Z & Aanor, R (On the Application Of) v London Borough of Hackney & Anor

A charity may restrict benefits to persons sharing a protected characteristic under section 193(2)(b) of the Equality Act 2010 where its purpose is to prevent or compensate for a disadvantage linked to that characteristic. This is an alternative to the proportionality test in section 193(2)(a), and requires no balancing assessment.

Positive action under section 158 may lawfully disadvantage persons outside the preferred group. Proportionality depends on whether the arrangements, viewed as a whole and in their market context, address characteristic-linked needs or disadvantages in a manner outweighing the adverse effect on others. An appellate court may intervene only where an identifiable flaw undermines the cogency of the lower court’s assessment, or the conclusion was otherwise wrong.

A charitable housing association primarily served the Orthodox Jewish community in Hackney. Because demand from that community greatly exceeded its limited housing stock, its properties were in practice allocated only to Orthodox Jewish applicants. The local authority made nominations consistently with those allocation criteria.

The appellants, who were not Orthodox Jews, challenged these arrangements as direct religious discrimination. The Divisional Court, in [2019] EWHC 139 (Admin), held that the arrangements were permitted both as positive action under section 158 and as the provision of charitable benefits under section 193 of the Equality Act 2010.

The principal issues on appeal were whether section 193(2)(b) contained an implied proportionality requirement, whether the Divisional Court’s proportionality assessment was flawed, whether the local authority’s nomination practices were lawful, and whether it had complied with section 11 of the Children Act 2004.

1. Appeal dismissed. Section 193(2)(b) of the Equality Act 2010 does not contain an implied proportionality requirement. Sections 193(2)(a) and 193(2)(b) establish alternative bases on which a charity may restrict benefits to persons sharing a protected characteristic. Paragraph (b) requires that the restriction be made pursuant to a charitable instrument and for the purpose of preventing or compensating for a disadvantage linked to the characteristic. It requires no comparison of the relative disadvantages experienced by different groups.

2. Reading proportionality into paragraph (b) would make it redundant because a proportionate pursuit of the relevant legitimate aim is already covered by paragraph (a). Neither the Human Rights Act 1998 nor EU law required that result. The housing arrangements fell outside the ambit of articles 8 and 9 of the Convention. The religious discrimination in issue was also outside the Race Directive. In any event, the arrangements were proportionate.

3. The Divisional Court had applied the correct proportionality principles. Positive action may disadvantage persons outside the preferred group. The question is whether the arrangements, assessed as a whole and in the relevant market conditions, meet characteristic-linked needs or disadvantages in a manner outweighing that detriment. Only about one per cent of Hackney’s potentially available social housing was removed from the general pool. That disadvantage was minuscule, while the Orthodox Jewish community’s linked needs and disadvantages were many and compelling. Allocating properties outside that community would seriously dilute the benefit and undermine the charity’s objective.

4. An appellate court does not repeat a proportionality assessment merely because it might have reached a different evaluation. Intervention requires a conclusion that was wrong, including an identifiable gap in logic, inconsistency, omission of a material factor or other flaw that undermines the cogency of the lower court’s conclusion. No such flaw existed.

5. The local authority acted lawfully in making nominations consistently with the housing association’s lawful criteria. Section 158 was available to the authority because it had reasonably formed the opinion required by subsection (1), and the arrangements satisfied subsection (2). Section 193 was unavailable to it because it was not a charity.

6. The section 11 Children Act 2004 challenge also failed. The pleaded case concerned the authority’s arrangements with the housing association, not any wider failure to assist the appellants. Those arrangements promoted children’s welfare, and the authority’s direct-offer procedure had given effect to the particular children’s needs.

1. Court of Appeal (Civil Division): The appeal was dismissed by [2019] EWCA Civ 1099. The court upheld the lawfulness of the housing association’s allocation arrangements and the local authority’s associated nomination practices.
2. High Court, Divisional Court: In [2019] EWHC 139 (Admin), Lindblom LJ and Sir Kenneth Parker dismissed the judicial review challenge. They held that the arrangements were permitted under sections 158 and 193 of the Equality Act 2010.