McDonald v McDonald & Ors [2016] UKSC 28

The Supreme Court has finally decided on the issue that has been hanging over private sector possession claims since Pinnock and Powell – whether article 8 proportionality of eviction defence might also apply to the private sector as well as to public body landlords. The Court of Appeal decision (our note here) was frankly unsatisfactory, so finality from the Supreme Court was desirable.

The short answer is no. Or rather yes, but the engagement of article 8 could not justify making a different order, so no.

The longer version looks like this…

The Supreme Court, in the unanimous judgment, given by Lord Neuberger and Lady Hale, set out the three issues before it:

The first is whether a court, when entertaining a claim for possession by a private sector owner against a residential occupier, should be required to consider the proportionality of evicting the occupier, in the light of section 6 of the Human Rights Act 1998 and article 8 of the European Convention on Human Rights (“the Convention”). The second question is whether, if the answer to the first question is yes, the relevant legislation, in particular section 21(4) of the Housing Act 1988, can be read so as to comply with that conclusion. The third question is whether, if the answer to the first and second questions is yes, the trial judge would have been entitled to dismiss the claim for possession in this case, as he said he would have done.

On the first – and perhaps most important issue, the Judgment rapidly comes to a preliminary view.

While the court is a ‘public authority’  for the purposes of the Human Rights Act, and it is the court that makes the possession order which deprives the tenant of their home, as per Harrow London Borough Council v Qazi [2004] 1 AC 983,

the court is “merely the forum for the determination of the civil right in dispute between the parties” and “once it concludes that the landlord is entitled to an order for possession, there is nothing further to investigate”.

To hold that the ECHR had effect in this way would be to effective make the Convention directly enforceable between private citizens, and do so in a way giving rise to unpredictable interference with the A1P1 rights of the landlord.

It would also mean that an Art 8 defence could only be invoked if the landlord proceeded through the court. The SC notes those lying outside the Protection from Eviction Act 1977 and the risk of ‘self help’ by landlords in evicting them if proceeding via the courts presented a risk of an Art 8 defence.

So, the SC’s preliminary view was:

In the absence of any clear and authoritative guidance from the Strasbourg court to the contrary, we would take the view that, although it may well be that article 8 is engaged when a judge makes an order for possession of a tenant’s home at the suit of a private sector landlord, it is not open to the tenant to contend that article 8 could justify a different order from that which is mandated by the contractual relationship between the parties, at least where, as here, there are legislative provisions which the democratically elected legislature has decided properly balance the competing interests of private sector landlords and residential tenants. In effect the provisions of the Protection from Eviction Act 1977, section 89 of the Housing Act 1980 and Chapters I and IV of the 1988 Act, as amended from time to time, reflect the state’s assessment of where to strike the balance between the article 8 rights of residential tenants and the A1P1 rights of private sector landlords when their tenancy contract has ended. (It is true that the balance was initially struck in statutes enacted before the 1998 Act came into force in 2000. However, the effect of those statutes has not only been considered and approved in government reports since 2000, as mentioned in para 19 above, but they have been effectively confirmed on a number of occasions by Parliament, when approving amendments to those statutes since 2000).

The ‘privacy’ cases – balancing Art 8 of the individual and Art 10 rights of media – are distinguished as arising not in a contractual and statutory relationship, but in a (quasi)tortious relationship, left to the courts impliedly or expressly by Parliament.

The question then was whether Strasbourg case law supported this initial view.

On a review of relevant ECtHR cases, the Supreme Court found that all of the cases involving ‘private’ landlord-tenant or property relations either involved the national court imposing an extra contractual resolution, statutory debt enforcement powers, or cases where the application of art 8 was not contested by the country, and/or were found to be manifestly unfounded. That left Di Palma v United Kingdom (1988) 10 EHRR CD149 and Wood v United Kingdom (1997) 24 EHRR CD69, both of which found court as public authority not an issue when the court “merely provided a forum for the determination of the civil right in dispute between the parties”.

The result – while there was some support for Art 8 being engaged, there was no support for the “proposition that the judge could be required to consider the proportionality of the order which he would have made under the provisions of the 1980 and 1988 Acts.”

The first issue decided against the appellant and fatal for the whole appeal.

Nonetheless, the SC go on to consider the remaining two issues as being of broader importance.

Could s.21 Housing Act 1988 be read in a manner to be Convention compliant, via s.3(1) HRA?

The parallel was with the reading of sections 143D and 127(2), s.128, s.143E and s.143F of Housing Act 1996 (as amended) on Introductory and Demoted tenancies, as read via s.3(1) HRA in Pinnock and Powell. But those involved public authority landlords and so had to be read in conjunction with s.6(1) HRA, prohibiting a public authority for acting in a non-convention compliant way. And, of course, there are associated public law obligations which don’t apply to private landlords.

There is not the same flexibility in the statutory language of s.21, despite the range of ‘interpretation’ found in previous (non-s.21) cases.

But there is a difference between interpretation, which is a matter for the courts and others who have to read and give effect to legislation, and amendment, which is a matter for Parliament. While the boundary may not always be easy to discern, the difference was neatly encapsulated by Lord Rodger in Ghaidan at para 121:

“If the court implies words that are consistent with the scheme of the legislation but necessary to make it compatible with Convention rights, it is simply performing the duty which Parliament has imposed on it and on others. It is reading the legislation in a way that draws out the full implications of its terms and of the Convention rights. And, by its very nature, an implication will go with the grain of the legislation. By contrast, using a Convention right to read in words that are inconsistent with the scheme of the legislation or with its essential principles as disclosed by its provisions does not involve any form of interpretation, by implication or otherwise. It falls on the wrong side of the boundary between interpretation and amendment of the statute.”

Notably, Lord Rodger was looking at the legislation itself when seeking to draw the line, rather than its broader policy. In the case before us, the “scheme of the legislation” is to draw a careful distinction between those cases in which good grounds must be shown for obtaining possession and those cases, such as this, where no ground need be shown. The “essential principles” disclosed by its provisions are that private landlords letting property under an AST should have a high degree of certainty that, if they follow the correct procedures and comply with their own obligations, they will be able to regain possession of the property. Reading in an obligation to assess the proportionality of doing so in the light of the personal circumstances of the individual tenant would not “go with the grain of the legislation” but positively contradict it.

So, s.21(4) could not be read as implying or importing proportionality.

Lastly, would the Judge at first instance have been entitled to dismiss the possession claim (assuming there had been an Art 8 defence)?

The Supreme Court makes clear that the language of s.89(1) Housing Act 1980 is so strong that there can be no suspension or adjournment of a possession order beyond 6 weeks. The options on an Art 8 defence are therefore as follows:

As Lord Phillips pointed out in Powell at para 103, the effect of section 89(1) is to increase the options available to the court. It may (a) make an immediate order for possession; (b) make an order for possession on a date within 14 days; (c) in cases of exceptional hardship make an order for possession on a date within six weeks; or (d) decline to make an order for possession at all. The cases in which it would be justifiable to refuse, as opposed to postpone, a possession order must be very few and far between, even when taken as a proportion of those rare cases where proportionality can be successfully invoked. They could only be cases in which the landlord’s interest in regaining possession was heavily outweighed by the gravity of the interference in the occupier’s right to respect for her home. The evidence filed on behalf of Shelter indicates that Pinnock defences hardly if ever succeed against public authority landlords save in combination with some other public law factor (although they may well provide a helpful bargaining counter in particularly deserving cases). Were a proportionality defence to be available in section 21 claims, it is not easy to imagine circumstances in which the occupier’s article 8 rights would be so strong as to preclude the making, as opposed to the short postponement, of a possession order.

In the present case, while the loan arrears were small, the loan term was short – 8 years – with the full amount of some £164,000 due a few weeks after the first instance decision. The best chance of recovering that (and equity for the appellant) was a sale with vacant possession. Even if an art 8 defence had been possible, a six week delay of possession was the most that could have been hoped for.

Comment

While not a huge surprise, this judgment does leave open some difficult issues.

What of housing associations using assured shorthold tenancies (and s.21 notices) as ‘starter tenancies’? The decision in respect of s.21 here is entirely on the basis of contractual rights and the statutory position. The same would equally apply to housing associations. While an art 8 defence in general is an attack on the proportionality of the decision to seek eviction, not on the notice and procedure, and so would remain applicable to housing associations as public authorities (if, as and when they are), it seems odd to refuse an art 8 defence to s.21 to PRS tenants on the basis of contract and statute, while retaining such a defence on the basis of non directly contractual factors, such as being a public authority, to housing associations. I suspect this issue will come to the fore in the future.

And then the question of the court’s responsibility as a public authority – the SC finding would seem, on the face of it, to extend to any private possession claim, such as against trespassers, where a Convention defence under art 8, or indeed articles 10 and 11 for protesters, may have been invoked. Would it make a difference if the possession proceedings were under common law rather than statute? Would this take the court’s role out of being the mere determiner of civil right?

The Supreme Court’s conclusion on s.89 Housing Act 1980 highlights how far an Article 8 defence is all or nothing in any event. Seeking a decision to dismiss the claim – the only alternative to a possession order within 6 weeks – is obviously the most serious option.

None of this rules out a challenge to the compatibility of s.21 with convention rights. But in view of para 45 of this judgment, such a challenge is very likely going nowhere. Change to s.21 is a political and legislative issue, not, the very strong suggestion is, something for the courts.