Possession orders: the absent defendant

Ian Peacock of New Square Chambers has kindly allowed us to republish one of his recent articles.

Possession orders: the absent defendant
A possession order is made in the absence of the defendant who has been served with the claim. The defendant subsequently applies to set aside the order. What principles govern the application? That question has recently been answered by the Court of Appeal in Forcelux Ltd v Binnie [2009] EWCA Civ 854. The Court of Appeal’s answer makes it easier for a defendant to have a possession order set aside than might previously have been assumed.
Procedure
Almost all possession claims are governed by CPR Part 55:
Section I of Part 55 applies to possession claims other than those where the accelerated procedure for possession claims of property let on an assured shorthold tenancy is used or an interim possession order is sought.
Such claims are invariably started in the county court for the district in which the land is situated (r 55.3(1)). The particulars of claim must be filed and served with the claim form (r 55.4).
The court will fix a date for the hearing when it issues the claim form (r 55.5(1)). At that hearing the court may decide the claim or give case management directions (r 55.8(1)).
The first hearing of a possession claim will typically be listed with other possession claims in a “possession list” with 5 or 10 minutes allowed for each case. If the defendant does not attend, or attends but clearly has no defence to the claim, the court will often make an order for possession at that first hearing.
Absence at trial
By CPR r 39.3(1) the court “may proceed with a trial” in the absence of a party. Where a party does not attend and the court makes an order against him, the party who failed to attend may apply for the order to be set aside (r 39.3(3)). The court, however, may grant the application only if the applicant (i) acted promptly when he found out that the court had exercised its power to make an order against him; (ii) had a good reason for not attending the trial; and (iii) has a reasonable prospect of success at the trial (r 39.3(5)).
Where a possession order is made at the first hearing of a possession claim in the absence of the defendant, it might be assumed that CPR r 39.3 applied to a subsequent application by the defendant to set aside the possession order. Indeed, in Estate Acquisition and Development Ltd v Wiltshire [2006] EWCA Civ 533 the Court of Appeal had dealt with such an application by applying r 39.3 (without any argument whether that was the correct approach). If CPR r 39.3 applied, the defendant might face an uphill struggle. The conditions in r 39.3(5) are cumulative and mandatory, so that the application would be bound to fail if the defendant had not acted promptly in making the application or if the defendant could not demonstrate a good reason for not attending the hearing.
Forcelux Ltd v Binnie
The question in Forcelux Ltd v Binnie was whether CPR r 39.3 did apply. The claimant (Forcelux) was the landlord and the defendant (Mr Binnie) the tenant of a long lease of a flat. Mr Binnie fell into arrears with the payment of ground rent and service charge and Forcelux commenced a claim for possession of the flat.
Mr Binnie was not living at the flat and did not pick up any documents relating to the claim. He did not attend the first hearing of the claim and the court made a possession order in his absence. He later became aware of the possession order when his girlfriend saw two men attending at the flat to take possession on behalf of Forcelux. Some three months later he made an application to set aside the possession order and to obtain relief from forfeiture.
The district judge (applying CPR r 39.3) set aside the possession order and granted relief from forfeiture. The circuit judge dismissed Forcelux’s appeal against the order setting aside the possession order and Forcelux appealed to the Court of Appeal.
The Court of Appeal suggested that if, exceptionally, the first hearing of a possession claim results in a hearing on the merits, that hearing could properly be called “a trial”. It gave the example of a situation where the judge’s list has collapsed so that he has half a day to spare and both sides are present and represented, have all their evidence available and agree that the matter should proceed. The court suggested that in that situation the judge would in effect be exercising his case management powers and bringing forward the trial to the date of the hearing.
But the court also held that, where a possession claim is determined at the first hearing in a short disposal in a possession list, the process of determination and decision cannot sensibly be called “a trial” in the ordinary use of the word and cannot be seen as a trial within the scope of CPR r 39.3.
The court accordingly held that CPR r 39.3 did not apply. Instead, the application to set aside the possession order was governed by r 3.1(2) (m), which is a sweeping-up provision at the end of a list of case management powers and which provides that the court can “take any other step or make any other order for the purpose of managing the case and furthering the overriding objective”. Rule 3.1(7), which provides that a power of the court under the CPR to make an order includes a power to vary or revoke the order, makes it clear that the court has power to set aside a possession order under r 3.1(2)(m).
CPR r 3.9(1) provides a checklist of matters to be considered when the court is considering an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order. Although that rule is not applicable to an application to set aside a possession order (as such an application is not an application for relief from a sanction), the court suggested that it is helpful to consider that checklist by analogy.
The court decided that the discretion should be exercised to set aside the possession order. Although Mr Binnie had not acted promptly, the delay was not so long as to disentitle him from relief. If relief was not granted, Mr Binnie would lose a valuable asset for want of payment of a comparatively modest sum whereas, if relief was granted, Forcelux would lose what could fairly be described as a windfall. As a result Forcelux’s appeal was dismissed.
The result of the decision in Forcelux Ltd v Binnie is that a defendant who fails to attend the first hearing of a possession claim may find it easier to obtain the setting-aside of a possession order made at that hearing. Any delay by the defendant in making an application to set aside the order will be a matter to be taken into account but, if the defendant failed to act promptly, that will not necessarily prevent the order being set aside.
Ian Peacock has a broad-based practice covering property and commercial litigation and public law. He frequently acts in landlord and tenant disputes, both residential and commercial and has experience of public sector housing disputes.
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