England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM H.H. JUDGE BROWN
(sitting as a High Court Judge)

		Royal Courts of Justice Strand, London, WC2A 2LL Wednesday 13th June 2001

LORD JUSTICE SCHIEMANN:

1. Mr. Boardman was employed by the Council as Assistant Revenues Manager. He had some 30 people under him. He learned that a Mr Waite, who was employed by the Council as Chief Officer in the Revenue Office, had, in the course of moving house, spent 15 days in a touring caravan pitched within the Borough. He took the view that Mr. Waite was liable to pay Council Tax for the 15 days in the caravan. His superiors in the Council took a different view. Mr. Boardman nevertheless referred the matter first to the District Auditor and then to the Council's Finance Sub-committee. This manifestly irritated his superiors who subjected him to a disciplinary process for making unsubstantiated allegations and ignoring instructions not to ventilate this matter further. He was summarily dismissed after a disciplinary hearing and his internal appeal was unsuccessful.
2. Although he had sufficient qualifying service to bring a complaint of unfair dismissal he did not do so. Instead he brought a claim in the High Court for wrongful dismissal at common law and for various torts alleged to have been committed by officers of the Council.
3. That claim came before His Honour Judge Brown sitting as a High Court Judge. He upheld Mr. Boardman's claim for wrongful dismissal. He did not have to decide, nor do we, whether Mr. Boardman's contention as to the proper construction of the relevant legislation was correct or whether the construction given by his superiors was correct. What he did have to decide was whether Mr. Boardman was justified in taking his complaint to the Finance Sub-Committee. He held that he was and that this conduct did not therefore justify the Council in summarily dismissing him. He ordered that damages for wrongful dismissal be assessed at a separate hearing to be held by himself. He said nothing about how those damages were to be assessed.
4. Now it has been generally thought that the common law measure of damages for wrongful dismissal is the amount of wages or salary lost during the period between the date of dismissal and the earliest date in which the employee could lawfully have been dismissed. In the present case we are told that this is about 8 weeks. Addis v Gramophone Company Ltd. [1909] AC 488 has generally been taken as deciding what is contained in the headnote namely, that, where an employee is dismissed from his employment, the damages for his dismissal can not include compensation for the manner of his dismissal, for his injured feelings, or for the loss he may sustain from the fact that the dismissal itself makes it more difficult for him to obtain fresh employment. Mr Boardman wants to recover much more than the traditional measure of damages. He wishes for compensation for his inability to get employment since his dismissal, for damage to his health and his reputation flowing from the manner of his dismissal.
5. Although he has acted in person throughout this litigation against the Council he has from time to time had access to legal advice. In his re-amended statement of claim, after reciting various facts, Mr. Boardman pleads in paragraph 13:

"In the premises the defendant wrongfully, and in breach of contract, purported to summarily terminated [sic] the Plaintiff's contract with effect from 4th October 1995. The Defendant was negligent and /or grossly negligent in that he (sic) wrongfully, and in breach of the duty of care he owed to the plaintiff, failed to support the plaintiff in the conduct of his lawful duties as a public servant. The defendant was negligent and/or grossly negligent in that he failed to confirm the legal precedent, advices and rulings (as provided by the sources of such legal advice that the Plaintiff was required to use) that the Plaintiff was required to observe and apply in his duty as a Revenues Officer. The Defendant acted unlawfully and improperly in that he ordered the Plaintiff to commit a criminal act. The Defendant acted unlawfully in that his General Manager, Robin Smith, assaulted the Plaintiff. In the aforesaid respects, the conduct of the Defendant was tortious and in want of probity."

6. The judge gave judgment for the claimant for damages for wrongful dismissal However no judgment was given for the claimant in respect of the other heads of claim if they can be so described. The Judge dealt with them summarily thus :

"The remaining heads of claim can be disposed of shortly.

1. The claim for negligence is misconceived

2. The claim for alleged breach of public duty is also misconceived.

3. The claim for assault was abandoned during the hearing.

4. The claim for intimidation fails. Although Mr Smith attempted to prevent the claimant from taking the matter further, the claimant did not comply and therefore sustained no damage as a result."

7. Mr. Boardman applied for permission to appeal, appearing in person in front of Hale L.J. This was on 17th February 2000. She said this:

"The problem facing the claimant is that he is a man imbued with the ethos of responsible public service. He has been wrongly treated, as the Judge found, by his public authority employer. But if all he is entitled to is the standard measure of damages for wrongful dismissal, then this is poor recompense indeed for all that has happened. As he very properly argues, there would be something wrong with the justice system in this country if that were the case. The obstacle in his way is the well-known decision of the House of Lords in the case of Addis v Gramophone Company Ltd. [1909] AC 488. There have been more recent cases which have developed the concept of the mutual obligations of trust and confidence which both employee and employer owe to one another."

8. She cited Lord Nicolls of Birkenhead in Malik and Mahmud v BCCI [1998] AC20 who said at page 39 D:

"In my view these observations [he is referring to the observations of Lord Loreburn in Addis] cannot be read as precluding the recovery of damages where the manner of dismissal involved a breach of the trust and confidence term and this caused financial loss. Addis was decided in the days before this implied term was adumbrated. Now that this term exists and is normally implied in every contract of employment, damages for its breach should be assessed in accordance with ordinary contractual principle. This is as much true if the breach occurs for or in connection with the dismissal as at any other time."

9. She gave him permission to appeal. She suggested that he amend his notice of appeal so as to rely on the breach of trust and confidence clause and perhaps some breach of the duty of care that all employers owe to their employees to take reasonable care for their health. This the appellant in due course did. The grounds in the notice of appeal contain some general points which cannot be described as separate grounds but contain the two to which I have made reference. The first is expressed thus:

"Breach of "trust and confidence": a recent development of law. The judgment of His Honour Judge Brown does not deal explicitly with the breach (on the part of the defendant) of the mutual obligations of "trust and confidence" which both employer and employee owe to one another."

10. Ground 4 reads:

"Employees' health: a duty of care owed by the defendant to the claimant. The judgment of His Honour Judge Brown described the claim in negligence as "misconceived". Case law has established that all employers owe to their employees a duty of care for their health/well-being. It is claimed that the defendant was in breach of that duty of care and that claimant suffered consequential damage to his health."

11. When he opened his case in front of us, Mr Boardman indicated that the notice of appeal should be taken as setting out the grounds of appeal upon which he relied. I propose therefore to address those grounds first. I put it that way because in the course of his submissions Mr Boardman at times advanced other arguments which had not been clearly formulated in his pleadings, advanced before the judge or in the notice of appeal. In these circumstances the court, both at first instance and on appeal, has the difficult task of, on the one hand, enabling a claimant to advance his case notwithstanding that he does not deploy his material using the legal language which would come naturally to a skilled lawyer, while, on the other hand, safeguarding defendants from new lines of attack in relation to which no case had been pleaded or proper evidence led. While we allowed Mr Boardman to develop his case as he wished before us, fairness to the defendants requires that in general they should only lose, if at all, on claims which were clearly made before the judge.

Breach of trust and confidence

12. Mr C Jeans Q.C., who appeared for the council, submitted correctly that the lengthy pleadings gave no clear warning that the claimant wished to rely on any breach of the duty of trust and confidence owed by an employer to his employee. However, I think it acceptable to proceed on the basis that, even if that phrase does not appear in the pleadings or the evidence, the claimant was making clear that he thought that his employers were wrongfully preventing him from fulfilling his duty to them and to the public to extract tax from a citizen liable to pay it. Fairness to the defendants does not require that the submission that there has been a breach of such a duty should be shut out because it has not been clearly pleaded. Fairness to the judge requires me to state that he is not to be blamed for not having himself during the trial raised the question whether the claimant's case could have been pleaded in this way.
13. Since My Lady gave permission to appeal, the House of Lords has addressed the law in this area in Johnson v Unisys Ltd. [2001] UK HL 13. Mr Johnson claimed damages for breach of contract or negligence. He pleaded various implied terms in his contract of employment and in particular that the employer would not so conduct himself as to destroy or seriously damage the relationship of trust and confidence between himself and his employee and that the company would not, without reasonable cause, do anything which would injure his physical or mental health, harm his professional development and so forth. The alleged breach of those terms was that he was dismissed without a fair hearing and in breach of the company's disciplinary procedure – see paragraph 32. Mr. Johnson's most substantial complaint was of financial loss flowing from his psychiatric injury which he claimed was a consequence of the unfair manner of his dismissal - see paragraph 55. The alternative claim in tort was based upon an allegation that the employers owed him a duty of care because they ought reasonably to have foreseen that such injury was likely to result from dismissing him the way they did – see paragraph 33.
14. Lord Steyn would have developed the law in a way favourable to the claimant in that and in the present case. But he was in a minority of one. Lord Nichols said he had been persuaded that what he had said in Malik was wrong. The majority judgment was given by Lord Hoffmann with whom Lord Bingham of Cornhill and Lord Millett agreed. They took the view that the present was not an appropriate time to develop the Common Law because Parliament had provided a series of remedies under the Employment Acts.
15. Lord Hoffmann indicated in paragraph 57 that he did not regard it as a proper exercise of the judicial function of the House to develop the common law in this area. He continued in paragraph 58:

"..... for the judiciary to construct a general common law remedy for unfair circumstances attending dismissal would be to go contrary to the evident intention of Parliament that there should be such a remedy but that it should be limited in application and extent.

59. The same reason is in my opinion fatal to the claim based upon a duty of care. It is of course true that a duty of care can exist independently of the contractual relationship. But the ground upon which I think it would be wrong to impose an implied contractual duty would make it equally wrong to achieve the same result by the imposition of a duty of care."

16. As it seems to me the view of the majority in Johnson's case puts an end to the applicant's hope of improving on the standard measure of damages for wrongful dismissal, at any event in this court. Mr. Boardman I think realises this.
17. However, faced with this unfavourable decision from his point of view, he understandably seeks to side-step it. He submitted that he was not seeking damages for the circumstances attending his dismissal but rather for the way his employers had behaved during the time of his employment and in particular during the 6 months or so when he was seeking to fulfil his public duties and some of his superiors were, as he saw it, seeking to inhibit him from so doing. That unfortunately, even if one accepts his premise, does not help him. He has neither pleaded nor shown any damage to him during the course of his employment which resulted from his employers conduct. The only damage which is demonstrated is that which followed from his dismissal and, arguably, the manner of his dismissal. That damage if it exists has been held in Johnson to be irrecoverable in a Common Law action. It follows in my judgment that the first ground of appeal fails.
18. Had Mr Boardman made a claim before the employment tribunal he might well have succeeded in showing unfair dismissal and might also have obtained an order for his reinstatement and compensation for any failure to do so. But he did none of these things.

Employees health

19. I turn now to the other substantive ground of appeal. It seems that Mr Boardman was diagnosed as suffering from Rheumatoid Arthritis in 1986. His doctor suggests that he was in some discomfort for some years before his dismissal, that there was no evidence that the dismissal or the period immediately preceding it had resulted in a physically more active form of arthritis and stated that the way he copes with chronic physical problems is related to his mental state and that this was not in good shape during the period surrounding his dismissal. The doctor goes on to state that there was no evidence of a depressive illness.
20. Mr Jeans accepts that the Council owed the claimant a duty to take care of his health. However, he points out, and Mr Boardman accepts, that there was no reason for the council to suppose that he was physically or psychologically unusually vulnerable and there was no reason for the judge or this court so to conclude. Nor was there any warning in the pleadings that Mr Boardman sought compensation for damage to health, physical or psychological, unconnected with his dismissal.
21. In my judgment it would be unfair to the defendants to allow this matter to be raised at the present stage. I add that there is no reason to suppose that Mr Boardman's claim, even if it had been properly pleaded, would have any more success that the claimant's similar plea in Johnson.

Other matters

22. During the course of his submissions, Mr Boardman suggested that the way that various employees of the council had behaved towards him amounted to misfeasance in public office. He relied on Three Rivers District Council and others v Bank of England (No 3) [2000] 3 All ER 1. This way of putting the case was not foreshadowed in the pleadings nor argued before the judge, whose judgment was delivered before Three Rivers was decided by the House of Lords. Nor is it foreshadowed in the argument before My Lady on the application for leave to appeal, in the notice of appeal or in the skeleton argument submitted before the hearing of the appeal. Again, I consider it unfair to the defendants to allow this way of putting the case to emerge for the first time during the course of the hearing of this appeal. Again, I add that I am not currently persuaded that Mr Boardman would have been able to prove all that is necessary before such a case could succeed.

Conclusion

23. For my part, I can understand entirely that Mr Boardman feels that he has suffered illness and financial damage as a result of the way his employment was terminated and that he ought to be compensated for it. The more so since a cause of his present position was his attempt to do his duty as he saw it, an attempt which the judge accepted was reasonable.
24. However for the reasons which I have endeavoured to set out this appeal fails.

LORD JUSTICE TUCKEY: I agree

LADY JUSTICE HALE:

25. I agree that this appeal must fail for the reasons given by Schiemann LJ. The law has moved on since I gave Mr Boardman permission to appeal in February last year. At that stage there was some reason to believe, from the speeches in particular of Lord Nicholls and Lord Steyn in Malik and Mahmud v BCCI [1998] AC 20, that the implied obligations of an employer towards an employee might be developed in such a way as to allow an employee who had been wrongfully dismissed to recover compensation for financial loss or physical (including psychiatric) injury suffered as a result of the way in which he had been dismissed.
26. As this Court held in Gogay v Hertfordshire County Council [2000] IRLR 703, an employee may obtain substantial damages for psychiatric illness caused by her suspension from duty in breach of the implied obligation that employers will not, without reasonable cause, conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence between employer and employee. In contrast, this Court had held in Johnson v Unisys [1999] ICR 809 that this term did not apply to a dismissal. It followed that an employer would be better off dismissing the employee in breach of contract than suspending him. I expressed the view in Gogay that 'the sooner these matters are comprehensively resolved by higher authority or by Parliament, the better.'
27. At that stage I entertained the belief, indeed the hope, that when Johnson v Unisys reached the House of Lords, a majority of the House of Lords might share the views expressed by Lord Steyn at [2001] IRLR 279, paragraphs 3 to 28. He took the view that the implied obligation of trust and confidence was not confined to breaches during the subsistence of the contract but could also extend to the manner of its ending. He also took the view that Parliament, in enacting the statutory scheme for compensation for unfair dismissal, must be deemed 'to have been aware that the system it was creating was only capable of dealing effectively and justly with less serious cases where the threshold of a breach of contract was not necessarily established': in other words, the unfair dismissal scheme, by its very limits, indicated that it was designed to deal with dismissals which might not be in breach of contract at all, although they were unfair, rather than to limit the capacity of the common law to develop in a principled fashion to provide proper compensation for dismissals which are not only in breach of the express terms of the contract, but also in breach of the 'overarching obligation implied by law as an incident of the contract of employment.'
28. The majority of their Lordships, however, took the view that the implied term of trust and confidence was confined to matters arising during the subsistence of the employment relationship. They also took the view that to develop the common law relating to damages for the manner of dismissal would run counter to the policy of Parliament, which had imposed limits upon the statutory scheme of compensation for unfair dismissal. Indeed, it was those very limits (in particular the then very low level of compensation available) which caused Mr Boardman to reject that course and launch these proceedings instead. It was only after he had succeeded in his claim for wrongful dismissal that, as a litigant in person, he realised that although his victory would clear his name and vindicate the stance he had taken, it would not provide proper compensation for all that he had lost as a result.
29. We are bound by the decision of the House of Lords which clearly applies to the issues in this case. It cannot be distinguished. Mr Boardman has throughout argued that various terms were implied into his contract of employment. As Schiemann LJ has shown, it was possible to spell the implied term of trust and confidence out of these. But Mr Boardman has also argued that his employers, as a public authority, have an over-arching duty to the public which requires that they should not act or require him to act in breach of the law or of the very high standards of probity and integrity which are expected of public servants. He saw their insistence that he fail to pursue the matter of a senior officer's liability to pay council tax with the same vigour that he was expected to pursue the liability of others as a breach of that implied term. In my view, he may very well be right that it is an implied term of the contract of employment of local government officers that their employers will not act otherwise than in accordance with their relevant statutory (or common law) powers or require their employees so to do (the parties in Gogay were agreed upon the existence of a similar implied term). But even if such a term exists, it would make no difference to the consequences of a wrongful dismissal. These we must now take to have been definitively settled in Johnson v Unisys. Although Mr Boardman complains of the way in which the Council behaved in the period leading up to his dismissal, he very fairly admits that it was the dismissal, and the way in which it was done, which caused him the damage of which he complains.
30. The consequence is that I did Mr Boardman no favour at all in giving him permission to appeal and for that I am sincerely sorry. He, of all people, will understand that it is our duty to uphold the law which has been laid down for us, whatever our personal sympathies may be.
ORDER: Appeal dismissed; Claimant to pay Defendants costs summarily assessed; permission to appeal to the House of Lords refused; Judgment for costs stayed for six weeks pending petition to the House of Lords. (Order does not form part of approved Judgment)