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Second time lucky? Hall v Elia: successive court applications

As the proverb goes, “if at first you don’t succeed, try, try, try again”. Unfortunately, in the case of Hall and another v Elia and another, the message from the High Court is: don’t try to apply again, unless there has been a material change in circumstances since the original decision.

The procedural history of the case is convoluted, to say the least, and involves the dismissal of numerous applications and appeals. The subject matter was a long leasehold interest in a property in Knightsbridge. The present judgment of Proudman J concerned the second application, by the mother of the leaseholder, for a stay of execution of an order for possession and sale of a property, pending an appeal under CPR 52.7. The appeal was based on the mother’s claim that she had a beneficial interest in the property following her son’s bankruptcy.

As practitioners will know, the general rule is that there should be no stay. As the judge put it at paragraph 10:

“… a successful litigant ought not to be deprived of the fruits of litigation pending appeal. Thus a stay is the exception rather than the rule”.

With this in mind, it will be clear that a second application for a stay will prove even more of an uphill struggle. Following the decision in Hall v Elia, and the apparent widening of the application of the Thevarajah test (see below), applicants may now face an even greater challenge in persuading the courts to consider the merits of a further application.

The applicant argued that she did not need to establish a material change in circumstances when making repeated applications for a stay. Instead, the court needed only to apply the usual test as to whether or not there were solid grounds for seeking a stay.

The judge disagreed and referred, at paragraph 18, to the decision in the case of Thevarajah v Riordan and others, namely that, in respect of a repeated application, “the applicant must establish either a material change of circumstances or an obvious mistake.” The applicant argued that the Thevarajah decision was limited to applications for relief from sanctions. Again, the judge disagreed and found that the reasoning applied equally to applications for a stay of execution pending an appeal.

However, the judge did not appear to limit the application of the Thevarajah test to these two such applications. She made more “general” comments, which could be taken to have a wider application. For example, she stated, in paragraphs 18 and 19:

“In any event the jurisdictions mentioned are not to be used as backdoor routes for an appeal… the applicants cannot have innumerable bites at the same cherry without showing a change of circumstances.”

Such comments may be of assistance to practitioners defending repeated applications.

In light of the decision in Hall v Elia, what does constitute a material change in circumstances subsequent to the initial decision which would persuade the courts to consider a further application? In Hall v Elia, it was held that the following did not constitute material changes:

  • Subsequent appeals had been made of the relevant order and various other orders in the proceedings.
  • The mortgagee had agreed not to enforce its possession order.
  • Proceedings challenging the amount of service charge were ongoing.
  • A stay of the relevant order had previously been granted.

In the case of Thevarajah, it was argued that the applicant’s subsequent (alleged) compliance with an unless order to provide disclosure constituted a material change of circumstances. The Supreme Court rejected this argument. Their reasoning was that, by refusing the first application for relief, the court was saying it was now too late for compliance with the unless order. To allow relief on a second application, because the unless order had been complied with late, would be inconsistent with the reasoning of the court hearing the first application.

However, the Supreme Court did give an example of when late compliance, after the first application had been refused, could give rise to a successful second application and constitute a material change of circumstances. They gave an example whereby the unless order required payment of a sum of money, the court refused relief when the money remained unpaid, but that payment of the money thereafter might be capable of constituting a material change of circumstances. However, the key point was that the payment had to be accompanied by other factors, for example, at paragraph 22:

“… if the late payment was explained by the individual having inherited a sum of money subsequent to the hearing of the first application which enabled him to pay; or if the company had gone into liquidation since the hearing of the first application and, unlike the directors, the liquidator was now able to raise money.”

The Supreme Court stressed that these were only possible examples, not events that would always constitute a material change of circumstances. However, it is of interest that, of these examples, the factor that constituted a material change of circumstances was also something which provided an explanation, or possibly an excuse, for the default.

Finally, whilst it was not an issue in Hall v Elia or Thevarajah, practitioners should also consider whether they could justify a repeat application on the basis that there was an obvious mistake in the initial decision.

Boodle Hatfield Rebecca Foden

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