Cause of action estoppel

Earlier possession order

Was a secure tenancy - now assured

Salix Homes v Mantato

[2019] EWCA Civ 445

Summary

A landlord was not prevented by cause of action estoppel from obtaining a possession order in respect of a property it already had a possession order in respect of.

Facts

The defendant had an assured tenancy held from the claimant, a housing association who had obtained the reversion by way of a stock transfer from the local housing authority, Salford City Council.

In 2008 Salford City Council had obtained a postponed possession order in respect of the property on the basis of rent arrears. In 2009 the Court fixed a date for possession requiring the defendant to vacate the property. There followed a number of successful applications for suspension of warrants for possession, the most recent warrant being issued in 2013.

In 2015 Salford City Council’s interest was transferred to the claimant. The defendant’s statutory security accordingly became an assured, rather than secure tenancy.

In 2017 the claimant issued a claim for possession on the basis of rent arears, the defendant did not attend the possession hearing listed on 9 June 2017 and an order for possession was made suspended on terms as to payment of rent and arrears. The defendant did not comply with those terms and a warrant was issued.

The defendant was evicted on 12 September 2017, later that day he paid all of the arrears and costs.

On 31 January 2018 the defendant issued an application to set aside the warrant of possession, discharge or rescind the 2017 possession order and for interim relief on the basis that the warrant had been obtained through oppression. On 19 March 2018 the defendant issued a further application to set aside the 2017 possession order on the basis that the claim that led to that order was an abuse of process as it was barred by res judicata.

Issues

Whether a landlord is precluded by cause of action estoppel from obtaining an order for possession of property by reason of the tenant’s non-payment of rent when there is an existing undischarged order for payment of earlier arrears and for possession for non-payment of those arrears.

First instance

The District Judge held that there had been no oppression in the execution of the warrant but that the defence of cause of action estoppel was an absolute bar to the proceedings. The 2017 possession order and the warrant of possession were accordingly set aside, and the defendant was able to re-enter the property.

The judge granted permission to appeal and indicated that the appeal should be referred to the Court of Appeal, the transfer was accepted by the Court of Appeal.

Appeal

Allowing the appeal, the Court of Appeal held that ‘Res Judicata’ was a term that described a number of principles, the first of which was cause of action estoppel.

Cause of action estoppel is a different concept to an abuse of process, Virgin Atlantic Airways Ltd v Premium Aircraft Interiors UK Ltd [2013] UKSC 46.

The Deputy District Judge had been plainly wrong to consider that the 2017 claim was founded on the same facts as those leading to the 2008 order. The arrears were different.

Further, the claim for possession could not be separated from the claim for rent arrears, it was a necessary ingredient of the second claim for possession that there were arrears of rent which had accrued and were unpaid since the date of the original possession order.

The claimant would have been entitled to apply to enforce the earlier possession order more than 6 years after it had been obtained. The fact that the current proceedings were not necessary may give rise to an argument about abuse of process but such an argument is not a substitute for a cause of action estoppel.

In any event, on the facts the stock transfer in 2015 to the claimant had changed the security of tenure enjoyed by the defendant from a secure tenancy under the Housing Act 1985 to an assured tenancy under the Housing Act 1988, the landlord conditions under those acts were different as were the grounds for possession, accordingly whatever the position in respect of rent there could not have been a cause of action estoppel.

The court affirmed, following Hackney LBC v Findlay [2011] EWCA Civ 8 that a hearing under CPR Pt 55 is not a trial for the purposes of CPR 39.3 but that when exercising the courts power under CPR 3.1.2 (m) to such hearings the court should apply the test in CPR 39.3 (5) by analogy.  See the page on Setting aside.

Comment

While a previous possession order is not a bar to fresh possession proceedings where the rent arrears relied on are different the Court of Appeal has left open the argument that such a claim may be abusive where the landlord is entitled to apply to enforce an earlier order for possession.

 

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