Smailes & Poyner-Smailes v Clewer Court Residents Ltd, Cardiff County Court 30 January 2019 (Unreported but copy of judgment is here).

Although only a County Court (Circuit Judge) decision, this is an interesting and potentially significant case on the application of Equality Act 2010 to leasehold covenants.

Mr Smailes and Ms Poyner-Smailes bought a two bedroom flat in a Victorian building converted to flats in the 1980s. The defendant is the Freehold Management Company of the block, administered by an elected group of leaseholders.

Ms P-S suffers from conditions that give rise to difficulties in walking, standing and using one or both of her upper limbs. She uses a wheelchair on occasion.

Mr S & Ms P-S proposed to carry out alterations to the flat to make it more suitable for Ms P-S needs

to change one of the bedrooms into the living room, and the original living room into the kitchen. That scheme did not involve the removal of any walls but did involve the cutting of a single doorway from the other bedroom into a wall which was not a structural wall.

The lease contained a tenant covenant:

“The Tenant will not alter the internal planning or the height, elevation or appearance of [No 14] nor will at any time make any alteration or addition thereto nor cut, maim or remove any of the party or other walls or the principal or load bearing timbers or iron, steel or other supports thereof nor carry out any development thereto nor change the user thereof (within the meaning of any legislation for the time being relating to Town and Country Planning).”

However, other leaseholders had previously been granted permission to carry out alterations, including the sub-division of a flat into two flats, and the removal of a wall between bathroom and WC.

After an initial discussion with a couple of members of the Defendant, which unfortunately the parties recalled quite differently, Mr S & Mrs P-S started works in early 2014 without express permission. The claimants took the view that the works were not ‘structural’ within the meaning of lease clause as not changing any party or load bearing walls. This, the court notes, was not correct.

In May 2014, the defendant asked for works to stop and a report of proposed works to be provided. The claimants did so, with the repots confirming the door was to a non-loadbearing wall, and that insulation would be applied to a false ceiling and walls to prevent any noise issues.

On receipt of the reports, the defendant instructed a solicitor to enforce the lease if works were recommenced. There was then a meeting in August 2014. A note circulated before the meeting, drafted by the defendant’s solicitor, read (in part):

Your board of directors are aware of a number of flats which remain in their original configuration, and where wheelchair users either reside or are frequent visitors there, and that the configuration, and indeed placement of the doors, does not present an obstacle or prevent them from using the flat in any way. It would seem therefore that the works being undertaken arise out of a wish to apply their own design for their [own] personal use, and yet will create difficulties for the flats around them, where, for example, a bedroom which would have been next to a quiet sitting room lounge area is now immediately adjacent to the kitchen and its attendant noise level.” (…)

“Whilst the directors have every sympathy with these tenants and in particular any disability, it has obligations to ensure that other tenants are not affected particularly in circumstances where the flats original configuration is no bar to occupation, and indeed that configuration would have been known to the tenants at the time that they purchased the flat. They would also, or course, been aware of the limitations and restrictions contained under the lease.

The directors are committed to taking further action, so therefore a meeting has been called so that all tenants can be made aware of the current position, and in order to respond to a number of queries raised. The decision remains that of the board of directors.”

At this stage, then, as the defendant had to accept at trial:

it was a concern of the defendant that the claimants were simply seeking to make a lifestyle choice, and that the view taken was why buy an unsuitable flat which needed works when there was a prohibition against such works in the lease.

The claimants responded to the note, setting out Ms P-S medical condition and the need for the works based upon that.

At the meeting a representative for the claimants raised the Equality Act 2010 and the defendant’s obligations under that Act. However, as the court found, “it was unlikely that the issue of disability was clearly in the minds of the residents at this meeting,  and that their principal concern was the effect on other flats”. Ms S-P had become very upset during the meeting.

Following this, the claimants instructed solicitors. Mediation was proposed and accepted. The claimants issued but stayed the present claim, on limitation issues. Mediation in 2015 was not successful. The claimants obtained further reports, using experts proposed by the defendant, on noise and drainage, confirming Building Regulation approval was not required and that noise and drainage issues were not a problem.

The defendant then, in early 2016, raised for the first time a requirement that the claimants pay for the defendant to have a surveyor monitor the works and the defendant’s legal costs. (This had not been done for any previous alterations by other leaseholders.)

The claimants asked for another EGM of the defendant to take place to approve the works. At the meeting, the defendant’s directors opposed approval on the basis of “the lack of clarity on the details of the proposals and the claimants’ refusal to pay for the defendant to appoint professional advisors as provided for in the lease”. The claimants pointed out, again, that the defendant could rely on the reports they had obtained from experts suggested by the defendant. The meeting voted against approval.

A further mediation was also unsuccessful and the claim proceeded.

Shortly before trial, after some 4 years, the defendant admitted (having previously denied):

that Mrs Poyner-Smailes has a disability within the meaning of the 2010 Act, that as a result she was at a substantial disadvantage when occupying No 14 in its original state, and that the adaptions comprised in the works were both reasonable and necessary to lessen that disadvantage. 

The main issue at trial was whether the defendant was in breach of its duty under section 20(3) Equality Act 2010 to make reasonable adjustments in respect of Ms P-S disability.

S.20(3) provides

“…where a provision, criterion or practice of A’s puts a disabled person at a substantial disadvantage in relation to a relevant matter in comparison with persons who are not disabled, to take such steps as it is reasonable to have to take to avoid the disadvantage.”

Schedule 4 paragraph 2 provides (with the manager or lessor as ‘A’):

(…)

(7) If a term of the letting that prohibits the tenant from making alterations puts the disabled person at the disadvantage referred to in the first requirement, A is required to change the term only so far as is necessary to enable the tenant to make alterations to the let premises so as to avoid the disadvantage.

(8) It is never reasonable for A to have to take a step which would involve the removal or alteration of a physical feature.

(…)

The claimants argued that all that was required from the defendant was consent. The defendant was not required to remove or alter any physical features.

The defendant argued that

such consent does involve such removal or alteration, even though the removal or alteration or removal will be carried out by or on behalf of the claimants. Had it been the intention to provide only that it was unreasonable for A to have to remove or alter a physical feature then it would have been very simple to word the provision accordingly.

The court reviewed the previous provision, under the Disability Discrimination Act 1995 (as amended by the DDA 2005) which made clear that it was acts of removal or alteration by the manager/lessor that were excluded. The Disability Discrimination (Premises) Regulations 2006 SI 2006/887 did likewise. The court held that the change in wording to the Equality Act 2010 was not intended to limit the scope of the duty to exclude all alterations, whether by lessor/manager or lessee. This view was supported by the fact the that EA 2010 was intended to encompass the directly applicable UN Convention on the Rights of Persons with Disabilities, ratified by the UK in 2009, and also must be interpreted as far as possible in accordance with Convention rights under article 8 and article 14.

The change of wording did not bring about a fundamental change to the duty. It did not extend ‘remove or alter a physical feature’ to include the tenant’s works to the demise. It simply remained that the manger or lessor was not required to carry out, or to have carried out, physical alterations themselves.

Ms P-S had been put at a substantial disadvantage by the defendants, both in not granting permission for the works and then also in attaching conditions (such as paying for the defendant’s surveyor and legal costs) that had not been applied to consent for other leaseholders to carry out alterations. The defendant was in breach of its duty under s.20(3).

On other heads of claim, brought out of time, but with the court’s permission under its discretion, the court found:

There was not unlawful discrimination under s.13 or s.15 EA 2010. The relocation of the kitchen gave rise to a legitimate concern by the defendant, and was not like any previous permission to alter that had been granted. The unfavourable treatment was principally on this ground, rather than on Ms P-S’s disability.

On harassment under s.26 EA 2010

the way in which the August 2014 meeting was conducted by or on behalf of the defendant and the failure to give the claimants an adequate opportunity to deal with the need for the works in the light of Mrs Poyner-Smailes’ disability, in my judgment amounted to unwanted conduct related to that disability.

That conduct amounted to creating an humiliating environment for Ms P-S. Other conduct complained of was either not by the defendant, or, it was insensitive but not harassment of Ms P-S.

Similarly, there was not victimisation under s.27. It was clear even as early as 2014 that proceedings may be brought, and that proceedings had been  brought had an influence on the defendant in the run up to the 2016 meeting. It could not be inferred that this had resulted in victimisation.

Comment

The case was, as I understand it, funded by the Equalities and Human Rights Commission, as part of their new approach to strategic litigation.

This gives welcome clarity in some respects on the reasonable adjustments requirement as applied to a prohibition on alterations in a lease clause.

On the other hand, there is a clear clash between the Equality Act requirement on absolute prohibitions on alterations as found here and the position in Duval v 11-13 Randolph Crescent Ltd [2018] EWCA Civ 2298 (our report) which found that where there is ‘mutual enforceability’ clause on lease covenants, the landlord could not waive or allow a breach of an absolute prohibition without giving rise to a cause of action for other leaseholders.

Still, the lesson for freeholders, managers and FMCs is that they must have the Equality Act obligations firmly in mind when dealing with requests for alterations. And that, on the whole, it is best not to spend 4 years denying that alterations have any relation to someone’s disability when there is medical and occupational therapist evidence to the contrary.