What is the test when a tenant applies to set aside a possession order made in their absence? Following Estate Acquisition and Development Ltd v Wiltshire [2006] EWCA Civ 533, [2006] All ER (D) 50 (a case of forfeiture of a lease), it seemed that the answer lay in rule 39.3(3) of the Civil Procedure Rules 1998 (CPR). This rule requires the tenant to satisfy all three limbs of CPR 39.3(5), namely a good reason for not attending the hearing, acting promptly on learning of the possession order and having a reasonable prospect of successfully defending the claim.

However, in Forcelux Ltd v Binnie [2009] EWCA Civ 854, [2010] HLR 340 (another forfeiture case) the Court of Appeal decided that a possession hearing before the district judge was not a ‘trial’ and that the court therefore had the power to set aside the possession order under CPR 3.1(2)(m), and should apply the checklist for relief from sanctions in CPR 3.9. That approach makes it more likely that the order will be set aside because of the prejudice the tenant is likely to suffer if it is not.

In Hackney LBC v Findlay [2011] EWCA Civ 8, [2011] All ER (D) 149, a possession order had been made in Mr Findlay’s absence and he had been evicted. Setting aside the order was his only way of recovering his home. It was argued, on behalf of Hackney, that the stricter test in CPR 39.3 should apply, as otherwise local authorities would face substantial difficulties if tenants could choose not to come to court and could easily obtain the setting aside of a possession order, even after eviction. The appeal court noted that in Forcelux the lessee had a compelling claim for relief from forfeiture, and that had the possession order not been set aside the lessee would have lost a valuable asset.

Allowing Hackney’s appeal and remitting the matter for reconsideration, Lady Justice Arden declared 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. This is in addition to, and not in derogation of, applying CPR 3.9 by analogy’. However, while the court should consider all the circumstances, it should normally give precedence to the provisions of CPR 39.3(5) above those in CPR 3.9.

There is a further qualification in the case of a secure or assured tenancy, where there is a statutory right at any time before eviction to apply for the date for possession to be postponed, or for execution to be stayed or suspended. Lady Justice Arden held that, in such a case, the requirements of CPR 39.3(5) need not be applied ‘with the same rigour as in the case of a final order that does not have this characteristic’, so as not to frustrate the intention behind the statutory provisions.

In Bank of Scotland v Pereira & ­Others [2011] EWCA Civ 241, [2011] 3 All ER 392, the appeal court considered the relationship between an application to set aside an order made at trial in a party’s absence and an appeal against the order itself. In that case, the defendant applied to set aside the order some two years after it had been made. Unsurprisingly, she failed on at least two of the tests in CPR 39.3(5), namely promptness and good reason for non-attendance at trial. While recognising that it is impossible to give rules to cover all situations, Lord Neuberger gave some general guidance. A party who believes they can satisfy the tests in CPR 39.3(5) should generally make an application to set aside the order, even if there are independent grounds for appealing the decision.

If they cannot satisfy the requirements of promptness and/or a good reason for non-attendance, they should seek to appeal the original order. If the application to set aside the order fails, the party should generally seek to challenge that refusal, rather than appealing the original order. On an application under CPR 39.3, a party can put in evidence as to the merits of their case which was not before the court which made the order. However, in an appeal, a party will find it difficult to rely on evidence which was not before the trial judge if it would have been before the court had that party attended the trial.

Two recent cases have considered the application of these decisions. In Fineland Investments v Pritchard 9/11/2011 Lawtel AC9300987, Mr Justice Norris gave some latitude to a litigant in person who made her application to set aside seven weeks after she knew of the making of the possession order, holding that she acted sufficiently promptly. However, she had not provided any medical evidence to support her assertion that she could not attend the trial through ill-health and therefore failed to establish a good reason for not attending, and she had no reasonable prospect of success on the merits. Her application accordingly failed. (It is not clear whether Mr Justice Norris was aware of the previous history of this matter - see [2011] EWHC 113 (Ch), Lawtel 3 January 2011, and [2011] EWHC 1424 (Ch), Lawtel 17 May 2011.)

In Williams v Hinton [2011] EWCA Civ 1123, [2011] All ER (D) 162, the appeal court considered an appeal by landlords against a judgment made in their absence on their tenants’ counterclaim for damages for disrepair. Judge Gareth Jones had concluded that the landlords had known of the trial date and had chosen not to attend without explanation. The appeal court considered that the appellants should have applied instead to set aside the order but, as the appeal had been issued before Pereira was decided, the court went on to consider it before dismissing it. However, Lord Justice Gross emphasised the need for litigants to follow the guidance in Pereira. Although there is no absolute bar on a party seeking to appeal when the correct course would have been to apply under CPR 39.3, there would need to be ‘unusual facts’ before the court would entertain the appeal.

From these cases, it seems that the answer to the question at the beginning of this article is generally that CPR 39.3(5) applies, but that in appropriate cases the court’s approach will be to apply the tests less rigorously.

District Judge Wendy Backhouse sits at Woolwich County Court