London Borough of Hounslow v Cumar

This is an appeal from the decision of His Honour Judge Oppenheimer on 16 February 2012 whilst sitting in the Brentford County Court. The judge himself granted permission to appeal considering that there arose a point of practice and procedure of significant importance.

The action before the judge was one for possession on the grounds of rent arrears of residential premises in Cranford let under a secure tenancy. The first and second defendants were husband and wife. However, by the time the matter was listed before the judge for trial on 16 February 2012, the first defendant had left the premises, having separated from the second defendant, the respondent to this appeal.

The action for possession has yet to be heard as the day fixed for trial was taken up with preliminary arguments, including that which is the subject matter of this appeal which relates to the court's powers under CPR Part 19.2.

The claim for possession was brought in the name of Hounslow Homes, as claimant. The respondent's defence asserted that the property is owned by the London Borough of Hounslow and that Hounslow Homes were merely acting as the managing agent for the London Borough of Hounslow and so had no interest in the property and thus no right to possession. Hounslow Homes is apparently a limited company owned 100 per cent by the local authority. It was submitted that the claim should be struck out as disclosing no cause of action.

A reply was filed acknowledging that an error had been made and that the London Borough of Hounslow should properly be named as claimant. It sought permission "to remove Hounslow Homes as claimant and replace them with the London Borough of Hounslow". This pleading was filed on 5 October 2011, but no notice to pursue the application was given to the court until the day before the hearing. It is, however, quite clear that the respondent cannot have been prejudiced by this and that she had been made aware of the Council's intentions by the reply. Pre-trial correspondence was addressed interchangeably to Hounslow Homes and the London Borough of Hounslow.

The relevant provisions of the CPR are set out at Part 19.2(1) to 19.2(4):

“19.2

(1)

This rule applies where a party is to be added or substituted except where the case falls within rule 19.5 (special provisions about changing parties after the end of a relevant limitation period^(GL)).

(2)

The court may order a person to be added as a new party if –

(a)

it is desirable to add the new party so that the court can resolve all the matters in dispute in the proceedings; or

(b)

there is an issue involving the new party and an existing party which is connected to the matters in dispute in the proceedings, and it is desirable to add the new party so that the court can resolve that issue.

(3)

The court may order any person to cease to be a party if it is not desirable for that person to be a party to the proceedings.

(4)

The court may order a new party to be substituted for an existing one if –

(a)

the existing party’s interest or liability has passed to the new party; and

(b)

it is desirable to substitute the new party so that the court can resolve the matters in dispute in the proceedings.”

At the hearing before the judge Mr Vanhegan for the respondent argued that what was being sought was the substitution of one party for another, that is London Borough of Hounslow for Hounslow Homes as claimant, and thus Part 19.2(4) applied. However, Part 19.2(4)(a) could not be satisfied because there was no question of any interest or liability of Hounslow Homes passing to the London Borough of Hounslow, thus the order sought could not be made and the action must fail.

Counsel for the appellant freely acknowledged that he could not bring himself within the substitution provisions of Part 19.2(4) for the reasons stated, but maintained that the court had power within 19.2 to remove Hounslow Homes as a party and replace them with the London Borough of Hounslow.

Judge Oppenheimer agreed. He held that the lack of power under Part 19.2(4) did not preclude the exercise of powers under Part 19.2(2) and (3) by adding the London Borough of Hounslow as a party under Part 19.2(2) and ordering that Hounslow Homes ceased to be a party under Part 19.2(3). Such an action was desirable and would enable the matters in dispute to be resolved. It would be absurd to hold otherwise and to dismiss the action because of a purely technical error, thus causing the matter to be litigated afresh.

Before us, Mr Vanhegan has maintained his position and urges that the judge was wrong in law. If Part 19.2(4) was not satisfied, as was common ground, the judge had unlawfully circumvented restrictions on his jurisdiction by resorting to the provisions of Part 19.2(2) and (3). The issue before us is a short one: is Part 19.2(4) to be regarded as the only basis upon which one party may replace or be substituted for another in an action or may a judge use the combined effect of Part 19.2(2) and (3) to achieve what cannot be achieved under Part 19.2(4) when the other circumstances of the case justify it and when the overriding objective will thereby be achieved?

It seems to me that Part 19.2 is not to be construed in the narrow way contended for. To adopt such a construction would be to limit the circumstances which amount to substitution of one party by another in a way which would unduly restrict the court's powers of action in avoiding unnecessary and empty technicality and in seeking to achieve the prompt, efficient and cost effective resolution of disputes. To limit the power to substitute to circumstances where an interest or liability has "passed" from the existing party to a new party would be to read the whole of Part 19.2 in a way which could not do justice to a number of other situations where it would be clearly desirable to permit a change of party.

There is support for this approach in some earlier decisions. In United Film Distribution Limited and Anor v Chhabria and Ors [2001] EWCA Civ 416 Blackburne J, with whom Lord Justices Aldous and Laws agreed, stated at paragraph 38 that the court’s power to add or substitute a party is wide. In Davies and Ors v Department of Trade and Industry [2007] 1 WLR 3232 Waller LJ, giving the judgment of the court, said at paragraph 12:

I too draw support from the wording of paragraph 1.1 of the Practice Direction as already cited. It seems to me that the language of Part 19.2(4) is permissive and does not preclude consideration of the application under any other provision. The language of 19.2(2) and (3) is apt to achieve generally in two steps what may be done in a single step in the particular circumstances set out in Part 19.2(4). I do not accept that the judge below fell into error. He had power to do what he did and did not exercise his discretion in the matter wrongly in the situation where the merits clearly called out for the course which he took. Accordingly, I would dismiss this appeal.

By way of footnote, I record that it has been unnecessary to consider the possible use of powers under CPR Part 3.1(2)(m) as discussed by Silber J in Johnson v Secretary of State for Health and Anor [2006] EWHC 288 (Admin) as the provisions of CPR Part 19.2(2) and (3) suffice in this case to obviate the use of such a long stop provision, whereas they were not in play in the matter before Silber J.

I agree.

I also agree.