30 JAMES AND OTHERS v. THE UNITED KINGDOM JUGDMENT transactions complained of (see paragraph 27 above) were not justified. The applicants drew attention to the factors listed in paragraph 29 above to show that the enfranchising tenants of the 80 houses concerned in Belgravia bore no resemblance to the kind of people, deserving of protection, whom the 1966 White Paper said the legislation was designed to benefit (see paragraph 18 above). Irrespective of its possible general compatibility with Article 1 (P1-1), the leasehold reform legislation, as applied in the concrete circumstances of these transactions, was alleged to infringe the principle of proportionality as it resulted in effects going far beyond what was required to achieve its apparent purpose. To illustrate that contention, they referred to one of their former properties where the tenant who purchased the lease near the end of its term for a low price before the introduction of the 1967 Act made a substantial and wholly "undeserved" gain on re-selling the property after enfranchising (see paragraph 29 (x) above). The view taken by Parliament as to the tenant’s "moral entitlement" to ownership of the house, which the Court has found to be within the State’s margin of appreciation (see paragraph 49 above), is one that applies equally to the applicants’ properties in Belgravia. An inevitable consequence of the legislation giving effect to that view is that any tenant who sells the unencumbered freehold of the property (comprising house and land) after enfranchising is bound to make an apparent gain, since the price of enfranchisement, at least on the 1967 basis of valuation, did not include the house and the tenant has benefited from the so-called merger value (see paragraphs 13 and 23 above). In addition, the broad sweep and scale of the redistribution of interests achieved by the reform mean that some anomalies, such as the making of "windfall profits" by tenants who purchased end-ofterm leases at the right time, are unavoidable. Parliament decided that landlords affected by the legislation should be deprived of the enrichment, considered unjust, that would otherwise come to them on reversion of the property, at the risk of a number of "undeserving" tenants being able to make "windfall profits". That was a policy decision by Parliament, which the Court cannot find to be so unreasonable as to be outside the State’s margin of appreciation. Neither does the operation of the legislation in practice, notably as illustrated by the 80 transactions concerning the applicants, show the scale of anomalies to be such as to render the legislation unacceptable under Article 1 (P1-1). Furthermore, in all the specific transactions complained of, even those where "windfall profits" were made by tenants in onward sales, the applicants received the prescribed compensation for what Parliament considered to be their entitlement in equity as landlords (see paragraph 28 above). Any hardship as a result of the making of a "windfall profit" was suffered not by the applicants, whose loss and compensation were unaffected, but rather by the predecessor(s) in title of the enfranchising tenant.