The Supreme Court has unanimously dismissed an appeal over the lawfulness and proportionality of a housing charity’s policy of allocating social housing primarily to members of the Orthodox Jewish community in Hackney and in particular the Haredi community.
Agudas Israel Housing Association (HA) makes properties available via an online portal operated by Hackney Council, which is open to applicants for social housing whom the London borough has identified as having a priority need.
The council cannot compel the housing association to take tenants who do not fall within scope of its charitable objective and its selection criteria.
The Supreme Court noted that this, combined with a significant surplus of need for social housing on the part of the Orthodox Jewish community, meant that in practice the council only nominates and Agudas Israel HA only accepts members of that community for the housing charity’s properties. The social housing provided by the charity makes up less than 1% of the social housing available in Hackney.
The principal appellant to the Supreme Court was a single mother with four small children, two of whom have autism.
Hackney identified her as having a priority need for social housing in a larger property, and she has now been housed by the council in such a property.
However, she had to wait longer to be allocated suitable housing as she was not a member of the Orthodox Jewish community and so larger properties owned by Agudas Israel HA which became vacant were not available to her.
She issued proceedings against the council and the charity, alleging that she had thereby suffered unlawful direct discrimination on grounds of race or religion contrary to the Equality Act 2010.
The Divisional Court dismissed the claim and the Court of Appeal dismissed her appeal.
For her appeal to the Supreme Court she was given permission to add to her claim based on the Equality Act 2010 a new claim that the allocation policy of the charity contravened Council Directive 2000/43/EC of 29 June 2000 (the “Race Directive”) by unlawfully discriminating against her on the grounds of race or ethnic origin.
The appeal turned on whether Agudas Israel HA acted unlawfully or not in restricting access to its stock of social housing.
In Z & Anor, R (on the application of) v Hackney London Borough Council & Anor  UKSC 40 the Supreme Court (Lord Reed, Lord Kerr, Lady Arden, Lord Kitchin, Lord Sales) unanimously dismissed the appeal.
Giving the main judgment, Lord Sales upheld the lower courts’ findings that Agudas Israel HA’s allocation policy was proportionate and lawful under sections 158 and 193(2)(a) of the Equality Act 2010.
As found by the Divisional Court and the Court of Appeal, the legitimate aims here included the minimisation of disadvantages which were connected to the Haredi community’s religious identity and counteracting discrimination which they suffered, including in the private housing market, and the fulfilment of relevant needs which are particular to that community.
The Supreme Court judge said Agudas Israel HA was entitled to adopt a clear and strict rule about who could and could not apply for its social housing, which meant that it was made available just for members of the Orthodox Jewish community, to ensure that its charitable activities were focused on that community, so that its activities did in fact fulfil its charitable objective to alleviate the problems of that community.
Lord Sales also held that the Divisional Court correctly considered the charity’s allocation policy in the light of the applicable legal framework and, accordingly, was entitled to find it to be proportionate and lawful under these statutory exemptions. The Supreme Court made his own assessment of proportionality, which was in agreement with that of the Divisional Court.
Lord Sales held that, in any event, the Court of Appeal was right to say that the Divisional Court’s finding of proportionality could only be set aside if it had misdirected itself or reached a decision which was wrong. Applying this approach, he held that the Divisional Court had been entitled to make this finding, with the result that its decision should be upheld on appeal.
In her concurring judgment, Lady Arden emphasised that an appellate court should generally not make its own assessment of proportionality in such circumstances, and with this caveat she agreed with the judgment of Lord Sales.
As regards the exemption in section 193(2)(b), the Supreme Court dismissed the argument for the appellants that the provision was subject to an implied proportionality requirement. There was no sound basis on which such a requirement could be read into the provision, Lord Sales found.
Lord Sales also concluded that Agudas Israel HA was not in contravention of the Race Directive for the simple reason that its allocation policy differentiated on the basis of religious observance and not race or ethnic origin.
This article was based largely on the Supreme Court’s press summary.