Court of Appeal rejects challenge to lawfulness of discriminatory allocation of housing on ground of religion

The Court of Appeal has rejected an appeal against a Divisional Court ruling that a charitable housing association’s arrangements for allocating housing, which amount to direct discrimination on the ground of religion, were lawful.

The Agudas Israel Housing Association ("AIHA") is registered as a smaller private provider of social housing. It owns property in Hackney, principally in parts of the borough which are inhabited by members of the Orthodox Jewish (Haredi) community.

AIHA's arrangements for the allocation of social housing in accordance with its objects are such that, in current circumstances, properties owned or controlled by AIHA are allocated only to members of the Orthodox Jewish community.

In Z & Aanor, R (On the Application Of) v London Borough of Hackney & Anor [2019] EWCA Civ 1099 the appellants – a mother and her four young children who are not members of the Orthodox Jewish Community – challenged those arrangements.

Hackney Council has nomination rights to property owned by AIHA. In making its nominations, the London borough nominates applicants who fall within AIHA's criteria for allocating property. In practice, this means that Hackney only nominates members of the Orthodox Jewish community.

In consequence, the appellants challenged Hackney's policy. Although in form the challenge was one to Hackney's housing allocation policy, in substance it was primarily a challenge to AHIA's allocation policy, Lord Justice Lewison said.

It was common ground that AIHA's arrangements for allocating housing amounted to direct discrimination on the ground of religion; because they treated less favourably those who were not members of the Orthodox Jewish community seeking housing, than those who were.

The Divisional Court (Lindblom LJ and Sir Kenneth Parker) held earlier this year that the discrimination was lawful. They based their decision on two grounds:

1. The arrangements were a proportionate means of overcoming a disadvantage shared by members of the Orthodox Jewish community, and hence permitted by section 158 of the Equality Act 2010 (positive action).
2. The arrangements were made pursuant to a charitable instrument, and were either a proportionate means of achieving a legitimate aim; or were for the purpose of compensating for a disadvantage linked to a protected characteristic. Thus, they were permitted by section 193 of the Act. Since that discrimination was lawful, Hackney's allocation policy was also lawful.

The Court of Appeal upheld the Divisional Court’s ruling.

Lord Justice Lewison found that AIHA’s allocation policy was permitted by s.193 (1) and s.193 (2) (b) of the 2010 Act.

That was enough on its own to dismiss the appeal but the judge went on to deal with the issues of proportionality since they had been fully argued.

Lord Justice Lewison said that he considered that the Divisional Court had answered the questions posed by the Supreme Court judgment in Coll:

1. The disadvantage to non-members of the Orthodox Jewish community was the withdrawal of 1 per cent of the potentially available units of accommodation.
2. The scale of that disadvantage was minuscule.
3. The needs of the Orthodox Jewish community linked to the relevant protected characteristic were many and compelling.
4. The allocation of properties to non-members of the Orthodox Jewish community would fundamentally undermine AIHA's charitable objectives. Thus there was no more limited way of achieving the legitimate aim.
5. Weighing these factors together, AIHA's allocation policy was proportionate.

Lord Justice Lewison said he did not consider that there was any flaw in this analysis which would entitle an appeal court to intervene. “For these reasons, too, I would reject the appeal in so far as directed against AIHA.”

As for the case against Hackney, the judge said he accepted that the council could not rely on s.193 because it was not a charity.

“If (as I would hold) AIHA's allocation policy is justified by section 158, I cannot see why Hackney cannot rely on section 158, which applies to everybody, even though Hackney did not advance a positive case to that effect,” Lord Justice Lewison said.

He added that the evidence was that Hackney had formed the reasonable opinion described in section 158 (1). “Because AIHA's allocation policy satisfies section 158 (2), Hackney is not acting unlawfully in making nominations in accordance with that policy.”

Lord Justice Lewison said he agreed with the Divisional Court’s finding that AIHA was co-operating with Hackney in a manner that was consistent with its own lawful arrangements.