Lewisham London Borough Council v Malcolm

1. This case is a possession claim by the claimant council against a former secure tenant who is a schizophrenic and who relies on the Disability Discrimination Act 1995 ("the 1995 Act") . As a secure tenant and with his particular history of having been a tenant of the council, he was entitled to exercise the right to buy. He decided to exercise that right and accepted an offer from the council to sell him his flat at £43,000. In order to raise the money he applied to a mortgage lender. In order to pay the mortgage payments he arranged to sub-let the flat. Unfortunately for him he jumped the gun by sub-letting before he had become the owner. He was still a tenant of the council when on 22 June 2004 agents on his behalf granted a tenancy agreement of the flat to a Mr Kratavicius.

On 6 July 2004 the council's officers discovered the sub-letting and they then served a notice to quit. By sub-letting the flat he had lost irrevocably his security of tenure because of section 93(2) of the Housing Act 1985. His right to buy depended on his status as a secure tenant continuing until completion, so he has also lost his right to buy.

The claimant then started possession proceedings which the defendant defended under the 1995 Act. In the defence he said at paragraph 2.2 that changes in his treatment and/or his failure to take the treatment led to him making irrational decisions in relation to the management of his tenancy, at paragraphs 2.3 and 6 that any confusion with his tenancy was caused by his condition and at paragraph 9 that his condition amounted to a disability under the 1995 Act, that the reason why the council was seeking possession was because of the disability and that unless the council could show justification under section 24 of the 1995 Act, the court may not make a possession order against the defendant.

At the trial he gave evidence, as did other members of his family. The court also had a report from a single joint expert, Dr Steadman. Dr Steadman said that the defendant "may well have had the mental capacity to enter into a contract", but:

"… would not have had the mental capacity to properly understand the issues concerning such, or the potential ramifications of such."

He was unable to say whether non-compliance with the treatment prescribed had contributed in any way to the decision to sub-let. The matter came before HHJ Hallon at trial. She had been invited to decide a point as a preliminary issue but, I have no doubt wisely, refused to take that course and heard all the evidence and the argument. Having done so, the first point which she had to decide was the point that had been identified as a preliminary issue: namely, whether the 1995 Act provides a defence to a claim for possession on a non-discretionary ground. In relation to discretionary grounds it has been held to be relevant and to limit the circumstances in which possession can be ordered, in the decision of this court in Manchester City Council v Romano [2004] EWCA Civ 834.

Section 24(2) of the 1995 Act sets out the circumstances in which discrimination can be justified so as not to give rise to a claim under the 1995 Act. If those factors are relevant to the present case, it does not seem to me that they could justify service of the notice to quit or taking possession proceedings against the defendant. The judge, however, held that no question of discrimination arose at any rate as a defence to the claim for possession because there was no discretion to be exercised. On that first point she herself gave permission to appeal.

She then went on to decide whether the defendant's schizophrenia was a disability within the meaning of the 1995 Act. She held, and Mr Carrott on the defendant's behalf submits that this is a rather surprising holding, that it was not, because on balance from the evidence of the extent to which the defendant coped with day-to-day activities, it did not have a substantial adverse effect. Permission to appeal on this point was refused by the judge but was later granted by Swift J.

The third issue, which is the one relevant before us today, is whether the sub-letting was caused by the schizophrenia. The judge considered this question at paragraphs 43 to 52 of her judgment, finding that the expert evidence was of limited help and that the defendant's own evidence was unreliable. She noted in particular that at times he had said that he did not know he was not allowed to sub-let and that a review of what the defendant had been doing as regards the property and other aspects of his affairs in 2004 did not suggest any impairment in his ability to deal with such matters. So she concluded at paragraph 52 that the sub-letting was a planned decision closely linked to his proposed purchase under the right to buy, but the only mistake was in the timing, in that he did not realise that he had to wait until after completion of the purchase and that it was not an irrational act or otherwise caused by his illness.

She also expressed a view on the fourth point, namely if, contrary to her finding, the defendant's condition was a disability within the 1995 Act and the sub-letting was caused by the disability, whether the council had discriminated against him. She expressed the view that in relation to the grant of the tenancy a person could not be held to have discriminated contrary to the Act without knowing of the disability. Permission to appeal on that fourth point was also given by Swift J.

The application for permission to appeal on the points other than point 1 was originally made to the High Court where, as I say, Swift J granted permission on points 2 and 4. She adjourned the application on point 3 to be considered by the court hearing the substantive appeal and the appeal was then transferred to the Court of Appeal. Since then ground 3 has been directed to be the subject of this separate hearing on the basis that the court will then give directions as to the hearing of the full appeal. As a result, we have the appellant's original skeleton from Mr Carrott and a skeleton argument from Mr Evans as to why permission should not be granted on point 3, both of which are very helpful. A stay of the possession order is in force pending the decision.

It seems to me that if point 3 were the only point in the case it would be very difficult to conclude that the defendant would have any reasonable prospect of upsetting the judge's conclusion on the point because it is a question of fact depending on the evaluation of the evidence and, although it may be surprising that the judge differed from the expert on point 2, which she did because in her view he had not been asked the right question, it is not surprising, it might be said, that he would not influence her view on point 3 because he did not express a view on that point. However, this is not the only point in the case and an appeal has, as I have said, been allowed to proceed on the other points. Mr Carrott, on behalf of the appellant, says that the judge's conclusion on point 2, namely that the schizophrenia did not have a substantial adverse effect on his ability to carry out normal day-to-day activities, has a bearing and an inter-relationship with her conclusion that it did not cause him to enter into the sub-letting.

Although it seems to me that the judge approached these two questions by reference to the separate relevant evidence, I can see that the evidence does overlap and that it could be that the decision on one point affected her conclusion on the other. Mr Evans submitted to us in his written submissions and orally this morning that the two questions are entirely distinct and that the judge approached each of them correctly on the evidence and came to conclusions which it would be impossible to upset.

If Swift J had refused or adjourned the question of permission on ground 2, I have no doubt that Mr Evans would have been making similar submissions in relation to ground 2 to those that he has made to us on ground 3. What concerns me however is that, especially in the field of claims based on discrimination legislation, it seems to me often a dangerous course to divide up cases into different issues. I do not mean by that the approach that the judge took, having heard the whole of the evidence and argument, to deal with the points separately in the course of her judgment, but separate points often turn out to be less independent of each other than one might have expected in advance, especially in the field of discrimination.

Accordingly, with some hesitation and without necessarily concluding that there is a reasonable prospect of upsetting the judge's findings on point 3, I have come to the conclusion that it would be appropriate to allow an appeal to proceed on this point as well as on the others, and accordingly for my part I would grant permission to appeal on this point as well.

I agree.

Order: Application granted.