England and Wales Court of Appeal (Civil Division) Decisions
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McDonald v McDonald & Anor (Rev 1)  EWCA Civ 1049 (24 July 2014)
 2 WLR 567,
 BPIR 1270,
 HLR 43,
 1 Ch 357,
 2 P &CR 20,
 CH 357,
 EWCA Civ 1049,
 1 CH 357,
 Ch 359,
 3 EGLR 30,
 WLR(D) 336,
 1 All ER 1041
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[View ICLR summary:  WLR(D) 336]
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||Neutral Citation Number:  EWCA Civ 1049
||Case No: B5/2013/1705
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Oxford County Court
His Honour Judge Corrie
20X50223Royal Courts of Justice
||Strand, London, WC2A 2LL
B e f o r e :
Lady Justice Arden
Lord Justice Tomlinson
Lord Justice Ryder
|| Miss Fiona McDonald
(By her Litigation friend Duncan J McDonald)
||- and -
||(1) Brian John McDonald
(2) Margaret Helen McDonald
(acting by Mr Andrew Hughes and Mr Julian Smith Joint Receivers)
Ms Kerry Bretherton (instructed by Turpin & Miller LLP) for the Appellant
Mr Stephen Jourdan QC & Ciara Fairley (instructed by TLT LPP) for the Respondents
Hearing dates: 4 – 5 March 2014
HTML VERSION OF JUDGMENT
Crown Copyright ©
Lady Justice Arden :
Miss McDonald resists a claim for possession of her home
- The appellant, Miss Fiona McDonald, is forty-three years of age. She has a mental disorder which makes her particularly upset by changes in her environment. She has been evicted from social housing in the past. She cannot work. She is not able to conduct these proceedings: her brother, Mr Duncan McDonald, acts as her litigation friend. She lives in a small property in Witney, Oxfordshire ("the property"). That is her home. Until recently she had an assured shorthold tenancy ("AST") in respect of it. She wants to stay there. An AST is a residential tenancy that allows the landlord to let the property whilst retaining the right to repossess the property at the end of the term. It is a very popular form of tenancy in use today both in the public and private sector.
- Through her brother she appeals against a possession order ("PO") made by HHJ Corrie, sitting in the Oxford County Court, on 23 April 2013. Her tenancy did not give the court discretion whether to make a PO. As she had been granted an AST, which, on expiry of the fixed term, had become a statutory periodic tenancy, the statutory provision about making a PO which the judge had to apply was section 21 (4) of the Housing Act 1988 ("HA 1988"). This imposed a duty on the court to make a PO. Section 21(4) provides:
"…a court shall make an order for possession of the dwelling-house let on an assured shorthold tenancy which is a periodic tenancy if the court is satisfied—
(a) that the landlord or, in the case of joint landlords, at least one of them has given to the tenant a notice in writing stating that, after a date specified in the notice, being the last day of a period of the tenancy and not earlier than two months after the date the notice was given, possession of the dwelling-house is required by virtue of this section; and
(b) that the date specified in the notice under paragraph (a) above is not earlier than the earlier day on which, apart from section 5(1) above, the tenancy could be brought to an end by a notice to quit given by the landlord on the same date as the notice under paragraph (a) above."
- Miss McDonald resists the PO on two grounds.
- First, she contends that the PO order did not respect the right to respect for one's home guaranteed by Article 8 of the European Convention on Human Rights ("the Convention"). This provides:
"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."
- Second, Miss McDonald claims that notice to terminate her tenancy was served on her without the appropriate authority from her landlords in the circumstances which I shall now describe.
- Miss McDonald's landlords happen to be also her parents, Mr and Mrs Brian McDonald. They raised money from a third party lender, Capital Homes Ltd ("CHL"), to buy the property so she could have a place to live for the foreseeable future. The money was secured by a mortgage over the property dated 13 May 2005. Mr and Mrs McDonald granted their daughter an AST of the property after the date of the mortgage. Miss McDonald paid the rent with housing benefit and Mr and Mrs McDonald used that money to pay the sums payable to CHL.
- The conditions of the mortgage prohibited the grant of a tenancy to a tenant who is assisted by social security, as Miss McDonald is. Other tenancies had to be assured shorthold tenancies previously approved by CHL. Mr and Mrs McDonald failed to apply for approval. Moreover a further condition required them to advise CHL if they proposed to enter into a tenancy with a family member. They did not do this either. Moreover, due to a change in circumstances they became unable to pay the instalments needed to meet their obligations to CHL.
- On 28 August 2008, CHL appointed receivers of the property, Mr Andrew Hughes and Mr Julian Smith ("the receivers"). Under the conditions, they had the same powers as CHL, and they were the agents of the mortgagors, Mr and Mrs McDonald. At the date of the receivers' appointment, Miss McDonald was in possession under the terms of an AST dated 15 July 2008 expiring on 14 July 2009. She has remained in possession after that date by virtue of a statutory periodic tenancy to which section 21(4)(a) of the HA 1988 applies.
- The receivers 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. The only issue about the notice is the fact that the receivers gave it and not the landlords. If the receivers had power to give it, they could do so in their own names because by section 45 of the HA 1988 the word "landlord" includes any person deriving title from the original landlord, which would include CHL, and under the conditions the receivers are able to exercise all the powers that CHL can exercise. If they did not have power to give the section 21 notice, then the notice to quit would be of no effect. Miss McDonald's periodic tenancy would have continued as before.
- Before the judge Miss McDonald lost on both grounds on which she resisted the PO. She now appeals on the same two grounds.
Right to a home where court bound to grant a PO (First ground of appeal)
- The more substantial ground of appeal is the question whether Miss McDonald can rely on Article 8 as against her landlords. We are principally concerned with Article 8(2). This permits interference with the right guaranteed by Article 8(1) where that is necessary in a democratic society for the protection of the rights and freedoms of others. It is well-established that means that the interference must be proportionate to the importance of the Article 8(1) right.
What is not in dispute
- There is no doubt that Article 8(1) is engaged. It is not in dispute that a person may have a home for the purposes of Article 8 without having any proprietary right, and indeed she may have a right to respect for her home even if her occupation is not lawful. The existence of a home in Strasbourg jurisprudence is identified with "efficient and continuing links" in terms of the social and psychological attachment or bond that develops with one's accommodation, and neighbourhood, rather than simply with the concept of a roof over one's head (see generally my judgment in Harrow LBC v Qazi  HLR 14, reversed on other grounds:  1 AC 893). There is nothing in Article 8 to exclude a home that is or was let to the applicant by a private landlord. The landlords in this case are private citizens.
- Nor is there any doubt that the court is a public authority. That means that it may not act in a way which is incompatible with Convention rights. This is shown by section 6 of the Human Rights Act 1998, which provides:
"(1) It is unlawful for a public authority to act in a way which is incompatible with a Convention right….
(3) In this section "public authority" includes—
(a) a court …"
- The fact that the court is a public authority is, however, of no consequence unless there is a Convention right which the court's order would violate.
- Nor is it in dispute that, where the landlord is a public authority, the tenant may rely on Article 8 or that in that case Article 8 imposes a procedural obligation to provide the tenant with an opportunity to have the proportionality of the possession order determined by a court. The Supreme Court has held that this defence to a possession order will only succeed in a very small number of cases because it will require a very strong case to override the interest of the public authority, which is enforcing its rights of property and discharging its statutory duty with respect to the allocation of its housing stock to homeless persons and in the enforcement of its property rights: see Manchester City Council v Pinnock  2 AC 104 and Hounslow v Powell  2 AC 186.
What is in dispute
- What is in dispute is whether the proportionality test applies where a person can contend that it would be disproportionate under Article 8(2) to make a PO against him as the tenant of a private landlord. This point does not matter in a case where the court must be satisfied as to the reasonableness of making a PO. But it does matter where the landlord relies on a mandatory ground for making a possession order, as in section 21 of the HA 1988.
- The judge's reasoning supporting his rejection of Miss McDonald's claim that the PO violated her Article 8 right involved a detailed study of domestic case law concerning possession claims against tenants in the public sector, there being no similar case law dealing with the tenants of private landlords. However, in the end he rejected the arguments on Miss McDonald's behalf and held that the court should defer to the decision of Parliament and hold that section 21(4) of the HA 1988 was itself proportionate.
- The parties made detailed submissions for which I am most grateful: the precise point at issue has not arisen before. We have been cited both Strasbourg case law and domestic authority which throws light on the point and I summarise that below.
Summary of my reasons for dismissing the appeal on the Article 8 point
- In my judgment, the judge was correct, and, it follows, Miss McDonald's claim that the PO should be set aside because it violates her Article 8 right must be rejected for the following reasons, which are amplified later in this judgment:
i) There is no "clear and constant" jurisprudence of the Strasbourg court that the proportionality test implied into Article 8(2) applies where there is a private landlord.
ii) Even if the proportionality test had applied in this case, the court would still have made a possession order.
iii) In any event, this court is bound by Poplar Housing and Regeneration Community Association Ltd v Donoghue  QB 48 to hold that section 21 of the HA 1988 is compatible with the Convention. That precludes this court from holding that the proportionality test applies.
iv) In the circumstances, the question of interpreting section 21 of the 1988 Act to conform to Convention rights does not arise.
- I shall now explain my reasons and summarise the relevant case law.
(1) No clear and constant Strasbourg jurisprudence
- In order for Miss McDonald to succeed on this appeal, she must persuade this court to apply section 3(1) of the Human Rights Act 1998 to interpret section 21 of the HA 1988 as subject to her right under Article 8 of the Convention. Section 3(1) of the 1998 Act provides:
"So far as it is possible to do so, primary legislation and subordinate legislation must be read and given effect in a way which is compatible with the Convention rights."
- For this purpose, Miss McDonald has to go further than to say that Article 8 is engaged. She has to say that any interference with her Article 8(1) right would be disproportionate under Article 8(2). To do this she must show that the Strasbourg court applies the proportionality test to a possession claim by a private landlord. This is clearly a different situation from where the landlord is a public authority. This task is not made any easier by the fact that Lord Neuberger, giving the judgment of the Supreme Court in Pinnock at , left open the question whether Article 8 could be invoked where a tenant of a private landlord seeks to resist a possession order. Lord Neuberger noted that the Strasbourg court had expressed conflicting views about that.
- This point is established by Pinnock and indeed in subsequent decisions of the Supreme Court. Under the Human Rights Act 1998, section 2, when a court has to determine a question which has arisen in connection with a Convention right, it must take into account Strasbourg jurisprudence. It is then for the court to decide what weight to give to that case law. The Supreme Court confirmed in Pinnock at  that the UK courts should in general follow Strasbourg jurisprudence if there is "a clear and constant line of decisions". I need not consider when that general rule does not apply as the first question is whether there is such a line of decisions in relation to claims to rely on Article 8 as against private owners. A line of decisions generally means more than one or two.
- In my judgment, there is no clear and constant line of decisions in Strasbourg jurisprudence which applies the proportionality test on a possession claim by a private landlord.
- I would analyse the position in the Strasbourg jurisprudence as follows:
- There is a small group of cases where the Strasbourg court has applied the proportionality test to a possession claim by a private landlord, but (1) in no case has the landlord had an unconditional right under the tenancy agreement to return of the property on a date which has passed, and (2) these cases proceed on the basis that the proportionality test applies when Article 8 is engaged in a dispute between a tenant and his private landlord.
- There is other authority to the effect that the proportionality test does not apply in this situation as it would interfere with the operation of arrangements agreed between private parties.
- None of these cases is a Grand Chamber decision.
Cases in which the Strasbourg court has proceeded on the basis that the proportionality test applies in a dispute between a tenant and his landlord
Miss Kerry Bretherton appears for Miss McDonald. Miss Bretherton's research revealed how few cases on this topic there are. She cited the following cases (I take them in ante-date order).
The most recent case is Brezec v Croatia  HLR 3. The national court made an eviction order. The landlord had been a state corporation but had been privatised. The tenancy was obtained at a time when the property was "socially-owned". It had been allocated to the applicant when she was an employee and at a time when she was required to make contributions to housing funds. She had paid rent for some years after the landlord was privatised on the basis that there was no change in the arrangements. The applicant complained of a violation of her Article 8 right. The court found a violation because the national court had failed to consider whether the order was proportionate. No point was taken as to whether the proportionality test applied once the landlord was privatised. It may be that this made no difference given that the landlord was simply the successor in title to the public body which granted the tenancy initially, though the concurring opinion of Judge Dedov suggests that the private landowner was not responsible for the state's social obligations.
Zrilic v Croatia, App. No 46726/11 3 October 2013, concerned a dispute between private co-owners of a property about the terms on which the national court had ordered it to be partitioned. The co-owners were formerly married. After they were divorced, they continued living in the same house. One of them applied to the court for an order partitioning the house. Croatian legislation made detailed provision for how partition was to be achieved. The Strasbourg court was satisfied that, while there was no formal process permitting the applicant to complain of interference with her right to a home, the national court had fairly balanced the parties' interests so that there was no violation.
In Buckland v United Kingdom (App No. 40060/08), a gypsy (as she is referred to in the Strasbourg court's judgment) took a licence to occupy a pitch for her mobile home from the Gypsy Council (an association set up to promote the welfare of gypsies). She was evicted. The Strasbourg court found a violation of Article 8 on the basis that the relevant UK legislation did not give her an opportunity to have the proportionality of her eviction determined by a court. The fact that the possession order could be suspended for a short period was not sufficient. The UK government did not argue that Article 8(2) did not apply. The only issue was whether the interference with the applicant's right was "necessary in a democratic society". The Strasbourg court held:
"An interference will be considered 'necessary in a democratic society' for a legitimate aim if it answers a 'pressing social need' and, in particular, if it is proportionate to the legitimate aim pursued."
The next case is Zehentner v Austria, App No 20082/02, which was not cited by Miss Bretherton but was cited by the Supreme Court in Pinnock. A violation of Article 8 was found because there was no opportunity for the applicant to challenge the proportionality of a judicial sale of her home at the instance of a creditor, but that throws no light on the present case because there was no question of the parties being in a contractual relationship.
Belchikova v Russia, App. No.2408/06, 25 March 2010 was an admissibility decision. It concerned a dispute between a private landlord and his tenant leading to the domestic court evicting the tenant from her home. Her complaints included a complaint that the eviction order violated Article 8. The Strasbourg court proceeded on the basis that Article 8 was applicable to private property. As the national court had carefully weighed up the conflicting interests of the parties, the Strasbourg court held that under Article 8(2) the landlord's rights outweighed the Article 8(1) right of the tenant.
Khurshid Mustafa and Tarzibachi v Sweden, App. No 23883/06 (2011) 52 EHRR 24 is of peripheral relevance. It concerned a dispute between a private landlord and his tenant leading to the domestic court evicting the tenant from her home for erecting a satellite dish in breach of the terms of the tenancy. The Strasbourg court did not consider the Article 8 complaint in this case because it found a breach of Article 10.
In none of these cases was there any decision that the proportionality test applied to a case involving a private landlord or co-owner. It was simply assumed to be the case that the proportionality test applied as if the landlord (or co-owner) was in the public sector. In my judgment, that is not enough to make it a clear and constant line of decisions if there are other indications that there is a countervailing principle.
Nor do the reports reveal the terms of the tenancies in any detail.
Strasbourg case law indicating that the proportionality test does not apply to the operation of arrangements agreed between private parties
It is remarkable that there is little discussion of the impact of the fact that the private landowner has rights as well as the tenant. However, there is some material in the form of the decision in Di Palma v United Kingdom (1986) 10 E.H.R.R. 149 and in the separate opinion by Judge De Gaetano in the recent case of Buckland.
Di Palma v United Kingdom was an admissibility decision of the European Commission on Human Rights ("the Commission") (which was abolished when the Strasbourg court was enlarged in 1998). A tenant's lease was forfeited and the tenant failed to obtain relief from forfeiture. She claimed violations of a number of Articles, including Article 8. The Commission did not deal with Article 8 but considered that the state's responsibility under Article 1 of the First Protocol was not engaged because of the "exclusively private law relationship between the parties" (page 210).
Di Palma reflects an important principle, namely the principle that parties who have exercised their contractual freedom to agree terms should not be allowed to invoke Convention rights to relieve themselves of the terms of the bargain. Di Palma concerned forfeiture with the assistance of the court, but the Commission held that, although the court was a public authority, its role was merely to provide a forum for the determination of the civil right in dispute between the parties.
Moreover, in Buckland, Judge De Gaetano took issue with a sentence in paragraph 65 of the majority's judgment, which endorsed the view that the proportionality test applied. The sentence ran:
"Any person at risk of an interference of this magnitude should in principle be able to have the proportionality of the measure determined by an independent tribunal in light of the relevant principles under art 8 of the Convention, notwithstanding that, under domestic law, his right to occupation has come to an end (see McCann, cited above, para 50; Kay, cited above, para 68; and Paulic v Croatia  ECHR 3572/06, para 43, 22 October 2009)."
Judge De Gaetano entered the following reservation about private landlords in a separate opinion:
"My only reservation in this case is with the principle as set out in the second sentence of para 65. This sentence is a verbatim reproduction of what is found in para 50 of McCann and in para 68 of Kay (the sentence was slightly modified, but not in substance, in para 43 of Paulic). However, all the cases quoted in support of the principle as thus formulated (including, indirectly, Connors) are cases where the landlord was either the Government or a local authority. None were cases where the landlord was a private individual. In my view while it is perfectly reasonable to require that an eviction or repossession notice issued by the Government or by a local authority – both of which are normally under a public law obligation to provide accommodation for people within their jurisdiction – or possibly even by a private entity in receipt of public funds, should be capable of being challenged on the grounds of proportionality, when the landlord is a private individual the tenant's right should in principle be limited to challenging whether the occupation – tenancy, lease, encroachment concession, et cetera – has in fact come to an end according to law. In this latter case the proportionality of the eviction or repossession in light of the relevant principles under art 8 should not come into the equation. This is not to say, of course, that the Government may not, by legislation, impose restrictions on the use of the property by the landlord upon or after the termination of the occupancy, from which restrictions the last tenant or occupant might even benefit (see, by way of analogy, James v UK  ECHR 8793/79, 21 February 1986; Hutten-Czapska v Poland  ECHR 35014/97, 19 June 2006); but this is a totally different issue from what is being proposed in the second sentence of para 65.
As the late Professor A. L. Goodhart said, 'The principle of a case is not to be found in the reasons given in the opinion'; it should, instead, be found by taking account of the facts treated by the judge as material, and his decision based on those facts. It is precisely to prevent what we have said in the second sentence of para 65 from being extrapolated to a different context that I would have preferred that the principle should have been qualified or otherwise restated."
I comment on this opinion in paragraph 42 below.
No Grand Chamber decision
None of the cases on which Miss Bretherton relies is a decision of the Grand Chamber of the Strasbourg court. Normally cases are heard by Chambers of judges in Strasbourg, but, if there is a serious point or one which would require an extension of the case law, the case may be referred to or, if already heard, reheard by a larger constitution of judges known as the Grand Chamber (see Article 43 of the Convention). To apply the proportionality test when a tenant relies on Article 8 in the context of a private dispute would raise substantial issues. The absence of a Grand Chamber decision requiring Article 8(2) to be applied in these circumstances confirms the conclusion that I have already reached.
Conclusions from the case law
As stated, I do not consider that the cases cited by Miss Bretherton can be regarded as a clear and constant line of decisions that the proportionality test applies when Article 8 is raised in a dispute between a tenant and a private landlord. If there was an unbroken line of decisions since the new Court was established, then it was broken by Judge Gaetano's separate opinion in Buckland. He did not consider that the law was settled. The fact that in Buckland, Brezec, Belchikova and Zrilic the Strasbourg court was content to proceed on the basis that there was a public sector tenancy does not necessarily prove otherwise because in some of those cases there were reasons why the court should wish to treat them as public authorities and in none of the cases was there any argument on this point. Moreover, in none of these cases is there any suggestion that there was a contractual term which would be breached if the proportionality test applied.
Furthermore, if the proportionality test does apply, it is not clear how this coheres with the test of "necessary in a democratic society". This would, if it applied require the landlord to show that the PO met a "pressing social need", not that his interests should weigh more heavily in the balance than those of the former licensee or tenant.
None of the cases is a Grand Chamber decision, which would carry greater weight.
For these reasons I conclude that there is no clear and constant line of decisions that the proportionality test applies in disputes between tenants and private landlords where the tenant relies on Article 8.
(2) The application of the proportionality test in this case would in any event have led to the making of possession order
The judge held that, if he was wrong and the proportionality test applied:
"I would on balance have taken the view that Miss McDonald's circumstances were sufficiently exceptional to justify dismissing the claim for possession on the basis that it was disproportionate. Those circumstances do not just include palpable disability and fragility, but the fact that these arrears were never very substantial; the fact that there was no element of deception or dishonesty in the mortgage application as was conceded…; the fact that the rent was always up-to-date; and very specifically the fact that this vulnerable young woman had failed to keep two previous tenancies which were, it appears, provided by public bodies. Whether they were or not is, in a sense, immaterial. She would find it very difficult to find alternative accommodation and, in consequence of this court's decision, if upheld, she will find it highly problematical and distressing." (judgment, para 40)
I am unable to agree with the judge's selection of factors for the purpose of the balancing exercise which he carried out for the purposes of Article 8. There were matters which the judge took into account which were irrelevant, such as the lack of dishonesty on the part of Mr and Mrs McDonald in their mortgage application. There were other matters which the judge left out of account which were relevant: as Mr Stephen Jourdan QC, counsel for the Respondents, points out, it is not only the arrears that are relevant because the lender is entitled to recover his capital too.
There is moreover no indication that the judge directed himself that very few cases would meet the high standard required for interference with the rights of the landlord in a public sector case. The position cannot be different in a case involving a private landlord. A challenge in the Strasbourg court to the decision in Pinnock was subsequently ruled inadmissible: Pinnock v UK (App no 31673/11).
Accordingly I consider that this court would have to set aside the judge's assessment and make its own assessment.
Where the right of a former tenant to respect for his home has to be balanced against the rights of a landlord, the balance is almost always going to be struck in the landlord's favour because the landlord is enforcing his property right to return of the property. Moreover, he may well have suffered loss (most obviously, arrears of rent) which he may not be able to recover if the tenant has few means and continues in possession. The position of the landlord may be even stronger if there are third parties who are directly concerned in the protection of the landlord's rights and who are liable to be prejudiced by the refusal to make a possession order, such as mortgagees of the property or other creditors of the landlord. The position of those third parties is no less relevant to the balancing exercise than the position of homeless persons who are interested in the enforcement by social landlords of their rights to recovery of their housing stock from tenants to whom they no longer owe any housing duty.
Matters to be taken into account in Miss McDonald's favour are that there is clear medical evidence that she will suffer distress on having to move her home and that she may attempt self-harm (even suicide) or be aggressive to others or have to be hospitalised. However, those who treat her and care for her would, by careful planning and calling on health and social services, be able to help her through the immediate distress she would suffer, and to take precautions to prevent her from causing herself serious harm. On that basis, the evidence does not go so far as to say that she would suffer lasting and irreversible harm from moving to a new home. There is nothing to suggest that she would not eventually settle there.
On the landlords' side there is some £200,000 owing to CHL. CHL will be unable to recoup this money out of their security unless a PO is made. I appreciate that the figure of £200,000 includes legal costs but there is nothing to show that CHL is not entitled to add its costs to its security.
In those circumstances, I consider that even if, contrary to my judgment, the proportionality test applies, the judge's conclusion that a PO would not be made should be set aside and a PO made.
(3) This court is in any event bound by Poplar
My third reason for rejecting the Article 8 claim is the decision of this court in Poplar, where Lord Woolf CJ, giving the judgment of this court, held that section 21 (4) (set out in paragraph 2 above) is not incompatible with Article 8. The judge also relied on this decision. Lord Woolf CJ held:
" There is certainly room for conflicting views as to the social desirability of an RSL being able to grant assured shorthold tenancies which are subject to s 21(4) of the 1988 Act. Mr Holmes considers the present policy mistaken. However, in considering whether Poplar can rely on art 8(2), the Court has to pay considerable attention to the fact that Parliament intended when enacting s 21(4) of the 1988 Act to give preference to the needs of those dependent on social housing as a whole over those in the position of the defendant. The economic and other implications of any policy in this area are extremely complex and far-reaching. This is an area where, in our judgment, the courts must treat the decisions of Parliament as to what is in the public interest with particular deference. The limited role given to the court under s 21(4) is a legislative policy decision. The correctness of this decision is more appropriate for Parliament than the courts and the HRA does not require the courts to disregard the decisions of Parliament in relation to situations of this sort when deciding whether there has been a breach of the convention."
Miss Bretherton submits that Poplar applies to the question whether the scheme of the legislation is incompatible with Article 8 and not the question whether, as a matter of interpretation, it would be possible to read in Article 8 to deal with the exceptional case where Article 8 prevents the court from making a PO. This is very difficult to follow. I do not consider that this distinction can be made. Once it is decided that section 21(4) is compatible with Article 8, it is not open to a court bound by that decision to deal with the matter. This court is bound by the ruling in Poplar.
(4) In the circumstances, the question of interpreting section 21 of the 1988 Act to conform to Convention rights does not arise
This follows from my conclusion that the proportionality test does not apply in the case of a PO sought by a private landlord. The clear mandatory wording of section 21 of the HA 1988 means that the court cannot decide that the proportionality test applies without there being clear and constant Strasbourg case law.
Conclusion on the Article 8 ground
I bear in mind that Ward LJ considered that the proportionality test under Article 8(2) applied where squatters had acquired a home for Convention purposes on privately owned land on which they had encamped: Malik v Fassenfelt  EWCA Civ 798. He went on to apply the same weight in the proportionality exercise to the owner's rights as the Supreme Court had done to the local housing authority's rights in Pinnock. However, this was not the view of the other members of the court. In any event, the context on this appeal is different and the authorities relevant to this case were not cited.
For the reasons given above, I have concluded that there is no clear and constant jurisprudence of the Strasbourg court which this court should follow so as to give Miss McDonald an opportunity to raise an Article 8 defence.
As Lord Bingham explained in R v Secretary of State for the Environment, Transport and the Regions ex parte Spath Holme Ltd  2 AC 349 at pages 378 to 379, section 21(4) was a deliberate statutory intervention into the housing market which was intended to and did have the effect of revitalising the rented property market. It also had a beneficial effect on the fixing of rents. The wording is very clear: once the fixed term has passed the landlord may serve two months' notice and obtain a possession order. In the light of the clear wording of section 21(4), and the delicacy of the area it covers, I do not consider that this court should itself interpret Article 8 as requiring the state to provide that procedural opportunity. In any event, this court, in my judgment, is bound by its earlier decision in Poplar to reach that conclusion.
I would dismiss the first ground of appeal. I now turn to the second ground of appeal.
Receivers' authority to terminate Miss McDonald's tenancy (Second ground of appeal)
I can take the point about the receivers' authority to give notice to Miss McDonald under section 21(4)(b) of the HA 1988 quite shortly.
The judge held that the receivers must have had power to issue the section 21 notice primarily because they had power under the mortgage to enter into possession of the property. If they did not have power to terminate the AST, their power to take possession of the property would be illusory. He noted that the conditions made the receivers the agents of Mr and Mrs McDonald, in the usual way, that is, to enable them to carry out their duties to CHL.
Miss Bretherton contends that the receivers did not have power to serve a section 21 notice on Miss McDonald. First, she submits that the landlord had to serve a section 21 notice. Alternatively CHL had to do so as the person deriving title from the landlord for the purpose of the definition of the term "landlord" (section 45 of the HA 1988). Second, the judge was wrong to imply any power into the conditions. The judge should have interpreted them against the receivers and CHL. Third, courts should not overlook the formalities required of a section 21 notice terminating a tenancy, just as the courts insist on compliance with the formal requirements of a notice to quit (see, for example, Wandsworth Borough Council v Attwell  27 HLR 531). Fourth, she further submits that the agency of the receivers could extend only to the enforcement of the terms within the loan agreement between Mr and Mrs McDonald and CHL, and not to the rights which Mr and Mrs McDonald had under the terms of the AST with Miss McDonald.
Mr Jourdan, submits that the service by the receivers of the section 21 notice was an incidental part of taking possession of the property so as to be able to sell it with vacant possession and obtain a better price. So the mortgage conditions gave them appropriate authority to serve the notice and take proceedings.
Conclusion on the second ground
I agree with Mr Jourdan and the judge. 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  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 fact that the mortgage conditions could have been drafted so as to confer an express power on the mortgagee to give a section 21 notice or that the mortgagee might be able to serve the notice by virtue of being within the definition of "landlord" does not mean that the receivers cannot do so where they have that power under the mortgage conditions. As a result of the true interpretation of the mortgage conditions, no question of strict compliance with formalities arises. Moreover the agency of the receivers must encompass the powers to enforce the security which the receivers are empowered to exercise.
Conclusion on this appeal
In my judgment, for the reasons given above, this appeal should be dismissed.
Lord Justice Tomlinson
I agree. The suggestion that the making of an order which by reason of s.21(4) of the Housing Act 1988 is mandatory can nonetheless be castigated as disproportionate in terms of Article 8.2 of the ECHR is in my view somewhat far-fetched. It would be an optimistic argument even without the benefit of Lord Bingham's explanation of the purpose of this deliberate and carefully calibrated statutory intervention in the social housing market, cited by my Lady at paragraph 59 above. The observations of Lord Woolf CJ, cited by my Lady at paragraph 54 above, ought to have been sufficient to indicate that the argument has no prospect of success in this court. My Lady's penetrating analysis of the Strasbourg jurisprudence has demonstrated convincingly that there is in any event no assistance to be derived from that quarter. Miss McDonald's predicament attracts sympathy, but the argument is hardly improved by deploying it in a case in which her landlords, her parents, are not only in egregious breach of the terms of their mortgage agreement concerning permitted letting but are also defaulters to the extent of £200,000 so that it is the mortgagees who seek to enforce their security in order to recoup an otherwise irrecoverable loss.
Lord Justice Ryder
I agree with my Lady and my Lord for the reasons they both give that the appeal should be dismissed.
It was conceded before us that the receivers could exercise any power in the mortgage including the right to claim possession and that they had the power to sue and issue proceedings (see, for example clause 9.5.1 of the contract). The only question on this ground of appeal was whether the receivers had the power to exercise the rights of the landlord to serve notices where there was no express provision for the same. I have no doubt that the powers granted should be construed purposively in the manner approved of in M Wheeler& Co v Warren  Ch 840 at 844 and 845 per Lawrence LJ so that the receivers may do that which is necessary to achieve the permitted end i.e. to serve notices so as to be able to take possession.
There is no clear and constant line of decisions in the Strasbourg jurisprudence that the proportionality test applies to a case involving a private landlord. I agree with the reservation of Judge De Gaetano in Buckland v UK (App No 40060/08) cited by my Lady at  that the decisions so far made do not establish that principle. That is unsurprising given the terms of art 8(2) and the fact that it is the court alone as a public authority that would be violating the art 8(1) right. Where Parliament has determined the balance of rights in legislation and mandates the decision the court must make, then unless the legislation is found to be incompatible with the Convention right, the balance struck is determinative given the wide margin of appreciation in the field of housing law. On the incompatibility point, this court is bound by the decision of Poplar Housing and Regeneration Community Association Ltd v Donoghue i.e. section 21 of the HA 1988 is compatible with the Convention.
I am not persuaded that because the court is a public authority which is bound to respect Convention rights, the court must apply proportionality in a horizontal context. It seems to me that such a conclusion would have significant implications for a wide range of private rights not limited to housing. The appellant has not established horizontality as a general concept nor in the narrower context of housing law given the specific rejection of that argument by Lord Millett and Lord Scott in Harrow LBC v Qazi  AC 983 at  and [143 and 144].
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