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 EMPLOYMENT APPEAL TRIBUNAL

		Royal Courts of Justice Strand London, WC2
		26 May 2004

1. LORD JUSTICE SEDLEY: Mr Barnes comes before the court this morning in person seeking permission to appeal against a decision of the Employment Appeal Tribunal, presided over by HHJ Reid QC, reversing the refusal of the Employment Tribunal by its Chairman, Mr Pritchard, to allow a review of its own decision. This was a decision which Mr Barnes had secured in his favour to the effect that he had been unfairly dismissed by Mr and Mrs Walker. Because he had drawn some suspicion of disloyalty on himself (although it was found by the Tribunal that the suspicion was misplaced), Mr Barnes' award was reduced by 30 per cent.
2. The facts of the case are well summarised in the Employment Appeal Tribunal's judgment and I do not need to set them out again here. Mr Walker, it appears, has not paid a penny of the award that was made. Instead, he has bombarded the Employment Tribunal with applications to review their decision. All of these applications have been rejected by the Chairman in carefully reasoned decisions. But on one issue, the EAT has now reversed the Chairman and ordered a review hearing. This issue relates to evidence about an arrangement made by Mr Barnes with Cavanagh Construction. The evidence passed the appropriate tests of being, on the face of it, credible, and of not having been available even with the exercise of due diligence at the time of the hearing before the Employment Tribunal. But in the Chairman's judgment, it failed the test of having potentially an important influence on the outcome of the case. He explained why in paragraph 10 of his decision:

" ... in the context of the long history of this case, I do not see it as any different, in kind, from the Sunderland contract in the main Decision. Nor do I find it remarkable that the applicant did not mention it or recall it earlier. It was all carried out, invoiced, and indeed rectified by Cavanagh. There is no evidence of any profit to the applicant, and it is entirely consistent with the applicant's hopes of fostering a mutually beneficial relationship with Cavanagh Construction ..."

3. The Employment Appeal Tribunal considered this perverse. Their reasons are these:

"In our view the reasoning behind the Chairman's decision is in law flawed. He starts from the proposition that the Employment Tribunal accepted Mr Barnes' evidence in relation to the Cavanagh Construction cases which were in evidence that he was trying to foster a relationship between Walkers and Cavanagh and that he was passing over jobs which would not have been of interest to Walkers. That argument is seeking to pull itself up by its own bootstraps. The point of the new evidence is that the (undisclosed) additional case might cast real doubt on the explanation which the Tribunal had previously, on less evidence, accepted. The likely effect on the outcome of the new evidence cannot be dismissed merely by saying that it could be explained away on the same basis as the earlier Cavanagh Construction cases. Furthermore, the evidence showed (if accepted) that Mr Barnes was trying to obtain a profit from the transaction, albeit he was thwarted. In these circumstances it seems to us to be perverse to discount the evidence on the basis that it did not show that Mr Barnes actually managed to make a profit. We therefore take the view that the evidence does pass the stringent test of showing that it could have a very real influence on the outcome of the 'contribution' element in the Tribunal's decision."

4. It is also relevant to see in what form their decision is to take effect. In paragraph 23 they conclude:

"Accordingly we hold that, notwithstanding the decision of the chairman on the review hearing, the case should be remitted for a re-hearing on the sole question as to the appropriate percentage (if any) deduction ... [to] be made from the award of compensation because of Mr Barnes' conduct. At the re-hearing Walkers can adduce evidence as to all the alleged instances then within their knowledge of Mr Barnes diverting work from Walkers, and Mr Barnes can adduce such evidence as he thinks appropriate to rebut those allegations. In the light of the views already expressed by the Chairman on the likely outcome of the re-hearing, the new hearing will have to be before a differently-constituted panel of the Tribunal."

5. Thus, a Tribunal which has not heard the previous evidence, or seen the witnesses, will, if this order stands, not only be considering the impact (if any) of the lately disclosed episode upon the award, but may well have to gauge its knock-on effect on the other elements of contributory conduct, conceivably to the extent of a 100 per cent finding. It is, potentially at least, a reopening before a different Tribunal of the entire award.
6. Is this then justified by the EAT's critique of the Chairman's reasons for refusing a review? It seems to me arguable, I put it no higher, that it is not justified. The Chairman at paragraph 6 of his decision gave himself a relevant reminder of the importance of finality in litigation:

"A Tribunal makes a compensatory award in unfair dismissal cases, according to section 123 of the Employee Rights Act 1996, on the basis of what is just and equitable. We do not undertake a strict accounting exercise. Unless the entire premise or substratum of the award is shown to be wrong, the Tribunal will not review it. Applications such as this, if allowed to proceed, would result in endless litigation, as events unfold, and facts are discovered. This was never the intention of the legislation. Hearings occur on certain days. Determinations are made. Projections are made. These may be approximate or even wrong. They remain enforceable. Litigation has to end, particularly in the business sphere, unless substantial injustice has occurred."

7. It seems to me at least arguable that the Chairman was better placed than the EAT was to know whether the material was likely to overset his Tribunal's view of the case; a view which depended centrally on what they had made of the individuals giving evidence to them. All of this will be lost on remission to a fresh Tribunal.
8. It is tempting, I know, where all that is at stake is a remission, to let it go ahead rather than take up time with an appeal against it. But there is frankly every prospect that, if this case is kept alive at first instance by remission, the next hearing will not be the last. For my part I am not convinced, as the EAT evidently was, that the Chairman's reasoning was question-begging; and it seems to me therefore arguable that the intellectual basis upon which the appeal was allowed is challengeable, as well as its jurisprudential basis.
9. Albeit without encouraging Mr Barnes to think that he is necessarily going to succeed on an appeal, I propose, for the reasons I have given, to grant him permission to appeal. He will have various calculations to make, and it will not be held against him if he does not in the event take up the permission but instead proceeds to the remitted hearing and takes his chance there.

Order: application allowed.