Hackney v Side By Side (Kids) Ltd.

MR JUSTICE STANLEY BURNTON: This is an application by the Claimant to set aside an order dated 9 July 2003 made by Deputy Master Partridge granting a stay of execution on the writ of possession issued by the Claimant, which seeks possession of the nursery site at Egerton Road and Rockwood Road, Hackney, occupied by the Defendant.

The Defendant is a charity. It operates a nursery for mentally handicapped children, of whom there are about 50, at the school.

On 14 April 2003, there were proceedings in the Central London County Court between the Claimant and the Defendant in which the Claimant sought possession of the nursery site, which was occupied by the defendant, according to the Claimant without its consent. On that date, the solicitors for the parties entered into an agreement, principally in the form of a Tomlin order, for the settlement of all claims and counterclaims between them. Their agreement was not made an order of the court on that date. The essence of the agreement, contained as is customary in the schedule to the consent order, was that the Defendant would give up possession of the nursery site on 25 June 2003, in return for the grant to it by the Claimant of a lease of an alternative site known as the One O'clock club site and a licence of a playground site known as the Big Hill Site, and payment by the claimant of £70,000 as a contribution to the Defendant's relocation expenses. In order to enable the Defendant to move onto the Big Hill Site, the Claimant was to carry out specified works, including fencing it with a secure chain link fence and works to make the site fit for portacabins that the Defendant would occupy. The schedule to the order required the works to ensure that the Big Hill site was suitable for the installation of portacabins to be carried out within 21 days of the date of the consent order (i.e. by 5 May 2003), with other works being carried out within 45 days and with a proviso that the Claimant was not to be obliged to carry out any works costing more than £50,000. The terms of the actual consent order were as follows:

“UPON the parties by the signatures of their solicitors herein having agreed to the terms of this order in full and final settlement of all claims and counterclaims whatsoever in this action

AND UPON the parties hereby jointly applying to the Court pursuant to section 38(4)(b) of the Landlord and Tenant Act 1954 to authorise the Claimant and the Defendant to enter into the agreement to surrender annexed hereto at Appendix D in the circumstances and on the terms set out in the schedule to this Consent Order

AND BY CONSENT

IT IS ORDERED THAT

1.

All claims and counterclaims herein be stayed upon the terms set out in the Schedule hereto save as regards enforcing those terms in which respect there be liberty to apply

2.

Notwithstanding any application pursuant to 1 above, the Defendant do give up possession of the Nursery Site (as defined in the particulars of Claim) no later than by 5pm on 25th June 2003.

3.

There be no Order for Costs save as may arise in respect of any application pursuant to 1 above.

4.

. . . “

The consent order was made an order of the Central London County Court on 5 June 2003. On the same date, the Defendant's solicitors for the first time alleged in correspondence that because the site had not been made suitable for the installation of portacabins within 21 days of the consent order, the Defendant could not give up possession of the site. That contention was disputed by the Claimant in correspondence.

The Defendant did not give up possession of the nursery site on 25 June 2003, and remains in occupation.

Article 8B of the High Court and County Court Jurisdiction Order 1991 provides that a judgment or order of a County Court for possession of land made in a possession claim against trespassers may be enforced in the High Court or a County Court.

On 26 June 2003, the Claimant's solicitors requested an order for enforcement of the possession order in the High Court by presenting to the Court Office a standard form combined certificate of judgment and request for a writ of possession. The certificate of judgment had been signed by an officer of the Central London County Court and bore the County Court seal. The note to that document reads as follows:

“Please note:

This judgment or order has been sent to the High Court for enforcement by (writ of Fieri Facias)(Writ of Possession against trespassers) only.

“The county court claim has not been transferred to the High Court. Applications for other methods of enforcement or ancillary applications must be made to the county court in which the judgment or order was made, unless the case has since been transferred to a different court, in which case it must be made to that court.”

The order for possession was thereafter treated as an order transferred pursuant to s 42 of the County Courts Act 1984, to which s 42(5) applies. A writ of possession was issued immediately, on 26 June 2003.

The Defendant contends that it has been prevented from giving up possession of the nursery site by the Claimant's breaches of the terms of the consent order, in failing to carry out works to the Big Hill Site, in particular failing to fence it securely until late June 2003, which have made it impossible for it to relocate to its new site. On the basis of those allegations, it sought without notice to the Defendant, and obtained, the order of the Deputy Master referred to above. The witness statement before the Deputy Master did not in terms state that exceptional hardship would be caused to the Defendant if it had to quit the site immediately, probably because the solicitors for the defendant were unaware of the possible application of s 89 of the Housing Act 1980. The witness statement did state that the term for the school the Defendant operates would end on 1 August 2003. The order made by the Deputy Master provides that an application to set aside the order for a stay should be given the earliest possible hearing date, if possible by 18 July 2003.

The claimant for its part disputes the Defendant's contentions, and itself contends that it will suffer substantial loss if it is unable to take possession of the site before the end of the month. On this basis it applied to me, as the interim applications judge, to set aside the order of the Deputy Master.

The present dispute is very unfortunate since it involves only what is to happen to the school and the site in the period between now and the end of the school term at the end of this month. In the absence of agreement between the parties, however, the Court must decide whether the Claimant is entitled to enforce the order for possession.

Both parties recognised that, within the time constraints of an application to the interim applications judge, I could not consider and rule on the factual disputes between the parties assuming it would be possible to do so without examination and cross-examination of the witnesses. The Claimant contended that it is entitled to set aside the order of the Deputy Master on the grounds:

(i) That by reason of s 89 of the Housing Act 1980 the court does not have jurisdiction to stay execution of the possession order.

(ii) That the facts alleged by the Defendant could not justify a stay of execution by reason of the terms of the consent order.

S 89 of the Housing Act 1980

S 89 is as follows:

“Restriction on discretion of court in making orders for possession of land.

(1)

Where a court makes an order for the possession of any land in a case not falling within the exceptions mentioned in subsection (2) below, the giving up of possession shall not be postponed (whether by the order or any variation, suspension or stay of execution) to a date later than 14 days after the making of the order, unless it appears to the court that exceptional hardship would be caused by requiring possession to be given up by that date; and shall not in any event be postponed to a date later than six weeks after the making of the order.

(2)

The restrictions in subsection (1) above do not apply if -

(a)

the order is made in an action by a mortgagee for possession; or

(b)

the order is made in an action for forfeiture of a lease; or

(c)

the court had power to make the order only if it considered it reasonable to make it; or

(d)

the order relates to a dwelling-house which is the subject of a restricted contract (within the meaning of section 19 of the 1977 Act); or

(e)

the order is made in proceedings brought as mentioned in section 88(1) above.”

It is common ground that this case does not fall within any of the exceptions specified in subsection (2) of s 89.

Mr Karas submitted that the order for possession made by the county court is plainly an order for possession within the meaning of s 89; accordingly, this court has no power to stay execution for more than 14 days after the making of the order, unless it appears to the court that exceptional hardship would otherwise be caused, and even then the maximum postponement is to a date 6 weeks from the making of the order. 6 weeks from the making of the order of the county court in this case expire on 18 July 2003; the order made by the Deputy Master will, unless set aside, continue after that date; it is therefore an order he had no power to make.

Mr Mendoza, for the Defendant, disputed these submissions. He relied on the judgment of Harman J in Bain v Church Commissioners for England [1989] 1 WLR 24, in which he decided that s 89 does not apply to an order for possession made by the High Court. He further submitted that s 89 has no application to a consent order.

Mr Karas countered:

(i) That Bain was wrongly decided.

(ii) That in any event the order for possession in the present case was an order of the county court, so that s 89 applies even if Bain was correctly decided.

Does s 89 apply to orders for possession made in the High Court?

On the face of it, s 89 is of general application. It is not expressly restricted to county court orders. The expression “court” is not specially defined so as to mean the county court. Looking at the section by itself, the natural meaning of “a court” is any court.

Leaving aside the decision in Bain, I find nothing in the Act to indicate that the expression “the court” means the county court in s 89, and clear indications that it includes the High Court. The long title to the Act includes the following:

“An Act to give security of tenure, and the right to buy their homes, to tenants of local authorities and other bodies . . . to make other provision with respect to housing; to restrict the discretion of the court in making orders for possession of land an for connected purposes.”

This does not hint at a restriction to county court orders. Nor does the context of s 89 itself. It is in part IV of the Act, which includes sections 86 to 89. S 86 refers to a county court as such when it refers to it and to the High Court as such when it refers to it. While it confers jurisdiction on the county court in respect of proceedings under Part 1 or Part 3 of the Act, as originally enacted it expressly envisaged that such proceedings might be taken in the High Court under those parts of the Act and, in subsection 3, imposed a costs penalty on a claimant who brought proceedings in the High Court that could have been taken in the county court. Subsection 3 has been prospectively repealed, but it is still in force. Given the express references to the county court and the High Court in s 86, it would be illogical to read the references to “a court” in the following sections as restricted to a county court. Moreover, the exceptions referred to in s 89(2) include proceedings that may be brought in both the county court and the High Court.

In Bain, Harman J seems to have relied on the fact that in s 87 “a court” must mean the county court because, he believed, only a county court has jurisdiction in proceedings in which possession is sought of a dwelling house let under a secure tenancy, to which that section relates, and that in s 88 it must have the same meaning because --

“ . . . possession of a dwelling house under a rental purchase agreement is a matter which prima facie would be a county court matter and I suspect is not a matter the High Court has ever had to consider.”

I am not sure that the first of these premises is correct, given the provisions of s 86(3), and the second is not a good reason to restrict the meaning of “a court”, given the fact that the definition of a rental purchase agreement in s 88(4) is not limited in terms of the value of the dwelling house at all. More importantly, these reasons ignore the fact that s 89 is not restricted to dwelling houses let under secure tenancies and those subject to rental purchase agreements, or even to dwelling houses, but applies to “any land”.

Harman J also referred to counsel for the plaintiff's submission that:

“The jurisdiction of the High Court, derived in this sort of case originally from the jurisdiction of the Court of Chancery which itself, of course, derived from the prerogative of Her Majesty, is not to be taken to be fettered unless Parliament plainly intends so to do.”

But the words of s 89 are plain. Harman J finally said:

“I confess to finding the point puzzling. I started, as I observed, with a disposition to sense that the ordinary jurisdiction cannot have been intended to be so radically altered and cut down so as to restrict every court in this country, including the other part of the Supreme Court, the Court of Appeal, in its jurisdiction to limit orders for possession. I have no help from the text books which simply assume that the matter is a county court matter. I can, I think, take some help from the chapter heading to Part IV of the statute, and in the end, more by way of a bold leap in the dark than by way of reasoned proposition, I assert that 'a court' in section 89 means a county court.”

I regret that I am unable to follow Harman J's leap in the dark. The wording of Part IV of the Housing Act 1980 and of s 89 are clear, and in my judgment leave no room for the words “a court” in s 89 to be construed as limited to a county court. No justification has been put forward for treating all possession orders made by the county court, including those relating to commercial property, as subject to s 89, whereas all High Court possession orders, even if made in relation to residential property, are not.

I am bound to follow the decision in Bain, which I am told is the only authority on s 89, unless I conclude that it is clearly wrong. With respect to Harman J, I have so concluded. In my judgment, s 89 applies equally to possession orders made in the High Court as it applies to orders made by the county court.

It follows that I do not have to consider whether, if Bain had been correctly decided, the transfer of enforcement proceedings by the county court to the High Court made this possession order a High Court order for the purposes of s 89. It would be curious indeed if such a transfer took a possession order out of the scope of s 89, but on the basis of my judgment, such a transfer has no effect on its application.

I add that Mr Mendoza contested whether the enforcement proceedings had been validly transferred to the High Court under s 42 of the County Courts Act in the absence of an order by a county court judge or district judge. The transfer was made in this case in accordance with the normal procedure. In any event, the premise of his application for a stay made to the Deputy Master was that the enforcement proceedings had been transferred to the High Court, which therefore had jurisdiction to order a stay of execution. Be that as it may, no order of a County Court Judge or District Judge is necessary by virtue of CCR Order 25, rule 13(1), of the County Court Rules which provides:

“Where the judgment creditor makes a request for a certificate of judgment under Order 22, rule 8(1) for the purpose of enforcing the judgment or order in the High Court --

(a)

by execution against goods; or

(b)

where the judgment or order to be enforced is an order for possession of land made in a possession claim against trespassers,

the grant of a certificate by the court shall take effect as an order to transfer the proceedings to the High Court and the transfer shall have effect on the grant of that certificate.”

Does s 89 apply to orders made by consent?

There is much to be said for the view that Parliament cannot have intended the restrictions in s 89 to apply to consent orders. The object of the section is presumably to prevent courts keeping out of possession, and of his rights, a person who is ex hypothesi entitled to possession, save in the excepted cases. But why should a person entitled to possession be precluded from reaching an agreement giving the occupier an extended time to quit? The generality of the wording of s 89 is not necessarily an obstacle to a restricted interpretation, applying it to orders made non-consensually only: c.f. Re International Tin Council [1987] Ch 419 (Millett J), [1989] Ch 309 (Court of Appeal). The present case highlights the desirability of such an interpretation: the parties signed their consent order on 14 April 2003, providing for possession to be given up on 25 June 2003, and even the order made by the court on 5 June 2003 gave more than the 14 days stipulated by s 89 unless it appears to the court that exceptional hardship would be caused by requiring possession to be given up. There is nothing to suggest that the county court had before it any evidence on 5 June, when the order was made, that exceptional hardship would be caused if the date for possession were not postponed, and s 89 of the 1980 Act requires that there should be sufficient material before the court for it to appear to it that exceptional hardship would be caused unless the date for possession were postponed more than 14 days from the date of judgment. The reference to the power of the court to extend the time for possession in cases where it appears to the court that exceptional hardship would otherwise be caused suggests that the court has evidence before it rather than simply an agreement of the parties.

Against this, it would be illogical for the powers of the court to postpone the order for possession being given effect to be enlarged because both parties consented to the possession order. The Court should encourage the parties to reach agreements to compromise their litigation without fear that by doing so they are either advantaged or disadvantaged as against their position if their litigation is decided with the same result by the court after an adversarial hearing. If anything, normally the court's powers to enlarge time are more restrictively exercised when the order in question is a consent order rather than one made in the normal course. If s 89 does not apply to consent orders, a claimant seeking a possession order could not sensibly agree to any order for possession being made in his favour without losing its protection.

Furthermore, the parties can agree to a postponed date for possession without infringing the requirements of s 89. The easiest means of doing so is for the parties to make an agreement in Tomlin order form, with no order for possession as such, but only an order for a stay of proceedings with the normal proviso. If the defendant fails to deliver up possession at the date required by the terms of the schedule to the Tomlin order, at that stage the claimant may apply for an order for possession pursuant to the leave to apply for the purposes of enforcing the terms of the schedule.

Not without hesitation, I conclude that the general words of s 89 do not permit me to find that it does not apply to consent orders.

It follows that the Deputy Master did not have jurisdiction to make his order. Even if he considered that there was evidence of exceptional hardship, he could not have postponed the date for possession beyond 18 July 2003.

Does the Defendant have any ground at law for preventing the Claimant from obtaining possession?

Under this head I consider whether, apart from s 89, the Defendant has any ground for resisting the enforcement of a possession order.

Mr Mendoza submitted that the effect of the conduct of the Claimant, of which the Defendant complains, was that the Claimant was in breach of a condition precedent to its right to possession under the agreement between the parties, or had waived its right to possession or was estopped from asserting it.

In my judgment, the terms of the consent order are inconsistent with the first of these submissions. The wording of paragraph 2 of the order makes it clear that the giving up of possession by the Defendant on 25 June 2003 is independent of any disputes as to the compliance of the parties with the terms of the schedule. The ceiling on the cost of the works to be carried out by the Claimant reinforces this conclusion. It cannot have been intended that possession would be deferred if the works to be carried out by the Claimant cost more than £50,000, with the result that neither it nor the Defendant had any contractual obligation to complete them. The possibility of that figure being exceeded was not academic, as the correspondence between the parties shows. For the same reason, the allegations of waiver and estoppel are unfounded. In any event, no express or implied representation by the Claimant is alleged on which either a waiver or estoppel could be based, but only a failure to carry out works within an agreed time.

While, if the court otherwise has jurisdiction to stay execution, the terms of the order do not necessarily exclude the exercise of the power, where the parties have made it clear in their agreement that enforcement of the terms of the schedule is not to affect the date for possession, the court should not, in the absence of exceptional circumstances, make an order that is inconsistent with their agreement.

Conclusion

I sympathise with the Defendant charity. I do not find it easy to accept that the postponement of its leaving the site to 1 August will cause substantial damage to the Claimant. However, the stay of execution is inconsistent with the agreement it entered into, and is inconsistent with the requirements of s 89 of the Housing Act 1980. For these reasons, the order of the Deputy Master will be set aside.

MR KARAS: My Lord, I would ask for a formal order to that effect and I would ask for our costs to be assessed.

MR JUSTICE STANLEY BURNTON: I am happy to set aside the order obviously, however I did not investigate the facts, and if there were exceptional hardship, you could not enforce the order until 17 July 2003.

MR KARAS: My Lord, yes, however this was an ex parte without notice application made against us. Your Lordship has seen the correspondence indicating we had asked to be given notice. All these matters could have been put before the Deputy Master, instead we have been forced to come to your Lordship urgently.

MR JUSTICE STANLEY BURNTON: I am not referring now to your application for costs. You have applied to set aside the order. I am happy to set aside the order, but I am troubled by setting it aside so that you can take possession before 17 July 2000 via circumstances where I have not investigated the question of exceptional hardship.

MR KARAS: My Lord, I am sorry, I was addressing the question of costs. On the question of a stay, given the circumstances before your Lordship and given the possibility of the Defendant having to consider what steps he may wish to take next, I can certainly accept that your Lordship would be entitled within his discretion to allow the stay, but vary the order to 17 July. That is all I can say on that.

MR MENDOZA: My Lord, I am grateful for that. We certainly would need as much time as possible. I think the actual date is 18 July.

MR JUSTICE STANLEY BURNTON: My calculation was the 17th. If you tell me it is the 18th -- if that is agreed --

MR MENDOZA: I think it is. The time starts to run from the --

MR JUSTICE STANLEY BURNTON: It is 5 June, is not? What day of the week was 5 June?

MR MENDOZA: It started on 6 June but we leave out of the account the fee.

MR KARAS: I understand my learned friend, Mr Mendoza, is right given that June was a month with 30 days.

MR JUSTICE STANLEY BURNTON: If there is no problem about whether it is the 17th or 18th -- what day of the week is 18th?

MR KARAS: The 18th is a Friday, my Lord.

MR JUSTICE STANLEY BURNTON: Is it not rather more sensible --

MR KARAS: I think, as I indicated, Mr Mendoza is right, I think the order was made on a Thursday. If the Thursday was not included then the Friday would be the last date possession could be given up.

MR JUSTICE STANLEY BURNTON: In view of the second part of my judgment, you could argue against the 18th, but it seems to me that nothing is going to happen between now and Friday and it does give them the rest of the week to make such arrangements as they can.

MR MENDOZA: My Lord, that being the case, although your Lordship has granted my learned friend's application to set aside the stay, my understanding of what your Lordship wants to do is effectively to vary the stay based on the hardship ground to take us up until the 18th.

MR JUSTICE STANLEY BURNTON: I am not going to say what ground but Mr Karas is not objecting to a stay until the 18th, and since he is not objecting, if you ask me for that stay you will be kicking at an open door. There will be a stay until the 18th but that is final. Now, Costs?

MR MENDOZA: My Lord, before we get to costs there is an application -- our application notice is returnable, I think, next week, that ought to be vacated. We withdraw that application and the date may be vacated.

MR JUSTICE STANLEY BURNTON: Thank you. Mr Mendoza, do you want to say anything about costs? I appreciate you are a charity.

MR MENDOZA: We are in extreme difficulty here. We are a charity and costs are within your Lordship's discretion. Although you have not investigated the full details of the factual position so as to reach findings of fact, your Lordship has seen sufficient documents to get a flavour of the nature of the dispute and the factual background. What does become clear is that Hackney, as your Lordship has held were entitled to, have taken a fairly hard-nosed approach to this matter. There is little -- I would not say no evidence -- but little substantial evidence as to real prejudice that would be suffered by Hackney if they were to be a bit more conciliatory in their approach.

MR JUSTICE STANLEY BURNTON: Is there a schedule of costs in this case?

MR KARAS: My Lord, there is. There was one file taken across until the Friday because the Friday involved a substantial amount of waiting. We have a revised one to include --

MR JUSTICE STANLEY BURNTON: You have see the schedule, have you?

MR MENDOZA: I have seen the schedule. It is £12,266 --

MR KARAS: Which compares to the £8,210 which my learned friend would be claiming against us if we were in a different position.

MR JUSTICE STANLEY BURNTON: Mr Mendoza, first of all in principle, you say -- I understand what you say. I did look at the material as you would have gathered on both sides. I could not reach conclusions to it and I suspect that it would have been difficult to do so except on the question of construction of the agreement and any sensible time because there will have been examination, cross-examination, was the original fencing adequate? You would have a week's trial just on the question of compliance.

MR MENDOZA: What I would say about our schedule --

MR JUSTICE STANLEY BURNTON: I have not seen your schedule. What do you say about their schedule?

MR MENDOZA: I suspect looking at the figures and from what I know of them that that would include also the hearing before the learned Deputy Master.

MR JUSTICE STANLEY BURNTON: He would not have any costs.

MR MENDOZA: He is effectively saying £12,266 plays £8,210.

MR JUSTICE STANLEY BURNTON: But what do you say about the rates and hours?

MR MENDOZA: My Lord, I simply look down the figures and look at the total at the bottom, and see the difference between their schedule and our's. I do not go through each item picking each one out. I noticed counsel's fees are substantially higher on my learned friend's side that this side. One has to take an overall view.

MR JUSTICE STANLEY BURNTON: One does but it is wrong just to look at a figure and say: I am astonished without looking at what it comprises.

MR MENDOZA: We have 2 and a half hours of attendance by an assistant solicitor coming to £662, third item down. We then have attendance on documents, 14 hours at £3,710 -- it seems a little high.

MR JUSTICE STANLEY BURNTON: I agree.

MR MENDOZA: Two solicitors at the hearing -- an assistant and a trainee. I am not sure why that was necessary at all.

MR JUSTICE STANLEY BURNTON: What does that bring it down to?

MR MENDOZA: A trainee would have been sufficient to sit by my learned friend. There is a £530 figure that comes out and on the second page for the waiting time there is £1,190 that would come out on that basis. So putting those together that is just other £2,100. Then there is, I do not wish to be critical of my learned friend's fee but I do alight on that in comparison to counsel's fees on this side.

MR JUSTICE STANLEY BURNTON: Thank you.

MR KARAS: My Lord, if I can deal with the attendance of two solicitors. Your Lordship would be entitled to take the view that only one was required. In terms of attendance upon the documents, a total of 15 hours is recorded on our side and a total of 20 hours attendance is recorded on their side.

MR JUSTICE STANLEY BURNTON: I may not have allowed their 20 hours either. There is a contract and a bit of correspondence here.

MR KARAS: My Lord, we were facing an application which, on the face of it, alluded to the merits. We had to deal with the merits and we put in two witness statements to deal with those merits which, on the face of it, had to be dealt with.

MR JUSTICE STANLEY BURNTON: I am looking at attendance on documents not on taking witness statements. All the documents I have seen are simply the order, no doubt the original pleadings, and a bit of correspondence since.

MR KARAS: My Lord, those figures include the drafting of two witness statements which your Lordship has seen. I cannot see where else they are. There were substantial documents in relation to the merits which we received two further substantial witness statements in response to. We had to deal with and be ready to respond to a number of factual matters going to the history of the works. That would explain why we took so long and it is comparable to what the other side suggest they reasonably pay. I accept the point in relation to attendance of more than one fee earner from my instructing solicitors, but in my respectful submission it is wrong given the background to this case to criticise Mr Smith for spending only 15 hours on the documents compared with the 20 hours which were claimed against us.

MR JUSTICE STANLEY BURNTON: Anything else?

MR KARAS: My Lord, on my fees it is invidious for me to comment.

MR JUSTICE STANLEY BURNTON: I do have sympathy for the Defendants but in the end they made an application without notice which they were not entitled to make. In these circumstances there is no basis on which I can deprive the Claimant of its costs. I propose to assess those costs summarily. The time spent on documents looks rather high. Two solicitors are clearly excessive. I propose to bring down the sum claimed of £12,266-odd to £10,000.