Forcelux Ltd v Binnie

An undefended first hearing of a possession claim under Part 55 of the Civil Procedure Rules 1998 is ordinarily a summary hearing, rather than a trial for the purposes of Rule 39.3. It may become a trial exceptionally where the court conducts a full hearing on the merits.

An order made at a non-trial hearing may be set aside under Rule 3.1(2)(m) where the interests of justice demand it. Promptness remains relevant but is not an absolute condition. The court should consider all the circumstances, including the merits, responsibility for delay, prejudice and the consequences for each party.

A landlord obtained an undefended possession order forfeiting a tenant’s long residential lease following non-payment of a comparatively modest sum. The tenant had been deemed served but knew nothing of the proceedings and did not attend the first hearing under Part 55 of the Civil Procedure Rules 1998.

The district judge later set aside the possession order and granted relief from forfeiture. Her Honour Judge Hampton dismissed the landlord’s appeal. On the further appeal, the principal questions were whether the original possession hearing was a “trial” governed by Rule 39.3 and, if not, whether the order could and should be set aside under Rule 3.1(2)(m).

1. Appeal dismissed. The first possession hearing was not a trial within Rule 39.3. A routine and undefended Part 55 hearing, at which the judge decides the claim summarily from the claimant’s written evidence, does not involve the full investigation and adjudication ordinarily associated with a trial. Rule 55.8 permits either summary decision or case management directions. The status of the hearing therefore depends on what occurs, rather than merely on the fact that the claim is decided.

2. A first possession hearing may exceptionally become a trial. That may occur where both parties are present and prepared, all evidence is available, and the court conducts an agreed hearing on the merits. The references to written evidence in Rules 55.8 and 32.2 did not establish that every hearing at which a possession claim is decided is a trial. Estate Acquisition and Development Ltd v Wiltshire [2006] EWCA Civ 533 was not authority to the contrary because the point had not been argued there.

3. Rule 3.1(2)(m) gave the court ample power to set aside the possession order where the interests of justice demanded it. Rule 3.1(7) answered any contention that the existing order could not be varied or revoked. Since neither lower judge had actually exercised the relevant Rule 3.1(2)(m) discretion, the Court of Appeal exercised it afresh.

4. The Rule 3.9 checklist provided a helpful analogy. Promptness was a factor rather than an absolute precondition. The court assumed that the tenant had not acted promptly and noted the absence of an explanation, but weighed those matters against the compelling merits, the responsibility of his solicitors for the delay, the absence of prejudice to the administration of justice, and the consequences for both parties.

5. Refusal of relief would have caused the tenant to lose a valuable long lease for failure to pay a modest sum which he had offered to discharge. The landlord could be compensated by receiving the sums due and its appropriate costs; retaining the lease would otherwise give it a windfall. The possession order was therefore properly set aside and relief from forfeiture preserved.

6. The tenant’s application to adduce further evidence from his solicitor was refused because the evidence could readily have been produced below and the Ladd v Marshal criteria were not satisfied.

1. Court of Appeal (Civil Division): Dismissed the landlord’s further appeal and upheld the setting aside of the possession order and the grant of relief from forfeiture: [2009] EWCA Civ 854.
2. Nottingham County Court: Her Honour Judge Hampton dismissed the landlord’s appeal from the district judge’s order.
3. Lincoln County Court: District Judge Hudson set aside the possession order and granted the tenant relief from forfeiture on terms as to payment.
4. Lincoln County Court: District Judge Hudson had previously made an undefended possession order against the tenant.