Decision Date: November 2, 2012
Link: Case Summary Document
Citation: [2012] UKUT 395 (Upper Tribunal(Tax and Chancery), Sales J)
Acknowledgement:The Pemsel Case Foundation thanks The Australian Centre for Philanthropy and Nonprofit Studies for its contribution in the drafting of this Case Note.


This was an appeal from a decision of the General Regulatory Chamber of the First Tier Tribunal (FTT) dealing with charity matters: see [2011] UKFTT B1 (GRC). The FTT dismissed an appeal by Catholic Care (Diocese of Leeds) (the appellant) against a decision of the Charity Commission (the Commission) which refused consent, as required by section 64 of the Charities Act 1993, for the appellant to amend the objects clause in its Memorandum of Association. The appellant had sought permission to make the amendment so as to permit it to continue its previous practice of refusing to offer its adoption services to same sex couples.

The appellant offered adoption services which consisted of identifying and screening potential parents willing to adopt children, placing children for adoption and providing some support for the parents after adoption. Up until 2008 the appellant had operated a practice of only screening potential adoptive parents and placing children with adoptive parents who were heterosexual and would constitute what was termed in this appeal a ‘Nazarene family’ of mother, father and child. Same sex couples who were potential adoptive parents were excluded from consideration. This was said to be for reasons of Roman Catholic religious doctrine. However, the appellant has been willing in the past to consider adoptive parents from other denominations and other faiths, provided they would constitute a Nazarene family.

Changes in the law meant that this practice became illegal at the end of 2008: see the Equality Act (Sexual Orientation) Regulations 2007 (the Regulations). However, there was a limited exception for charities, from the general law which prohibited discrimination on the ground of sexual orientation. In addition, the Equality Act 2010 also provided a limited exception for charities under sub-sections 193(1) and (2), where the charity is following the provisions of a ‘charitable instrument’. Thus, the appellant needed to make alterations to its Memorandum of Association (the relevant ‘charitable instrument’) to make explicit that its adoptive services were only to be offered to heterosexual adoptive parents.

The proposed alteration was to read:

The Charity shall only provide adoption services to heterosexuals and such services to heterosexuals shall only be provided in accordance with the tenets of the Church. For the avoidance of doubt the Roman Catholic Bishop of Leeds from time to time shall be the arbiter of whether such services and the manner of their provision fall within the tenets of the Church.

The Commission originally rejected the appellant’s application to amend its Memorandum of Association and the appellant appealed to the High Court under the provisions set out in the Regulations. Briggs J allowed the appeal and remitted the matter to the Commission in March 2010: see [2010] EWHC 520 (Ch). The Commission again rejected the application in July 2010. In the interim, the form of Tribunal to hear the matter had changed and the Equality Act 2010 had been introduced.

In his judgment of 2010, Briggs J interpreted Regulation 18 of the Regulations as a provision which implemented Article 14 of the European Convention on Human Rights (prohibition of discrimination). This allowed differential treatment of heterosexuals and homosexuals if undertaken for a legitimate aim and in a manner where the means employed were proportionate to the aim sought to be realised (at [72]–[74], [78], [84] and [104]). Briggs J considered that at that stage the appellant had made out a prima facie case of justification which required further detailed examination and consideration by the Commission (at [107]–[111]).

The Equality Act 2010 (the Act) was then passed. Section 29 of the Act provides that a person providing a service to the public (such as adoption services) must not discriminate against a person requiring the service by not providing the person with that service. Section 13 defines direct discrimination for the purposes of the Act as including a case where the service provider treats a person seeking to use the service less favourably than he would treat others ‘because of a protected characteristic’. Section 4 of the Act sets out a list of relevant ‘protected characteristics’, which include ‘sexual orientation’.

A defence of objective justification can be made out under section 193. It was the agreed position of both parties to this appeal that section 193 of the Act should be interpreted in the same way as section 18 of the Regulations had been in the original hearings. This meant that Article 14 of the European Convention of Human Rights was analogous to the operation of section 193 of the Act.

Before the FTT, the appellant argued that the discrimination proposed was proportionate to a legitimate aim. If it could not limit its services as it proposed, it would lose much of its funding and would need to close. This would be particularly difficult because it dealt with many hard to place children in its service. The evidence showed that the appellant placed about 10 children a year with approved adoptive parents. These children were in care with local authorities, and the appellants’ contention was that children would remain unadopted if it had to close its service.

However, the few local authorities who responded to the Commission’s query about this issue said that this was not so. The children could be adopted through other agencies. Moreover, there was an oversupply of potential adoptive parents, and a lack of adoptions. This was because of cost rather than anything else. The fees charged by voluntary adoption agencies for placements were high, and few local authorities could, or would, pay them. Indeed, this was a problem for the appellant too, which had to raise at least £130,000 just to place 10 children.

The FTT held that the appellant’s aims were definitely legitimate, particularly where children’s interests were taken into account. However, its position that its funding would only be maintained or increased with the proposed limitation of its services was not a true position. Nor would more children necessarily be placed, because of the nationwide difficulty with ‘matching’ and the fees payable. The Upper Tribunal agreed with both these propositions (at [24]–[25]).

On the issue of proportionality, the FTT had rejected the appellant’s argument that adoption services from local authorities and other voluntary agencies filled the gap for same sex adopting parents. The Upper Tribunal agreed that this availability could not justify the discrimination of the appellant. Nor could the private prejudices of third parties, who might withhold funding from the appellant if it allowed adoptions by same sex couples. On this point, the Upper Tribunal said (at [38]):

The basic approach adopted by the FTT is correct. The mere fact that some people may feel upset if homosexuals are accorded equal treatment in some area of life cannot, of itself, provide objective justification for discrimination on grounds of sexual orientation… This is the point made by the FTT at para. [57] of the decision. However, if, as a consequence of some people having prejudices about or negative attitudes towards homosexuals, some real detriment to the general public interest (of sufficient weight) might arise unless a practice discriminating against them were adopted, then in principle it is possible under Article 14 and under section 193 of the Equality Act for such a practice to be found to be proportionate to the legitimate aim of preventing that detriment or harm and hence objectively justified. The FTT was therefore right to go on in the decision to consider the question of justification as it did.

While the sincerely held views of a ‘major tradition in European society’ had ‘a legitimate place in pluralist, tolerant and broadminded society’ (at [45]), the Upper Tribunal took the view that (at [47]):

The legal context in which the Charity comes before the Tribunal is one in which the national authorities, in particular Parliament, have established a very clear framework of equality law which makes discrimination on grounds of sexual orientation unlawful. That is the basic ground rule of public policy established by the national authorities in their assessment of and responding to the needs of society. The Charity seeks to rely on section 193 and the objective justification argument it puts forward to derogate from that basic position. The interest of promoting the traditional family on which the Charity relies has not been endorsed by the national authorities. As a result, in the context of assessing whether the Charity has made out a case of objective justification, I think that the view of the Charity that the traditional family should be promoted is not entitled to be given the same degree of weight as if it had been adopted by the national authorities….

Children’s interests were paramount in this case. The Upper Tribunal could not agree that the appellant’s position would offer a greater benefit to children. Indeed, it was entirely possible that more children might be placed if the appellant’s services were offered to a broader range of parents. Expert evidence was certainly offered to this effect. The Upper Tribunal said that (at [55]):

The FTT was therefore right to conclude that the Charity could not show that there were weighty and convincing reasons why it should be permitted to change its Memorandum of Association to enable it to discriminate against homosexuals as it proposed.

Although the Upper Tribunal did criticise some other aspects of the FTT’s decision, these were held not to be material to the outcome, or not to be such as would change the outcome. Therefore, the appeal was dismissed.

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Implications of this case

Catholic Care had taken the position that if it could not restrict its adoption services as it proposed, then it would not offer adoption services at all. It had not done so since 2008. Alternatively, it said that third parties would withdraw funding if it allowed adoption to same sex parents, so that it would need to close its adoption service in any case. The Upper Tribunal said that these contentions were unproven, and in any event, it was not permitted to offer adoption services only to heterosexual parents. Although the charity had legitimate aims, its response to the legal restrictions in the Equality Act 2010 was not proportionate to those aims and therefore could not warrant an exemption.