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Court of Appeal decision reinforces protection for disabled persons

7 August 2007

At the end of July, the Court of Appeal handed down a judgment in the case of Lewisham Borough Council -v- Courtney Malcolm, which has dramatically extended the reach of legislation aimed at preventing disability discrimination. The decision will have considerable impact on all landlords in their day-to-day handling of any of their tenants who are disabled. Its implications are not confined to residential properties let by local authorities and social landlords, although that sector will be particularly affected by it.

The facts

Mr Malcolm was Lewisham Borough Councils (the "Council") secure tenant of a flat pursuant to section 79 of the Housing Act 1985. As a secure tenant, Mr Malcolm had a statutory right to buy the flat from the Council and had taken almost all steps necessary to complete his purchase. Shortly before he was due to complete, Mr Malcolm, through a letting agency, sublet his flat in breach of one of the tenants covenants. A fundamental feature of a secure tenancy is that the tenant must occupy it as his only home. Accordingly, it cannot be sublet without the consent of the relevant local authority. If it is, the tenant will lose both his status as a secure tenant and with it the right to buy. As a result of the unlawful subletting Mr Malcolm not only broke one of the terms of his tenancy, but also in so doing took the tenancy outside the secure tenancy regime of the Housing Act 1985 altogether, losing therefore his statutory right to buy. His status automatically became that of a weekly contractual tenant lacking any security of tenure whatsoever. The Council, when it found out what he had done, responded by refusing to complete the sale of the flat to Mr Malcolm and by giving him a valid notice to quit. When Mr Malcolm failed to leave, the Council issued proceedings for possession. On the face of things, these proceedings should have been open and shut in the Councils favour but they were complicated by the Disability Discrimination Act 1995 (the "Act").

For a long time Mr Malcolm had been diagnosed as a schizophrenic, an illness he had previously successfully controlled with medication. However, during the relevant period, Mr Malcolm had stopped taking his medication and as a result became psychotic, which period ended with him subletting his flat.

Mr Malcolms defence to the possession claim

Mr Malcolm defended the proceedings by relying on section 22(3)(c) of the Act. This states that "it is unlawful for a person managing any premises to discriminate against a disabled person occupying those premises…by evicting the disabled person, or subjecting him to any other detriment". Also under the Act, "a person discriminates against a disabled person if (a) for a reason which relates to the disabled persons disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply; and (b) he cannot show that the treatment in question is justified".

A "disabled person" is defined by the Act as a person having "a physical or mental impairment which has a substantial and long term effect on his ability to carry out normal day-to-day activities". If the disability can be controlled with medication, the disability is taken to have the effect it would have were the person not taking such medication.

The decision

Plainly Mr Malcolm was disabled within the meaning of the Act. The court did not have any discretion when deciding whether a possession order should be granted, in circumstances where Mr Malcolm lacked security of tenure. Nevertheless, the court held that granting a possession order would constitute discrimination against Mr Malcolm and therefore would be unlawful within the Act. Mr Malcolm was disabled as a result of his schizophrenia. He had sublet the flat while he was suffering from a schizophrenic episode. The Councils decision to serve notice to quit and institute possession proceedings were as a consequence of the subletting and were held therefore to "relate" to Mr Malcolms disability and to constitute discrimination on grounds of disability.

The result of this decision is that unless Mr Malcolm were to provide other grounds for obtaining possession of his flat unrelated to his disability there is no way that the Council can obtain possession against him. The Court of Appeal, by applying the disability discrimination legislation to the facts, conferred security of tenure on Mr Malcolm in circumstances where he otherwise did not enjoy any. This can, in landlord and tenant terms, only be regarded as remarkable and shows the extent to which discrimination legislation is treated as pre-eminent when placed alongside other legislation.

In reaching the decision, the Court of Appeal made various points that must be taken into account by all landlords of both commercial and residential premises in their mission to comply with disability discrimination legislation. For example, there is no need for the disability to be the cause of the action by the disabled person that results in the alleged discriminatory treatment. So in this case, Mr Malcolm did not need to show that it was his mental state as a schizophrenic that caused him to sublet his flat; the two merely had to be "related". The fact that the Council did not know about Mr Malcolms condition is irrelevant. In fact, the court held that a local authority in such a case was under an obligation to make enquiries to see if the subletting, being a breach of a secure tenancy with such serious consequences, was caused by any disability and to address the court on this issue even if not raised by the tenant. There is no need for the disabled person actually to be suffering from the relevant disability at the relevant time. A person suffering from schizophrenia but controlling his condition by medication would still have the protection of the Act.

What the case means for you

The implications of the decision are wide ranging, extending well outside the context of residential tenancies, if as a landlord your objective is to evict a tenant who is in breach of the terms of his lease. Take a commercial tenant who is in breach of repairing covenants that he cannot face complying with as he is suffering from depression. In this case, the Lewisham -v- Malcolm decision means the landlord may not in practice be able to forfeit the lease in the sense that to seek a court order for possession would be to discriminate against the tenant on grounds of his disability. Imagine a tenant who suffers a nervous breakdown and is not expected to recover for a few years. During that time, the tenant does not pay his rent. Again, the landlord could be prevented from recovering possession. Section 22 of the Act extends to "subjecting [the disabled person] to any other detriment" so other remedies usually available to the landlord may also be resisted, e.g. distress or court proceedings for recovery of rent arrears.

The answer is not of course to seek to avoid letting premises to people who benefit from the protection of the Act as that of itself would be clearly unlawful let alone reprehensible morally. In reality, what the court is doing in cases like this is feeling its way somewhat in the dark when considering what constitutes permissible and impermissible actions where discrimination issues are raised and defining these as it goes along. While undertaking this process, when it comes to conflicting rights between landlords and disabled tenants the law seems to be indicating a policy preference in favour of the victim of discrimination. Accordingly it appears clear that in such circumstances landlords will have to learn to temper their expectations and be prepared to make special allowance for any disabled tenants. Furthermore it should not be overlooked that disability discrimination may lead to an award of compensation to the victim of discrimination in addition to inhibiting a landlords rights.

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