Supreme Court Judgement

The Supreme Court has today given judgement in the key case of McDonald v McDonald. This case relates to the important issue of section 21 notices and whether Article 8 of the European Convention on Human Rights (ECHR) can apply to private tenancies.

Article 8 of the ECHR requires respect for private and family life. This is a qualified right and it can be interfered with in a democratic society in order to achieve reasonable ends. Article 8 has been held by the European Courts to include a right to protection of the home as that it is the bedrock of family life. The concept of respect and permissible interference has generally been reduced to the concept of proportionality and so interference must be proportionately applied and for a proportionate objective. However, the European Courts have been clear that this is an area in which national governments have a very great deal of leeway as they are best placed to manage property needs in their own territory.

This case is extremely unfortunate and unusual. The tenant has serious mental health difficulties, to the extent that there is strong psychiatric evidence that she will self-harm and possibly seek to take her own life if she is displaced from the property. She has had unsuccessful housing placements in social property in the past and in order to alleviate this issue her parents took out an interest only mortgage to buy her a home. They then granted her a tenancy and she applied for housing benefit to pay the rent. Due to financial problems relating to their business, the parents did not keep up with the mortgage. The mortgage company eventually decided that it would prefer to sell, not least because the mortgage was only for a fixed period at the end of which the full capital was repayable and so it appointed receivers to end the tenancy to allow it to sell. The receivers served a section 21 notice on the behalf of the parents as they are permitted to do and commenced proceedings for possession.

For the tenant, it was being argued that, just as with social landlords, article 8 should apply to the tenancy between the private landlord and tenant. This was not to say that the ECHR was applicable to private contractual relationships, it is not, but rather because the Court was being asked to enforce an element of the relationship, the giving of a section 21 notice, the ECHR was applicable because it applied to the Court as an organ of the state. They were arguing that section 21 should either be held to be incompatible with the ECHR or alternatively that it should be read in such a way that the Court should be required to consider whether eviction was proportionate, notwithstanding the fact that s21 normally requires the giving of possession without these sort of considerations.

Obviously, in this exceptional case, they were then seeking to argue that not only was the Court required to consider the issue of disproportionality but further that it would be proportionate to evict the tenant given her very poor mental health and the potentially serious consequences that would arise.

The Court of Appeal took the view that the ECHR did not apply at all in relation to matters between private individuals but the Supreme Court has taken a different route. It is quite apparent that the ECHR does apply and is relevant to the possible loss of a person's home. However, if Article 8 applies then so does the landlord's rights under the ECHR which are set out in Article 1 of Protocol 1 of the ECHR. This prohibits the removal of a person's property without compensation. It has already been held that preventing a landlord from recovering possession is an interference with his or her Article 1, Protocol 1 rights and so this must be justified.

As the Supreme Court the balance between Article 8 and Article 1, Protocol 1 would have to be considered every time. This would have meant that every possession case could potentially involve a tenant asserting their Article 8 rights while the landlord would then assert his Article 1, Protocol 1 rights in response. If the court struck the balance wrongly both sides would also potentially have the right to appeal to the European Court. As a system, this would have been a total disaster.

The Supreme Court resolved the issue by removing the issue from the Courts altogether. Therefore, it held that while Article 8 does apply to private tenancy issues the matter has been considered carefully by Parliament. Most recently through the Deregulation Act and its new restrictions on s21. Therefore, it took the view that as there was no clear statement that the Court had to consider proportionality in every case that this could be dealt with and had been dealt with, in the round by Parliament. Therefore, Courts are not permitted to entertain Article 8 defences in the face of a mandatory right to possession such as is provided by s21.

While this decision is undoubtedly harsh for the tenant it was probably the only practical route the Supreme Court could have taken without destroying the operation of s21 altogether. Private landlords will be able to breathe a sigh of relief that they will not have to face Article 8 defences while tenant campaigners will need to return to Parliament if they wish s21 to be restricted further. The decision will also mean that it will be hard for any of the mandatory grounds for possession under s8 to be challenged in the same way and a new argument will need to be made to justify the Court taking the ECHR into consideration in those cases. Lenders would also have been very unhappy if they had not been able to recover possession and potentially faced ECHR defences and this would have had a real risk of restricting lending into the sector.

In principle, it would be open to the tenant to take her appeal further by going to the European Court of Human Rights at this stage. This would not prevent her being evicted though and would only award relatively nominal compensation so it is more a matter of principle at that stage. It is not clear whether this will happen.