Factual and Procedural Background
In 1999, the Appellant ("Company A") granted the Respondent ("Plaintiff") a secure tenancy of a residential property. The Plaintiff was in receipt of housing benefit, which was temporarily stopped, causing rent arrears. Company A initiated possession proceedings and notified the Plaintiff of a hearing scheduled for 7 May 2009. The Plaintiff did not attend the hearing, asserting he did not receive a formal court summons and thus did not consider himself bound to attend.
At the hearing before District Judge ("DJ") Manners, Company A sought a possession order based on the Plaintiff's failure to pay rent and multiple missed appointments. DJ Manners granted the possession order and judgment for arrears, noting the Plaintiff's absence and that the order was made on discretionary grounds under the Housing Act 1985.
Following the order, the Plaintiff was evicted on 6 July 2009. After eviction, the Plaintiff applied to set aside the possession order and for re-entry to the property. DJ Armon-Jones initially set aside the possession order and allowed re-entry, but this decision was overturned on appeal by HHJ Birtles QC, who upheld setting aside the possession order but rejected some of Company A's grounds of appeal. The matter was remitted for further hearing, which has been stayed pending the current appeal.
Legal Issues Presented
- Whether the factors listed in CPR 39.3(5) are highly relevant and should be applied when the court exercises its discretion under CPR 3.1 to set aside a possession order made in the absence of a tenant.
- Whether the order of HHJ Birtles QC setting aside the possession order and permitting re-entry should be set aside.
Arguments of the Parties
Appellant's Arguments
- Prior to the decision in Forcelux Limited v Binnie, courts applied the criteria in CPR 39.3(5) to set aside possession orders, requiring a good explanation for non-attendance and prompt action.
- The decision in Forcelux was argued to be per incuriam and inconsistent with established authorities, particularly regarding the application of CPR 3.1(7) and the finality of orders.
- Company A contended that setting aside possession orders after eviction undermines certainty and efficient management of social housing.
- Weight should be given to the Plaintiff's failure to attend the initial hearing, the timing of his application, and the fact that the possession warrant had been executed.
- Company A submitted that it would still be possible to make a suspended possession order even after execution by varying the original order under s 85 of the Housing Act 1985.
Respondent's Arguments
- The Plaintiff had not elected not to attend but was attempting to resolve housing benefit issues with Company A.
- The Plaintiff asserted he never received the court summons and thus did not consider attendance required.
- The arrears largely resulted from housing benefit problems rather than deliberate non-payment.
- It was unusual for Company A to seek an outright possession order while housing benefit issues, including a backdated claim, remained unresolved.
- The power to set aside possession orders under CPR 3.1 is wide and allows correction of injustices, even post-execution of a warrant.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Forcelux Limited v Binnie [2009] EWCA Civ 854 |
Wide discretion under CPR 3.1(2)(m) to set aside possession orders made in tenant's absence; CPR 39.3 does not apply as possession hearings are not trials. |
Established that possession orders made in absence of tenant can be set aside if interests of justice demand, even post-execution of warrant. |
| Roult v Strategic Health Authority [2010] 1 WLR 487 |
Limitations on CPR 3.1(7) powers; final orders should not be reopened except on proper appeal grounds; judges should not hear appeals from themselves. |
Distinguished from Forcelux; emphasized finality of orders and proper grounds for reopening. |
| Governors of Peabody Donation Fund v Hay (1987) 19 H.L.R. 145 |
Execution of possession orders must be set aside if the underlying judgment is set aside. |
Supported principle that setting aside possession order post-execution requires setting aside execution. |
| Cheltenham and Gloucester Building Society v Obi (1994) 28 HLR 22 |
Execution may be set aside for abuse of process or oppression. |
Not directly applied but acknowledged as relevant to execution challenges. |
| Customs and Excise Comrs v Anchor Foods (No 2) The Times, 28 September 1999 |
CPR 3.1(7) cannot be used to hear appeals from a judge's own final orders. |
Reinforced principle limiting reopening of final orders. |
| Lloyds Investment (Scandinavia) Ltd v Ager-Hanssen [2003] EWHC 1740 |
Similar limitation on CPR 3.1(7) powers to reopen final orders. |
Supported approach restricting reopening absent proper appeal. |
| Collier v Williams [2006] 1 WLR 1945 |
Approved the restrictive approach to CPR 3.1(7) in case management decisions. |
Endorsed limitation on reopening final orders. |
Court's Reasoning and Analysis
The court began by considering the scope of the discretion under CPR 3.1(2)(m) to set aside possession orders made in the absence of the tenant. It reaffirmed the decision in Forcelux that possession hearings are not "trials" for CPR 39.3 purposes and thus the stringent requirements of CPR 39.3(5) do not strictly apply. However, the court emphasized that in the ordinary case, the requirements of CPR 39.3(5) should be applied by analogy when exercising discretion under CPR 3.1, particularly the need for a good explanation for non-attendance, promptness, and a reasonable prospect of success.
The court noted that the discretion is wide but not unstructured and that finality of litigation and proper administration of justice favor applying these analogous requirements. It acknowledged that in cases involving secure tenants, the statutory framework under section 85(2) of the Housing Act 1985 contemplates some flexibility, allowing applications to vary possession orders before execution.
The court also recognized the relevance of social housing context and best practices, including the Rent Arrears Pre-Action Protocol, when assessing whether a tenant has a good reason for non-attendance.
Execution of possession orders is a highly relevant factor in deciding whether to set aside such orders, especially where the landlord has reallocated or refurbished the property. Nonetheless, compelling circumstances, such as those in Forcelux, may justify setting aside even executed orders.
Applying this reasoning to the present case, the court found that the order of DJ Armon-Jones was flawed because he incorrectly concluded that the first hearing judge had not been informed of the reinstatement of housing benefit. The court held that the order of DJ Armon-Jones and the subsequent order of HHJ Birtles QC should be set aside and the matter remitted for rehearing by a district judge to resolve outstanding factual issues, including arrears and the possible oppression claim.
Holding and Implications
The court held that the appeal should be ALLOWED, the orders of DJ Armon-Jones and HHJ Birtles QC should be set aside in part, and the case remitted to a district judge for further hearing.
This decision clarifies that while the discretion under CPR 3.1 to set aside possession orders made in the tenant's absence is wide, the factors in CPR 39.3(5) should generally be applied by analogy to ensure fairness and finality. The ruling underscores the importance of balancing the efficient management of social housing possession claims with the statutory protections afforded to secure tenants under the Housing Act 1985. The judgment does not establish new precedent but reaffirms and refines the approach in Forcelux, emphasizing the need for careful judicial consideration of all relevant circumstances, including execution of possession orders and social housing protocols.