England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
(MR JUSTICE LINDSAY)

		Royal Courts of Justice Strand London WC2 Friday 6 April 2001

1. LORD JUSTICE PILL: This is an appeal against a decision of the Employment Appeal Tribunal, Mr Justice Lindsay presiding, given on 3 November 1999. The EAT dismissed an appeal from a decision of an Employment Tribunal for London North, which decided, for extended reasons given on 10 September 1998, that it had jurisdiction to hear an application by Mr Gregory Paul Turner. Mr Turner had, on 2 March 1998, filed his application to the Employment Tribunal claiming damages for unfair dismissal, unlawful deduction from wages and wrongful dismissal.
2. On 20 March 1998 the employers, Harada Limited (trading as Chequepoint UK), filed a reply contesting the merits of the applications and also stating that they would contest the jurisdiction of the Employment Tribunal. On 22 March 1998 the chairman of the Employment Tribunal directed a hearing of the preliminary issue on jurisdiction. That was listed for 26 April 1998. It was adjourned at the request of Harada who stated that a witness was abroad. It was further listed for 1 June 1998 and was then adjourned because of lack of time available to the tribunal.
3. The hearing was listed for 26 June 1998 for the preliminary hearing on jurisdiction. The parties attended, in each case with counsel, prepared for a hearing before a chairman sitting alone. It is not necessary for present purposes to set out the nature of the dispute as to jurisdiction in detail, although it will be necessary to make some reference to it. It arose out of the fact that Harada were domiciled in Ireland and out of the fact that Mr Turner spent some of his time working in Spain. It was alleged that, by reason of his Spanish connection, the statutory jurisdiction of the tribunal for unfair dismissal did not exist, and that, by reason of the domicile of Harada and the absence of any other reason for giving the English courts jurisdiction over that company, there was no jurisdiction.
4. A very unhappy feature of the present dispute is that, for myself, I am satisfied that both parties appeared before the tribunal on 26 June with every intention of contesting the jurisdictional point. Skeleton arguments had been filed with the tribunal. Upon arrival, Mr Hickey, who appears for Mr Turner today as he did on the day in question, indicated that the parties had only one bundle of documents available, each party being under the impression that the jurisdictional issue would be determined by a chairman sitting alone.
5. The hearing had been fixed for 10 am. Some minutes after that time, the chairman, having received a message from counsel, requested, Mr Hickey says, that counsel come to see him and the lay members of the tribunal. That was not a part of the hearing; it was a private meeting requested, no doubt, with the best of intentions. The chairman indicated that, by reason of remarks which had been made by Morison J, who was then President of the Employment Appeal Tribunal, a three-member Employment Tribunal would hear the jurisdictional issue. It followed that, if each member of the tribunal was to have a copy of the bundle of documents, two copies needed to be made so that two further bundles were available.
6. I find no evidence to support a suggestion, and Mr Hickey does not make any suggestion, that there had been any delaying tactic on behalf of Harada on this occasion. Both parties were entirely in good faith in arriving that morning with only a single bundle of documents. Unfortunately, remarks were then made by the chairman which have formed the basis for the appeal to this court.
7. Private meetings of this kind are not routinely to be entertained. I see no reason why the matter should not have been dealt with at the commencement of the hearing. There is a danger which, unfortunately, materialised in this case that at such a private hearing remarks are made which cause problems. No criticism could be made of counsel for disclosing to his clients what the chairman had said at the private meeting. For present purposes, it is agreed that the following remarks were made. They are based on the note prepared by Mr Snelson, who then acted as counsel for Harada. Both before the Employment Appeal Tribunal and before this court, Mr Hickey accepts that the issues should be approached on the basis of this statement of what the chairman said:

"This is the 7th time that these respondents have appeared here in the last 6 months. These respondents are well known to the tribunal.

These respondents turn up with excuses and arguments to avoid the matters going to trial.

There was a flutter in the dovecotes in another case last Wednesday when it became clear that counsel for the respondents did not even know what the true [corporate] set-up was."

8. That was not Mr Snelson.

"The Chairman made this remark twice. He then went on to recount that the applicant in the earlier case had been litigating at length against a company which did not - and the employers knew did not - exist.

In the circumstances it is not as though the respondents come here with a slate which is exactly clean.

We have not read the other cases. We are not interested in them.

We wonder in view of [the history] if there is any light at the end of the tunnel. The parties might benefit from 10 minutes to discuss."

9. Mr Snelson then took instructions from his client. A solicitor was also present and advice was given. In the result, Harada, and those advising them, withdrew from any further part in the proceedings. The tribunal indicated that it would proceed with the hearing and did so, at the same time ordering that Harada's witnesses should remain at court. Mr Hickey, counsel for Mr Turner, called evidence on the jurisdictional issue before the tribunal in circumstances which are not entirely clear. Two witnesses who had been brought to court by Harada were called to give evidence, Mr Dodson and Mr Bermudez. They were each cross-examined by Mr Hickey on behalf of Mr Turner. Documents were also placed before the tribunal. It was in those circumstances that the Employment Tribunal reached the decision that it had jurisdiction to hear the applications of Mr Turner.
10. It is submitted by Mr Pitt-Payne, on behalf of Harada, that the tribunal ought not to have proceeded to hear the case. Before leaving, Mr Snelson had requested that the members of the tribunal should recuse themselves from hearing the jurisdictional issue and that the case should be remitted for rehearing by an Employment Tribunal in another region. The tribunal, nevertheless, proceeded.
11. In the chairman's notes of evidence he recorded that neither he nor the members felt subject to bias. It is submitted that there was apparent bias, as that term is understood in the authorities. Mr Pitt-Payne refers to the statement of Lord Goff in R v Gough [1993] AC 646 at 670F when he said that the test is:

"Whether, having regard to the circumstances, there was a real danger of bias on the part of the relevant member of the tribunal in question, in the sense that he might unfairly regard (or have unfairly regarded) with favour, or disfavour, the case of a party to the issue under consideration by him."

12. The application of the test laid down in R v Gough was considered in this court in R v Inner West London Coroner ex parte Dallagio and Anor [1994] 4 All ER 139 at 151 where Simon Brown LJ stated that he derived a number of propositions from the decision in R v Gough. These included:

"(4) The question upon which the court must reach its own factual conclusion is this: is there a real danger of injustice having occurred as a result of bias? By 'real' is meant not without substance. A real danger clearly involves more than a minimal risk, less than a probability. One could, I think, as well speak of a real risk or a real possibility.

(5) Injustice will have occurred as a result of bias if 'the decision-maker unfairly regarded with disfavour the case of a party to the issue under consideration by him'. I take 'unfairly regarded with disfavour' to mean 'was pre-disposed or prejudiced against one party's case for reasons unconnected with the merits of the issue'.

(6) A decision-maker may have unfairly regarded with disfavour one party's case either consciously or unconsciously. Where, as here, the applicants expressly disavow any suggestion of actual bias, it seems to me that the court must necessarily be asking itself whether there is a real danger that the decision-maker was unconsciously biased.

(7) It will be seen, therefore, that by the time the legal challenge comes to be resolved, the court is no longer concerned strictly with the appearance of bias but rather with establishing the possibility that there was actual although unconscious bias."

and in relation to the coroner's decision in that case:

"(9) It is not necessary for the applicants to demonstrate a real possibility that the coroner's decision would have been different but for bias; what must be established is the real danger of bias having affected the decision in the sense of having caused the decision-maker, albeit unconsciously, to weigh the competing contentions, and so decide the merits, unfairly."

13. The issue has been considered further in this court following the coming into effect of the Human Rights Act 1998. In Director General of Fair Trading v Proprietary Association of Great Britain & Anor (unreported, transcript 21 December 2000), an allegation of bias was made and the relevant hearing was adjourned to enable this court to consider the question. Giving the judgment of the court, Lord Phillips, MR stated at paragraph 67:

"What is the court to do where, although inclined to accept a statement about what the Judge under review knew at any material time, it recognises the possibility of doubt and the likelihood of public scepticism. It is invidious for the reviewing Court to question the word of the Judge in such circumstances, less so to say that the objective onlooker might have difficulty in accepting it."

14. In paragraph 69, following a reference to an Australian case, the judgment continued:

"The problem with the 'real danger' test is particularly acute where a Judge is invited to recuse himself. In such a situation it is invidious to expect a Judge to rule on the danger that he may actually be influenced by partiality. The test of whether the objective onlooker might have a reasonable apprehension of bias is manifestly more satisfactory in such circumstances."

15. The court reviewed the Strasbourg jurisdiction in this area and in paragraph 83 stated:

"We would summarise the principles to be derived from this line of cases as follows:

(1) If a Judge is shown to have been influenced by actual bias, his decision must be set aside.

(2) Where actual bias has not been established the personal impartiality of the Judge is to be presumed.

(3) The Court then has to decide whether, on an objective appraisal, the material facts give rise to a legitimate fear that the Judge might not have been impartial. If they do the decision of the Judge must be set aside.

(4) The material facts are not limited to those which were apparent to the applicant. They are those which are ascertained upon investigation by the Court.

(5) An important consideration in making an objective appraisal of the facts is the desirability that the public should remain confident in the administration of justice."

16. 84. This approach comes close to that in Gough. The difference is that when the Strasbourg Court considers whether the material circumstances give rise to a reasonable apprehension of bias, it makes it plain that it is applying an objective test to the circumstances, not passing judgment on the likelihood that the particular tribunal under review was in fact biased.
17. 85. When the Strasbourg jurisprudence is taken into account, we believe that a modest adjustment of the test in Gough is called for, which makes it plain that it is, in effect, no different from the test applied in most of the Commonwealth and in Scotland. The Court must first ascertain all the circumstances which have a bearing on the suggestion that the Judge was biased. It must then ask whether those circumstances would lead a fair-minded and informed observer to conclude that there was a real possibility, or a real danger, the two being the same, that the tribunal was biased."
18. In my judgment, the outcome of this appeal does not turn on any difference which may exist between the test in R v Gough and the test with the modest adjustment to which the Master of the Rolls referred. This is not a case where this court, or any member of it, has to consider his own position in relation to the issue to be tried. While it is to be hoped that in present circumstances the position of this court is no different from that of a fair-minded and informed observer, with respect, I see the force of the expression adopted by the court in Director General as against an approach which involves attributing an unconscious bias to a tribunal.
19. Harada appealed to the Employment Appeal Tribunal which dismissed the appeal. Having referred to the chairman's remarks, they stated:

"However, doing the best we can to recapture the context as it was on the day, the Chairman's remarks did no more, it seems to us, than indicate, albeit in ill-considered and perhaps hurtful terms, that if Harada's position was going to emerge as tending to delay (as Mr Turner's counsel feared, as Mr Turner's witness statement suggested might be the case, and as the procedural history of the case showed had previously been the position) then Harada was going to have a very difficult issue on its hands and could expect heavy resistance."

20. This court is concerned to consider for itself the effect of the chairman's remarks in the Employment Tribunal. This is a second appeal. The approach of the Employment Appeal Tribunal is only relevant in so far as it may assist the court to come to a conclusion on a point of law which the EAT itself had to consider. I do have difficulty on certain aspects of the reasoning of the EAT. In particular, I find their emphasise upon delay difficult to understand. They stated at paragraph 32 of their decision:

"Here, delay was obviously likely to be a feature in argument."

21. At paragraph 35:

"There was, in our judgment, no indication of minds irreversibly set against Harada on the question of jurisdiction though there had been an over-firm indication that if delay was going to be sought by Harada it was going to have a difficult task on its hands."

22. I can find no evidence, nor does Mr Hickey suggest, that when they arrived at the Employment Tribunal, and when they were called in by the chairman of that tribunal, any ploy to achieve delay was in the minds of those appearing for Harada. I know that this case is not the only one in which Harada is involved, and we have been told in outline form of other litigation which exists. I do have difficulty in accepting that the chairman's remarks could have had any justification based on any ploy to achieve delay which Harada can have had in mind.
23. I also have difficulty with the suggestion in paragraph 31 of the decision that:

"The comments that we are here talking about were not made in open court or before the parties."

24. If they do involve a mischief, it makes no difference whether they were said at a private hearing, to counsel, who would be under a duty to assess the situation and if he thought appropriate pass them on to his client, or whether made in open court. I only repeat that it would be very unlikely that this or any other chairman would have made remarks like this at a public hearing. Nevertheless, I do bear in mind the conclusion of the EAT that remarks which, from other part of the judgment its members regarded as inappropriate and "needlessly aggressive", did not establish bias within the meaning of the cases.
25. In seeking to uphold the decisions below, Mr Hickey submits that the remarks did not show any disfavour with respect to any issue before the Employment Tribunal. Nothing was said by the chairman about jurisdictional issues so that the remarks do not show disfavour to Harada on the issue which was to be determined that day.
26. He further submits that what the chairman had in mind in making the remarks was his concern with the possibility of delay by reason of the lack of documents. The reference to 10 minutes was, submits Mr Hickey, to give the parties an opportunity to sort out the bundles. Mr Hickey further submits that the court should look not only at the remarks but at the subsequent conduct of proceedings on that day and at the decision reached.
27. It emerges from the notes of evidence, and from the judgment of the Employment Tribunal, he submits, that the decision they reached was one reached fairly and without any bias being demonstrated. He further submits that, if any mischief arose it arose by reason of the withdrawal of Harada's representatives and Harada from the proceedings. Had they stayed, they would have had every opportunity to call evidence and make submissions to the tribunal. They could not now complain, having failed to take that opportunity.
28. It is further submitted that there could be only one result upon the jurisdictional issue. There was no answer to the submission that, by reason of article 5(5) of the Brussels Convention, the court had jurisdiction on the general claim. The evidence inevitably led to the conclusion that the statutory jurisdiction was made out by reason of the nature and location of Mr Turner's employment. A further subsidiary submission is made that, since there can only be one result, there is no virtue in remitting the case even if the court were to be of the view that apparent bias within the meaning of the authorities had been established.
29. In my judgment, the statement by the chairman that neither he nor the members felt subject to bias cannot be conclusive in this case. The duty of the court is to apply the test as laid down in the authorities to which I have referred.
30. I deal first with question of bias. In my judgment, applying the principles laid down in the cases, a fair-minded and informed observer would in this case conclude that there was a real danger that the tribunal was biased. On a consideration of all the circumstances, I conclude that the chairman of the tribunal might in this case unfairly regard with disfavour the case of Harada. I cannot accept the submission that the remarks were only those of the chairman. While, of course, the chairman can be out-voted, one cannot exclude the influence which the remarks of a legally qualified chairman will have upon the lay members.
31. Mr Pitt-Payne for Harada accepts that judges may make remarks at the beginning or in the course of hearings which indicate the difficulties a party faces upon one or more of the points at issue. Provided a closed mind is not shown, a judge may put to counsel that, in the view of the judge, the counsel will have difficulty in making good a certain point. Indeed, such comments from the Bench are at the very heart of the adversarial procedure by way of oral hearing which is so important to the jurisprudence of England and Wales. It enables the party to focus on the point and to make such submissions as he properly can. Mr Pitt-Payne submits, however, and I agree, that that principle cannot cover the comments made by the chairman in this case. They were not directed to a particular issue which the tribunal was to consider that day, or to the difficulties which, in the provisional view of the chairman, Harada might have upon that issue.
32. With regret, I have come to the conclusion that the remarks do involve a general slur upon Harada, upon the making of which I find it impossible to conclude other than that there was a real danger that the tribunal was biased. The remarks come within Simon Brown LJ's proposition (5) in Dallagio.
33. To state that Harada did not come before the tribunal with a clean slate and to refer to excuses and arguments which the chairman believed Harada to have made on other occasions is an indication that, upon the present issue, there was a real danger that he would not approach it with an open mind. Those remarks were followed immediately by the suggestion that the parties might benefit by 10 minutes to discuss the matter. I can only take that as an indication that Harada should settle the case. It is often possible for a judge, having explored the difficulties on the facts or legal issues of the case with counsel, to give such an opportunity. There is certainly nothing wrong with it in principle, and it is a course which often, helpfully, is taken. But to make that suggestion, having made the other comments which are set out, can in my judgment only have been an indication that Harada could expect difficulties upon the specific issues, but which had not been mentioned by the chairman in his remarks.
34. As Mr Pitt-Payne put it, the indications were such as to show that Harada were not standing on a level playing field. The comments amounted to an indication that Harada could expect that there was a real danger that the tribunal would look generally with disfavour at any case they presented on that day.
35. It is necessary to consider the decision of Harada to withdraw from the hearing and the proceedings which in the event followed. The circumstances in which it is appropriate for a party to leave a hearing were considered in this court in Peter Simper & Co v Cooke [1996] IRLR 19. In the Employment Appeal Tribunal, Peter Gibson J stated that:

"Save in extraordinary circumstances, it cannot be right for a litigant, unhappy with what he believes to be the indications from the Tribunal as to how the case is progressing, to apply, in the middle of the case, for a re-hearing before another Tribunal. It is undesirable that the Tribunal accused of giving the opinion of bias should be asked itself to adjudicated on that matter. The dissatisfied litigant should ordinarily wait the decision and then, if he thinks it appropriate, he would make his dissatisfaction with the conduct of the case by the Tribunal a ground of appeal."

36. I certainly should not wish to encourage a general practice of parties declining to appear further before a tribunal if they believed that the tribunal was biased against them. With respect, I see the force of the observations of Peter Gibson J. Other remedies are sometimes available. In Director General, for example, the hearing was adjourned to enable the legal issue to be clarified and there may be cases, as the EAT indicated, where that would be an appropriate course when a point arises before an Employment Tribunal. In my judgment, it cannot however be said in this case that it is conclusive against Harada that, upon consideration, they decided to withdraw from the hearing. There may be cases where the alleged conduct of the tribunal is such, or where there is to be a long hearing and the point arises at a very early stage, that it would not be appropriate simply to carry on with the case and then take the point on appeal. It depends on all the circumstances, including the subject matter of the case, the statement which is complained of and the circumstances in which it is made.
37. The procedure which followed the withdrawal of Harada was not in my judgment a satisfactory one. Harada's witnesses were required to remain. When they gave evidence, not only were their statements put in, but they were cross-examined on material points by Mr Hickey for Mr Turner. It is not necessary, for the decision in this case, to pass judgment upon the procedure of the tribunal in this respect. I would however say that it must, in my view, be an extremely rare case in which the course followed here is proper. In the present case it has also to be considered whether Harada, having made the decision to withdraw, and having done so in circumstances where bias has been established, the defect may be overcome by continuing with the hearing.
38. Mr Hickey submits, by reference to contractual documents, to the Brussels Convention and to the chairman's notes of evidence, that not only the hearing which followed a fair hearing, but that the decision on jurisdiction was one properly reached and no other decision could then or could in the future properly be taken. I bear in mind proposition (3) in the summary of the Strasbourg jurisdiction as stated in this court in Director General. It would follow from that proposition that once the legitimate fear that the judge might not have been impartial is established, the decision of the judge must be set aside. If it ever can be otherwise, it would, in my judgment, be an exceptional case into which category the present case does not fall.
39. I say that for these reasons. There are issues of fact, certainly upon the statutory jurisdiction. The statements of Mr Dodson and Mr Bermudez were both prepared with a view to establishing Mr Turner's links with and employment in Spain. In order to establish his case Mr Hickey thought it necessary to have those witnesses called. Objection has been made on behalf of Harada to their remaining at the hearing, whereupon Mr Hickey called for a witness order. He accepted in the course of submissions that, effectively, the witnesses were called by him. Having effectively been called by him, they were cross-examined by him. He fairly and rightly accepts that he did not want to run the risk of their evidence going unchallenged, that Mr Dodson's written statement supported the employer's case, and that, he having cross-examined Mr Dodson and Mr Bermudez, the Employment Tribunal rejected their evidence. This was evidence given by those witnesses without the advantage of legal representation or an advocate to examine them in chief or to re-examine them following a cross-examination which Mr Hickey accepts was material to the proceedings.
40. I do not consider the procedure which was followed to be fair. The claim to fairness is based upon Mr Hickey's submissions which, in the circumstances of this case, I do not accept, that Harada's decision to withdraw could not properly be taken. Whether fair or not, the other consideration is whether this case can be put into that category where the decision to be reached was inevitable. Even if a category does exist in which the effect of bias can be cured by a subsequent fair hearing, this case cannot, in my judgment, fall into that category.
41. We have not heard Mr Pitt-Payne in detail upon arguments which may be put forward. Mr Hickey submits that on the case for wrongful dismissal he is in an unassailable position having regard to the contents of the Brussels Convention. Mr Pitt-Payne has sought in outline to draw attention to arguments of law and of fact which he would seek to put forward. Having reached the conclusion I have, I do not propose to embark on any assessment on the strength or otherwise of the respective cases on the jurisdictional issue.
42. In my judgment the appeal must be allowed on the basis that, in all the circumstances, there was a real danger that the tribunal was biased and that Harada were not on the day going to get a fair trial upon the issue before the tribunal. That danger having arisen, there is nothing in the subsequent hearing which permits the decision of the Employment Tribunal to stand.
43. I repeat the view I expressed at the beginning of this judgment that this was an unfortunate sequence of events. Mr Turner has a substantial money claim which he puts forward in good faith. The amount has been assessed at about £37,000, subject of course to the final decision on the question of jurisdiction. Both he and Harada appeared before the Employment Tribunal to have the preliminary issue resolved and with every intention of doing so. The sequence of events which then occurred was unfortunate, the fact that a tribunal of three was required (and I do not doubt that it was properly required), that fresh bundles were required, that the chairman thought it right to call counsel into a private hearing in which he made the comments which have formed the basis for this appeal. It is unfortunate for the parties that, as a result, there have now been two appeals. In my view, there needs to be a remission of the issue to a differently constituted Employment Tribunal.
44. I would allow the appeal and propose to hear any further submissions as to whether Mr Pitt-Payne's submission that the hearing should be in a different region is made out.
45. LORD JUSTICE MANTELL: I agree with my Lord that on an objective appraisal of the material facts in this case a legitimate fear does arise to as to the impartiality of the tribunal. Irrespective of the correctness or otherwise of the decision which was eventually reached, it has to be remembered that what is at stake here is public confidence in the administration of justice.
46. Accordingly I, with my Lord, would allow this appeal. I would set aside the decision of the tribunal and I would remit the whole of the matter for re-hearing by a tribunal differently constituted.
47. MR JUSTICE MCKINNON: I agree with both judgments.
Order: Appeal allowed with costs subject to detailed assessment. Case to be remitted for re-hearing with a request that, by consent of the parties, which the court endorses, the matter should be transferred to London Stratford region.