Z & Ors, R (On the Application Of) v Hackney London Borough Council & Anor

The claim challenged allocation and nomination arrangements that in practice resulted in social housing controlled by Agudas Israel Housing Association (AIHA) being allocated primarily to members of the Orthodox Jewish community. The court accepted that those arrangements amounted to direct discrimination under section 13 of the Equality Act 2010 but held that AIHA’s arrangements were nevertheless lawful as "positive action" under section 158 and, alternatively, fell within the charities exception in section 193 (subject to section 194) because they were proportionate means of achieving legitimate aims and of preventing or compensating for disadvantages linked to the protected characteristic of religion. The court emphasised the acute imbalance of supply and demand for social housing in Hackney, the particular housing needs of the Orthodox Jewish community (including security concerns and larger household size), and concluded that AIHA’s approach was a proportionate response in the market circumstances described. Because AIHA’s arrangements were lawful, the claim against Hackney for unlawfully nominating applicants to AIHA was dismissed: Hackney had no lawful power to compel AIHA to abandon arrangements that were lawful under the Equality Act 2010. The court also dismissed related public law and Children Act 2004 section 11 challenges.

Background and parties: The claimants were a mother and her young child. The defendants were Hackney London Borough Council and Agudas Israel Housing Association (AIHA). The claim was a judicial review challenging AIHA’s allocations policy and Hackney’s nomination arrangements on equalities and public law grounds.

Nature of the application and relief sought:

• The claim sought declarations that AIHA’s allocation arrangements and Hackney’s nomination practices (which in practice resulted in allocations only or primarily to members of the Orthodox Jewish community) were unlawful under the Equality Act 2010 and contrary to public law, and that Hackney had failed to comply with its duties under the Children Act 2004.

Issues before the court:

• Whether AIHA’s allocation arrangements discriminated unlawfully under the Equality Act 2010 (direct and/or indirect discrimination) and, if so, whether they could be justified as lawful positive action under section 158 or under the charities exception in sections 193–194.
• Whether Hackney was liable for discrimination by nominating applicants to AIHA while knowing AIHA’s allocation practices and whether Hackney had breached public law duties or section 11 of the Children Act 2004.
• Ancillary issues of justiciability and the correct scope of remedies.

Court’s reasoning (concise):

• The court found that AIHA’s practices constituted direct discrimination by reason of religion (and there was argument about race/colour, but the primary characteristic was religion).
• Applying section 158, the court held that members of the Orthodox Jewish community suffered disadvantages and had different needs connected to their religion: poverty/deprivation, high levels of overcrowding, the need to live close to community infrastructure and heightened exposure to anti-Semitic crime. Those needs and disadvantages were material and could be addressed by targeted allocation arrangements.
• On proportionality the court applied the established four-part proportionality approach and concluded AIHA’s arrangements were proportionate in the specific market conditions of acute scarcity of suitable housing in Hackney and the very limited number of lettings by AIHA. The arrangements were not a blanket unconditional exclusion of others and were tailored to the charity’s objectives and the local housing market.
• The court also considered section 193 (charities exception) and section 194: it rejected arguments that the exception was unavailable because of indirect racial effects or because AIHA’s approach was not "in pursuance of" its charitable instrument. The court held section 193 could apply where the arrangements were authorised by the charity’s governing instrument and were proportionate.
• Because AIHA’s allocations were lawful under the Equality Act 2010, Hackney could not be required lawfully to force AIHA to abandon those arrangements, and the claim against Hackney failed. The Children Act 2004 section 11 challenge failed because Hackney had no realistic means of procuring a different lawful outcome from AIHA and had not acted unlawfully in allowing a lawful discriminatory scheme to operate.

Disposition: The claim for judicial review was dismissed.

The claim is dismissed. The court held that AIHA’s allocation arrangements, although discriminatory in effect, were lawful as either proportionate "positive action" under section 158 of the Equality Act 2010 or under the charities exception in section 193 (read with section 194). Given AIHA’s lawful position, Hackney could not lawfully be required to force AIHA to abandon those arrangements and the related public law and Children Act 2004 section 11 challenges also failed.

Permission for judicial review was granted below by Nicol J (procedural history noted in the judgment). This hearing was in the Divisional Court (Neutral Citation: [2019] EWHC 139 (Admin); Case No: CO/667/2018).