Security of Tenure & Coronavirus Stay of Proceedings: Whether appeals in respect of security of tenure claims were automatically stayed

Where security of tenure proceedings were undertaken, were appeals in two actions automatically stayed as a result of Practice Direction 51Z and what was the effect of this on determination of the proceedings? (TFS Stores Ltd v Designer Retail Outlet Centres (Mansfield) General Partner Ltd and others and BMG (Ashford) Ltd and others v TFS Stores Ltd - 2020)

The background

In two separate actions of TFS Stores Ltd v Designer Retail Outlet Centres (Mansfield) General Partner Ltd and others and BMG (Ashford) Ltd and others v TFS Stores Ltd [2020], six tenancies were the subject of appeals in proceedings regarding security of tenure provisions contained in the Landlord and Tenant Act 1954. The same party was the tenant across all tenancies, although landlords differed.

The first action, claiming that tenancies were not validly excluded from security of tenure and seeking protection from the landlord’s possession proceedings, was commenced by the tenant in 2017. The second action was commenced by landlords in 2018 and sought an order that tenancies did not enjoy security of tenure. Landlords did not seek possession at this time because lease terms had not expired.

When judgment was passed down, three of the four subject tenancies had expired. The parties agreed that orders for possession should be made but no formal amendment was made to the landlord’s claim in respect of possession. It was found that all six tenancies were excluded from security of tenure protection, making orders for possession for five out of the six. The tenant appealed, seeking an injunction to prevent the landlord from taking possession. Meanwhile, an automatic stay had been imposed by the Civil Procedure (Amendment No.2) (Coronavirus) Rules 2020 Practice Direction 51Z in March 2020, which was extended until August 2020.

The decision

The Court of Appeal assessed whether the stay imposed by PD 51Z applied to the appeals in the two actions, finding that an automatic stay did apply and vacating the hearing of the appeal.

In reaching its decision, the Court considered whether the tenant’s claims were ‘proceedings for possession brought under CPR Part 55’ or ‘proceedings seeking to enforce an order for possession’ as defined in PD 51Z, finding that they were not. Landlords’ counterclaims did fall within such definition, and were automatically stayed.

The landlords’ claim that tenancies were excluded from security of tenure was not automatically stayed as it did not fall within either definition from the Practice Direction, but the possession counterclaim moved the action under the definition, thereby meaning that the automatic stay applied. As an order for possession could not be made without possession proceedings, the automatic stay did apply in respect of appeals relating to all tenancies.

Advice and action

A case arising from the unique circumstances presented by the pandemic, landlords should be aware of the effects of Practice Direction 51Z and the definitions of those proceedings affected by the automatic stay – and, in particular, proceedings which do not fall under the definition.

This case usefully references possession proceedings in the context of PD 51Z, finding that a possession order could not be made without being preceded by possession proceedings, and therefore concluding that the automatic stay does apply in this instance.