The House of Lords decision in Lewisham LBC v Malcolm [2008] UKHL 43, concerning the effect of the Disability Discrimination Act 1995 on possession proceedings, will come as a great relief to landlords (see [2008] Gazette, 10 July, 23). Although the decision may be seen as wholly sensible in a housing law context, it has consequences for other areas of the law, and ­represents a significant reduction in the rights of the disabled.

Section 22(3) of the act provides that: ‘It is unlawful for a person managing any premises to discriminate against a disabled person occupying those premises… (c) by evicting the disabled person, or subjecting him to any other detriment.’ ‘Discrimination’ is defined in section 24:

(1) For the purposes of s.22, a ­person (‘A’) discriminates against a ­disabled person if –

(a) for a reason which relates to the disabled person’s 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.

The key to the problem created by section 22 is the exercise of ­comparison that is required. The ­wording of section 22 mirrors that of sections of the act relating to other areas of law, for example employment. In Clark v TDG Ltd (t/a Novacold) [1999] ICR 951, CA, the applicant was dismissed from his employment following an accident, which meant that he would probably be unable to work for a year. The employer argued that the relevant comparison was between the ­applicant and a non-disabled person who would be away from work for a year. That approach was rejected. The ‘reason’ in section 22(1)(a) for the applicant’s dismissal was not his ­disability but the fact that he could not work. Accordingly, the appropriate comparator was someone who could continue to work.

In the context of possession actions, the Court of Appeal considered itself to be bound by Novacold. The effect of the Novacold test is illustrated by ­possession cases based on nuisance and annoyance to neighbours, for example, Manchester CC v Romano; Manchester CC v Samari [2004] EWCA Civ 535; [2005] 1 W.L.R. 2775; North Devon Homes Ltd v Brazier [2003] EWHC 574 (QB); [2003] H.L.R. 59. In those cases, the tenant’s ­­anti-social behaviour related to mental ­illness. In deciding whether there was discrimination, the court looked not at whether a non-disabled tenant would be treated differently, but whether a tenant who was not guilty of ­anti-social behaviour would be treated differently. The eviction was therefore prima facie discriminatory.

In the Manchester cases, however, there was no discrimination because the evictions were held to be justified. Section 24(3) provides a limited ­number of grounds for justification, the only one of which that is likely to be relevant in practice being that the treatment is necessary in order not to endanger the health or safety of any person (which may include that of the disabled person): section 24(3)(a).

The court adopted a low threshold for this test by adopting the World Health Organisation’s definition of health: ‘A state of ­complete physical, mental and social well-being and not merely the absence of disease and infirmity’. The appeal court foresaw, however, that there would be cases in which the grounds of justification would not assist the landlord, for example, rent arrears cases where the tenant failed to pay owing to mental illness. Indeed, the court urged Parliament to review the act at an early date because it could ‘lead to absurd and unfair consequences’.

The case of Malcolm illustrated the difficulty facing landlords where a ground for justification is unavailable. The defendant suffered from ­schizophrenia. He was admitted to hospital on a number of occasions but his condition was later stabilised by medication. In 2002, the claimant authority granted him a secure ­tenancy of a flat. Two months later, he applied to exercise the right to buy. The application took some time to process and in June 2004, before completion, he sublet his flat.

In October 2003, the defendant’s medication changed and his relatives noticed that his behaviour altered. In April 2004, his doctors discovered that he had ceased taking his medication towards the end of 2003.

The claimant authority discovered that the defendant had sublet the flat and served notice to quit on him in August 2004. Possession proceedings were issued in December 2004. When the notice to quit was served, the authority was unaware of the defendant’s mental illness but became aware of it during the course of the possession proceedings. The ­defendant’s case was that he sublet the property as a result of his ­schizophrenia and that the claim for possession amounted to unlawful ­discrimination in contravention of ­section 22 of the act.

In the present case, the county court judge made a possession order. She held that the act was irrelevant because the defendant had lost ­security of tenure. She also held that, in any event, the reason for evicting the defendant was his subletting of the flat and that that reason did not relate to his disability because the subletting resulted from a planned decision rather than an irrational act caused by his illness. The defendant appealed to the appeal court.

The court allowed the appeal: [2007] EWCA Civ 763; [2008] Ch 129. The ­tenant’s lack of security of tenure did not prevent the act applying. The judge had been wrong to find that the ­subletting did not relate to the ­defendant’s disability. The requirement that the reason for the discrimination must relate to the defendant’s ­disability in section 24 of the act, meant that there had to be a ­relationship between the subletting and the defendant’s schizophrenia.

It was not necessary, however, for the defendant’s schizophrenia to be the actual cause of the subletting. The evidence of the defendant’s condition, which involved susceptibility to ­distortions of thinking, was sufficient to establish the relevant relationship. The House of Lords unanimously allowed the authority’s appeal. The majority of the committee held that Novacold should be overruled. The comparison to be made under section 24(1)(a) was between (i) the defendant and (ii) a tenant who had sublet and who was not disabled. The defendant had been treated in the same way that the authority would have treated any tenant who had unlawfully sublet with the consequence that there had been no discrimination.

The adoption of this comparator means that in the absence of direct discrimination, the act is effectively irrelevant to possession actions. Where the landlord is seeking ­possession for breach of the tenancy agreement (for example, rent arrears or anti-social behaviour) the landlord is able to say that a non-disabled tenant would have been treated in the same way. This form of comparison is ­familiar from the context of other forms of discrimination (race or sex). Certainly, by adopting it.

The House of Lords has removed the absurdities caused by the Novacold test in the context of landlord and tenant law. That said, there were compelling arguments that the Novacold test was what Parliament had intended, as explained in Baroness Hale’s powerful dissenting judgment at 79-81.

A number of other points arise from the speeches. The committee agreed that the reason for the possession proceedings (that is, the subletting) did not ‘relate’ to the defendant’s disability. Lord Brown, Baroness Hale, and Lord Neuberger held that the appeal court had not been entitled to go behind the judge’s finding of fact on this issue. Taking a slightly different approach, Lords Bingham and Scott said that the authority’s reason for seeking possession was a housing management decision, and that there was no evidence that the defendant’s disability played any part in the authority’s decision to take ­proceedings. It was also unanimously held that knowledge of a person’s disability was required before someone could be said to have discriminated against that person under the act.

Andrew Dymond is a barrister and co-founder of Arden Chambers.