Mental Disabilities and ASTs analysed by Court of Appeal in latest ECHR case

Ref. McDonald v McDonald [2014] EWCA Civ 1049

In the recent case of McDonald v McDonald [2014], the Court of Appeal has ruled that a possession order granted to a private landlord of an assured shorthold tenancy was not in breach of Article 8 of the European Convention of Human Rights (ECHR).

The case saw Miss Fiona McDonald appeal against the decision by Oxford County Court to grant a possession order against her, concerning her occupation of a property owned and let to her by her own parents.

The property was let on an Assured Shorthold Tenancy (AST) basis. Her parents owned the property with a mortgage from Capital Homes Ltd, her rent was paid from her social security payments and this was used to pay off the mortgage. When the parents became unable to fulfill their payment obligations under the Mortgage, it became clear that there were terms in the agreement precluding them from appointing a family member as tenant without the mortgagee’s permission, from selecting any tenant without their approval and granting a tenancy to anyone assisted by social security.

The Mortgagee appointed receivers who claimed to use their powers under the mortgage to serve a notice in their own names on Miss McDonald under section 21(4)(b) of the HA 1988 on 13 January 2012 and to commence possession proceedings in the name of Miss McDonald’s landlords on 16 April 2013. A possession order was later granted by Oxfordshire County Court.

Miss McDonald objected to this on two counts:

1.  She contended that the PO order did not reflect the right to respect for one’s home guaranteed by Article 8 of the European Convention on Human Rights (“the Convention”).

“Article 8 – Right to respect for private and family life”

1. Everyone has the right to respect for his private and family life, his home and his correspondence.

2. There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.

2.  She further contended that notice to terminate her tenancy was served on her without the appropriate authority from her landlords, her parents.

In response, the Court of Appeal highlighted that the ECHR permits interference with the right provided by Article 8, where this is necessary in a democratic society for the protection of the rights and freedoms of others. It is well established that this means that the interference must be proportionate to the importance of the right provided by Article 8 and a tenant of a public authority may be provided with an opportunity to have the proportionality of the possession order determined by a Court since the rulings of Manchester v Pinnock and Hounslow v Powell.

In dismissing the first grounds of appeal, the Court of Appeal relied on the following reasons.

  1. Firstly, there is no clear and constant line of decisions provided by the European Court of Human Rights that the proportionality test applies when Article 8 is raised in a dispute between a tenant and a private landlord.
  2. Additionally, the Court of Appeal stated that they were bound by a previous decision – Poplar Housing and Regeneration Community Association Ltd v Donoghue – where it was decided that a s.21 Housing Act 1988 notice was compatible with the ECHR.

To address Miss McDonald’s second objection, Lady Justice Arden concluded:

“This is a short point. The mortgage conditions have to be interpreted purposively: the clear purpose of the mortgage conditions was to enable the receivers to proceed to realise the charged property in an orderly and efficient way. 

“The powers conferred on the receivers must therefore include power to do anything which is necessarily incidental to the exercise of the specified powers: see M. Wheeler & Co v Warren [1928] 1 Ch 840. The specified powers included the power to sell the property and to take possession of it (clause 9.2.1 of the mortgage conditions). In the circumstances, service of the section 21 notice was an act which the receivers had to do to get vacant possession and thereby to sell the property at the best price.

The Appeal was dismissed on both grounds, therefore, which will be good news not only for lending providers, but for private landlords, who may see this as evidence that future possession orders under s.21 Housing Act 1988 are unlikely to suffer costly legal arguments under ECHR proportionality – even where serious mental disorders are concerned.

LCB / SJ                                                                                                                                 11.08.14

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