A possession order was made on 27 January 2017, at which the Defendant had attended in person. In September 2017, the Defendant applied to stay a warrant of possession which the Claimant had obtained. Prior to that application being heard, the Defendant also applied, on 1 December 2017, to set aside the possession order under CPR 3.1(7). The grounds were that he had held a conference with counsel the day before (30 November 2017) at which point he became aware that he had a potential defence to the possession claim.
The application to set aside the possession order was dismissed on 6 April 2018; the Defendant appealed. The appeal was dismissed by High Court Judge Mr Justice Zacaroli.
The grounds of appeal were that:
- the judge who dismissed the application was wrong to rigidly distinguish between final and interim orders
- the judge paid undue attention to the importance of finality in litigation, overly downplaying other factors
- the judge gave undue weight to finality and did not heed the risk of irreconcilable decisions from ongoing litigation between the parties concerning other loans and properties
Zacaroli J held that the authorities draw a clear distinction between interim and final orders, disposing of the case ‘in whole or in part’. A possession order was a final order; the judge had granted the Claimant possession at the hearing in January 2017 (which was a final order), and it was immaterial that the money claim was adjourned generally with liberty to restore – Roult v North West Strategic Health Authority  1 WLR 487 at paragraph . This meant that the court should be slow to exercise its discretion under CPR 3.1(7).
The 3.1(7) test was most recently articulated (in a Senior Court) in Daniel Terry v BCS Corporate Acceptances Limited  EWCA Civ 2422 per Hamblen LJ at paragraph :
“…the circumstances in which CPR 3.1(7) can be relied upon to vary or revoke an interim order are limited. Normally, it will require a material change of circumstances since the order was made, or the facts on which the original decision was made being misstated. General considerations such as these will not, however, justify varying or revoking a final order. The circumstances in which that will be done are likely to be very rare given the importance of finality. An example is provided by cases involving possession orders made when the defendant did not attend the hearing where CPR 39.3 may be relied upon by analogy – see Hackney London Borough Council v Findlay  EWCA Civ 8,  HLR 15.”
The Court of Appeal in the Terry decision emphasised the importance of finality to orders, and the fact that the discretion under CPR 3.1(7) is a narrow one.
The Defendant’s counsel sought to advance the argument that the Defendant had attended ‘ineffectually’ at the possession hearing, such that this should be treated as non-attendance for the purposes of an application under CPR 39.3. This was in an attempt to open-up the discretion under CPR 3.1(7); it was predicated on the notion that only after the Defendant had obtained legal advice could his attendance have been ‘effectual’.
Zacaroli J rejected this contention, holding that attendance or non-attendance at a hearing is a simple, binary issue. By contrast, the concept of ‘ineffectual’ attendance was inherently uncertain, such that it could not be squared with the crystalline requirements under CPR 39.3(5). Further, the mere fact that a point was not taken at the original possession hearing would not normally suffice to set aside an interim order, let alone a final one.
The Judge went on to dismiss the appeal, holding that the need for finality was of central importance – a theme which emerged strongly from the authorities on CPR 3.1(7) – and that the first instance decision had involved a proper exercise of discretion by the Deputy District Judge which was within the generous ambit afforded to her in considering various factors under that rule.