"Wrong Warrants? Issues with N325 compliance" (first published as a guest blog on NearlyLegal)...

In this issue of the Housing Team Legal Bulletin, first published as a guest blog on  Nearly Legal  , GCN’s Jonathan Holt sets out the background and detail to the recent emergence of a potential argument employable by those facing a warrant for possession, whether it be as the result of rent arrears or a failure to make mortgage payments.

Special thanks to Tony Fearnley of Platt Halpern Solicitors and  James Stark of GCN for their contribution to this article. 

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This bulletin was originally published as a  guest blog post on Nearly Legal and is reproduced below with kind permission:

Background

In a recent claim for possession faced by a client of Tony Fearnley of Platt Halpern Solicitors, disclosure resulted in the obtaining of the completed form N325 used to request a warrant for possession. The order for possession had been previously suspended on terms requiring monthly payments.

Upon inspection, the disclosed form N325 was defective; at paragraph 4, under the heading “Warrant details”, the amount listed for “Balance due at date of request” was “£0.00”, and the amount listed for “Amount for which warrant to issue” was similarly “£0.00”. The only item for which any positive amount was detailed was the issue fee of £110.00.

CPR 83.26(7) provides as follows:

In a case to which paragraph (6) applies or where an order for possession has been suspended on terms as to payment of a sum of money by instalments, the creditor must in the request certify—

(a) the amount of money remaining due under the judgment or order; and

(b) that the whole or part of any instalment due remains unpaid.

The effect of the above can be summarised as follows:

  • Where a warrant of possession is issued;
  • And the order for possession was suspended on terms as to payments by instalments;
  • The N325 warrant request  must  specify:
    • The amount of money remaining due;
    • That the whole, or any part of any, instalment due remains unpaid.

An application was prepared to set aside or alternatively to suspend the warrant; this relied in part upon the argument that the N325 request failed to comply with CPR 83.26(7), and that the warrant ought to be set aside on the basis of the apparently defect. The warrant was withdrawn on the 23rd June, before the application could be made.

Suspecting that this was not a one-off, on the 24th June a general inquiry was submitted by Mr. Fearnley to Oldham County Court regarding its processing of N325 forms generally. Over the following days, numerous calls and emails were received from Oldham County Court indicating that this matter had been escalated to the HMCTS management teams, both regionally and nationally. HMCTS confirmed that there was to be an urgent review within the entire civil court network, focussing on the issue of whether there had been a general failure to complete N325 forms correctly by landlord representatives throughout England and Wales. It appeared that this was a widespread error.

Further correspondence from HMCTS provided that the Possession Claims On-Line (PCOL) system may have been responsible for the widespread errors, and that this system had been updated to reflect our observations. (It appeared that there was some ambiguity in the PCOL system that failed to require Claimants to enter the outstanding amount regardless of whether the request was limited to recovery of the property or recovery of the money outstanding.)

Somewhat predictably, the Court and Tribunals Development Directorate (CTTD) is of the view that the entry of a nil amount for money due under the order does not invalidate warrants that have already been executed. CTDD argue that the purpose of CPR 83.26(7) is not to establish the ground for the warrant, but to establish the amount for which the bailiff may execute against the defendant’s goods if the claimant seeks such execution. (This appears to be a reference to CPR 83.26(6)). CTDD concludes by observing that an application can always be made to suspend or set aside a warrant and that it is for each court to decide upon such applications.

CTDD have confirmed that PCOL was introduced in 2006 and there is nothing to indicate that the relevant box on form N325 has changed in any way since then. Although suspected to be widespread, CTDD are unable to provide statistics regarding the number of warrants issued that are subject to the above defect.

Analysis

It is arguable that the position taken by CTDD is wrong in law: there is an argument as to whether the defect creates a nullity or an irregularity. Neuberger J, in  Bell v Tuohy  [2002] EWCA Civ 423 considered the nature of a warrant that had, in that case, been applied for and issued prematurely. It was argued by Mr Tuohy that he couldn’t be in contempt of court the warrant was invalid. Neuberger J , at §22, considered the nature of the issue of a warrant:

“a warrant for possession is, in my judgment, of a very different nature from an order made by a High Court judge. First, the County Court is not a court of unlimited jurisdiction. Secondly, a warrant for possession is not issued pursuant to a judicial act; its issue is an administrative act. It appears clear that, if a claimant applies for a warrant for possession after the date for possession has expired, and fills in Form N325, the County Court Office will then issue a warrant for possession. There is no question of any hearing, of any party being entitled to make any representation, or of any judicial discretion, or even any judicial involvement.”

So much is straightforward: the issuing of a warrant is not itself a judicial act, as it is so often conducted in an entirely administrative fashion. Neuberger J, at §23, considers the impact of this natural approach:

“However, the fact that the issue of a warrant for possession is an administrative act by the staff of the County Court is not of itself conclusive as to the issue of whether a warrant issued before the date ordered for possession is a nullity (as is contended on behalf of Mr Tuohy) or irregular (as the Judge thought, and as is submitted on behalf of the Trustee). The question of whether the issue of a document in a manner or at a time which fails to comply with the requirement of a Statute, a Statutory Instrument, or Rules of Court, renders the document void (in which case it is wholly ineffective) or irregular (in which case it can, but not necessarily will, nonetheless be valid) inevitably depends upon the language used and the purpose of the document and the requirement, and the provisions of which the relevant provisions form part.”

There are only two options: the warrant is either a nullity, in which case it is ineffective, or it is irregular, which preserves its validity. We can safely say that CDDT appears to have indicated a preference for the latter argument. At §24, Neuberger J points us towards  Secretary of State for Trade and Industry –v- Langridge  [1991] Ch. 402, where Balcombe LJ provided a four-question approach:

  • What is the scope and purpose of the Act?
  • What is the importance of the [the requirement as I have called it]?
  • What is the relation of that requirement to the general object to be secured by the Act? 
  • What are the relevant circumstances of the present case? (only relevant if the failure to comply is an irregularity rather than a nullity)

The argument of the CDDT is unsustainable. CPR 83.26(7) does not only require that the creditor certifies the amount due in cases where a warrant of execution is also to issue. It is explicit that it applies in such a case (for example, where an outright order for possession for rent arrears is being enforced), but also where an order for possession has been suspended on terms as to payment of a sum of money by instalments.

What is the purpose of CPR 83.26(7) in relation to suspended possession orders? The N325 also has a requirement to certify that there has been a breach of the order. It is unclear whether court officers are checking that the sums specified in the warrant are lower or higher than the judgment in the possession order, or as set out in any later order to suspend a warrant. If a warrant is issued for a sum lower than that on the order, this might well lead a court officer to refer the request to a judge.

It is true that, on occasions, such a sum may be lower, but there has also been non-compliance with the order (for example, if a tenant did not comply with the exact terms of a suspended order, but made irregular payments). Such a scenario may, however, ring warning bells that despite the certifications the conditions for issue of a warrant are not in fact satisfied.

Applying the Langridge Approach:

  • The purpose of the rule is to ensure that the court is informed of the money owed at the point of the request for a warrant of possession for the purpose of ensuring that the court can be satisfied that there is a breach of the suspended order;
  • CPR83.26(7) is not a mere procedural step in the course of litigation. It is the method by which eviction is triggered. It is a requirement of the highest importance for the court to be satisfied that the Claimant is entitled to a warrant;
  • It is imperative that the rule is complied with as only then can the court be satisfied that the eviction is lawful and in compliance with the terms of the order: save in the most exceptional of circumstances, a warrant issued when no sums remained outstanding under the suspended order would not be enforceable.

This approach indicates that warrants issued pursuant to an N325 that bears the defect detailed above are a nullity.

Where the CPR concerns administrative (rather than judicial) acts, officers of the court are, unlike judges, not necessarily in a position to make an assessment of the importance of non-compliance with a rule, order or practice direction. They should apply the rules strictly, leaving to the party alleging that their non-compliance is merely an irregularity to convince the court that this is the case. There is no scope for the CTDD to issue internal unpublished guidance that conflicts with the mandatory terms of a rule.

As such, if a warrant issued without complying with CPR83.26(7) is a nullity, it cannot be cured and is always a nullity. Thus it is arguable that any warrant so issued has led to unlawful eviction.

Practitioners will normally only receive the notice of eviction from their clients and should therefore put the Claimant to proof of the validity of the N325 and seek disclosure. This is especially so in PCOL cases. If the N325 fails to certify the amount of money remaining due (as in this case) the warrant should be set aside.

More difficult issues may arise if the sum set out in the N325 is wrong, but still demonstrates breach of the order for possession. The court might be much more willing to regard such an N325 as irregular.

A quick and somewhat speculative note with regard to damages: according to §29 of Neuberger J’s judgment in  Bell v Tuohy :

“if, as I think, no County Court should ever issue a warrant for possession until the date for possession has passed, it appears to me that, while the bailiffs are entitled to all the protection the Courts can properly give them, their complaint if they are sued as a result of executing an invalid warrant is not against the state of the law, but against the County Court for wrongly issuing such a warrant.”

Jonathan Holt 
Garden Court North Chambers
July 2016 

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