ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION DIVISIONAL COURT
LORD JUSTICE LINDBLOM; SIR KENNETH PARKER
Strand, London, WC2A 2LL
B e f o r e :
LADY JUSTICE KING
SIR STEPHEN RICHARDS
| THE QUEEN
(on the application of Z and Another)
|- and -
|(1) LONDON BOROUGH OF HACKNEY
(2) AGUDAS ISRAEL HOUSING ASSOCIATION LIMITED
MR MATT HUTCHINGS QC (instructed by Hackney Legal Services) for the First Respondent
MR CHRISTOPHER BAKER & MS REA MURRAY (instructed by Asserson Law Offices) for the Second Respondent
Hearing dates : 12th and 13th June 2019
Crown Copyright ©
Lord Justice Lewison:
"A2 The Association is formed for the benefit of the community. Its object shall be to carry on for the benefit of the community (and primarily for the benefit of the Orthodox Jewish Community):
A2.1 the business of providing housing, accommodation, and assistance to help house people and associated facilities and amenities for poor people or for the relief of the aged, disabled, handicapped (whether physically or mentally) or chronically sick people.
A2.2 any other charitable object that can be carried out by an Industrial and Provident Society registered as a social landlord with the Corporation."
The EU background
"access to and supply of goods and services which are available to the public, including housing."
"With a view to ensuring full equality in practice, the principle of equal treatment shall not prevent any Member State from maintaining or adopting specific measures to prevent or compensate for disadvantages linked to racial or ethnic origin."
The domestic legislative framework
"(1) This section applies if a person (P) reasonably thinks that –
(a) persons who share a protected characteristic suffer a disadvantage connected to the characteristic,
(b) persons who share a protected characteristic have needs that are different from the needs of persons who do not share it, or
(c) participation in an activity by persons who share a protected characteristic is disproportionately low.
(2) This Act does not prohibit P from taking any action which is a proportionate means of achieving the aim of –
(a) enabling or encouraging persons who share the protected characteristic to overcome or minimise that disadvantage,
(b) meeting those needs, or
(c) enabling or encouraging persons who share the protected characteristic to participate in that activity."
"(1) A person does not contravene this Act only by restricting the provision of benefits to persons who share a protected characteristic if –
(a) the person acts in pursuance of a charitable instrument, and
(b) the provision of the benefits is within subsection (2).
(2) The provision of benefits is within this subsection if it is –
(a) a proportionate means of achieving a legitimate aim, or
(b) for the purpose of preventing or compensating for a disadvantage linked to the protected characteristic."
"(2) That section [i.e. section 193] does not apply to race, so far as relating to colour."
"Consideration only to the Orthodox Jewish community."
"… there are very high levels of poverty and deprivation, with associated low levels of home ownership. …On the evidence before us, we are satisfied that, applying that approach, there is a strong correlation between the evidenced poverty and deprivation and the religion. This is explained in part by the way of life, especially affecting educational and employment opportunities, which is characteristic of the Orthodox Jewish community."
"We refer again, in particular, to the widespread and increasing overt anti-Semitism in our society, and to the 44.5% increase in reported anti-Semitic crime between 2014 and 2016, with 10% of such crimes involving violence. The traditional Orthodox Jewish clothing, which characterises the community, heightens the exposure to anti-Semitism and to related criminality. In particular, Ms Cymerman-Symons MBE stated in evidence that in 40 years working in the Orthodox Jewish Community in Hackney she had heard "countless accounts from housing applicants whom AIHA has housed from the private sector about the prejudice they have faced in trying to rent in the private sector on account of their appearance, their language and their religion". This evidence was not challenged, and we believe that it credibly describes the position that members of the Orthodox Jewish community are likely to face in seeking accommodation."
"There was also evidence before us of the relevant need for family and community facilities, such as schools, synagogue and shops, as well as the special features of the accommodation already mentioned….
As for the particular characteristics of the housing, such as kosher kitchens, we would accept that, standing alone, they would be unlikely to be sufficient to justify the challenged discrimination. However, we do not believe that they should be entirely discounted."
"… there was evidence in data from 2015 which showed that the average number of occupants of Orthodox Jewish households in Stamford Hill was 6.3, in contrast to the average for the whole of Hackney of 2.43, and for the UK of 2.38. In our view, this evidence demonstrates a particular need in the Orthodox Jewish community for property, which is likely to be in very short supply, that would accommodate substantially larger families, and that would significantly reduce the particular and intensified risk to such families of eviction from overcrowded accommodation."
The Divisional Court's reasoning
i) The disadvantages faced by Orthodox Jews are real and substantial.
ii) Those disadvantages are "connected with" the religion of Orthodox Judaism.
iii) The needs of members of the Orthodox Jewish community are different from those who are not members of it. They have a relevant need to live relatively close to each other, with a view to reducing apprehension and anxiety regarding personal security, antisemitic abuse and crime. They also have a need for family and community facilities, including schools, synagogues and shops, as well as special features of accommodation. They also have a need for property that would accommodate substantially larger families.
"We are satisfied, for these reasons, that AIHA's arrangements for allocating housing, which place Orthodox Jews in a primary position, enable them both to avoid the disadvantages and to meet the needs to which we have referred. The remaining question is whether they do so in a "proportionate" manner."
"AIHA's charitable objectives permit and oblige it to accord "primary" benefit to members of the Orthodox Jewish community. There is no unqualified restriction of benefits to members of that community, nor absolute exclusion of non-members. AIHA currently has over 700 applicants on its waiting list. It has a total housing stock of 470 homes in Hackney, but the crucial consideration in this context is that, over the seven-year period from 2011 to 2018, only 89 general needs properties became available for allocation, a marginal availability of only about 12 to 13 properties each year, with a huge imbalance between supply and demand. There is no evidence that that imbalance is likely to decrease markedly in the foreseeable future. At the same time there is an acute imbalance between supply and demand for social housing in Hackney generally. About 13,000 households are currently registered under Hackney's scheme for the allocation of social housing. In 2016, Hackney allocated only 1,229 properties for social housing. Again, there is no evidence that the imbalance is likely to decrease markedly in the foreseeable future."
"We also conclude that AIHA's arrangements are justified as proportionate under section 158. For the reasons we have already given, the disadvantages and needs of the Orthodox Jewish community are many and compelling. They are also in many instances very closely related to the matter of housing accommodation. We recognise the needs of other applicants for social housing, but, in the particular market conditions to which we have referred, AIHA's arrangements are proportionate in addressing the needs and disadvantages of the Orthodox Jewish Community, notwithstanding the fact that in those market conditions, a non-member cannot realistically expect AIHA to allocate to him or her any property that becomes available."
"In this case it is self-evident that the allocation of particular accommodation to a member of the Orthodox Jewish community may well disadvantage an individual non-member who may have a priority need for such accommodation. However, the relevant question, which we have dealt with above, is whether the arrangements, viewed as a whole and in the light of relevant market circumstances, address the disadvantages and needs of the Orthodox Jewish community in a manner that outweighs the disadvantage to non-members of that community."
i) AHIA did not discriminate on the ground of colour.
ii) The specific protected characteristic, on the basis of which AHIA discriminated, was the religion of Orthodox Judaism.
iii) AHIA's arrangements for allocating housing were "authorised by" or "in line with" its charitable instrument; and were therefore made "in pursuance of" it.
iv) For the same reasons as underpinned its conclusion in relation to section 158, AHIA's arrangements were a proportionate means of achieving a legitimate aim.
Is proportionality a requirement of section 193 (2) (b)?
"(1) Nothing in Parts II to IV shall—(a) be construed as affecting a provision to which this subsection applies, or (b) render unlawful an act which is done in order to give effect to such a provision [ i.e. a provision in a charitable instrument].
(2) Subsection (1) applies to a provision for conferring benefits on persons of one sex only (disregarding any benefits to persons of the opposite sex which are exceptional or are relatively insignificant), being a provision which is contained in a charitable instrument."
"(2A) But subsection (1) does not apply to discrimination under section 1 or 2A in its application to sections 29 to 31 unless the conferral of benefits is—(a) a proportionate means of achieving a legitimate aim, or (b) for the purpose of preventing or compensating for a disadvantage linked to sex"
" … I infer … that at least sub-s (2A)(a) was introduced so as to bring the express terms of s 43 into compatibility with convention rights, and with art 14 in particular. Even before this amendment came into force, it would in my judgment have been necessary to construe s 43 as containing that limitation by implication, pursuant to s 3 of the 1998 Act, because of its undoubted effect upon the interpretation of antecedent legislation.
 It is also to be noted that s 43(2A) necessarily contemplates that sex discrimination in the conferring of benefits by a charity may be a proportionate means of achieving a legitimate aim even if for a purpose which does not consist of meeting the special needs of the protected class. That conclusion is necessitated by the use of the word 'or' at the end of sub-s (2A)(a). There may of course be a large overlap in practice between sub-ss (2A)(a) and (b)."
"The third and remaining question is how none the less reg 18 is to be confined by way of interpretation so as to avoid it transgressing the real restrictions imposed by the requirement to construe it compatibly with convention rights, and in particular with the jurisprudence about art 14. In my judgment the answer is to be found in three elements of reg 18. The first is the restriction (unique to reg 18 among these regulations), that it applies only to charities. The second lies in the fact that, as expressly contemplated by reg 18(2), the practical effect of reg 18 is controlled by a public authority, namely the commission, as regulator. The third is, as I have described in relation to s 43 of the 1975 Act, that even without an express reference to the need for the proportionate pursuit of a legitimate aim, a convention-right compatible interpretation of reg 18 requires that limitation to be implied."
"There is no enshrined right to a physical home; the right is to the enjoyment of a family life. However, this can, in reality, only be enjoyed in settled accommodation. Accordingly, I am satisfied there is a sufficient link."
"This section allows charities to provide benefits only to people who share the same protected characteristic… if this in line with their charitable instrument and it is objectively justified or to prevent or compensate for disadvantage."
"A charity will not breach the Act by providing benefits only to people who share a particular protected characteristic if this is in accordance with the charitable instrument that establishes or governs the charity, and is either:
a proportionate means of achieving a legitimate aim; or
for the purpose of preventing or compensating for a disadvantage linked to that protected characteristic."
"There is no requirement that a charity must provide benefits to the most disadvantaged group, or assess the relative disadvantage of different groups. The Act only requires that, if a charity provides benefits to a group of people with the same protected characteristic to the exclusion of others, it must be able to show that the purpose of restricting benefits in this way is to prevent or compensate for disadvantage experienced by members of the selected group or groups."
The role of an appeal court
"If, after reviewing the judge's judgment and any relevant evidence, the appellate court considers that the judge approached the question of proportionality correctly as a matter of law and reached a decision which he was entitled to reach, then the appellate court will not interfere. If, on the other hand, after such a review, the appellate court considers that the judge made a significant error of principle in reaching his conclusion or reached a conclusion he should not have reached, then, and only then, will the appellate court reconsider the issue for itself if it can properly do so (as remitting the issue results in expense and delay, and is often pointless)."
" In conclusion, the references cited above show clearly in my view that to limit intervention to a "significant error of principle" is too narrow an approach, at least if it is taken as implying that the appellate court has to point to a specific principle—whether of law, policy or practice—which has been infringed by the judgment of the court below. The decision may be wrong, not because of some specific error of principle in that narrow sense, but because of an identifiable flaw in the judge's reasoning, such as a gap in logic, a lack of consistency, or a failure to take account of some material factor, which undermines the cogency of the conclusion. However, it is equally clear that, for the decision to be "wrong" under CPR r 52.11(3), it is not enough that the appellate court might have arrived at a different evaluation. As Elias LJ said in R (C) v Secretary of State for Work and Pensions  PTSR 1344, para 34:
"the appeal court does not second guess the first instance judge. It does not carry out the balancing task afresh as though it were rehearing the case but must adopt a traditional function of review, asking whether the decision of the judge below was wrong …""
"The statements in all of these cases and, of course, in McGraddie itself were made in relation to trials where oral evidence had been given. On one view, the situation is different where factual findings and the inferences drawn from them are made on the basis of affidavit evidence and consideration of contemporaneous documents. But the vivid expression in Anderson that the first instance trial should be seen as the "main event" rather than a "tryout on the road" has resonance even for a case which does not involve oral testimony. A first instance judgment provides a template on which criticisms are focused and the assessment of factual issues by an appellate court can be a very different exercise in the appeal setting than during the trial. Impressions formed by a judge approaching the matter for the first time may be more reliable than a concentration on the inevitable attack on the validity of conclusions that he or she has reached which is a feature of an appeal founded on a challenge to factual findings. The case for reticence on the part of the appellate court, while perhaps not as strong in a case where no oral evidence has been given, remains cogent. In the present appeal, I consider that the Court of Appeal should have evinced a greater reluctance in reversing the judge's findings than they appear to have done."
Failure to balance?
"First, is the objective sufficiently important to justify limiting a fundamental right? Secondly, is the measure rationally connected to the objective? Thirdly, are the means chosen no more than is necessary to accomplish the objective?"
"… this concept of proportionality, which has found its way into both the law of the European Union and the European Convention on Human Rights, has always contained a fourth element. This is the importance, at the end of the exercise, of the overall balance between the ends and the means: there are some situations in which the ends, however meritorious, cannot justify the only means which is capable of achieving them."
"But it is for the Secretary of State to show that the discrimination is justified. Given that the Ministry has not addressed the possible impacts upon women, assessed whether there is a disadvantage, how significant it is and what might be done to mitigate it or to meet the particular circumstances of women offenders, it cannot show that the present distribution of APs for women is a proportionate means of achieving a legitimate aim."
i) Assess whether there is a disadvantage;
ii) If so, consider how significant it is;
iii) Consider what might be done to mitigate that disadvantage, or to meet the particular circumstances of the persons in relation to whom the discrimination takes place.
"The Court notes that the subject matter of this case is the applicant's differential treatment in the context of the total removal of his access rights to his son, and this to a decisive extent on account of the applicant's religious beliefs. It considers that, in the light of the importance of the rights enshrined in art 9 of the Convention in guaranteeing the individual's self-fulfilment, such a treatment will only be compatible with the Convention if very weighty reasons exist. The Court has applied a similar approach in the context of differences in treatment on the basis of sex (see Abdulaziz, para 50), birth status (see Inze v Austria  ECHR 8695/79, para 41), sexual orientation (see L v Austria  ECHR 39392/98 and 39829/98, para 50) and nationality (Gaygusuz v Austria  ECHR 17371/90, para 42)."
"Given the limited availability to, and pressing demand from, that community, if AIHA were to allocate any of its properties to non-members, it would seriously dilute the number of properties available to Orthodox Jews, and would fundamentally undermine its charitable objective of giving "primary" position, in a meaningful, as distinct from formalistic, sense to Orthodox Jews."
"The example in the statutory code, under the heading "Distinguishing positive action and 'positive discrimination'", specifically recognises that positive action in favour of a preferred group may well cause disadvantage to other groups, but the advantages to the preferred group may well outweigh the disadvantage, and so be proportionate. In this case it is self-evident that the allocation of particular accommodation to a member of the Orthodox Jewish community may well disadvantage an individual non-member who may have a priority need for such accommodation. However, the relevant question, which we have dealt with above, is whether the arrangements, viewed as a whole and in the light of relevant market circumstances, address the disadvantages and needs of the Orthodox Jewish community in a manner that outweighs the disadvantage to non-members of that community."
i) The disadvantage to non-members of the Orthodox Jewish community was the withdrawal of 1 per cent of the potentially available units of accommodation.
ii) The scale of that disadvantage was minuscule.
iii) The needs of the Orthodox Jewish community linked to the relevant protected characteristic were many and compelling.
iv) 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.
v) Weighing these factors together, AIHA's allocation policy was proportionate.
The appeal against Hackney
"Provided that AIHA is acting lawfully in the relevant respect, Hackney simply has no legal right or power, even if it were so minded, to insist that AIHA jettison its lawful arrangements, and to make allocation decisions without regard to those arrangements. AIHA has a "duty to co-operate", but it has not been suggested, nor could it be sensibly suggested, that AIHA would act "unreasonably" in so far as it insisted, as it currently insists, on applying arrangements that are perfectly lawful under the 2010 Act. AIHA is co-operating with Hackney in a manner that is consistent with its own lawful arrangements."
Section 11 of the Children Act 2004
"The Claimants' case is that in making and maintaining nomination arrangements with [AIHA], [Hackney] has failed to ensure that it has exercised its housing allocation functions "having regard to the need to safeguard and promote the welfare of children"."
" The claimants did not contend that Hackney failed to comply with section 11 in settling the scheme, or in its application generally of the arrangements for deciding priority to applicants for social housing. Nor is there any attack of that nature on Hackney's nomination arrangements as such with AIHA.
 The real thrust of the claimants' case under section 11 is that, in "allowing" AIHA to operate its arrangements for allocating its available properties, and, in particular, in "allowing" AIHA to operate lawful discriminatory arrangements, Hackney did not have regard to section 11, and, implicitly, that it might have not "allowed" such conduct if it had had regard to such duty."
"AIHA's allocation arrangements are valuable for the purpose of alleviating high levels of child poverty in the Orthodox Jewish community, and also more general evidence showing that the Orthodox Jewish community has households very substantially larger than average, and that young children form a relatively large proportion of the community."
Lady Justice King:
Sir Stephen Richards: