England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
HHJ BURKE QC
UKEAT033712DM

		Royal Courts of Justice Strand, London, WC2A 2LL
		24th June 2014

Master of the Rolls:

1. The claimant was employed by the respondent as a client services executive in the travel industry. She is of Black African origin. On 10 June 2011, she presented her first claim of race discrimination. The central complaint was that in November 2009 her supervisor had publicly described her as a "monkey dressed in silk" or words to that effect. She found the incident humiliating, developed a psychiatric illness as a result and was admitted to a psychiatric hospital. The respondent admitted the incident, but relied on a limitation defence.
2. It was stated at para 15 of the claim form (ET1) that in May 2010 "a decision in respect of the claimant's grievance was reached by the respondent which went against the claimant. The respondent said there was no evidence of racism and that the [monkey] comment was just banter". It was added that the respondent had refused to take part in mediation and that an internal appeal decision was also adverse to the claimant. The remaining part of the claim form was directed to the issue of whether it was "just and equitable" for the tribunal to consider the complaint outside the statutory period of three months beginning when the act complained of was done.
3. After the presentation of the claim form, but shortly before the pre-hearing review ("PHR"), the claimant submitted a draft amendment which was in these terms:

"18. From November 2009 to the present day, the Respondent has been responsible for a discriminatory state of affairs which constitutes "conduct extending over a period" under the Equality Act 2010 s123. In addition to the facts alleged above, the Respondent has continued to dismiss the November 2009 racist incident as "banter" (most recently at a meeting on 7^th June 2011), failed to implement proper culture awareness training for staff and failed to guarantee a racism-free workplace for the Claimant to return to. In particular, the Respondent continues to insist that the Claimant work on the same premises as Laia Gonzalez knowing that the Claimant is medically unable to do so. The claim is therefore in time.

18a If the claim is out of time, the Claimant claims it would be just and equitable to allow it to proceed because (1) she relied entirely on the advice of her trade union representative, who told her that time limits would not apply; (2) she suffers from mental illness which affected her ability to understand her obligations and (3) the core facts of the care are all contained in documents which are still extant."

4. At the outset of the PHR (which was held on 2 September 2011), the claimant sought permission to introduce the amendment. EJ Potter refused permission for the amendment. A note of her oral judgment includes the following:

"The Claimant had legal advice, [the] ET1 [is] quite clearly couched on [the basis that the claim is] out of time. [There was] no attempt to link to [an] ongoing course of conduct. In particular 7 June 2011.

The Claimant gets notice of PHR on 22 July 2011. [It is] clear that there will be [a] hearing. The Claimant waits until last minute before producing amendment that is vague in extreme, no coherent statement of continuing act claim.

There is prejudice because C [should be the Respondent] has spent money preparing for this hearing and undermines PHR.

I take into account that the Claimant can bring another claim in relation to continuing employment issue. There may be Henderson v Henderson issues but that is for another day.

If there is continuing discrimination, she can set out recent events and seek remedies.

Overriding objective. Just and equitable. Case has very stale characteristics. The Respondent should have opportunity to argue that they will stop here."

5. There was no appeal against this decision. The judge then went on to consider whether it was just and equitable to extend time. After hearing evidence and considering submissions from both parties, she decided not to do so. Accordingly, she dismissed the claim on the grounds that she did not have jurisdiction to hear it. It is common ground that, unless the period for bringing the claim was extended, the judge had no jurisdiction to entertain it and was obliged to dismiss it. She expressed her conclusions as follows:

"24. Following an admitted incident of harassment in November 2009, the Claimant's initial decision was not to bring proceedings, despite ACAS and Union advice, including very clear advice on the time limits applicable to Tribunal proceedings. She chose to take the internal route, she chose to exhaust the internal route. She thought she would go ahead with a claim, took advice from her union, was advised to make a claim as soon as possible and then chose not to act on that advice. She appeared to be influenced by indications that there was an opportunity to go back to work and put the whole thing behind her and in the Employment Judge's view, on the evidence she made a conscious decision not to go to the Tribunal. She did not present a coherent explanation for the delay that then ensued until she finally saw a solicitor in May 2011 and until the claim was lodged in June 2011. That was in circumstances where medical evidence showed her fit to work from January 2011. It was also in circumstances where the details of the ET1 pointed to the Claimant having been able to give a coherent account to the solicitors. This was not in the view of the Employment Judge an individual who was not able to engage with the facts of her case, with finding an adviser or the filling in of a claim form.

25. In weighing in the balance the relevant factors, the Employment Judge took into account but did not weigh heavily prejudice to the Respondent of lack of witnesses because of the findings of fact that this was not a very significant matter. She did note that this was a Respondent who had not been discriminatorily blameworthy in their handling of matters on the case as currently pleaded in the period since the end of 2009.

26. In summary, weighing the factors of the case in account, in accordance with Section 33 of the Limitation Act 1980, the conclusion of the Employment Judge was that it was not appropriate to exercise the just and equitable discretion."

6. The claimant appealed against this decision. Her appeal was rejected at the sift stage of the EAT's procedures and rejected again at an oral hearing under rule 3(1) of the EAT Rules.
7. On 6 September 2011, she issued a second ET1. This repeated the first 15 paragraphs of the first ET1. Paras 18 to 22 set out a number of matters in support of the case that the respondent's "practice should be viewed as an act or conduct extending over a period as opposed to a series of isolated acts". I shall refer to these as "the new complaints". Para 21 described the new complaints in these terms:

"The Claimant claims that the Respondent has failed to implement the recommendations of its own internal investigation that the member of the team receive cultural awareness training, that it continues to dismiss the incident on November 2009 as 'banter', most recently at a meeting on 7 June 2011 and continues to expect the Claimant to work at the same premises as her racially abusive supervisor."

8. Para 22 stated that the claimant regarded the following as evidence that the respondent's practice should be viewed as an act or conduct extending over a period as opposed to a series of isolated acts:

"22. The Claimant regards the following as evidence that the Respondent's practice should be viewed as an act or conduct extending over a period as opposed to a series of isolated acts:

a) that inappropriate banter was commonplace as acknowledged by the Respondent's internal investigation and for many months the Respondent failed to address this even after it was aware of it.

b) the efforts of the Respondent's officer Mark Cotter (HR) and Maura Ryan (management) to dissuade the Claimant from complaining about the incident which took place in November 2009

c) that it continues to dismiss the incident in November 2009 as 'banter'

d) that two separate stages in the internal complaints procedure unreasonably decided that an obviously racist comment was not racist and the subsequent failure to discipline the perpetrator Laia Gonzalez

e) the continued unreasonable demand that the Claimant return to work in the same premises as Laia Gonzalez, most recently at a meeting held on 7 June 2011

f) its failure to implement cultural awareness training among the team.

The Claimant claims that the Respondent's practice should be treated as an act extending over a period culminating in a meeting held on 7 June 2011 thus enabling her claim to be lodged within time on 6 September 2011."

9. A PHR was held in respect of the second ET1 before EJ Grewal. On this occasion the respondent argued that the first 15 paragraphs of the second ET1 should be struck out on the basis of the doctrine of cause of action estoppel. The respondent also argued that the new complaints could have been raised in the first ET1 and should therefore not be permitted to be litigated on the grounds that to do so would be an abuse of process.
10. The claimant submitted that the doctrine of cause of action estoppel was not applicable because EJ Potter had not considered the merits of the underlying case when dismissing the first claim. The only issue that had been determined at the first PHR was whether it was just and equitable to extend time. This was not now being challenged because the second claim was not out of time, so that there was no basis for an estoppel. As for abuse of process, the claimant argued that it did not follow from the fact that she could have raised the new complaints in the first ET1 that she should necessarily have done so. The respondent needed to point to some unjust harassment by the claimant to make out a case of abuse of process.
11. EJ Grewal accepted the respondent's submissions and struck out the second claim. She expressed her conclusions as follows:

"18 I considered first of all whether cause of action estoppel applied to the complaints of race discrimination in respect of acts that occurred between November 2009 and the dismissal of the Claimant's grievance appeal, i.e. those set out in the first 16 paragraphs in her claim form. I considered that it did because those complaints had been the subject matter of the first claim and had been dismissed by the Employment Tribunal at the pre-hearing review on 1 September 2011. The fact that Judge Potter dismissed them because the Tribunal did not have jurisdiction to hear them and did not dismiss them after hearing the evidence and determining the merits of the claim makes no difference. In order for the doctrine of cause of action estoppel to apply all that is necessary is that there should have been a judgment formally dismissing those claims.

19 I then considered whether the two new complaints should be struck out as an abuse of process under the rule in Henderson v Henderson. It was accepted that they could have been raised in the first claim and I accept that the mere fact that a complaint could have been raised in earlier proceedings does not make the raising of it in later proceedings as an abuse of process. I considered whether on the facts of this case the Claimant was abusing or misusing the process in raising the two new matters. I took into account that the Claimant was aware of both the two new matters before her first claim form was drafted. It was not something that came to light or something which she discovered after her claim form had been submitted. Her claim form was drafted by solicitors who were aware of the fact that jurisdiction was an issue because the complaints were out of time. In those circumstances, if the Claimant had genuinely believed or felt that the Respondent's conduct at the meeting of 7 June 2011 or its alleged failure to implement the recommendations in respect of cultural awareness training were acts of racial discrimination, those matters would have been included in her claim form. It is inconceivable that she would have accepted that her claim was out of time in circumstances when she could point to two acts of race discrimination that she believed had occurred in the preceding three months. The Claimant's failure to include them, when she was fully alert to the time limit issues, indicates to me that she did not consider them to be acts of race discrimination. That is why they were not raised in her first claim. The only reason that they are being raised in this claim is to attempt to resurrect the claim that was dismissed at the pre-hearing review. In those circumstances, I am satisfied that the Claimant is misusing or abusing the process by raising those claims now. She did not raise them previously, when she could have, because she did not consider them to have any substance, but is choosing to raise them now as a way of trying to revive a claim that has been dismissed."

12. The claimant appealed to the EAT. In a judgment handed down on 6 September 2013, His Honour Judge Burke QC upheld the reasoning and conclusions of EJ Grewal. She now appeals to this court with the permission of Rimer LJ.

The issues

13. The two issues that arise on this appeal are whether Judge Burke was right to uphold the decision of EJ Grewal (i) to strike out the second claim on the grounds that it was an abuse of process and (ii) to strike out the first 15 paragraphs of the second claim on an application of the doctrine of cause of action estoppel. These issues necessarily focus on the reasoning of EJ Grewal.

Abuse of process

14. The question that arises is whether EJ Grewal was right to decide that the claimant should not be permitted to bring the second claim on the grounds that it was an abuse of process under the principle of Henderson v Henderson (1843) 3 Hare 100 as explained authoritatively by the House of Lords in Johnson v Gore Wood [2002] 2 AC 1. The classic exposition of the principle is to be found in the speech of Lord Bingham at p 30 H:

" It may very well be, as has been convincingly argued (Watt, "The Danger and Deceit of the Rule in Henderson v. Henderson: A new approach to successive civil actions arising from the same factual matter," 19 Civil Justice Quarterly, (July 2000), page 287), that what is now taken to be the rule in Henderson v. Henderson, has diverged from the ruling which Wigram V.-C. made, which was addressed to res judicata. But Henderson v. Henderson abuse of process, as now understood, although separate and distinct from cause of action estoppel and issue estoppel, has much in common with them. The underlying public interest is the same: that there should be finality in litigation and that a party should not be twice vexed in the same matter. This public interest is reinforced by the current emphasis on efficiency and economy in the conduct of litigation, in the interests of the parties and the public as a whole. The bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all. I would not accept that it is necessary, before abuse may be found, to identify any additional element such as a collateral attack on a previous decision or some dishonesty, but where those elements are present the later proceedings will be much more obviously abusive, and there will rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party. It is, however, wrong to hold that because a matter could have been raised in early proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive. That is to adopt too dogmatic an approach to what should in my opinion be a broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case, focusing attention on the crucial question whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise before it the issue which could have been raised before. As one cannot comprehensively list all possible forms of abuse, so one cannot formulate any hard and fast rule to determine whether, on given facts, abuse is to be found or not. Thus while I would accept that lack of funds would not ordinarily excuse a failure to raise in earlier proceedings an issue which could and should have been raised then, I would not regard it as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim. While the result may often be the same, it is in my view preferable to ask whether in all the circumstances a party's conduct is an abuse than to ask whether the conduct is an abuse and then, if it is, to ask whether the abuse is excused or justified by special circumstances. Properly applied, and whatever the legitimacy of its descent, the rule has in my view a valuable part to play in protecting the interests of justice."

15. Mr Amey's first submission is that the respondent is estopped from advancing the abuse of process argument because one of the reasons relied on by Mr Mitchell in opposing the amendment was that the claimant could "claim again". Mr Amey relies on the principle that a party's conduct in legal proceedings may estop him adopting an inconsistent position in later proceedings: see Spencer Bower and Handley, Re Judicata (4^th ed) at para 9.46. The contours of this principle are not entirely clear. It certainly applies where a party successfully contends for a particular construction of an instrument in proceedings A and later seeks to contend for a different construction in proceedings B. It is less clear whether and, if so, how far the principle applies generally in relation to submissions made by a party in successive legal proceedings.
16. But even if the principle may apply generally, I do not consider that it can avail the claimant in the present case. First, the statement by Mr Mitchell at the first PHR that the claimant could "claim again" was only one of the points made by him in opposing the amendment and, as the note of the judge's ex tempore judgment shows, it was only one of the matters taken into account by the judge. Secondly, this estoppel argument was not advanced before EJ Grewal or Judge Burke. Indeed, it was not raised in the skeleton argument submitted by Mr Amey for this appeal. In these circumstances, he cannot in my view rely on it as a reason for contending that the decision of EJ Grewal (upheld by Judge Burke) was wrong in law.
17. On the substance of the matter, Mr Amey challenges the reasoning set out at para 19 of EJ Grewal's judgment. It is necessary to examine this paragraph in some detail. The judge stated that the mere fact that the new complaints could have been raised in the first claim did not make the raising of them in the second claim an abuse of process. She said that she considered the question whether on the facts of this case the claimant was abusing or misusing the process in raising the new complaints. Thus far, Mr Amey accepts that the judge's approach was an impeccable application of Johnson. She then examined the facts of the case which were relevant to this question. First, she took into account the fact that the claimant was aware of the facts which comprised the new complaints. That was clearly correct and has not been challenged. They were not something that first came to light after the first claim had been issued. Secondly, the judge took into account the fact that the claimant was being advised by solicitors at the time and that they had drafted the first claim form. They knew that the claim was out of time and that it would be necessary to seek an extension of time. That too was correct as a matter of fact.
18. It is the next part of para 19 that is challenged by Mr Amey. It is critical to the judge's conclusion that the claimant was abusing or misusing the process by raising the new complaints in the second claim. She found that the claimant did not consider the new complaints to be acts of race discrimination and that the only reason they were raised in the second claim was to resurrect the first claim. It is this crucial finding that Mr Amey challenges. He submits that there was no evidential basis for it.
19. In my view, EJ Grewal was entitled to make this finding. In particular, she was entitled to hold that, if the claimant had genuinely believed that (i) the respondent's continuing dismissal of the monkey incident as "banter", including most recently at the meeting of 7 June 2011 or (ii) its failure to implement the recommendations that there should be cultural awareness training were acts of race discrimination, then these matters would have been included in the first claim form. As Mr Mitchell points out, the meeting of 7 June 2011 preceded the issue of the first claim form by three days.
20. The claimant did not give evidence before EJ Grewal. She could have done so. In his skeleton argument, Mr Amey states that it did not occur to the claimant that it was worth complaining in her first claim about anything other than the monkey incident, which was the most serious act of discrimination. He says that it did not occur to her that it was worth complaining about subsequent less serious acts of discrimination; she was not aware of the concept of a continuing act; and it was only after the presentation of the first claim form, but shortly before the first PHR, following a change of legal representation, that she realised for the first time that it was possible to allege a continuing act. But there is no evidence to support these assertions. The claimant has not waived privilege. In the absence of evidence, the judge had to make an assessment. She had to decide whether the claimant considered the new complaints to be acts of race discrimination. In my view, she was fully entitled to conclude, for the reasons that she gave, that the claimant did not consider the new complaints to be acts of race discrimination. This court should be very slow to interfere with this assessment by the judge. It should do so only if satisfied that she reached a conclusion which is plainly unsustainable. The claimant comes nowhere near meeting this stringent test.
21. Having found that the claimant did not consider the new complaints to be acts of race discrimination and that the only reason why they were introduced into the second claim was in an attempt to resurrect the first claim, the judge had to decide whether this amounted to an abuse of process. She directed herself in accordance with Johnson. She cited the central part of the passage of Lord Bingham's judgment which I have set out above. She was, therefore, aware of the need to adopt a "broad, merits-based judgment which takes account of the public and private interests involved and also takes account of all the facts of the case".
22. I accept that the burden is on the respondent to establish clearly that it is an abuse of process for it to be subjected to the second claim and that this must be clearly demonstrated. The question whether a second claim is abusive calls for an exercise of judgment. It is not an exercise of discretion. Rather, it is a question to which, ultimately, there is only a correct answer: see Aldi Stores Ltd v WSP Group plc [2007] EWCA Civ 1260, [2008] 1 WLR 748 at para 16. Nevertheless, an appellate court will generally only interfere with the decision of the judge where the judge has taken into account immaterial factors, failed to take into account material factors, erred in principle or come to a conclusion that was not open to him (Aldi loc cit).
23. For the reasons I have given, EJ Grewal's decision is not tainted by any such error. I should add that Mr Amey relies on the fact that in Johnson Lord Bingham said that there would rarely be a finding of abuse unless the later proceeding involves what the court regards as unjust harassment of a party; and he submits that there was no harassment of the respondent by the issue of the second claim in this case. It is true that there is no evidence that the claimant issued the second claim in order to harass or oppress the respondent. But it does not follow that the second claim was not an abuse of process in the particular circumstances of this case. As Lord Millett said in Johnson at p 59E-H, the abuse of process doctrine in this context is a procedural rule "based on the need to protect the process of the court from abuse and the defendant from oppression" and the question was whether "it was oppressive or otherwise an abuse of the process of the court" for the claimant to raise in second proceedings a claim which he could have raised in the first proceedings. The very fact that a defendant is faced with two claims where one could and should have sufficed will often of itself constitute oppression. It is not necessary to show that there has been harassment beyond that which is inherent in the fact of having to face further proceedings.
24. I would, therefore, dismiss the appeal against the decision to strike out the second claim on the grounds of abuse of process.

Cause of action estoppel

25. In view of my decision on the issue of abuse of process, it is unnecessary to decide whether EJ Grewal was right to strike out the second claim on the grounds of cause of action estoppel.

Overall conclusion

26. I would, therefore, dismiss the appeal.

Lord Justice Sullivan:

27. I agree.

Lady Justice Sharp:

28. I also agree.