The Court of Appeal in Hackney London Borough Council v Patrick Findlay  EWCA Civ 8 CA (Civ Div) re-considered their decision of Forcelux Ltd v Binnie (2009) EWCA Civ 854, (2010) CP Rep 7
in which a private tenant had applied to set aside a forfeiture order which had been enforced against him following a default on a relatively small sum of money. The question in that case had been whether the provisions of CPR 39.3 applied to such an application where the tenant had failed to attend the original hearing, or whether the much wider discretion under CPR 3.1.2 (m) should apply. The factors under CPR 39.3 (a need to demonstrate good reason as to non-attendance at the hearing; a need to act promptly; and a reasonable prospect of success) are often higher thresholds to pass than those under CPR 3.9. In Forcelux it was held that the correct approach was to apply CPR 3.1.2(m) considering CPR 3.9 by analogy, which allows for a wide discretion for a Court to set aside a possession order “if, in its discretion, it considers that the interests of justice demands it”. Importantly it was held that the making of a possession order at the usual 5 minute hearing did not constitute an order made after a trial, thus the provisions of CPR 39.3 did not automatically apply.
The new case of Findlay involved a secure tenant who had got behind in his rent as a result of housing benefit being withdrawn. The issue was whether the same reasoning would apply given the specific difficulties that face housing associations in relation to recovering possession against secure occupiers and the efficient management of social housing. Arden LJ, giving the leading judgment, highlighted the special nature of the facts in Forcelux which involved the loss of a valuable asset for a much smaller financial default. The Court held that “in the absence of some unusual and highly compelling factor as in Forcelux, a Court that is asked to set aside a possession order under CPR 3.1 should in general apply the requirements of CPR 39.3(5) by analogy”.
It stands therefore that the prior to Forcelux approach of applying CPR 39.3 remains wrong as there has been no trial. However, the criteria of CPR 39.3 should be applied by analogy not withstanding that the application to set aside a possession order should be made under the discretion granted by CPR 3.1.2(m). Unless of course there is an ‘unusual and highly compelling factor’ sufficient to justify ignoring CPR 39.3.
Morgan John / 2nd Feb 2011
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