England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM the EMPLOYMENT APPEAL TRIBUNAL
MR JUSTICE WILKIE sitting with two lay members
UKEAT330/09

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/04/2011

Lord Justice Elias :

1. This is an appeal in relation to a remedies judgment of the Employment Tribunal when it assessed compensation for unfair dismissal and victimisation discrimination. The compensation for the latter was very high. In total, the Tribunal awarded almost £300,000 as compensation for the victimisation discrimination.
2. The school appealed to the Employment Appeal Tribunal on a series of grounds and succeeded in part. It now pursues to this court two grounds on which it was unsuccessful before the EAT. It also seeks permission to run a fresh ground of appeal, namely that the appeal should be allowed on the grounds that there is fresh evidence, obtained since the remedies decision was given, which suggests that the Tribunal may have made its assessment of compensation on a false factual premise. The evidence relied upon suggests that the claimant (as Mrs Blundell was below and as we shall continue to call her) was studying for an MA in the academic year 2007-2008, and that is inconsistent with the Tribunal's finding that she was not. The appellant contends that this is potentially highly significant evidence.

The background.

3. Mrs Gemma Blundell was employed at the appellant school from 1992 until she was dismissed with effect from 21 June 2007 when she was 41.
4. In June 2003 she announced her intention to take a period of maternity leave from the following December. She was requested to accept floating duties until the beginning of her maternity leave but was unwilling to do so and insisted on the right to be assigned to a particular class. That was, in fact, what happened but it seems that relations between her and the headmistress at the school, Mrs Assid, became somewhat difficult thereafter.
5. In May 2005 she presented a claim to the Employment Tribunal alleging sex discrimination and discrimination by way of victimisation. That claim was dismissed. Mrs Blundell appealed and succeeded on a minor point before the EAT, which otherwise upheld the determination of the Employment Tribunal that the head teacher had not acted inappropriately towards her.
6. In due course Mrs Blundell was dismissed and she brought a second set of proceedings, this time for unfair dismissal and victimisation. She alleged that the head teacher had ostracised her, had set out to harass her, and to find fault with her following the lodging of her first appeal to the EAT. This all culminated in what was termed a "feedback meeting" in November 2006 at which she was told by the head teacher that there were grave concerns about her ability as a nursery teacher and that her future was under review. Her dismissal arose after she had told some parents, whom she had met by chance, that she was being bullied by the head teacher.
7. The Employment Tribunal rejected most of the allegations, in particular those alleging bullying and harassment by the head teacher. However, they did find that there were certain acts of victimisation discrimination, including in particular that the head's assessment of her abilities was unjust and that the head had been deliberately fault finding. The Tribunal accepted her claim that the false assessment was because she had lodged her appeal against the unsuccessful outcome of the first ET claim. The Tribunal found that the real reason for the dismissal was that she had taken legal proceedings.
8. This led to the remedy hearing in which Mrs Blundell was awarded her compensation. The hearing took place over four days, the 12-14 and 27 January 2009, followed by two days of deliberation in chambers on the 16 February and the 12 March.
9. The Employment Tribunal considered a report from a psychiatrist, Dr Hallstrom, who was instructed jointly by the solicitors of both parties. The evidence was that the claimant had pre-existing medical conditions, namely arthritic psoriasis and depression, which were exacerbated by the stress resulting from her mistreatment. The claimant herself gave evidence about the deleterious effect of her treatment. Her depression had got worse and she sometimes felt suicidal. She had applied for one teaching job but was unsuccessful. She had lost confidence and no longer had any energy or enthusiasm to teach. She did not expect to teach again. She said that she had effectively lived in a bubble for the two years preceding the remedy hearing, i.e. from about January 2007 to about January 2009 where she socialised only with close family and friends.
10. This assessment of compensation was based on a number of assumptions which were made in the light of the evidence. These included that Mrs Blundell would have recovered sufficiently to work in some capacity in less than a year; that she would return to teaching in about six years; and that she would be likely to earn about £20,000 a year from when she commenced work until she went back into teaching. The Tribunal rejected her evidence, supported by the expert, that she would never return to teaching.
11. One of the issues raised during the course of the hearing concerned the question whether Mrs Blundell had been studying at Kingston University during the year 2007/2008. The school considered that this was potentially important evidence because if it were the case, then it cast doubt on the claimant's description of her depressive state and general lack of interest and enthusiasm in education at that time. There were two pieces of evidence which the school obtained during the course of the hearing which lent some support to the proposition that she had undertaken this course.
12. First, at the beginning of the hearing the Tribunal made an order for disclosure by the solicitors for the claimant of medical notes in their possession. There is an entry in one of the GP notes dated 20 May 2008 which appears to indicate that the claimant was at that time studying. The claimant was asked about that in cross examination. She admitted that she had enrolled for a course, an Early Years Masters degree, and had completed the first year of her course by June 2007, the month when she was dismissed. She said that it was a part time course involving one night a week. Her answers certainly led the Tribunal to understand that she had stopped studying at that point and had not resumed the course. That is how they recount her evidence: see paragraph 26 of the decision. Her counsel, Ms Cunningham, suggested that in fact her answers were ambiguous and did not warrant that construction, but we must take the Tribunal's finding at face value. When asked specifically about the doctor's note, it is accepted that the claimant stated that the doctor was mistaken to suggest that she was studying, but she could not think of what she might have said which could have caused that misunderstanding.
13. The second piece of evidence did not emerge until after her cross examination had been completed. On 22 January - that is during the period between the first and second stages of the hearing - the claimant disclosed a document headed "personal statement" which had been included as part of her unsuccessful job application in September 2007. She said in that statement that she had completed the first year of a two year course, had qualified for a diploma award, and then said this:

"I am enrolled in the final year and plan to complete the Master's degree in 2008".

14. No application was made asking that she should be recalled to give evidence about this document.
15. The school remained concerned about this point. On the 12 February, that is very shortly before the Tribunal commenced its deliberations, the school sought a third party disclosure order from the Tribunal requiring Kingston University to provide details of the claimant's further education at the university from November 2006. More specifically, it sought details of the courses enrolled on, the dates of attendance, the courses completed and the qualifications obtained.
16. The application was acknowledged but the Tribunal never formally responded to that application at all. They handed down the judgment without any reference to it. The appellant says that this was particularly unfair because the claimant's representatives also sent a letter to the Tribunal to say that they had not grossed up the figures which they had provided to the Tribunal at the hearing, and the Tribunal had regard to that letter.
17. The Tribunal's judgment demonstrated that it had accepted the claimant's evidence - as they understood it - that she had not worked after the end of the first year. They in terms rejected a submission that her involvement in the course was inconsistent with her contention that she would not continue in education. They said this (para 30):

"The Respondents also contend that the fact that the Claimant pursued this course is inconsistent with an assertion that she is unlikely to continue to work in education in the future. The Respondent's submissions however appeared to be based on the premise that the Tribunal should reject the Claimant's evidence that she was only enrolled on this course until about June 2007. However, there is no evidence that the Claimant continued this course beyond that date." (emphasis added.)

Grounds of appeal to the EAT.

18. The school raised a whole series of challenges to the Tribunal's conclusion. To some small degree they were successful, including obtaining a reduction in the amount of the compensation for injury to feelings. The two grounds now relied on were unsuccessfully advanced before the EAT.
19. The first ground was the Tribunal had been wrong to say in paragraph 30 that there was no evidence that the claimant had been working at the MA course in the academic year 2007-8. That simply ignored the two pieces of evidence to which we have referred. The EAT (Mr Justice Wilkie presiding) rejected this ground. It described the evidence relied on by the appellant as no more than "straws in the wind" and commented that "there was no evidence from any source to suggest that she had continued with the MA part of the course". The EAT was satisfied that it was not inaccurate for the Tribunal to describe this limited evidence as "no evidence", and the Tribunal's decision to prefer the oral evidence given by the claimant plainly could not be challenged.
20. The second ground related to the Tribunal's failure to consider the application for the order for discovery. The EAT properly pointed out that the Tribunal ought to have responded, but it treated the failure to do so as an implicit refusal to make the order sought. The EAT considered that this was wholly justified. Given the stage in the litigation when the application was made, and the fact that the application could have been made much earlier than it was, the EAT concluded that it was well within the case management powers of the Tribunal to reject the application.

The grounds of appeal.

21. The two grounds of appeal effectively repeat the arguments advanced before the EAT. It is again said that the ET erred in reaching the conclusion that there was "no evidence" to support the contention that the claimant was enrolled and studying on the MA course. That was plainly wrong, submits Mr Neaman, counsel for the appellant. It may be that having considered all the evidence the Tribunal could still come to the conclusion which it did, but it was a fundamental error of law for it to fail to address and weigh the relevant evidence. The EAT was not entitled to be dismissive of the evidence and to conclude that it could in effect be treated as of no evidential value at all.
22. Second, the EAT erred in law in accepting that the ET's failure to respond to the application should be treated as a refusal. In any event, there was no justification for refusing the application. The fact that the relevant evidence relied on by the appellant had only reluctantly been disclosed very late in the hearing, and the claimant's unwillingness to give permission to the school to obtain the information from the university directly, strongly favoured the making of the order. This was potentially significant evidence. It would have gone potentially to the severity of her symptoms and her claim that she had suffered significant injury to feelings. It would also have affected the analysis of when she would be fit to work and, contrary to her evidence, would if established have supported the contention that she would in future seek work in education.
23. I would reject both these grounds of appeal. As to the first, in my view it is relevant to note that the doctor was simply recounting what he was told, and the "personal statement" relied upon also emanated from the claimant herself. She was asked about the doctor's note and gave her response. In those circumstances in my view it is understandable that the Tribunal would have described this as "no evidence". As the EAT pointed out, there was no contrary evidence from any source at all. I do not accept that the Tribunal would simply have ignored these matters. The appellant's representative below (who was not Mr Neaman) would have emphasised these points in her closing submission, and I have no doubt that the Tribunal would have had that evidence in mind. Whether the evidence can properly be described as "straws in the wind" or not, it was relatively worthless in the face of the claimant's evidence to the Tribunal. In the absence of other evidence casting doubt on the claimant's credibility, I can see no grounds on which the Tribunal could properly have rejected her oral evidence on the basis of these potentially inconsistent statements. On any view, it was entitled to accept her evidence on this point.
24. Similarly, I have no doubt that the EAT was right to reject the second ground of appeal, essentially for the reasons they gave. In my judgment, it was entitled to treat the failure to respond as an implicit refusal. If that is right, then it was plainly within the case management powers to refuse the application. Even allowing for the fact that the material evidence relied on in support of the application itself only emerged late in the day, it was always optimistic to believe that an application made only two days before the Tribunal met to consider its decision would receive a favourable response. It could have been made weeks earlier. Inevitably if the application had been granted, it would have delayed matters further and it was far from obvious that the information would take matters any further.
25. Ms Cunningham ran an additional argument why this ground should fail. She submitted that the application was requesting the Tribunal to do something which it has no power to do. This involved a consideration of rules 10(2)(d) and 10(2)(f) of the Employment Tribunal rules. No doubt many a happy hour could be spent disentangling the proper construction of those somewhat inelegant provisions. In view of the conclusion I have reached it is not necessary for me to do so, and I am content to leave that pleasure for another court on another day.
26. In my judgment therefore the appeal as initially presented should be dismissed.

Fresh evidence.

27. Since the Tribunal decision, and only very shortly before this appeal, the appellant received some further information from an investigator at the London Borough of Lambeth which suggested that the claimant was indeed following an MA course in education in the year 2007-2008. During the course of the hearing we were shown an email from someone at the university which states that the claimant had completed one module on the course but suspended her studies on 10 June 2008 due to ill health.
28. Mr Neaman submits that this evidence ought now to be admitted. There is a power to admit it under CPR 52(11)(2) and the justice of the case demands it.
29. The classic test for determining whether fresh evidence should be admitted was laid down over half a century ago by Lord Denning MR in Ladd v Marshall 1954] 1 WLR 1489, 1491:

"To justify the reception of fresh evidence or a new trial three conditions must be fulfilled: First, it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; secondly, the evidence must be such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive; thirdly, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible."

30. Ladd v Marshall was a case under the old rules, but a number of authorities have affirmed that its principles still underpin the jurisprudence in this area, although the rules must be applied flexibly and in the light of the overriding objective: see for example the observations of Lord Phillips MR in Hamilton v Al Fayed - (unreported 21 December 2000) at paragraph 11 and of Richards LJ in Sharab v Al-Saud [2009] EWCA Civ 353, at paragraph 52.
31. Mr Neaman submits that the three tests are satisfied. The evidence is apparently credible; it could not realistically have been obtained before the hearing given that the evidence alerting the appellant to the possibility that the claimant had been working on the course emerged late in the hearing itself; and it would, if believed, have a significant influence on the outcome because it may well affect the assumptions on which the future compensation was assessed, as well as having some bearing on the injury to feelings award. Furthermore, the fact that the evidence suggests that the claimant may have been less than frank with the Tribunal reinforces the argument.
32. Ms Cunningham's first response to this submission was to contend that we should refuse to engage with this issue at all. The appropriate way to deal with this evidence, she submitted, was for the appellant to ask the Tribunal to review its decision pursuant to rules 35-36 of the Tribunal Rules of Procedure. She pointed out that in Adegbuji v Meteor Parking Ltd [2010] UKEAT 1570, Underhill P, giving the judgment of the EAT, observed that this would almost always be the best way of dealing with fresh evidence cases, not least because the original Tribunal would be in the best position to determine whether the second and third of the Ladd v Marshall principles were satisfied.
33. Alternatively, Ms Cunningham says that if we do engage with this question, the Ladd v Marshall criteria are not met. She does not dispute the apparent credibility of the evidence. She does, however, submit that the evidence could have been obtained before the completion of the remedies hearing. The Tribunal could have been asked to make an appropriate order directing the university to give this information much earlier than they did.
34. In addition, she submits that in any event the evidence is of relatively minor significance and would not have undermined the assumptions on which the Tribunal made their compensation calculations. However, this submission was closely linked with her contention that in fact the Tribunal had misunderstood the answers which the claimant gave in cross examination and that the claimant had never categorically denied that she had been doing the MA in the academic year 2007-2008. That may be right and if so it may counter the suggestion of deliberate deception. Equally, however, it would suggest that the Tribunal had made its decision on a false premise when it assumed that she had not been fit to work at all in that academic year.
35. I see force in Ms Cunningham's submission that it is better to pursue the fresh evidence point by way of review rather than by pursuing it before this court. Had this been the only issue before us, I would have acceded to that submission. But we have had to consider the significance of this evidence in the context of the original grounds of appeal and in my view it is desirable that we should consider this related ground also.
36. In my judgment, the criteria of Ladd v Marshall are satisfied here. I think that it would be unfair to exclude this evidence on the basis that it had been requested too late. The claimant herself was not willing to provide it in time for the hearing, and the university would not give it to the appellant without her permission, which she withheld. So it was difficult to obtain without a Tribunal order.
37. Certainly prior to receiving the job application document, which only occurred after her cross examination, it could have been said with considerable force that any application for an order from the Tribunal to obtain this information would merely have been a fishing exercise. The same criticism might have been made even after receiving that document if, like the EAT, the Tribunal had thought that the material relied on was still no more than straws in the wind.
38. It can be said that since the appellant did choose to make an application after receiving that document, there was unacceptable delay thereafter. But in my judgment, it is fanciful to think that the Tribunal members would have been any more enthusiastic about this application if it had been made on the last day of the hearing than they were receiving it shortly before they met to consider their decision. Either way, if acceded to it would inevitably have delayed matters until the information had been obtained and, depending on the information supplied, the case might have had to be re-opened.
39. Moreover, for reasons given by Mr Neaman, I think that the evidence could, if found to be credible, materially influence the Tribunal's assessment of the facts, and they in turn underpinned the assumptions which led the Tribunal to award the compensation it did. This might particularly be so if the Tribunal were to conclude that the claimant had been deliberately concealing this information from them.
40. In the circumstances, therefore, I think that justice does require that the award of compensation be reconsidered in the light of this new evidence.
41. Mr Neaman urged us to send the matter back to a different tribunal. He made the point that the members of this Tribunal had appeared to look favourably on the claimant's evidence and that it would be difficult for them to look objectively and fairly at the new evidence. I reject that submission. I think that there are very powerful reasons why the case should be remitted to the same Tribunal, particularly given the terms on which I would remit the case. I would allow the Tribunal to consider this fresh evidence and any further evidence arising from it. No doubt it would be sensible to conduct a case management conference to determine the precise parameters of the new evidence and the scope of the submission which may be made with respect to it. The Tribunal would then be able to assess the extent, if any, to which the new evidence had a bearing on each aspect of its original compensation assessment.
42. In my view, it is a real advantage for the same Tribunal, with its detailed knowledge of the evidence given in both the liability and remedies hearings, to conduct this exercise. Indeed, that is typically what happens whenever there is a review by a tribunal of its decision. In any fresh evidence appeal the Tribunal must be willing to consider the evidence with an open mind and if necessary to alter its assessment of that evidence. I see no reason to doubt that this Tribunal would do just that. The effect of the order I propose is as if the Tribunal had acceded to the application to conduct a review. It must now carry it out.

Disposal.

43. I would grant permission to allow the amendment to the grounds of appeal to include the fresh evidence ground, give permission for that ground to be pursued, and I would allow the appeal on that ground only. I would direct that the same Tribunal now considers the matter as I have outlined in this judgment.

Lady Justice Smith:

44. I agree.

The Master of the Rolls:

45. I also agree.