T he appellant was a 45-year-old woman, with an unstable personality disorder which, at times of stress, could develop into psychotic episodes. She was unable to work and had lost two public sector tenancies because of her behaviour.
In 2005, her parents (the respondents) bought a property for the appellant to live in. They financed the purchase with a loan from Capital Home Loans (CHL) Ltd, which was secured by a legal charge over the property. The respondents granted the appellant a series of assured shorthold tenancies, with the rent being covered by housing benefit. The last of these assured shorthold tenancies was for one year from 15 July 2008. The appellant continued to live in the property.
The respondents paid interest on the loan by way of monthly instalments until, due to financial difficulties, they fell into arrears. Accordingly, in August 2008, CHL appointed receivers of the property. The receivers, although appointed by CHL, were entitled to take steps in relation to the property on behalf of and in the name of the chargors, ie, the respondents. As the rent was being paid and the arrears were not substantial, the receivers took no action in respect of the property until 2012 when, because the arrears persisted, the receivers served a notice, in the name of the respondents, on the appellant, on 13 January 2012, indicating that they would be seeking possession of the property. The notice was served under Housing Act (HA) 1988 s21(4), and it expired on 14 March 2012. On the expiry of the notice, the receivers issued the proceedings in the Oxford County Court, again in the name of the respondents, for possession of the property. The county court made an order for possession, and this was upheld by the Court of Appeal ([ 2014] EWCA Civ 1049). The appellant then appealed to the Supreme Court. The judgment was given by Lord Neuberger and Lady Hale with Lords Kerr, Reed and Carnwath agreeing.
The appeal raised three questions. First, in respect of possession proceedings by a private landlord, whether the court should consider the proportionality of evicting the occupier, in view of the Human Rights Act (HRA) 1998 s6(1) and European Convention on Human Rights (‘ the convention’) article 8. Second, if the answer to the first question is ‘yes’, could HA 1988 s21(4) be read to comply with that conclusion? Third, if the answer to the first and second question was ‘yes’, would the trial judge be entitled to dismiss the claim for possession?
It was the first question that was central to the case and the answer is the ratio decidendi of the case. Article 8 gives everyone the right to respect for their private and family life. Section 6(1) of the HRA provides that: ‘It is unlawful for a public authority to act in a way which is incompatible with a convention right’, which of course includes the article 8 right.
The … court supports its decision to dismiss the appeal by citing government policy in passing the HA 1988 … to reverse the decline of rented housing and to improve its quality
Where a local authority or other public authority is seeking possession of a residential property, it is open to the occupier to raise the question of whether it is proportionate to make the order (Manchester City Council v Pinnock [2010] UKSC 45). Pinnock made domestic law compatible with Strasbourg jurisprudence and changed the earlier view of the House of Lords that although a claim for possession of residential property by a local authority engaged the article 8 right of the residential occupier, the proportionality of making an order for possession was already taken into account by parliament through the legislation which, limited the landlord’s right to obtain possession.
However, Pinnock makes it clear that only in exceptional cases would it be appropriate for the court to consider a proportionality argument, as where a local authority is entitled to possession as a matter of domestic law, there will be a very strong case for saying that making an order for possession would be proportionate. The Supreme Court also said that this law should only be applied against local authorities or other public authorities. The convention is intended to protect individual rights against infringement by the state or its emanations, thus HRA s6(1) only applies to a ‘public authority’.
What Pinnock did not decide was whether this law applied where the person seeking a possession order was a private landlord. This was the issue to be determined in McDonald. The appellant’s argument was that while CHL was a private company and, therefore, not a public authority, a court is a public authority (HRA s6(3)). Therefore, no judge can make an order for possession without considering whether it would be proportionate to do so and, if so, what terms it would be proportionate to include in the order.
Thus, the position of a private sector residential tenant facing eviction is quite similar to that of a public sector residential tenant, as determined in Pinnock. This is known as the indirect horizontal effect of the convention.
However, the private sector tenant is in a weaker position because the private landlord could claim that a delay in granting possession to a property to which they are entitled would be an interference with their rights under article 1 of the First Protocol to the convention. This article provides that every natural or legal person is entitled to the peaceful enjoyment of their possessions.
Thus, a judge who is invited to make an order for possession against a residential occupier by a private sector landlord would, if the appellant’s argument was correct, have to balance the landlord’s rights under article 1 of the First Protocol against the occupier’s rights under article 8. Either party would have a potential claim against the UK in Strasbourg if the balance were struck in the wrong place.
The Supreme Court held that while article 8 was engaged, it was not open to the appellant to contend that because of it the court could justify a different result from that mandated by the contractual relationship between the respondents and CHL. This is because parliament had already decided in the Protection from Eviction Act 1977, HA 1980 s89 and HA 1988 Chapters I and IV, the proper balance between the article 8 rights of residential tenants and the article 1 of the First Protocol rights of private sector landlords when their tenancy contract has ended. While these statutes where enacted before the HRA came into force in 2000, since 2000 they had been effectively confirmed on a number of occasions by parliament when approving amendments to those statutes.
The Supreme Court maintains that it is right that parliament sets out a general set of rules to be applied in the private sector, without in addition requiring the court to address the issue of proportionality in each case where possession is sought. This will lead to consistency of application and certainty of outcome, which is what the rule of law requires. The acceptance of the appellant’s argument would dilute the consistency and certainty of the law. It was a question of getting the balance right, ie, conferring a measure of protection on residential occupiers, without conferring so much protection as to deter private individuals and companies from making residential properties available for letting.
The law enables both parties to know where they stand when they enter into an assured shorthold tenancy. Even in hard cases, the court should not be required to address the issue of proportionality, as once it is determined that the landlord is entitled to possession this should be the end of the matter.
To hold otherwise would involve the convention e›ectively being directly enforceable as between private citizens so as to alter their contractual rights and obligations, whereas the purpose of the convention is … to protect citizens from having their rights infringed by the state. To hold otherwise would also mean that the convention could be invoked to interfere with the [article 1 of the First Protocol rights] of the landlord, and in a way which was unpredictable (para 41).
If article 8 permitted a court to delay the execution of a possession order for a significant time, it could lead to financial loss without compensation because the landlord would not be able to sell with vacant possession. It would also encourage private landlords to engage in self-help by unlawfully changing locks when the residential occupier was absent. These are valid reasons in the context of the capitalist system, but the quote above from the judgment does indicate that the operation of the convention in domestic law is not fully understood by the Supreme Court because it is not a question of CHL being directly in violation of the appellant’s article 8 rights or the appellant being directly in violation of CHL’s article 1 of the First Protocol rights since they are not public authorities.
What the court is, in fact, saying is that indirect horizontal effect of the convention by a court has no role to play in cases where parliament has already decided the balance between rights. Contrast those cases where parliament has not intervened, such as a potential tortious relationship where the court is required to carry out a balancing exercise of conflicting convention rights as in PJS v News Group Newspapers Ltd [2016] UKSC 26; (2016) July and October CILExJ pp28–30 and pp48–49 respectively. ‘It is in sharp contrast to the present type of case where the parties are in a contractual relationship in respect of which the legislature has prescribed how their respective convention rights are to be respected’ (McDonald, para 46).
The Supreme Court then reviewed Strasbourg case-law and found nothing that required the indirect horizontal effect of the convention by the court (paras 48–60). The court, thus, dismissed the appeal on the first question as the answer was ‘no’. In view of this conclusion, the answers to the final two questions are obiter.
PJS successfully applied to the Supreme Court for the continuance of an interlocutory injunction preventing News Group Newspapers (NGN) from publishing, in England and Wales, a newspaper story identifying PJS as a famous celebrity who had engaged in sexual activity involving two other people when he was in a civil partnership with YMA (who he married in 2014). This was despite the fact the identity of PJS and his sexual activities are readily available on the internet and a hard copy of the story had been published in a Scottish newspaper.
The Supreme Court allowed the injunction to remain in place by a 4:1 majority. Here, there was a potential tortious relationship where the legislature, had impliedly or through inaction, left it to the courts to carry out the balancing exercise between PJS’s right to respect for his private and family life under article 8 of the convention against NGN’s right to freedom of expression under article 10 when deciding to make the injunction permanent. Thus, the indirect horizontal effect of the convention was applicable in this case.
In respect of the second question, the Supreme Court concluded that HA 1988 s21(4) could not be read down under HRA s3 to allow a court to assess the proportionality of making the possession order. Had the Supreme Court concluded that section 21(4) was incompatible with article 8, the only option would have been to issue a declaration of incompatibility under HRA s4. A distinction was drawn between tenancies granted by a public authority landlord and those granted by a private landlord (paras 62–65).
Under the legislation governing the former, reasons for possession had to be given which could be subject to principles of public law; it would be open to a tenant to defend the possession proceeding as unlawful if no reasons were given. The ending of public authority tenancies was a reasons-based process. ‘There is nothing equivalent in [HA 1988 s21(4)], which is purely mechanical - the right form of notice must be given at the right time to expire at the right time at’ (para 65).
Thus, in respect of a public authority tenancy, there was an opportunity to enable the court to read into it a requirement that the court considered the proportionality of making an order for possession. This was not possible with a private landlord tenancy. To do otherwise would have involved using HRA s3 to amend section 21(4) rather than interpret it.
As to the third question, if the answer to the first and second questions was ‘yes’, the court went on to set out its view about the cases in which it would be justifiable to refuse, as opposed to postpone, a possession order in paragraph 73 of the judgment.
The outcome in McDonald is understandable when taking into consideration the lack of affordable rented property. The Supreme Court supported its decision to dismiss the appeal by citing government policy in passing the HA 1988, which was to reverse the decline of rented housing and to improve its quality (para 13). The aim was to encourage private landlords to let their properties.
However, this was a harsh decision against a vulnerable appellant, who risked being homeless, although the Supreme Court, in an afterthought, hoped that there would be suÿcient equity in the property, when it is sold with vacant possession, to fund the cost of new accommodation (para 74). The appellant’s only option now is to appeal to the European of Court of Human Rights, a route that the current conservative government intends to end.