The exercise of a statutory power of sale is not a breach of the right to possession under the Convention for the Protection of Human Rights. In Horsham Properties Group Ltd v Clark and Beech and others, the court had to decide whether s101 of the Law of Property Act 1925 (LPA) infringed the Convention rights of a mortgagor by permitting a mortgagee to overreach the mortgagor's rights in relation to the mortgaged property by selling it out of court without first obtaining a court order for possession or an order for sale.
The defendants fell into arrears and their lender appointed receivers over the property pursuant to s101 LPA and pursuant to the mortgage deed. The property was sold (pursuant to the terms of the mortgage deed) at auction and then immediately sold on to the claimant. The claimant then issued possession proceedings against the defendants whom it alleged were now trespassers, their rights having been overreached by the receivers' sale.
The court held that the exercise of the statutory power of sale under s101 LPA after default by the mortgagor is not a deprivation of possession within the meaning of the Convention. S101 implements, rather than overrides, the private contractual bargain between the mortgagor and mortgagee by supplying a convenient power of sale out of court to the mortgagee, rather than the parties having to spell out the power in the mortgage.
Things to consider
Bear in mind that the use of s101 LPA to obtain a sale also circumvents the court's discretion to relieve the mortgagor from having to give up possession under s36 Administration of Justice Act 1970.