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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ON APPEAL FROM CENTRAL LONDON COUNTY COURT (HHJ FABER)

		Royal Courts of Justice Strand, London, WC2A 2LL
		15/06/2012

MR JUSTICE HICKINBOTTOM:

Introduction

1. This appeal raises common and important questions of routes of appeal in possession claims, under the Access to Justice Act (Destination of Appeals Order) 2000 ("the Destination Order").
2. With the permission of Globe J, the Defendant Roy Ofogba appeals against the Order of Her Honour Judge Faber dated 24 November 2011 in which, on a claim for possession brought under CPR Part 55, she:

i) gave judgment for the Claimant local housing authority ("the Council") in the sum of £1,731.78 in respect of rent arrears and

ii) adjourned the claim for possession of the Defendant's home at 26 Kevan House, Wyndham Road, Comber Estate, Camberwell ("the property"), with liberty to restore after 23 February 2012.

A disposal in that form is not uncommon in possession claims based on rent arrears.

Background

3. The property is owned by the Council, and has been the subject of a secure tenancy to the Defendant since 1 March 1999.
4. On 2 March 2009, in Lambeth County Court, the Council commenced possession proceedings against the Defendant on Ground 1 of Schedule 2 to the Housing Act 1985, i.e. rent arrears. The claim was brought under CPR Part 55. In the usual way, the Council claimed possession of the property and any unpaid rent. A Defence was filed by the Defendant's then solicitors, which made no admission as to any arrears. On 11 September 2009, a consent order was made by which the claim for possession was adjourned generally on terms that the Defendant pay the on-going rent together with £3.25 per week towards the arrears in the sum of £1,928.50. Permission to apply to restore the proceedings was granted, until such time as the rent arrears were discharged.
5. Over the following year, there were two developments. First, the Defendant failed to pay the due rent and instalments of rent arrears. Second, he changed solicitors.
6. His new solicitors applied to restore the proceedings, and rely upon an Amended Defence and Counterclaim. On 8 November 2010, District Judge Zimmels restored the claim, allocated the claim to the multi-track and gave directions, including permission to the Defendant to rely upon his amended pleading, which included (amongst other things) the following two new defences:

i) The Defendant was not liable for the water charges imposed by the Council, because the Council was a "water reseller" for the purposes of the Water Resale Orders 2001 and 2006, and hence the charges that it could impose were limited.

ii) The Defendant was not liable for charges imposed by the Council since 2003 for estate cleaning, estate lighting and ground maintenance (which had previously been charged within a single rental amount), because no valid contractual or statutory notice of variation had been given in respect of such payments.

As a result, it was contended that no rent arrears were in fact due at the time the proceedings were issued.

7. The Council duly filed a Reply and Defence to Counterclaim, and the matter moved to trial at Central London County Court, the relevant multi-track hearing centre. The trial took place before Judge Faber on 10-12 October 2011. By this stage, the Defendant's public funding had been withdrawn, and he was acting in person.
8. On 2 November 2011, with a view to an approved judgment being handed down later in written form, a draft judgment was distributed to the parties. In it, the judge found:

i) The Council was not a water reseller for the purposes of the Water Resale Orders. However, in some years, no valid notice of increase had been served, resulting in the Council not being able to recover all of the water charges claimed in some years.

ii) Although the charges for estate cleaning, estate lighting and maintenance were new charges, a simple notice under Clause 7 of the tenancy agreement was effective to cover them; and such a notice had been served. However, the Council had failed to serve a valid notice in respect of an increase in charges for CCTV coverage. That again resulted in an overpayment.

9. The net result was that, at the time of issue of proceedings, the Defendant owed only £92.39 rent arrears; although the arrears had since risen substantially. In paragraph 49 of the draft judgment, given all the circumstances of the case (including the amount of the arrears and the Defendant's difficulty in paying them off), the judge found that it would not be reasonable to make an order for possession. In paragraphs 50-2 (in a section headed "Consequential Orders"), she indicated that, "The first order will be that the Claim for Possession will be dismissed"; together with judgment for the outstanding rent arrears as recalculated in accordance with her rulings.
10. At the formal handing down of the judgment on 24 November 2011, the judge calculated the outstanding rent arrears as being £1,731.78, and she gave a money judgment in that sum. However, in relation to the claim for possession, in the light of the current arrears and the Defendant's poor payment record, and in the exercise of the statutory power in section 85(1) and (3) of the Housing Act 1985, she was persuaded that the appropriate order was to adjourn the claim for possession generally, with permission to restore after 24 February 2012. She made an order accordingly.
11. The Defendant, still acting in person but with some assistance from his former solicitors, wished to appeal on three grounds:

Ground 1: The judge erred in adjourning the claim for possession, having dismissed the claim in the draft judgment which she circulated.

Ground 2: The judge erred in not finding that the Council was a water reseller for the purposes of the restrictive charging provisions of the Water Resale Orders.

Ground 3: The judge erred in finding that the Defendant was liable for charges, in circumstances in which valid notices of change had not been served on him.

12. On 15 December 2011, he lodged an Appellant's Notice with the Court of Appeal (Civil Division), relying upon all three grounds. However, upon reflection, that appeal was not pursued; rather, an appeal on the same grounds was lodged in the High Court on 29 February 2012. The Council lodged a Respondent's Notice, appealing against the findings of the judge that various charges could not be claimed because valid notices had not been served in respect of them. On 14 March 2012, Globe J granted the Defendant general permission to appeal, and directed the appeal be set down with a time estimate of one day.
13. That appeal came before me for hearing on 29 May 2012. That day, I revoked the grant of permission in respect of Grounds 2 and 3 (on the basis that any appeal in respect of those grounds must be to the Court of Appeal), thereby restricting permission to Ground 1. In respect of that ground, I transferred the appeal to the Court of Appeal pursuant to CPR Rule 52.14(1)(b). Because it is common for a money judgment to be given for rent arrears, with an adjournment of the claim for possession with permission to apply if the tenant does not keep up payments, I was asked to give reasons for my ruling on the relevant routes of appeal; which I now do.

Routes of Appeal in Possession Claims under CPR Part 55

14. Whilst section 77(1) of the County Courts Act 1984 provides that, generally, if a party to proceedings in the county court "is dissatisfied with the determination of the judge… , he may appeal from it to the Court of Appeal", the Destination Order (made by the Lord Chancellor pursuant to section 56 of the Access to Justice Act 1999) implemented a new general principle with regard to routes of appeal, namely that an appeal lies to the next level of judge in the court hierarchy (see Tanfern Ltd v Cameron-MacDonald (Practice Note) [2000] 1 WLR 1311 at paragraph 15). Consequently, Article 3 of the Destination Order provides that, subject to exceptions set out in Articles 4 and 5, an appeal from a circuit judge sitting in the court lies to a single High Court Judge.
15. Importantly for the purposes of this appeal, Article 4(a) provides (so far as relevant):

"An appeal shall lie to the Court of Appeal where the decision to be appealed is a final decision… in a claim made under Part 7 of the Civil Procedure Rules 1998 and allocated to the multi-track under those Rules…".

16. The effect of this provision is accurately and helpfully set out in CPR Note 52.0.11, as follows:

"The normal route of appeal will not be followed where a district judge or a circuit judge in a county court, or a master or a district judge in the High Court, gives a 'final decision' in a multi-track claim made under CPR Part 7 and allocated to the multi-track under those rules. In such a case appeal lies directly to the Court of Appeal."

17. For this direct route of appeal to the Court of Appeal to apply, the following points are worth emphasising.

i) The claim must be made under Part 7.

ii) Until October 2001, when the Civil Procedure (Amendment) Rules 2001 (SI 2001 No 256) introduced CPR Part 55, possession claims were brought under CPR Part 8. CPR Part 55 introduced a new procedural code for possession claims, under which claims are treated as Part 7 claims (see CPR PD 7A paragraph 3.3, and Scribes West Limited v Relsa Anstalt (No 2) [2004] EWCA Civ 965 at [30]-[33]).

iii) The claim must have been allocated to the multi-track.

iv) The decision against which an appeal is made must be a "final decision", defined in Article 1(2)(c) and (3) of the Destination Order as follows:

" (2) (c) 'final decision' means a decision of a court that would finally determine (subject to any possible appeal…) the entire proceedings whichever way the court decided the issues before it.

(3) A decision of a court shall be treated as a final decision where it

(a) is made at the conclusion of a part of a hearing or trial which has been split into parts; and

(b) would, if made at the conclusion of that hearing or trial, be a final decision under paragraph (2)(c)."

That is reiterated in CPR PD 52 at paragraphs 2A.2-3, in which the following is given as an illustration of the application of Article 1(3):

"Accordingly, a judgment on liability at the end of a split trial is a 'final decision' for this purpose and the judgment at the conclusion of the assessment of damages following a judgment on liability is also a 'final decision' for this purpose."

Of course, what matters for these purposes is not whether a formal direction for a split trial is made prior to the event; but rather whether a decision is made at the conclusion of part of a hearing or trial which has, in fact, been split into parts. Therefore, where a court gives judgment on liability only because time constraints means that there is insufficient time for damages to be dealt with at a trial originally planned to deal with both, an appeal against that judgment will lie to the Court of Appeal; just as much as where a trial of issues of liability only is earlier directed at a case management hearing. However, if, at the same time as giving judgment on liability, a circuit judge in the county court makes case management orders in relation to quantum, those would not be "final decisions" and would be appealable to the High Court.

v) So long as the other conditions apply, it is irrelevant whether the judge in the county court is a circuit judge or a district judge. An appeal against a final decision in the county court in a Part 7 claim which has been allocated to the multi-track is directly to the Court of Appeal, whether the county court judge is a circuit judge or a district judge.

vi) Where the decision of the county court is itself made on an appeal (i.e. by a circuit judge from a district judge), then the decision can only be made to the Court of Appeal (Article 5 of the Destinations Order).

vii) In identifying the correct appeal route, the appeal court can only interpret the order as it finds it (Scribes West at [29] per Brooke LJ). However, where permission to appeal is requested from the lower court, CPR Rule 40.2(4) requires the substantive judgment or order to state whether it is final, and the route of appeal. Where it does not do so, an application under the slip rule can be made to require those mandatory particulars to be included.

18. Whilst, with respect to its learned authors, I do not find the White Book as clear as it might be with regard to routes of appeal specifically in Part 55 claims for possession, routes of appeal are in general helpfully described and elucidated in CPR PD 52, at paragraphs 2A.1-2A.5. Tables 1-3 in paragraph 2A.1 are particularly commended, as setting out in tabular form the appeal court for any decision of the county court or High Court.

Application to this Case

19. In this case, the claim was a CPR Part 7 claim, by the time of trial, it had been allocated to the multi-track. The Defendant sought to appeal both the money judgment (on two grounds), and the decision of the judge to adjourn the claim for possession. By dealing with the money claim and the claim for possession as she did, the judge did split the trial into parts. In relation to the money claim part, the judgment was final: and any appeal was to the Court of Appeal. In relation to the claim for possession part, the decision to adjourn was not a final decision; and any appeal was to the High Court).
20. For that reason, Globe J had no jurisdiction to grant permission in relation to the money judgment grounds (Grounds 2 and 3), and hence I was bound to revoke permission to that extent. In respect of those grounds, the Defendant must seek permission from the Court of Appeal. The permission in relation to the adjournment of the claim for possession was properly granted; but, to enable all issues to be dealt with in one appeal forum, I transferred that appeal to the Court of Appeal pursuant to the power I have to do so in CPR Rule 52.14(1)(b).

Coda

21. When a judge is case managing a possession claim, he or she needs to give careful consideration to allocation to track, as that can affect not only the costs regime but also the route of appeal. I should say that, in this case, in my view Judge Zimmels was not only entitled to allocate the claim to the multi-track but, in the light of the issues raised in the proposed Amended Defence, was clearly correct in doing so. The result of such an allocation is that any challenge to (i) an order for possession, or (ii) a money judgment in respect of rent arrears (whether or not there is a final disposal of the claim for possession), whether made by a circuit judge or a district judge, must be to the Court of Appeal.