United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 660_93_1706

Appeal No. EAT/660/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 17 June 1994

Before

THE HONOURABLE MR JUSTICE MORISON

MR P DAWSON OBE

DR D GRIEVES CBE

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MRS V M RICHARDSON          APPELLANT

SOUTHAMPTON CHAMBER OF COMMERCE & INDUSTRY          RESPONDENTS

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellant THE APPELLANT IN

PERSON

For the Respondents MR D HUGHES

(OF COUNSEL)


 


MR JUSTICE MORISON: The facts relating to this matter are as follows:

In December 1992 Mrs Richardson, whom we shall hereafter call the appellant, presented a complaint to an Industrial Tribunal against the Southampton Chamber of Commerce and Industry, whom we shall hereafter call 'the SCCI', alleging that on the grounds of her sex they had unlawfully discriminated against her in refusing to appoint her a director.

The SCCI is a company limited by guarantee; and, according to the documentation which we have seen, it is a long established organisation which was set up initially for the better promotion of the business at the port of Southampton. There is unlimited membership under the Articles of Association but prospective members must seek election and on election pay an annual subscription. The Board of Directors, to whom is entrusted the management of the Chamber, has the power to terminate a member's membership at any time by majority vote. Directors are elected at the Annual General Meeting and serve for three years, and are entitled thereafter to seek re-election. In the event that a vacancy occurs due, for example, to a director dying or becoming insolvent, then the Directors may declare the seat vacant and fill the position as soon as is convenient. The appointment of such a person continues only until the next Annual General Meeting.

The appellant was a director of an organisation which was a member of the SCCI, Telesearch (UK) Ltd, from 1985 until its membership was terminated in October 1992. The circumstances in which the termination occurred are in dispute and it is not necessary to recite the details here. Suffice it to say, the appellant believed that a fellow member had been misconducting itself and said so; she was invited to substantiate her allegations under threat of expulsion, which was duly effected. It was shortly before her company's expulsion that she applied to fill a vacancy in the Board which gave rise to her claim in the Industrial Tribunal. The SCCI's version of events leading to the refusal to appoint her a director and the reasons for the expulsion of her company were set out in the SCCI's IT3 which was presented to the Industrial Tribunal on or about January 14 1993.

A copy was sent to the appellant and two days later she submitted a rebuttal of what was said and copied that to the Industrial Tribunal. On January 19 1993 the Industrial Tribunal wrote to the appellant saying that the Chairman was minded to strike out her claim as it did not appear to raise allegations falling within their jurisdiction, and invited her to make submissions to the contrary effect.

The appellant replied that she had consulted with the EOC (Equal Opportunities Commission) who had given her some guidance and that she was relying upon section 12(1) of the Sex Discrimination Act 1975 [the Act]. So far as we are aware this section has received little or no consideration by industrial tribunals. In the light of this representation, the Industrial Tribunal decided to hold a preliminary hearing as to the question of jurisdiction under section 12 of the Act.

About a fortnight later the appellant asked for further and better particulars and when there was no response asked for an order for them. As they were perceived to go to the merits of the claim and not to the issue of jurisdiction they were refused by the SCCI's solicitor pending the preliminary hearing. Following that, the appellant's representative, a friend, made written submissions to the Industrial Tribunal urging that the SCCI was an organisation falling within section 12(1) of the Act, on the grounds that it was an organisation

"which exists to promote the interests of its members who carry on particular trades or professions within industry, commerce, business and shipping."

and asking why there was any need for a preliminary hearing which had, by then, been fixed for May 8 1993. The point was pressed in subsequent communications. On April 29 1993 a fax was sent to the Industrial Tribunal saying that the appellant was in hospital and had undergone her fourth major operation and would be unlikely to be able to attend a hearing within the next three months. The Industrial Tribunal responded, on April 30, notifying both parties that the hearing would take place on a date to be fixed

"when applicant has recovered"

On May 6 1993 SCCI's solicitors submitted amended grounds of opposition setting out a clear case on the question of jurisdiction in relation to section 12(1), and saying that particular allegations regarding the management of assets and funds were, in any event, outwith the Industrial Tribunal's jurisdiction. Despite this last point, the solicitors wrote to the Industrial Tribunal saying that "serious allegations have been made against our client and we are anxious that these allegations should be addressed and resolved", and asking, in effect, that the appellant be required to submit medical evidence as to her condition.

On May 11 1993 the Chairman wrote to the appellant's representative asking for the provision of a medical certificate as soon as possible. A full response was sent to the Industrial Tribunal referring to her medical problems stemming from a Road Traffic Accident - her claims in relation to it were at that time outstanding although the third party had admitted liability, and the appellant was anxious about disclosing her medical records as such. She offered to send the documents to the Tribunal "in the strictest confidence" and asked for an assurance that they would not be disclosed to the SCCI's solicitors who are themselves members of the SCCI and one of their partners is allegedly a director.

The Industrial Tribunal responded saying that all that was required was a certificate from her General Practitioner stating that she was unable to attend court and indicating when she was likely to be able to do so.

Again, relying on the seriousness of the allegations, which they were contending fell outside the Industrial Tribunal's jurisdiction, the SCCI's solicitors, at the beginning of June, asked that the matter could be listed at some convenient date in July. In response to that, the Industrial Tribunal fixed a date for hearing on July 15. Her representative's response, a month later, on July 5, was that it was unlikely that the appellant would be returning to work for the rest of the year.

The Chairman decided that the time had come when the appellant should produce a certificate from her General Practitioner setting out briefly the nature of the illness/injuries and certifying her unfit to attend and giving them an opinion as to when she was likly to be fit to attend a hearing, as opposed to attending for work. This was communicated to the appellant's representative on July 6 with an indication that such a certificate should be made available to the SCCI's solicitors "if they wish to see it". The representative objected to this course for a number of reasons:

1. that the Industrial Tribunal had been advised already of the nature of the condition and had accepted the letter that was sent to them as sufficient;
2. the case had been adjourned until the appellant was fit and this was a new position being adopted without jurisdiction and if the earlier order had been revoked, the representative asked when it had been so revoked.
3. the appellant was still unfit to attend.

The Industrial Tribunal responded on July 8 1993 that a balance had to be struck between the interests of the parties and asking for the requested medical evidence. The Industrial Tribunal made it clear that the hearing was going to go ahead on July 15 and if it remained in the list for that day it would then be a matter for the Tribunal to decide how to proceed "if it should be that the [I interpolate the Appellant] is not present".

On the same day, the SCCI's solicitors sent to the appellant a bundle of the documents on which they intended to rely at the hearing. The appellant's representative continued to debate with the Industrial Tribunal their power to ask for medical evidence and sent an amended application, which effectively set out the case on jurisdiction and shortly before the hearing submitted a further statement which related to the merits of the case.

The matter remained in the list, the case was called on and the SCCI attended with counsel. The appellant neither appeared herself nor was she represented by her friend.

Pausing there, we would wish to say that at this stage it seems to us that the conduct of the Industrial Tribunal cannot be criticised for the way they have approached the matter. They were entitled, in our view, to decide that the time had come for a hearing on jurisdiction and had dealt with the matter fairly and sensibly in relation to the difficulties which the appellant was experiencing as to her attendance.

The Decision of the Industrial Tribunal on July 15 was that

"The Tribunal has no jurisdiction to entertain the applicants complaint under Section 12 Sex Discrimination Act 1975. The applicant has behaved unreasonably in bringing and pursuing this complaint and is ordered to pay to the Respondents costs in the sum of £6,000"

That Decision was entered in the Register and sent to the parties on July 26.

The Notes of Evidence show that the Industrial Tribunal received no oral evidence as to the issue of jurisdiction although they were told that the documents which were presented to them, which were contained in the bundle previously supplied to the appellant, were the proper documents. That was confirmed by a person who attended before the Tribunal from the Chamber but he did so not on oath. The argument appeared to be that the appellant was not a member of the SCCI and she was not seeking membership of it; therefore, even if the SCCI was an organisation to which section 12(1) applied, the refusal to appoint her a director did not fall within subsection (2) and because she was not a member subsection (3) was not applicable.

It seems to us that the Industrial Tribunal cannot be criticised for arriving at that conclusion. An application for an order for costs was made and the Industrial Tribunal were provided with certain information. We have, for the purposes of this appeal, had the assistance of the notes of evidence (although no evidence as such was given) which we find at page 134 of our file, supplemented by what Counsel has told us in response to substantial questioning by this Tribunal of him. We are grateful to him and would like to record our debt of gratitude to him for the way in which he has responded to our questions.

It appears that the Industrial Tribunal were given certain figures orally, that is, they were told on Counsel's instructions a figure of £8,500 which, apparently, were the costs which had been incurred in relation to these matters and it was in the form of an estimate that the costs of that day (July 15) alone were £2,400, which is the note made by the Chairman. They were told that two invoices had been rendered, the first in respect of work done to 4 February, by the solicitors to SCCI, and the second invoice in respect of work done between 4 February and 25 June 1993. A figure of £4,879.25 was given for the costs which had been incurred since 25 June 1993 but on checking it seemed to be in excess of the actual figure. The Industrial Tribunal Chairman has noted two other figures in his notes of evidence, neither of which appears to be explicable. At some stage during the course of the costs argument the representatives of SCCI retired to a waiting room and there prepared in hand writing a schedule of the costs giving in more detail the figures which we have indicated. That hand-written document was produced to the Industrial Tribunal together with the two invoices.

In the decision, given by the Industrial Tribunal, they refer to the accounts, that is the two invoices which had been produced to them. It also appears, although it is not recorded in the notes of evidence or in the Decision, that the solicitors indicated to the Industrial Tribunal that later that day the hand-written manuscript document would be put into typescript and sent to them together with a copy of the hand-written document and the two invoices. A letter dated July 15 was sent to the Tribunal with a typed version of the schedule together with the two invoices.

The appellant had been given no inkling that an order for costs was to be sought, and she was entitled, we think, to be surprised that on a preliminary issue on jurisdiction which cannot have taken more than about half an hour to present, the costs order amounted to £6,000.

On July 28 1993, the solicitors demanded payment of the sum of £6,000.

On receipt of the Decision she immediately protested that she had not been given an opportunity to be heard on the question of costs and made a number of other criticisms of the Industrial Tribunal's behaviour. The Industrial Tribunal treated that protest as a request for a Review of their Decision which they granted on the issue of costs only. The 30 September was fixed as the hearing date.

The representative then asked the SCCI's solicitors to disclose their expenditure records and invoices in support of their application. The solicitors refused to comply with that request and wrote to the Industrial Tribunal explaining why and saying this

"Please also let us know whether a copy of our letter to the Chairman dated July 15 with enclosures has been sent to [the appellant]. We take the view that all documents relating to the conduct of this case between our firm and our client are confidential. This includes the invoices delivered to our clients enclosed with our letter of July 15. Please confirm that the invoices referred to in our letter of 15 July will not be disclosed to [the appellant]."

The representative pressed the application for discovery and complained that the request that they did not have to disclose the invoices "seeks to deprive the [appellant] of a fair hearing".

That request for an Order was refused-

"despite your lengthy arguments, I cannot see that any of the documents she seeks are of any relevance on the issue of costs."

On the morning of the review hearing, the appellant was handed a bundle of documents which contained a schedule of legal expenses (that is, the typed up version which had been provided to the Industrial Tribunal and to which she had been refused access before, and a further schedule). This was the first time she had seen any such documentation. She immediately told the Chairman of the Industrial Tribunal that she objected to the order for costs both in principle and in relation to amount and at the outset complained that she had only been given details of the costs that morning.

The Industrial Tribunal reaffirmed its earlier Decision and that Decision was entered in the Register and sent to the parties on October 20 1993.

By Notice of Appeal dated August 10 1993 the appellant appealed against the Tribunal's Decision of July 15. She also appeals against the Industrial Tribunal's refusal to order discovery in relation to the amount of the costs. She also appeals against the Review Decision, saying, amongst other things that she did not have

"any copies of the primary documents of evidence entered in support of legal costs at the Preliminary Hearing of July 15 [1993]".

It is to be noted that the appellant, despite a specific request for them, has not been given a copy of the letter of July 15 which was sent to the Industrial Tribunal and has never seen the documentary material presented to the Industrial Tribunal in support of the claim for costs.

The appellant came before this Court on April 15 1994, before the appeals had been listed for a full hearing, and asked for an order for discovery so that she could properly pursue her appeals. She told us that despite the fact that an appeal was pending an attempt was being made in the local County Court to enforce the order for payment of £6,000. We made an order for a stay; asked for the Chairman's Notes of evidence in relation to the two hearings and ordered the SCCI to file a list of documents showing what documents were presented to the Industrial Tribunal on the first occasion, what were sent to the Industrial Tribunal under cover of the letter of July 15 and what were produced at the review Hearing. This they have done.

The Industrial Tribunal's Decision on costs, contained in that Decision of 15 July, sets out in paragraph 9 two findings: firstly, that the respondent was not an organisation to which Section 12(1) of the Act applied and secondly, the applicant was not a member of it. Accordingly they had no jurisdiction to entertain the claim. They then refer to the fact that an application had been made by counsel for costs. We were told by him - and accept - that at no stage did he put forward any figure to the Industrial Tribunal although he did ask them to award a specific figure rather than to go through the hassle of a taxation. It was noted that the submissions of counsel were that:

"11. ..........the applicant had acted vexatiously and unreasonably both by virtue of the fact that she had brought and continued to prosecute this claim and by virtue of the way in which she had done so. The Tribunal accept the view that the applicant had acted ureasonably both in bringing the matter and in pursuing it the way that she did so particularly having regard to the Tribunal's repeated, but fruitless requests that she should produce medical evidence to substantiate her assertion that she was unable to attend."

They then go on to say:

"12. The Tribunal were presented with some difficulty in considering in the question of costs through inability to make any direct enquiry of the applicant as to her means. Although Telesearch (UK) Ltd is no longer a member of the respondent information that the respondents had indicated that it was still trading with at least one employee. It was understood that the applicant lived near Southampton in a degree of comfort. Whilst the ability of a party to meet an order for costs is a matter which is properly to be taken into consideration it is not a conclusive factor (Wiggin Alloys -v- Jenkins [1981] IRLR 275) and accordingly the Tribunal are satisfied that it would be appropriate to make an order for costs in this case.

13. The respondents had incurred substantial costs which they put at a figure of the order £8,500. Accounts had been rendered by their solicitors to the respondents for the period up to 25 June 1993. Those accounts were produced to the Tribunal. Additional costs would have been incurred from that date until the date of the hearing and counsel was able to provide calculations for the cost of today's hearing in respect of the attendance of his instructing solicitor and his own fee. It was stated that, in view of the fact that the respondent's solicitors were, themselves, members of the respondent, their charges had been levied on the basis that they contained no profit element. Efforts were made to make all due allowance for any items of work carried out which were not wholly referrable to this application. Having regard to the representations received in respect of the question of the level of costs and counsel's request that a specified sum should be ordered rather than an order for taxation, the Tribunal determine that the appropriate contribution which the applicant should make towards the respondent's costs is in the sum of £6,000 and an order is made accordingly."

When the matter came on for review on 30 September the Review did not succeed and the Industrial Tribunal ordered the Appellant to pay £250 in relation to the costs occurred in relation to the Review.

It seems to us, having considered the matter and having heard counsel's submissions, that the order for costs made by the Industrial Tribunal cannot stand for the following reasons:

4. Having regard to the amount of costs being sought, the Industrial Tribunal should, in our view, have adjourned the question of costs to another day, giving the appellant an opportunity to appear to deal with the matter. We do not say that such a step would be required in every case, but on the facts here, we are satisfied that natural justice required that she be given such an opportunity. One of the matters which the Industrial Tribunal should take into account is the means of the prospective payee, and with an amount they had in mind the Industrial Tribunal should surely have wished to give the appellant a chance to make representations. We do not consider that it is satisfactory or appropriate for an Industrial Tribunal to proceed to hear a matter in the absence of a party merely because that party will have the right to ask for a Review later on. The Industrial Tribunal recognised the difficulty but decided, wrongly in our view, to deal with the matter that day. We consider that no reasonable Tribunal acting in accordance with the concept of fairness could have decided to have proceeded to deal with the question of costs on that day.
5. The way the documentation relating to costs has been dealt with is plainly contrary to natural justice. Any evidential material submitted to the Industrial Tribunal must always be made available to the other party save in wholly exceptional circumstances such as where questions of trade secret or public interest immunity arise. It seems to us quite bizarre that the SCCI's solicitors should submit documentary evidence to the Industrial Tribunal in support of their claim for costs and then ask that it be not disclosed to the appellant. Neither she nor we have seen a copy of the letter of July 15 or the enclosures. The Industrial Tribunal were shown the two invoices as part of their submission on costs. This was the principal evidential material relied upon to make the order in the sum of £6,000. Having produced that evidence to the Industrial Tribunal and it having formed part of their Decision, it was an essential requirement of natural justice that the appellant was provided with copies. This is so obvious as to require no further elaboration from us. In our view this was manifestly an error of law which vitiated both the original Decision and the Review Decision.
6. The amount of the order was we think manifestly perverse. The question at issue was a short one. The solicitors had correctly taken the view that it would be inappropriate to answer requests for particulars dealing with substantive matters. Whilst the amount of costs will seldom be interfered with by this Tribunal it will do so where, as here, it is wholly unjustified. The fact that £6,000 of costs had been incurred, if they had been, is only one factor. Industrial Tribunals should be chary of awarding such high amounts of costs as would deter litigants from pursuing genuinely held grievances, which the Industrial Tribunal held that the appellant had.The amount of costs which was ordered is quite disproportionate to what was involved in this case.It seems to us that SCCI faced a dilemma: either the question of jurisdiction was so simple that it became perverse or unreasonable for the appellant to pursue her claim, in which case the amount of costs would have been quite small, or the matter was sufficiently complicated to require a substantial investment in legal costs, in which case an order for costs was not appropriate at all. In any event it seems to us that the Industrial Tribunal should, when considering an order for costs of that size, have ordered that those costs be subject to the normal rules of taxation. We note that the new rules would now prevent an Industrial Tribunal from what this Industrial Tribunal did on this occasion.
7. We also take the view that no reasonable Industrial Tribunal could have concluded that any order for costs was appropriate on the facts of this case. The issue as to the application of section 12(1) to the SCCI is not straightforward, although we think that the Industrial Tribunal's conclusions on that issue may well have been correct. As to whether the claim fell within section 12(2) we think the position was clearer. However, in the light of their finding that the appellant held a substantial sense of grievance over the way she had been treated, and bearing in mind the medical position of which the Industrial Tribunal were aware, it was not, we think, a case for any order for costs at all. It is to be noted that it was the Chairman who first raised the question of jurisdiction and not the SCCI. It was only when the IT3 had been amended that the case of jurisdiction had been properly set out and that was in 10 May 1993.

In these circumstances we need say no more about what happened at the Review hearing. We think the Industrial Tribunal were right to order a Review; it did not cure the matters to which we have been referred. The Tribunal were wrong, we think, not to offer the appellant an adjournment so that she could study documents which certainly should have been provided to her long before the hearing. By holding them back the appellant was, we think, not given a fair chance to present her case at the Review Hearing.

Accordingly for all these reasons we have come to the very clear conclusion that the appeals on the question of costs should be allowed. Accordingly we will quash the order. The Decision made by the Industrial Tribunal on 15 July will be quashed and the order made by the Industrial Tribunal in its Review Decision that the appellant should pay £250 costs, should also be quashed.