardship would be caused by requiring possession to be given up by that date; and shall not in any event be postponed to a date later than six weeks after the making of the order.

2. The restrictions in subsection (1) above do not apply if --

(a) the order is made in an action by a mortgagee for possession; or

(b) the order is made in an action for forfeiture of a lease; or

(c) the court have power to make the order only if it considered it reasonable to make it;

(d) the order relates to a dwelling house which is the subject of a restricted contract (within the meaning of Section 19 of the 1977 Act); or (e) the order is made in proceedings brought as mentioned in Section 88(2) above."

It is important to realise that the exceptions in subsection (2) do not include cases relating to squatters, nor those relating to assured shorthold tenancies which have come to an end.

8. Before coming to the cases which have considered the construction of that section, it is important to have in mind the common law as explained by Lord Denning in the well known case of McPhail v Persons Unknown [1973] 1 ChD 447. In that case Lord Denning explained the law as to squatters. At page 456 he dealt with the remedy of self-help. He said this:

"Now I would say this at once about squatters. The owner is not required to go to the courts to obtain possession. He is entitled if he so desires to take the remedy into his own hands. He can go in himself and turn them out without the aid of the courts of law. This is not a counsel to be recommended because of the disturbance which might follow but the legality of it is beyond question."

Lord Denning went on to consider the remedy by action. At page 457F he said:

"Seeing that the owner can take possession at once without the help of the courts, it is plain that, when he does come to the courts, he should not be in any worse position. The courts should give him possession at once, else he would be tempted to do it himself. So the courts of common law never suspended the order for possession".

9. Lord Denning next considered the position of a tenant when the tenancy had come to an end. At page 459H he said:

"In my opinion, therefore, when a tenancy has come to an end the landlord is not entitled to take possession except by order of the court: and, on making the order, the court has power to fix a date for possession. How then is this power to be exercised? It is a matter for the discretion of the court. But, in the ordinary way, where the defendant has no statutory right to remain, the usual order is from four to six weeks"

10. His conclusion on the case came at page 460. He said at E

"My conclusion is that, when the owner of the house comes to the court and asks for an order to recover possession against squatters, the court must give him the order he asks. It has no discretion to suspend the order. But, whilst this is the law, I trust that owners will act with consideration and kindness in the enforcing of it -- remembering the plight which the homeless are in".

In that case the order was suspended pending the appeal.

11. Of course McPhail was before the passing of the Housing Act 1980 but as stated by Lord Denning the law has been clear for many years, namely that a court has no right to stay an order for possession against squatters.
12. I next turn to the three cases where construction of section 89 has been considered. The first is a case decided by Harman J, namely Bain v The Church Commissioners for England [1989] 1 WLR 24. In that case Harman J had concluded at an earlier hearing that the Church Commissioners were entitled to possession of the premises. In his second judgment he had to decide what the order should be; in particular whether the order for possession should be stayed pending appeal to the Court of Appeal. At page 26 he said, after citing section 89(1) of the 1980 Act:

"The phrases when just read like that are in the most general terms -- 'a court makes an order'. It appears to apply, on the face of it, to every court in the land, and neither I nor any judge in the Commercial Court or the Queen's Bench Division or the Court of Appeal can under any circumstances ever postpone any order for possession longer than six weeks from its making. I confess to finding the subsection perfectly astonishing and one which, I regret to say, I shall do my utmost to avoid reaching the conclusion that that is indeed what it means. But the words are there and are very wide. How can they be read?"

13. After considering the words and going through a tortuous route of construction he concluded at page 28 C in these terms:

"I confess to finding the point puzzling. I started, as I observed, with a disposition to sense that the ordinary jurisdiction cannot have been intended to be so radically altered and cut down so as to restrict every court in this country, including the other part of the Supreme Court, the Court of Appeal, in its jurisdiction to limit orders for possession. I have no help from the text books which simply assume that the matter is a county court matter. I can, I think, take some help from the chapter heading of Part IV of the statute, and in the end, more by way of bold leap in the dark than by way of reasoned proposition, I assert that 'a court' in section 89 means a county court. I hold, therefore, that I have jurisdiction to make the order which I would certainly wish to make, and that is that Bain should continue in possession, provided they pay some substantial sums of money for at least three months and, if an appeal is made, should continue until the appeal is determined provided the conditions of appeal are observed."

14. I find his reasoning strained and I think the judge also found his decision on construction difficult to justify. That was also the conclusion of Stanley Burnton J in Hackney LBC v Side by Side (Kids) Ltd [2004] 1 WLR 363. He refused to follow Harman J's judgment in Bain. At page 368 he said this:

"25. I regret I am unable to follow Harman J's leap in the dark. The wording of Part IV of the Housing Act 1980 and of section 89 are clear and in my judgment leave no room for the words 'a court' in section 89 to be construed as limited to a county court. No justification has been put forward for treating all possession orders made by the county court including those relating to commercial property as subject to section 89, whereas all High Court possession orders, even if made in relation to residential property, are not.

26. I am bound to follow the decision in Bain & Co v the Church Commissioners for England…, which I am told is the only authority on section 89, unless I conclude that it is clearly wrong. With respect to Harman J I have so concluded. In my judgment, section 89 applies equally to possession orders made in the High Court as it applies to orders made by the county court."

15. The matter came before the Court of Appeal in Boyland & Son Ltd v Rand [2006] EWCA Civ 1860. The judgment was given by Neuberger LJ, a recognised expert in landlord and tenant law. The facts as set out in the head note were these:

"The defendant was a member of a group of travellers who moved onto land owned by the claimant company. The company brought possession proceedings against them in the county court and obtained an outright possession order, enforceable forthwith.

The defendant applied for the execution of the order to be suspended. The district judge dismissed the application. The defendant appealed to a circuit judge, who dismissed her appeal. The defendant applied for permission to appeal to the Court of Appeal. She argued that the court had power to postpone the possession order either under s.89, Housing Act 1980, or as a result of her right to respect for her home and family life under Art. 8 of the European Convention on Human Rights."

16. The court held that the trespassers, against whom an order for possession was made, could not be given time to vacate without the agreement of the claimant. The issue that arose for decision is concisely stated in paragraph 1 of Neuberger LJ's judgment. It was this:

"The issue on this renewed application for permission to appeal is whether the court has the power to give trespassers time to vacate when making an order for possession. It is conceded on behalf of the applicant that the law used to be that the court did not have such power, but it is said that it now does, either pursuant to the provisions of the Housing Act 1980 or else pursuant to the European Convention on Human Rights, at least where residential use is involved."

17. The judge referred to Lord Denning's judgment in McPhail and then went on to make this statement:

"7. The applicability of the reasoning from that decision [McPhail] through the county court, under what was then CCR Ord.26, was confirmed by the Court of Appeal Swordheath Properties Ltd v Floyd [1978] 1 All ER 721. The correctness of those cases was not challenged in the Privy Council case of Bibby v Partap [1996] 1 WLR 931, which confirmed the power of the court to grant a stay of execution in relation to a trespasser as part of its inherent jurisdiction in connection with an appeal process."

18. Having set out the relevant parts of Section 89, Neuberger LJ said this,

"9. As a matter of ordinary language, it seems to me that s.89 cannot assist the applicant. As the title to the section, which is reflected in the longer title to the 1980 Act, shows, the provision is concerned with cutting down the period from which the court can postpone the operation in law for possession. It is also clear from the negative terms in which the section is expressed. It is to my mind concerned with cases where the court has power to postpone and, in those cases, it is corrected to curtailing the exercise of that power. There is no reason to think that, by a side wind, the legislature intended to grant squatters rights which did not previously exist.

10. My view that McPhail remains good law is confirmed in the views of both the editors of the White Book and the Green Book […].

11. As if this was not enough, the four members of the House of Lords in the majority in Kay v Lambeth LBC [2006] w WLR 570 all appear to assumed that McPhail remained good law […]

12. It was suggested by Mr Johnson that a decision of Stanley-Burnton J in Hackney LBC v Side by Side (Kids) Ltd [2003] EWCA 1813 calls this conclusion into question. I do not agree. The importance of that case is that Stanley-Burnton J was invited to follow the decision in Bain & Co v Church Commissioners  for  England [1989] 1 WLR 24, where Harman J had reached the slightly idiosyncratic conclusion that s.89 did not apply to the High Court. I would take this opportunity of saying that, in my view, Stanley-Burnton J was plainly right. If the issue of whether s.89 could be relied on by someone who had always been a trespasser had been a point which could have been raised in the Side-by-Side case, it seems to me that it was not a point which was taken and therefore the decision does not assist the applicant in this case […]

14. In those circumstances it seems to me that the law remains as it was and that the district judge and the circuit judge reached the right conclusion. Although the point is of some interest, I regard the answer as clear. Furthermore, as a result of making this application, the applicant has had a fair amount of time before the order for possession can be executed. I would, for the reasons I have given, therefore dismiss this application for permission to appeal and discharge any stay of execution which has been granted."

19. Thus the Court of Appeal resolved the difference between the judgment of Harman J in Bain and that of Stanley Burnton J in Hackney London Borough Council, and came to the clear view that the Section 89 prevented a court from granting a stay for longer than fourteen days or six weeks in exceptional circumstances. However, Neuberger LJ did not consider the position as to whether a stay was possible pending appeal.
20. I turn back to the judgment the subject of appeal.
21. It appears that Mr Roach, who appeared on behalf of the defendants, submitted that Section 89(1) did not apply to a court exercising appellate jurisdiction. That submission the judge found attractive. In any case, the judge found in favour of it. At paragraph 8 Teare J said:

"In considering which of those two possible constructions is the correct construction I have considered the consequences of both constructions. The Defendant's construction enables an appellate court which has either granted permission to appeal an order for possession or is still considering such permission to stay the order of possession until the appeal has been determined or until the application for permission to appeal has been determined. In an appropriate course that would be a sensible course to take because, if the appeal succeeds, the successful appellant will not in the meantime have lost possession of the premises. Conversely, the claimant's construction does not enable the appellate court to take that course save in very limited circumstances. Thus a tenant will be compelled to give up possession. If the property is then sold a successful appeal for the tenant will not result in the restoration of possession of the premises to him. This would appear to be an odd and unjust result; it is unlikely that such a result would have been the intention of Parliament."

22. The judge went on to conclude that Section 89 could be construed as not leading to that result. He said that Parliament could not have intended such a result. He relied on the long title of the Act, which I have read, which said that the Act was to restrict the discretion of the court in making orders for possession of land.
23. Of course, Mr Roach's submission was novel in the sense that it had not been advanced in any of the cases that had been before the court. However, the construction of Section 89 had been settled by the Court of Appeal. In my view it is quite clear that the word "court" used in that section means any court. Thus, if the county court refuses an order for possession, an appellate court can do so, but its ability to suspend the order is limited to fourteen days or, in exceptional circumstances, six weeks.
24. The tortuous routes adopted by Harman J and Teare J on construction appear to have been taken to avoid the injustice of an appellate court not being able to suspend the order pending appeal. Section 89 has exclusions, but covers cases relating to squatters; and, where an assured shorthold tenancy has come to an end. In most cases the issues involving such cases can be dealt with quickly, but that is not always the case. For example, an alleged squatter may claim possession due to twelve years adverse possession. An appeal against an order for possession in such a case may involve difficult questions of fact and law. It cannot be right that eviction should in every case take place before an appeal is heard on its merits.
25. Neuberger LJ referred to the Privy Council case of Selwyn Bibby v Sumintra Partap [1996] 1 WLR 931. That case dealt with the law in Trinidad and Tobago; but as Neuberger LJ pointed out in Boyland at paragraph 7, it confirmed the power of the court to grant a stay of execution in relation to a trespasser as part of its inherent jurisdiction in connection with the appeal process.
26. At page 934 Lord Nicholls giving the judgment said this:

"Under English law a court of first instance which grants relief, whether interlocutory or final, has an inherent power to suspend ("stay") its order until an appeal or would-be appeal to the Court of Appeal is disposed of. The Court of Appeal has a like jurisdiction. The existence of these parallel jurisdictions is assumed, and thereby confirmed, by RSC, Ord. 59, r. 13(1) […].

In the ordinary course an application for a stay should be made to the court of first instance. It is obviously convenient, and it is the usual practice, for the application to be made to the judge whose decision is sought to be appealed, and for the application to be made at the time judgment is given. If the judge refuses a stay as asked, or imposes unacceptable terms, the appellant or would-be appellant may renew his application of the Court of Appeal: see Cropper v Smith [1883] 24 Ch D 305. This is in accordance with [Wills of the Supreme Court, Order 59 rule 14 4] […].

These general principles are well established, and are as much applicable to possession orders, and to possession orders made under Rules of the Supreme Court Order, 113, as other orders. These principles are subject to contrary provision in any statute or rule. Order 113 contains no express contrary provision, nor is a contrary provision implicit. Justice may require that a possession order made under Order 113 should be stayed pending the hearing of an appeal. Order 113 is intended to provide a summary and speedy remedy. But this does not negative the need for the court to have a discretionary power to stay the carrying out of a possession order in suitable cases while an appeal is pending."

27. Lord Nicholls went on at page 935 to consider how the court came to the conclusion that it did, namely that it had no power to suspend the order. He said this at 935F:

"That principle, and its correctness, are not in point in the present case. The principle is concerned with whether, regardless of any ground for appeal, the court has power to postpone the date on which the lawful owner may recover possession from a person who has unlawfully entered his land and remained there as a squatter. Those cases are not concerned with what are the court's powers if, a possession order having been made, a defendant seeks to appeal with a view to having the order set aside. Those cases do not bear upon the powers of the court in this situation. (Indeed, it is interesting to note that in McPhail the Court of Appeal stayed execution of the judge's order pending the hearing of the appeal.)"

28. Lord Nicholls was considering the position prior to the CPR, but the CPR did not change a court's inherent power to arrange its appeal business and when so doing to suspend an order if necessary.
29. Mr Petts in his helpful submissions did not suggest that an appellate court did not have an inherent power to suspend orders pending appeal. He drew attention to the qualification made by Lord Nicholls at page 934 at F, where he said:

"These principles are the subject of contrary provision in any statute or rule."

30. He submitted that Section 89(1) was just such a provision. It prevented a court from making an order which postponed possession whether by variation, suspension or stay of execution to a date later than fourteen days or, in exceptional circumstances, six weeks. That, he submitted, must refer to any court, and thus no court could suspend an order for longer than the period set out in the subsection. I cannot accept that submission for four reasons. First, that construction of the section prevents the appellate court from preserving the position until it can be dealt with. It would, in my view, need very clear words in the statute to interfere with the court's inherent jurisdiction. There are, in my view, no such clear words. Second, the subsection can be properly read as restricting the jurisdiction of the court granting the order, not as directed to an appellate court, considering its inherent jurisdiction. Third, the title is, in my view, consistent with a restriction on the right of the court to make an order, not upon restricting the court's inherent jurisdiction. Fourth, to decide that an appellate court had no power to suspend an order obviously could lead to injustice. I do not believe that Parliament could have so intended.
31. I conclude that an appellate court has jurisdiction to suspend an order pending appeal, which comes within Section 89(1). When considering whether to grant a stay it will of course have in mind the purpose of Section 89(1).
32. I conclude with two observations. This court has not been concerned with the question of whether the court which grants the order in the first place can suspend its order pending appeal. That was expressly reserved by Lord Nicholls in the Bibby case; and I do not feel with the limited argument that we have heard that it would be right to decide it. Second, there is a need to ensure that applications for possessions, particularly those falling within Section 89(1), come before the court speedily. It is important that self-help gets no encouragement and therefore the court should decide the matter quickly. I believe it is in the public interest that appeals of that kind are expedited. They are normally of short duration and can be dealt with expeditiously. What happened in this case is a particular example. There were three hearings. If one of those had been directed to hearing the merits, then in those circumstances the appeal could have been dealt with without further consideration and reduced expense.
33. It is for those reasons that I would dismiss the appeal.

Lord Justice Jacob:

34. I agree.

Lord Justice Tuckey:

35. I also agree.

Order: Appeal dismissed