Horsham Properties Group Ltd v Clark [2009] 1 WLR 1255

Facts

• Mr. and Mrs. Clark mortgaged their home to secure a loan.
• After defaulting on mortgage payments, the mortgagee, Horsham Properties Group Ltd, exercised its power of sale derived from both the mortgage deed and the Law of Property Act 1925.
• The property was sold to a third party, who sought possession.
• The Clarks contended that the sale and their resulting eviction violated their rights under Article 8 of the European Convention on Human Rights (ECHR).
• The process allowed the mortgagee to sell the property without prior court intervention, subject to statutory conditions.

Issues

1. Whether the exercise of the mortgagee’s power of sale without prior court oversight is incompatible with the mortgagor’s rights under Article 8 ECHR.
2. Whether lack of judicial scrutiny renders the process unfair or disproportionate and thus contrary to human rights protections.

Decision

• The Court of Appeal held that the statutory power of sale, as set out in the Law of Property Act 1925, is not incompatible, in itself, with Article 8 ECHR.
• The court determined that the statutory framework was clear and accessible and qualified as “in accordance with the law.”
• The Court found that statutory safeguards—such as the requirement for mortgagees to act in good faith and obtain the best price—provided sufficient protection for mortgagors.
• Judicial review and other remedies were deemed adequate to ensure fairness, and the Human Rights Act 1998 does not mandate prior judicial scrutiny for every interference with a person’s home.
• The court ruled that the interference with Article 8 rights was proportionate to the legitimate aim of protecting mortgagees' contractual rights.

Legal Principles

• Under the Law of Property Act 1925, a mortgagee can exercise the power of sale without court involvement if statutory conditions are satisfied.
• Article 8 ECHR provides a right to respect for one’s home but permits interference in accordance with law and where necessary in a democratic society.
• The requirement for interference with Article 8 rights to be “in accordance with the law” is met where statutory procedures are clear and accessible.
• Proportionality is assessed by considering both the effectiveness of statutory safeguards and the presence of legal remedies after the event.

Conclusion

The Court of Appeal confirmed that a mortgagee’s exercise of the statutory power of sale, without prior court intervention, does not, of itself, violate Article 8 ECHR, provided the statutory safeguards are followed and legal remedies are available, thus maintaining the balance between contractual rights and human rights in mortgage law.