Green v Southern Pacific Mortgage Ltd & Anor

For disability discrimination, the service under the Disability Discrimination Act 1995 is the service actually provided, not every service a lender might offer. A secured repayment mortgage and an interest-only mortgage are different services. A universal refusal to convert existing repayment mortgages does not create a disability-specific barrier where disabled and non-disabled borrowers receive the same service on the same terms. Even assuming a duty to adjust arose, requiring a mortgagee to surrender agreed repayment security and possession rights for speculative interest-only security was not reasonable. Regulatory guidance requiring flexibility and consideration of forbearance did not compel that result. The change would also fundamentally alter the service under section 21(6).

The appellant defended possession proceedings brought by her mortgage lender after she fell into arrears. The Recorder rejected her arguments under the Disability Discrimination Act 1995, the Equality Act 2010 and article 8 of the European Convention on Human Rights. The appellant appealed only on the disability-discrimination issues.

She argued that the lender’s policy of refusing to convert repayment mortgages to interest-only mortgages made it impossible or unreasonably difficult for disabled persons to use its mortgage service, and that conversion was a reasonable adjustment. She also argued that an interest-only mortgage was not fundamentally different from the repayment mortgage originally provided.

1. Appeal dismissed. Coulson LJ held that the loan and mortgage were inextricably linked and together constituted the service. The service was the secured repayment mortgage actually provided. An interest-only mortgage would have been a different service. Patten LJ agreed. Jackson LJ would have defined the service more broadly as secured loans for home purchase, but this difference did not affect the result.
2. The no-conversions policy did not make it impossible or unreasonably difficult for disabled persons to use the service. The appellant had accessed the repayment mortgage without difficulty, and the policy applied equally to disabled and non-disabled borrowers. Although affirmative action may sometimes be required to achieve equality of results, no adjustment was required on these facts. The court referred to FirstGroup Plc v Paulley [2017] UKSC 4, Archibald v Fife Council [2004] UKHL 32 and Griffiths v The Secretary of State for Work and Pensions [2015] EWCA Civ 1265.
3. Alternatively, assuming that the policy restricted access to the service, the proposed adjustment was not reasonable. The duty was anticipatory, the burden shifted once a potential adjustment was identified, and reasonableness was assessed objectively. Requiring the lender to abandon agreed repayment security and its possession rights would substitute security dependent on future property value, condition and market conditions. The regulatory material required flexibility and consideration of interest-only arrangements, particularly temporary forbearance, but did not require such lending regardless of the risks.
4. The proposed change would also fundamentally alter the service under section 21(6) of the Disability Discrimination Act 1995. This was a question of statutory scope, not an exception requiring narrow construction. On the facts, the interest-only arrangement would leave the appellant unable to redeem the loan and would make the lender’s security speculative.
5. Jackson LJ made separate observations about the very substantial contractual legal costs and the absence of an effective costs-control mechanism. He agreed that the appeal should be dismissed.

• Court of Appeal (Civil Division): Appeal dismissed on 20 April 2018.
• Bristol County Court: Recorder Rowlands rejected the disability-discrimination defence in a judgment dated 19 November 2015 and ordered possession by 17 December 2015.
• Permission to appeal was granted on 24 March 2017.