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Associate Paul Grant examines the recent ruling in Churchill v Merthyr Tydfil County Borough Council

By Paul Grant

The Court of Appeal has ruled in Churchill v Merthyr Tydfil County Borough Council that the courts can stay proceedings to order parties in dispute to engage in alternative dispute resolution.

The dispute

The case concerned a property owned by Mr Churchill situated adjacent to land owned by Merthyr Tydfil County Borough Council. Mr Churchill claimed that the Council’s land had Japanese knotweed which was encroaching and causing damage to his property. Mr Churchill opted to serve the Council with a letter of claim rather than use the Council’s Corporate Complaints Procedure. After Mr Churchill proceeded with his court claim, the Council applied to the court for a stay of the proceedings on the basis that Mr Churchill had not engaged in ADR in the form of the Complaints Procedure.

The first instance decision

At first instance the judge dismissed the application for a stay, on the basis that he felt that he was bound by the principle established in Halsey v Milton Keynes General which states that “to oblige truly unwilling parties to refer their disputes to mediation would be to impose an unacceptable obstruction on their right of access to the court.

The Appeal

The issues dealt with in the appeal concerned:

i. Whether the judge at first instance was correct in believing that he was bound by the principle in Halsey.
ii. Whether the court can lawfully stay proceedings or order parties to engage in ADR.
iii. If so, how should the court decide whether to exercise these powers.
iv. Whether, on the facts specific to this dispute, the judge at first instance should have granted the Council’s application for a stay of proceedings.

Issue 1: Whether the judge at first instance was correct in believing that he was bound by Halsey.

The issue was whether the principle in Halsey was a necessary part of the court’s reasoning in deciding the original Halsey case. The court held that the principle in Halsey was not part of the key reasoning of that decision. It reasoned that the case of Halsey concerned the issue of costs sanctions and not whether the parties should be ordered to participate in ADR. As such, as the principle in Halsey was not a key part of the reasoning used to come to the decision in Halsey, it was found that the judge at first instance was not bound by it.

Issue 2: Whether the court can lawfully stay proceedings or order parties to engage in ADR.

Mr Churchill argued that the court did not have the power to stay the proceedings on the basis that he had not complied with the Complaints Procedure. He submitted that this was because the Complaints Procedure was, for several reasons, unsatisfactory and a disproportionate restriction on his right of access to the court. In determining this issue, the Court of Appeal required to consider the balance between not impairing the “very essence” of a party’s right to proceed to a judicial hearing by staying proceedings for ADR, whilst being proportionate to settling the dispute quickly and fairly at a reasonable cost.

The Court of Appeal held that the Court has the power and discretion to control its own proceedings, including to stay proceedings in order to allow the parties to engage in ADR.

Issue 3: How should the court decide whether to exercise these powers.

In his judgment the Master of the Rolls, Sir Geoffrey Vos, made clear that it was not the place of the Court of Appeal to set out fixed principles as to what factors will be relevant to determining whether a court should stay proceedings for non-court based dispute resolution. This should be left to the discretion of the judge dealing with the matter.

Issue 4: Whether, on the facts of this dispute, the judge at first instance should have granted the Council’s application for a stay of proceedings.

The court noted that the judge at first instance would in all likelihood have granted a stay of proceedings if he had been aware he was not bound by the principle in Halsey. Whilst the Court took the view that there was little point in granting a stay to allow the parties to engage with the Complaints Procedure given the stage which the proceedings had reached, it nevertheless allowed the appeal and suggested that the parties consider using mediation as a form of ADR to resolve the dispute.

Key Points

The Court of Appeal’s ruling further establishes ADR as an integral part of the justice system. In particular, the Court’s finding that integrating ADR into the civil justice system does not breach Article 6 of the European Convention on Human Rights (the right to a fair trial) is an important development.

Whilst the Court has been reticent to lay down strict guidelines as to what may be considered an acceptable form of ADR, this ruling is an indication of the trend towards increasing flexibility in this regard.

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