COVID-19 Real Estate: Court Of Appeal Re-Examines PD51Z And Claims For Possession Brought Under CPR Part 55

• Published date: 31 August 2020
• Subject Matter: Real Estate and Construction, Coronavirus (COVID-19), Landlord & Tenant - Leases, Government Measures
• Law Firm: Clyde & Co
• Author: Jeremy Stephen and Keith Conway

TFS Stores Ltd v Designer Retail Outlet Centres (Mansfield) General Partner Ltd and others; BMG (Ashford) Ltd and others v TFS Stores Ltd

Court of Appeal, Civil Division

[2020] EWCA Civ 833

PD51Z (now CPR 55.29)

As a result of the COVID-19 pandemic, Practice Direction 51Z (PD51Z) granted a stay of claims for possession and enforcement action until 25 June 2020. CPR 55.29 came into force on 25 June 2020 and extended the stay on claims for possession further until 23 August 2020.

Background

The proceedings relate to two actions involving TFS Stores Limited (TFS), a tenant, and six separate tenancies.

In the first action in 2017, TFS made a claim for a declaration that two of the six tenancies had not been validly excluded from the protections afforded under sections 24-28 of the Landlord and Tenant Act 1954 (1954 Act). TFS also sought an injunction preventing the landlords from taking possession. The landlords counter-claimed for possession.

The landlords issued the second action in 2018, claiming a declaration that the remaining four tenancies were not protected by the 1954 Act (the tenancies had not expired at the time the claim was made). The same year, the Court decided that all six tenancies were excluded from the 1954 Act protections. Both parties agreed by consent to orders for possession to give effect to the decision; however, the landlords' claim forms were never formally amended to include a claim for possession under CPR 55.

In May 2020, TFS applied to the Court, averring that the possession hearing due to take place on 24 June 2020 must be automatically stayed pursuant to PD51Z.

Hearing

Lord Justice Vos considered two main question: i) as TFS' claim in the first action fell outside the scope of CPR 55, how would the landlords' counterclaim in that action, clearly proceedings for possession, be affected by PD51Z? and ii) could the orders for possession by consent in the second action be captured by PD51Z?

In a 2-1 majority judgment, the Court held that the automatic stay on possession proceedings pursuant to PD51Z (CPR 55.29) applied.

In respect of the first question, although the Court held that TFS' claim in the first action was for a declaration alone, the counterclaim was for possession, causing the entire action to become proceedings for possession brought under CPR 55 and, therefore, caught by PD51Z. Vos LJ stated:

"I accept that, without the counterclaim, the first action was not brought under CPR Part 55, but once the counterclaim was...