England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		21/07/2008

Mr. Justice Teare :

1. This is an application by the Defendants pursuant to CPR 39.3(3) to set aside an order made by myself on 10 July 2008. The Defendants failed to attend the hearing on that day. It appears that whilst they knew the date of the hearing they had not received notification of the time of the hearing. There is no dispute that the Defendants acted promptly when they found that the order had been made. It is also not disputed that they had good reason for not attending the hearing (though any arguments on costs were reserved by counsel for the Claimants). The only matter in dispute was whether there was good reason to set aside my order.
2. The order I made on 10 July 2008 set aside an order I made on 17 June 2008 granting a stay of execution of an order for possession. I gave a short judgment which counsel for the Claimants noted down. His note of my judgment (slightly corrected by me) is as follows:

"This is an application by Admiral Taverns (Cygnet) Limited to discharge an order made by myself on 17/06/08, in which I granted a stay of execution of a warrant of possession, pending the determination of permission to appeal. The order had been made by HHJ Gibson on 29/08/08. The application for permission to appeal has not been determined.

I should point out that at this hearing the Defendants have not been represented. Solicitors are on record. They were served, but have not appeared. Shortly before the hearing, Ford & Warren Solicitors contacted the solicitors for Defendants, but, I am told, the phone was put down

The background to this matter is that the Claimant is the head lessee of the Castle Tavern and entitled to the immediate reversion.

One Stephen Shaw occupied the Property pursuant to a lease dated 20/09/07.

The term of that lease expired on 21/12/07. It is believed that Mr Shaw went to Canada.

The Claimant, intending to assign the head lease, entered into a caretaking agreement with the first Defendant pending that assignment. The second Defendant is the first Defendant's partner.

In February 2008, pursuant to clause 7 of the caretaking agreement, Mr Roger Williams, on the Claimant's behalf, gave the first Defendant notice terminating the same with effect from 04/04/08.

On that date, Mr Williams attended the Property with the prospective assignees. The second Defendant refused to give up possession, claiming he had been promised a long lease.

On 04/04/08, Ford & Warren Solicitors wrote to the first Defendant confirming the termination of the caretaking agreement and demanding possession.

Possession was not delivered up and proceedings were issued in the Lambeth County Court on 16/04/08.

The hearing of that claim was fixed for 29/04/08. The second Defendant arrived late. Despite the second Defendant having informed the court staff that he would not be at court on time, HHJ Gibson heard the claim in the second Defendant's absence and made an order for possession forthwith and costs.

The order having been made, the second Defendant arrived. He presented the Judge with a Defence and a purported lease of the Property granted to him by the Claimant.

The Judge declined to vary his order.

A warrant of possession was issued on the same day, which was due to be executed on 18/06/08.

The second Defendant lodged an appellant's notice, out of time, on 21/05/08, which included an application to stay the warrant, but no application for an extension of time.

The application for the stay was considered by me on the documents alone on 17/06/8. My reasons for granting the stay were as follows:

(i) 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.

(ii) There is evidence that the Defendant/Applicant had been in possession of the property under some form of agreement since 07/01/08 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 had made his ruling and the Defendant/Applicant had arrived.

(iii) I consider that there should be a stay of execution of the warrant for possession pending the determination of the application for permission to appeal. Whether it is continued thereafter will be a matter for the Judge deciding the application for permission to appeal.

(iv) I have noted the letter dated 30/05/08 from Ford & Warren and in particular the last paragraph. Although it is said that a Notice to complete the sale of the property has been served there is no indication that the grant of a stay pending determination of the application for permission to appeal will cause irreparable prejudice.

(v) A transcript of the hearing before HHJ Gibson on 29/04/08 should be obtained as soon as possible.

The application to discharge raises, in effect a single point, that is that s. 89 of the Housing Act 1980 restricts the power of the court to grant a stay to 14 days after the order for possession, save that if exceptional hardship is caused the date may be postponed to 6 weeks.

This point was not drawn to my attention when I considered the application to stay on documents

I am very grateful to Mr Petts who has put the matter to me very fairly in the absence of the Defendants.

He referred me to the court's case management powers to stay in the CPR and the court's inherent jurisdiction. However, he submits that they are both subject to primary legislation; in particular section 89 of the Housing Act.

He refers me to sub section (2) of section 89 and says that none of the exceptions apply

There are three previous cases on section 89:

Bain & Co v Church Comrs for England [1989] 1 WLR 24

Hackney LBC v Side by Side (Kids) Ltd [2004] 1 WLR 363

Boyland & Son Ltd v Rand [2007] HLR 24

In the first of those cases Harman J held that "court" in s. 89 meant "County Court". He said that he reached that conclusion "more by way of bold leap in the dark than by way of reasoned proposition".

In the second case, Stanley Burton J considered the ambit of s. 89. and concluded that it was wide enough to include the high court. He said:

"18. On the face of it, section 89 is of general application. It is not expressly restricted to county court orders. The expression "court" is not specially defined so as to mean the county court. Looking at the section by itself, the natural meaning of "a court" is any court.

19. Leaving aside the decision in the Bain case, I find nothing in the Act to indicate that the expression "the court" means the county court in section 89, and clear indications that it includes the High Court. The long title to the Act includes the following: "An Act to give security of tenure, and the right to buy their homes, to tenants of local authorities and other bodies ... to make other provision with respect to housing; to restrict the discretion of the court in making orders for possession of land; and for connected purposes."

20. This does not hint at a restriction to county court orders. Nor does the context of section 89 itself. It is in Part IV of the Act, which includes sections 86 to 89. Section 86 refers to a county court as such when it refers to it and to the High Court as such when it refers to it. While it confers jurisdiction on the county court in respect of proceedings under Part I or Part III of the Act, as originally enacted it expressly envisaged that such proceedings might be taken in the High Court under those parts of the Act and, in subsection (3), imposed a costs penalty on a claimant who brought proceedings in the High Court that could have been taken in the county court. Subsection (3) has been prospectively repealed, but it is still in force. Given the express references to the county court and the High Court in section 86, it would be illogical to read the references to "a court" in the following sections as restricted to a county court. Moreover, the exceptions referred to in section 89(2) include proceedings that may be brought in both the county court and the High Court."

The third of the three cases was Boyland. The Court of Appeal was referred to the first two cases and Neuberger LJ, as he then was, said at para 12:

"I was invited to follow the decision of Bain, 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-Burton J was plainly right."

None of those three cases concerned an application for a stay pending a determination of an application for permission to appeal.

It is necessary to set out the sub-section (1) of s. 89 in full:

(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 fourteen 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.

In this case the Defendant, who has sought permission to appeal, has sought a stay of the execution of the order.

As Mr Petts has frankly acknowledged, section 89(1) does have a surprising consequence in that if there are good grounds for granting the appeal the court's powers to stay are limited to 14 days from the possession order and six weeks from the possession order in the case of exceptional hardship.

But he suggests that the section does not deny the appellants the right to an appeal and points out in his skeleton argument that permission to appeal could have been requested of the trial judge; the appellant's notice could have been lodged the day after judgment; an expedited appeal could have been requested. Instead, the second Defendant waited 22 days before filing his appellant's notice.

Those points are correct, but it would require the machinery of the High Court and Court of Appeal to move very quickly to avoid the apparent injustice which would be caused to a tenant who had been ordered to give up permission but then later won his appeal.

Nevertheless, the terms of s. 89 plainly apply to a stay of execution and that is the order I was asked to make on 17/06/08. The restrictions imposed by section 89 therefore apply. By that date the two week period had expired; it expired in mid May 2008. There is no reason to think that this is a case of exceptional hardship; even so, six weeks would have run out in about mid June.

I have reached the conclusion that the order I made must be set aside.

The Defendants are ordered to pay the Claimant's costs summarily assessed in the sum of £3,000.00."

3. Mr. Roach who appeared before on 14 July 2008 on behalf of the Defendants submitted that section 89(1) did not apply to a court exercising appellate jurisdiction. He referred me to the opening words of the section, namely, "where a court makes an order for the possession of any land" and submitted that the natural construction of the rest of the section was that the restrictions imposed upon the court's powers applied to the court which made the possession order. This was not a construction of the section which had occurred to me, or I think to Mr. Petts, on 10 July 2008.
4. Mr. Petts submitted that this construction required the insertion of the words "by that court" inserted after the words "shall not be postponed". He said that there was no warrant for inserting those words and that the natural construction of the words used by Parliament was that the restrictions imposed by the section applied to any court which was requested to order a stay of execution of a possession order.
5. The argument put forward on behalf of the Defendants was not discussed in any of the three cases which have considered the true construction of section 89. That is because none of them involved an appeal from the court which made the possession order. Neither party submitted that the reasoning and discussion in those cases provided any assistance on the issue before me.
6. I consider that the construction put forward by Mr. Roach is a possible meaning of the section. The construction does not require words to be read into the section as suggested by Mr. Petts. Rather, the opening words of the section, "Where a court makes an order for the possession of any land", enables the section to be read as if the restrictions on the power to postpone possession apply to the court which makes the order for possession.
7. But I also consider that the construction put forward by Mr. Petts is a possible construction of the section. The phrase "the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution)", can be read as to referring to any court which is requested to postpone the giving up of possession.
8. 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 from 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 case that will 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 by 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.
9. Counsel for the Claimant said that these considerations were not decisive. He pointed out that the very same injustice would occur where the court which made the order in the absence of the Defendant was later asked by the Defendant, who had applied promptly to the court, had a good reason for not being present at the hearing and had an argument with reasonable prospects of success, to set aside the order, The court's discretion to stay the order for possession until the defendant's application was heard would be limited even on the construction put forward by Counsel for the Defendants. Similarly, if permission to appeal were obtained from the court which made the order the court's power to grant a stay would be limited.
10. Counsel for the Claimant also said that section 89, and in particular the exceptions in sub-section (2), sought to strike a balance between the rights of the landlord and the rights of the tenant. In cases falling within the exceptions the court's powers were not restricted. It was only in other cases, particularly cases where the occupier was said to be a trespasser, that the restrictions on the court's powers applied.
11. These are cogent points. But one is still left with a very odd and apparently unjust result. An appellate court which considers that there is merit in an appeal against a possession order is severely limited in its ability to preserve the position until the appeal is heard. The time limits are so short that it will not be possible save in very rare cases to bring the appeal on within 14 days (or 6 weeks). It is true that the same position applies in the court which granted the order but an application to set aside an order in the circumstances described above may well be brought before that court within the 14 days (or 6 weeks) and if permission to appeal is granted by the court below there is, on the Defendant's argument, the possibility of applying to the appellate court for a stay pending the appeal, unrestricted by the terms of s.89. It is also true that Parliament has drawn a distinction between those tenants who fall within the exceptions in sub-section 2 and those who do not, such as those alleged to be trespassers. But the question is whether, even in the case of a person said to be a trespasser who has good prospects of successfully appealing from the possession order, it was the intention of Parliament that such a person was to be denied the fruits of a (potentially) successful appeal.
12. I have concluded that, in circumstances where section 89 can fairly be construed as not leading to that result, Parliament cannot have intended such a result. I also note that the long title to the Housing Act 1980 describes the Act as one "to restrict the discretion of the court in making orders for possession of land". This does not suggest that it was Parliament's intention to restrict the discretion of an appellate court, with jurisdiction to hear and determine an appeal from the court making the order for possession, when ordering a stay of execution of the order for possession pending such appeal.
13. It follows that the Defendants' application to set aside the order I made on 10 July 2008 must succeed. I order, as I did on 17 June 2008, that the execution of the order for possession made on 29 April 2008 be stayed pending the determination of the application for permission to appeal.