The Supreme Court has today ruled that the Human Rights Act does not apply in possession claims between private parties, preventing a major expansion of human rights into private contractual disputes.
The ruling in the Mcdonald v Mcdonald case centred on whether a possession order sought by a private landlord against an assured shorthold tenant would be incompatible with the tenant's right to a private and family life under Article 8 of the Human Rights Act. This was the first time that any court in the UK or Europe has been specifically asked to consider this issue. The Supreme Court ruled in favour of the receivers appointed by a mortgagee and who were seeking possession.
Acting for the receivers in the case, Mark Routley, Head of Property Litigation, at UK law firm TLT said:
"Today's judgment has been on the watch list across the property and financial services sectors and beyond because it raised for the first time the prospect of expanding the use of the Human Rights Act into litigation between private individuals.
"Had the case succeeded, it would likely have been a deterrent to investment in the buy-to-let mortgage market and in property generally. It could have seen the role of the court significantly extended so as to alter the basic principle of freedom of contract.
"However, the Supreme Court has made it clear that provided a private landlord complies with the relevant regulations in the Housing Act, the court must order possession. It is not for the court to apply its discretion and decide whether granting the possession order is proportionate in the circumstances.
"It is already established that where the landlord is a public authority, the Human Rights Act applies and the tenant may raise the proportionality of the step being taken as a defence to the claim. The arguments in this case arose because a court is also a 'public authority' under the Act. Was it open as a consequence to the tenant to raise a similar defence where the landlord was a private person? The Court said no. The role of the Court is there to see that the rules are properly applied but not to express its own view on the appropriateness of the step being taken by the landlord. Despite reviewing a large number of cases from Strasbourg, the Supreme Court concluded that there was no clear and consistent line of authority supporting the tenant's case.
"The decision is welcome news for landlords and lenders alike. Private rented accommodation is a rapidly growing sector. Obtaining possession quickly remains a procedural step giving private sector landlords certainty that as long as they comply with the law they will be able to obtain possession of the property.
"There are a number of cases where appeals are on hold pending the outcome of this case. The human rights arguments in each of those cases will now fall away."
Turpin & Miller LLP acted for the appellant, Freshfields Bruckhaus Deringer LLP acted for Shelter, The Government Legal Department acted for the Secretary of State for Communities and Local Government and Bury & Walkers LLP acted for Residential Landlord Association.
Background to the case
The McDonald V McDonald case involved an assured shorthold tenant lodging an appeal against a possession order. The tenant had rented the house from her parents and the house was purchased with the aid of a mortgage secured on the property. The grant of the tenancy breached the mortgage conditions.
The parents defaulted on the mortgage payments and the lender appointed receivers, who obtained a possession order. The tenant appealed on the grounds that the possession order breached her human rights under Article 8, which gives a right to respect for private and family life, of the European Convention on Human Rights. The Court of Appeal dismissed the appeal and the appellant was granted permission to appeal to the Supreme Court.