McDonald (by her litigation friend Duncan J McDonald) v McDonald and Others
| Jurisdiction | England & Wales |
| Judge | Lord Carnwath,Lord Kerr,Lord Neuberger,Lady Hale |
| Judgment Date | 15 June 2016 |
| Neutral Citation | [2016] UKSC 28 |
| Date | 15 June 2016 |
| Court | Supreme Court |
[2016] UKSC 28
Lord Neuberger, President
Lady Hale, Deputy President
Lord Kerr
Lord Reed
Lord Carnwath
Appellant
Kerry Bretherton QC Rebecca Cattermole Diane Doliveux
(Instructed by Turpin & Miller LLP)
Respondents
Stephen Jourdan QC Ciara Fairley
(Instructed by TLT LLP)
Intervener (Secretary of State for Communities and Local Government)
James Eadie QC Jonathan Moffett Heather Emmerson
(Instructed by The Government Legal Department)
Intervener (Residential Landlords Association Limited – written submissions only)
Jonathan Manning Justin Bates Alice Richardson
(Instructed by Bury & Walkers LLP)
Intervener (Shelter – written submissions only)
Matt Hutchings Jennifer Oscroft
(Instructed by Freshfields Bruckhaus Deringer LLP)
Heard on 15 and 16 March 2016
Lord Neuberger AND (with whom Lord Kerr, Lord Reed and Lord Carnwath agree)
This appeal raises three questions. 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.
The appellant, Fiona McDonald, is aged 45 and, sadly, she has had psychiatric and behavioural problems since she was five. Dr Peter Sargent, an experienced psychiatrist, explained in his expert evidence that she had "an emotionally unstable personality disorder and at times when her mental state has deteriorated she has presented with frank psychotic symptoms". She has been unable to hold down any employment, and has not worked since 1999; since that time she lost two public sector tenancies owing to her behaviour.
In those circumstances, her parents, who are technically the respondents to this appeal, decided to buy a property for her to occupy. Accordingly, in May 2005, they purchased 25 Broadway Close, Witney ("the property") with the assistance of a loan from Capital Home Loans Ltd ("CHL"), which was secured by way of a registered legal charge over the property. From about June 2005, the respondents granted the appellant a series of assured shorthold tenancies ("ASTs") of the property, on the basis that the rent would be covered by housing benefit. The last of those ASTs was granted in July 2008 for a term of one year from 15 July 2008. The appellant continues to live in the property.
The financial arrangements between the respondents and CHL were that the respondents were to pay interest on the loan by way of monthly instalments, and that the loan was to be repayable in full after eight years — ie on 12 May 2013. Initially, the respondents paid the interest instalments as they fell due. However, owing to financial difficulties which they unfortunately encountered in their business, they failed to meet all the interest as it fell due. Accordingly, in August 2008, CHL appointed Andrew Hughes and Julian Smith ("the Receivers") to act as receivers of the property under section 109 of the Law of Property Act 1925. Having been appointed under that provision, the Receivers, although appointed by the chargee, CHL, were entitled to take steps in relation to the property on behalf of, and in the name of, the chargors, the respondents.
As the rent was being regularly paid, and the arrears of interest were not substantial, the Receivers took no immediate steps to end the AST or to sell the property. However, not least because the arrears persisted, albeit not on a very large scale, 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 section 21 of the Housing Act 1988 ("the 1988 Act") and it expired on 14 March 2012.
On the expiry of that notice, the Receivers then issued the instant proceedings, again in the names of the respondents, for possession of the property in the Oxford County Court. In the light of the appellant's mental health, her brother, Duncan McDonald, was appointed her litigation friend. The proceedings came on for trial before His Honour Judge Corrie, who heard them on 4 December 2012 and 7 March 2013.
The evidence of Dr Sargent included the following passages, which were quoted by the judge in his judgment:
"[Homelessness], I am sure, would have a major detrimental effect on [the appellant's] mental health and she would decompensate entirely, very probably requiring admission to hospital. …
I think that if she was evicted from the current accommodation … she would have real difficulty in finding alternative rented accommodation that would accept her on benefits and in view of her mental health history including at times aggression towards others. I think that there is a significant possibility that she would become homeless as a consequence.
Even if alternative accommodation is found for her, I think that the stress and upheaval of trying to find and move into alternative accommodation would also very likely have a significantly detrimental effect on her mental health with the possibility of harm to herself or suicide, or the possibility of violence towards others which she has exhibited on a number of occasions when she has previously de-compensated under stress."
Judge Corrie gave judgment on 22 April 2013. In his judgment, he considered a number of issues which are no longer live between the parties, including whether the respondents had misled CHL (they had not), and whether the Receivers had had authority to serve the notice and bring the proceedings (they had). Accordingly, the judge concluded that, subject to the appellant's reliance on article 8, the court had no alternative to make an order for possession. He then turned to consider the appellant's article 8 case, and held that it was not open to her to require the court to consider the proportionality of making an order for possession against a residential occupier, given that the person seeking possession was not a public authority. He went on to hold that, if he was wrong on that issue, and he had been entitled to consider the proportionality of making an order for possession, he would have dismissed the action, because, "on balance", he would "have taken the view that those circumstances were sufficiently exceptional to justify dismissing the claim for possession on the basis that it was disproportionate".
The appellant appealed to the Court of Appeal, who dismissed the appeal — [2014] EWCA Civ 1049; [2015] Ch 357. The main judgment was given by Arden LJ, Tomlinson LJ gave a brief concurring judgment, and Ryder LJ gave a concurring judgment agreeing with them both. The Court of Appeal agreed with the judge that article 8 could not be invoked by a residential occupier in possession proceedings brought by a private sector landowner, as a ground for opposing the making of, or the terms of, the order for possession. However, they considered that, if article 8 could have been invoked in this case, the judge would have been wrong to dismiss the claim as he had indicated that he would have done.
The appellant now appeals to this court. Before turning to the three issues identified in para 1 above, it is appropriate to explain the relevant provisions of the 1988 Act, and, albeit in very summary terms, the history of the policy of successive Governments towards renting in the private sector.
In the late 1970s, residential tenants in England and Wales had two forms of protection, which applied even if their tenancies had contractually expired, namely (i) protection from summary eviction and (ii) security of tenure. The first, which applied to all residential tenants and most licensees, was under the Protection from Eviction Act 1977, which, among other things, precluded their eviction other than through court proceedings. That statute remains in force, and, although it has been amended from time to time (sometimes for the purpose of strengthening or extending), its original provisions remain substantially in place. There were also statutory provisions governing the amount of time which a court could allow an occupier before an order for possession took effect and could be executed.
Security of tenure, which only applied to tenants with private sector landlords, was accorded by the Rent Act 1977, whose provisions extended to most but not all such tenancies. In very summary terms, that Act (i) precluded a court making an order for possession against most such tenants unless one or more of a number of specified grounds could be established, (ii) permitted family members to succeed on the death of the tenant in some circumstances, and (iii) limited the level of rent which a landlord could recover from the tenant, often to a rate considerably below the market level. Under Chapter II of Part I of the Housing Act 1980, later replaced by Part IV of the Housing Act 1985, residential public sector tenants were for the first time given a substantially similar degree of security of tenure.
In 1987,...
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