Permissions Suspended - Briefing on Cardiff County Council v Lee


02 November, 2016

Housing landlords throughout England and Wales have been reacting to the recent Court of Appeal decision in Cardiff County Council v Lee [2016] EWCA Civ 1034 which has held that the Court's permission is required to issue a warrant for possession on a Suspended Possession Order. As the dust begins to settle, Lachlan McLean (Partner and Solicitor-Advocate) considers some of the implications below and how to deal with the issues raised.

How did this ruling happen?
Housing landlords will be familiar with the process of seeking enforcement of a suspended possession order (SPO) by filling out Form N325 and paying a Court fee, currently £121. It has always been thought that in most straightforward cases, the Court's permission was not needed to issue a warrant on an SPO. This is because CPR rule 83.26 states that "An application for a warrant of possession … may be made without notice" (i.e. without notifying the tenant).

However in Cardiff CC v Lee, The Court held that the changes to the Civil Procedure Rules (CPR) in 2014 introduced a new requirement at rule 83.2(3)(e) that the Court's permission to issue a warrant must be obtained first if "under the judgment or order, any person is entitled to a remedy subject to the fulfilment of any condition, and it is alleged that the condition has been fulfilled".

Which orders are affected?
The only orders are suspended possession orders for residential premises, where the enforcement of the order is suspended on any terms. This could include rent, anti social behaviour, compliance with tenancy conditions, maintaining property condition, or anything else.

An immediate or outright possession order is not affected because the entitlement to possession is not "subject to the fulfilment of any condition".

Postponed possession orders (PPOs) are not affected because they already cannot be enforced without making a paper application for a date to be fixed, at which point it converts to an immediate / outright possession order.

Are possession warrants invalid then?
The Court of Appeal confirmed that a warrant for possession issued without prior permission will not automatically be invalid unless a Court decides that it should be invalidated.

What if an existing warrant is challenged by tenant solicitors?
If a tenant solicitor challenges the validity of the warrant, then the landlord can make an application under CPR Part 23 for the Court to exercise its discretion under CPR r.3.10 to dispense with the need for a prior permission application and proceed to validate the warrant. The Court of Appeal held that the tenant had not actually suffered any prejudice and the end result was exactly the same. If tenant solicitors now start making applications to invalidate warrants without having good grounds for doing so and purely to cause disruption and delay, then social landlords should consider whether there are grounds to ask the Court to make an order for "wasted costs" against the tenant's solicitors and / or draw their conduct to the attention of the Legal Aid Agency to have funding cancelled.

What do we need to do to ensure compliance?
As things stand, it is necessary to make an application to Court in accordance with Part 23 CPR and Rule 83.2. The application must comply with the requirements of CPR 83.2(4) but it can be made "without notice" meaning that the Court application fee should be £100. The Court should then make an order without a hearing, confirming permission - although it may list a hearing of the application if it chooses to do so.

We have prepared a precedent application notice and supporting witness statement which is available from us for a fixed fee. Please email Lachlan McLean for further details.

Can we apply for permission and a warrant at the same time?
This is highly doubtful under the current procedures. In Cardiff CC v Lee, the Court of Appeal confirmed that obtaining permission was an essential prior requirement to the warrant being issued. If the N244 and N325 were put in the same envelope to Court, we would have concerns as to whether these would be dealt with in the correct order.

That said, we have recently heard that the Civil Procedure Rule Committee is proposing to meet on 4 November to discuss the changes made by Cardiff CC v Lee. This may result in an amendment to the current Form N325 (Warrant Request) with a view to adding a permission section so as to avoid the need for an N244 and hopefully also the additional fee of £100.

Can we apply for permission via PCOL?
Part 83 of the CPR sets out certain requirements of an application for permission, but is not very specific about whether it is necessary to submit a witness statement and / or copies of the relevant documents referred to. However for example it says that the claimant must "identify the judgment or order to which the application relates" and "give such other information as is necessary to satisfy the court that the applicant is entitled to proceed to execution on the judgment or order". As a starting point, this could be taken to mean attaching a copy of the SPO for ease of reference and perhaps also a copy of the rent statement demonstrating default on the SPO terms. However the PCOL website says that if you need to attach evidence in support of the application then you can't process it online. The practicalities of how such applications are processed and approved and whether it could be done without attaching copies remains to be seen.

Once permission is granted, then a warrant can be requested via PCOL in the usual way.

Can we just continue with our existing processes?
In a word, no. The Court of Appeal was willing to overlook the failure to seek a warrant prior to permission being granted in the specific case on the basis that the landlord had made an "honest" mistake, and the Court of Appeal expressly stated that "of course, if [the Council] knew that it was not entitled to possession, then the outcome would have been very different." Housing landlords must unfortunately stop their existing processes immediately and either use the N244 application process or await the outcome of the Civil Procedure Rules Committee's deliberations.

Case comment
With the greatest of respect to their Lordships who heard the appeal, and to those advising Mr Lee, we have concluded that the ruling was highly regrettable and unnecessary. The Court seemed swayed by the importance of giving additional procedural protection to the tenant facing eviction, but at the same time conceded that most social landlords could be trusted to act ethically and responsibly. In non-rent cases, there is an existing widespread practice of continuing to use PPOs rather than SPOs, which provides the additional procedural safeguards in cases where there may be subjective perceptions or disputes of fact.

The Court therefore went on to justify the ruling by reference to the risk of eviction by unscrupulous private landlords, but in our experience private landlords almost never end up with SPOs as they generally seek possession on Ground 8 or Section 21, and so there is no practical basis for that justification either. In any case, the application for permission is usually made "without notice" and without a hearing, and so there is virtually no extra practical protection afforded to the tenant other than perhaps receiving a copy of the permission order in the post.

That only leaves mortgage possessions which are subject to their own specific protections and requirement to certify that prior notice has been given under CPR 83.26(5) and to which this ruling adds nothing of any substance.

So other than lumping extra debt on the costs to be paid by tenants (and in reality on the social housing sector who foot the bill for writing off such debts and which has already been in a state of unprecedented financial pressure for several years) we really don't see any positive outcome which the ruling has achieved. We hope that the CPRC will resolve this issue without delay.

For further information please contact Lachlan McLean on 01257 260600 or via email Lachlan McLean


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