Claims for possession are often long drawn-out affairs. Although invariably listed (relatively) promptly for an initial hearing, under CPR 55.8(2), where a claim is genuinely disputed on grounds which appear to be substantial, the court will usually give case management directions for a final determination at a trial, likely to be many months away.
Inherent in many of these claims lies a tension between the parties, often more pronounced than in other litigation: A tenant may lose its rights of occupation; a landlord will often be in a position where rent is not being paid, and there will be minimal prospects of recovery even if the claim succeeds. These tensions were heightened during the Covid-19 pandemic and the (statutorily-imposed) stays on claims for possession.
What happens, therefore, if a landlord succeeds with its claim at first instance and is granted a possession order, but the tenant subsequently appeals? Who should suffer the prejudice consequent upon an appeal in such circumstances?
The answer is, unsurprisingly, nuanced and involves a multi-factorial analysis.
The General Rule
The general rule is simple: An appeal does not automatically operate as a stay. This is provided for under CPR r.52.16:
(a) the appeal court or the lower court orders otherwise; or
(b) the appeal is from the Immigration and Asylum Chamber of the Upper Tribunal,
an appeal shall not operate as a stay of any order or decision of the lower court.
In the case of DEFRA v Downs  EWCA Civ 257, the single Lord Justice observed that solid grounds have to be put forward by an appellant seeking a stay before the court will consider departing from this general rule.
This general rule is all well and good but provides no guidance on how applications for stays pending appeals should be considered in practice. Thankfully, there is guidance from the Court of Appeal in the form of Leicester Circuits Ltd v Coates Brothers PLC  EWCA Civ 474. In Leicester Circuits, the court held that:
- The general rule is that an appeal should not operate as a stay of any order of the lower court.
- The court, however, has an unfettered discretion in granting a stay pending an appeal.
- The role of the court is to make the order which accords with the interests of justice by balancing the prejudices to both sides if a stay is, or is not, ordered.
- If the justice of the general rule (of no stay) is in doubt, the court can look at the strength of the appeal.Prejudice covers a wide spectrum. In the earlier decision of Hammond Suddard Solicitors v Agrichem International Holdings Ltd  EWCA Civ 2065, the Court of Appeal noted that it will often be helpful to consider the following questions:
“In particular, if a stay is refused what are the risks of the appeal being stifled?
If a stay is granted and the appeal fails, what are the risks that the respondent will be unable to enforce the judgment?
On the other hand, if a stay is refused and the appeal succeeds, and the judgment is enforced in the meantime, what are the risks of the appellant being able to recover any monies paid from the respondent?”
Stays in Possession Claims
In most cases, the question of prejudice will involve simple concepts surrounding the recovery of moneys: a relatively straightforward balancing exercise. Possession claims are, of course, different because built into any order for possession is the reality that a tenant faces eviction by execution of the possession order (usually by a warrant of possession).
At one stage it was considered that the landlord may be in a more advantageous position, and that the court’s discretion to stay execution had been circumscribed by statute. This argument was firmly put to rest in Admiral Taverns (Cygnet) Ltd v Daniel  EWCA Civ 1501, where the Court of Appeal rejected the proposition that s.89 of the Housing Act 1980 (requiring a possession order to take effect no later than 14 days after making the order) precluded an appellate court from staying a possession order pending determination of an appeal. It was held that the court’s inherent jurisdiction to grant a stay pending an appeal was not altered by the wording of the statute, which merely restricted the jurisdiction of the court granting the possession order itself.
What then of the other side of the coin? It is frequently argued that appeals of possession orders are an ‘exception to the general rule’ (that an appeal does not operate as a stay). It is said that the impact of a possession order (be it on the commercial business, or on the occupation of residential tenants) invariably justifies a stay pending determination of the appeal.
However, there is no practice or rule affording tenants special status on appeals; and more recent authority suggests that the Court of Appeal’s guidance should apply as with any other case.
In the High Court decision of In & Out Developments Ltd v Ei Group PLC  EWHC 1887 (QB), Kerr J refused to grant a tenant a stay of execution pending determination of its appeal. Applying Leicester Circuits, the Judge found that each party would be prejudiced if a stay was ordered, or refused. He held that it was inevitable that there was a risk to the Tenant’s business and the jobs of employees; he also accepted the landlord’s evidence of the prejudice to it consequent upon a stay. He therefore considered the next stage: the merits of the appeal. The Judge’s assessment was that the tenant’s appeal was very weak and that this militated against the imposition of a stay in the circumstances. Kerr J’s judgment makes it clear that it is not incumbent on a judge to find that the appeal is unarguable to refuse a stay (that is a matter for the appeal judge), but a weak appeal coupled with prejudice to the landlord may well justify a refusal of a stay – even if the effect on the tenant may be damaging.
In possession claims, therefore, In and Out v Ei makes it clear that the general rule still applies, and that where the prejudice to both parties surrounding a stay is palpable, the court should willingly grapple with the merits of the proposed appeal. Although in many cases the loss of possession will sway the balance in favour of the tenant, this will not automatically be the case. Where the landlord would suffer prejudice with the grant of a stay, the parties should attend any application for a stay with the expectation that they will need to consider the merits of the appeal itself.
Article by Jamal Demachkie