In a landmark judgment, the Court of Appeal has ruled in Cardiff County Council v Lee (Flowers)  EWCA Civ 1034 that residential landlords must apply for the court's permission before being able to apply for an eviction warrant if a Suspended Possession Order is breached.
In March 2013 Cardiff County Council issued ASB possession proceedings against its tenant, Lee. Six months later, the Council obtained a suspended possession order (SPO) against Lee, with the right to possession being suspended for two years so long as Lee complied with the terms of his tenancy.
In August 2015, following further complaints of ASB, the Council issued a request for a warrant for possession (Form N325) and sought an eviction date. A date was set but Lee applied to court to stay the warrant. At a hearing, the District Judge dismissed Lee's application and he appealed the decision.
On appeal, the Circuit Judge ruled that the Council hadn't followed the correct procedure because it had failed to apply to the court for permission before issuing the warrant. The decision was based on Civil Procedure Rule 83.2(3)(e) which provides that a warrant for possession cannot be issued without the court's permission where under the order being enforced "any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled". The court held that this Rule applied to enforcement of a SPO, meaning that issuing a warrant for possession following breach of a SPO without first having obtained the court's permission to do so is unlawful.
Although the Council had not applied for permission, the High Court nevertheless excused this procedural error and refused Lee's appeal. In doing so, the Court relied on Civil Procedure Rule 3.10 which allows the court the discretion to excuse a technical procedural error.
Lee appealed again, this time to the Court of Appeal. Before the Appeal Judges, the Council accepted that Rule 83.2 applied and that it should have sought permission before requesting a warrant of possession. Lady Justice Arden was unequivocal about the requirement for prior permission being needed:
"I reiterate that CPR 83.2 constitutes an important protection for tenants. It is not to be taken lightly. Social landlords must ensure that from now on their systems are such that the same mistake will not be made in future".
The more difficult question for the Court of Appeal was whether it was acceptable for a court to rely on Rule 3.10 to excuse a failure to seek permission before applying for a warrant in circumstances where a stay application is made by the tenant so that the relevant facts were before the court before the eviction date.
The Court of Appeal agreed with the High Court. As a result, the county court can, at a hearing of a tenant's stay application, rely on Rule 3.10 to excuse the landlord's failure to seek possession. The county court could, at that hearing, decide whether a breach had occurred and, if so, then give permission for the warrant application to be approved. The tenant would not be prejudiced in that situation, as he/she will have been given the safeguard of the chance to challenge the warrant and have the landlord's evidence for breach tested. However, the court has discretion to rely on Rule 3.10 or not – in some cases a judge may be willing to do so, not in others.
The lessons to be learned from the case are important ones:-
- To enforce a SPO, landlords must first apply for and obtain the court's permission under Rule 83.2. This will require a change in policy and procedure for social landlords, because to date landlords and their lawyers have not understood Rule 83.2 to apply to suspended possession cases. It is not obvious from the wording of 83.2 that it applies to SPO cases, but the Court of Appeal have told us that it does. That will remain the case unless the decision is overturned by the Supreme Court.
- The need to seek permission is seen as an "important safeguard" for a tenant and is an important stage in the process of seeking possession that mustn’t be overlooked. Landlords must take the process seriously and accept there is a degree of risk that permission may be refused, at least until it becomes clear how the courts will deal with permission applications.
- The courts may impose cost sanctions against landlords who do not seek permission before issuing warrants for possession in the knowledge that permission is required. In an extreme case, a court could go further and ‘un-do’ an eviction and possibly avoid damages. After the decision in Lee, landlords will be expected to know this and conduct cases accordingly.
- Helpfully, permission applications may be made without notice, although the courts have the ability to list hearings if they feel that is necessary. It remains to be seen how stringent the courts will be when considering permission applications.
- Permission applications will need to be made by way of an N244 application notice supported by evidence. Rule 83.2(4) sets out what the application must contain and can be found here: http://www.justice.gov.uk/courts/procedure-rules/civil/rules/part-83-writs-and-warrants-general-provisions#83.2
What should landlords do now?
The action that landlords should take now in cases of SPO breach will depend on the stage of the case.
If a SPO is in place but has only just been breached, the landlord will need to make a without notice application for permission in Form N244, pay the application fee (currently £100), and then wait for permission to be granted before a warrant can be requested. This will add cost and delay to the possession process.
Where a landlord has obtained a SPO and has already requested a warrant relying on a breach by the tenant, the permission application should be made straight away. The application should also seek an order that under Rule 3.10 he is entitled to rely on the warrant that has already been issued (even though it was issued before permission was obtained). At the same time, we would advise the landlord to request that the court put the warrant 'on hold' and not list it for an eviction date until permission has been obtained. The court will doubtless expect the landlord to inform the tenant that this has been done.
Where the case is even more advanced and an eviction date has been listed, a landlord will need to act quickly to prevent an eviction taking place unlawfully. The landlord has several options. First, if the tenant is proactive and applies to stay the warrant, the landlord could contest and ask the court to excuse the procedural error under 3.10 (as happened in the Lee case). A second option would be to make an urgent without notice application for permission and to request that it be dealt with before the eviction date. The third and safest option would be to ask the court to cancel the eviction date to allow the landlord time to seek permission to issue a warrant before a new eviction date is listed. Which of these is best will depend on the facts and timescales involved in each particular case.
The final scenario is where a tenant has recently been evicted for breach of a SPO in circumstances where the landlord did not ask the court for permission before the warrant was issued and enforced. Here, there is a risk that a well-advised tenant may try and set aside the eviction on the grounds of abuse of process. Given the fact that the Court of Appeal has only just clarified this area of law, landlords may have to defend such claims (which we anticipate will be rare) on the basis that they were operating under a misapprehension and that there was no deliberate abuse of the rules.
Alongside the exercise of managing existing SPO cases, all social landlords should also now be reviewing their policies and procedures for enforcing SPOs to ensure they are compliant with the decision in Lee.
What does the future hold?
It is clear what landlords are now required to do, but there are still a number of questions that currently sit unanswered.
For example, it isn't clear from the judgment in Lee how the Court of Appeal expects county courts to deal with permission applications, and how rigorous they are going to be about testing a landlord's case for permission. Likewise, it remains to be seen whether courts will be comfortable in dealing with permission applications without notice or whether permission hearings will routinely be listed.
In these times of rising court fees, court closures and under-resourced court offices, it is our hope that District Judges will take a pragmatic approach to implementing this new law. We hope they will recognise that the permission stage is essentially there to protect tenants from unscrupulous landlords who might otherwise apply for warrants without justification, and that every tenant will retain the right to apply for a warrant to be stayed. However, until the dust settles both landlords and their solicitors should expect variations in the way that different courts and judges approach the permission question.