A charity letting social housing in Hackney only to members of the Orthodox Jewish community did not act unlawfully under the Equality Act 2010. The Supreme Court held that its policy was a proportionate way of meeting that community’s particular needs and disadvantages, and that a separate charity exemption did not require the charity to prove proportionality case by case. The appeal by a mother who was not a member of that community, and who had waited longer for a suitable home, was dismissed.
Agudas Israel Housing Association Ltd (AIHA), a charity established in 1986, owns 470 homes in Hackney, about 1% of the borough’s general social housing. Its objects are to provide housing for the community, primarily the Orthodox Jewish community. Hackney London Borough Council nominates applicants in priority need to vacant AIHA homes, but cannot require AIHA to take tenants outside those objects. Advertisements stated that consideration was only for the Orthodox Jewish community. Demand from that community exceeds supply and is likely to do so for the foreseeable future, so in practice every AIHA home is let within it. If there were a surplus, homes would be offered outside the community.
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Z needed suitable social housing and was eligible for nomination by the council. The housing association’s allocation policy meant that she was not considered for a vacancy. She challenged both the association’s arrangements and the council’s participation in them.
In 2018 she claimed that the arrangements were unlawful direct discrimination in the provision of services, on grounds of religion and race, contrary to the Equality Act 2010. Direct discrimination is less favourable treatment because of a protected characteristic. There is no general justification defence, but section 158 allows proportionate positive action to address disadvantage, different needs or low participation connected with a protected characteristic, and section 193 exempts a charity acting under its charitable instrument if the restriction is either a proportionate means of achieving a legitimate aim or for preventing or compensating for a linked disadvantage. AIHA accepted religious distinction, which would be unlawful without a defence, but denied racial discrimination. The Council accepted that its nominations could stand only if AIHA’s policy was lawful. AIHA accepted that it was amenable to judicial review, but no claim that it was a public authority under the Human Rights Act 1998 was before the Supreme Court.
The Divisional Court dismissed the claim and the Court of Appeal dismissed the appeal. Unchallenged findings were that Hackney’s social housing was under severe pressure; that the growing Haredi community faced poverty, overcrowding, anti-Semitism and prejudice in the private rented sector; and that members needed to live near one another and near schools, synagogues and shops, often in much larger homes. Features of AIHA’s homes adapted to religious life were relevant but not enough on their own. The Divisional Court held that the policy addressed disadvantages and needs connected with Orthodox Judaism. Applying the structured proportionality test described by Baroness Hale in Aster Communities Ltd v Akerman-Livingstone, it held the policy proportionate under sections 158 and 193(2)(a): supply was tiny against need, any wider allocation would undermine a real “primary” benefit, and the effect was to withdraw about 1% of units from the wider pool. It said the same result might not follow for a large provider, and rejected an analogy with European employment cases concerned only with equality of opportunity.
Lord Sales, with whom Lord Reed, Lord Kerr and Lord Kitchin agreed, held that an appellate court should not remake that assessment unless it was wrong. He agreed both that there was no such flaw and with the conclusion itself. Group benefits could properly be weighed against group disadvantage, not against one person’s wait. Charities may use clear rules so that limited funds reach the intended beneficiaries. Lady Arden agreed, while stressing that a sound first-instance evaluation need not be repeated on appeal.
A new argument, permitted only at the Supreme Court hearing, was that the policy was direct racial or ethnic discrimination contrary to the Race Directive, by analogy with R (E) v Governing Body of JFS. That claim failed. JFS concerned admission by matrilineal descent, treated by the majority as ethnic origin, without any test of religious practice. AIHA’s unchallenged criterion was Orthodox Jewish observance. Religious discrimination is outside the Race Directive. No wider ethnic-group case was allowed.
The express terms of section 193(2)(b) were met. Lord Sales agreed with the Court of Appeal that this limb contains no implied proportionality test. Reading one in would duplicate section 193(2)(a) and contradict Parliament’s deliberate choice, so neither the Human Rights Act nor EU law permitted that reading. The appellant could not rely on other people’s possible Race Directive rights. Even assuming article 14 of the European Convention applied, Parliament’s charity regime was itself proportionate. Whether this housing allocation fell within article 8, so as to engage article 14, was left open. The Court did not endorse the Court of Appeal’s view that it fell outside article 8.
Verdict: The Supreme Court unanimously dismissed the appeal. The statutory exceptions in sections 158 and 193 of the Equality Act 2010 applied on the evidence. The challenge under the Race Directive also failed. The Court did not decide whether the allocation fell within the ambit of article 8 for the purposes of article 14.
Source: R (on the application of Z and another) v Hackney London Borough Council and another [2020] UKSC 40
