United Kingdom Employment Appeal Tribunal

BAILII case number: [1994] UKEAT 738_93_1406

Appeal No. EAT/738/93

EMPOLYMENT APPEAL TRIBUNAL

58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

At the Tribunal

On 14th June 1994

Before

THE HONOURABLE MR JUSTICE MUMMERY (P)

MR F DAWSON OBE

MR R H PHIPPS

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RAM OFFICE SYSTEMS LTD T/A RAM COMPUTER CARE          APPELLANTS

R E O'BRIEN          RESPONDENT

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Transcript of Proceedings

JUDGMENT

Revised


 


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APPEARANCES

For the Appellants MRS C WILKINS

(Of Counsel)

Messrs Bray Walker

36 Furnival Street

London

EC4A 1JQ

For the Respondent MR R E O'BRIEN

(In Person)


 


MR JUSTICE MUMMERY (PRESIDENT): This is an appeal against the decision of the Industrial Tribunal held at Liverpool on the 26th March 1993. For full reasons notified to the parties on the 11th May 1993 the Tribunal unanimously decided to reject an application, made on behalf of RAM Office Systems Limited, to extend the time period to enter a Notice of Appearance to complaints of unfair constructive dismissal and claims under the Wages Act 1986 by the Applicant, Mr O'Brien, against his former employers.

RAM was dissatisfied with the decision and therefore appealed by Notice of Appeal dated the 21st June 1993.

On the hearing of the appeal Mrs Wilkins has appeared for RAM. She has conducted the case with conspicuous ability.

Mr O'Brien has appeared "in person". He submitted, at the opening of the appeal his outline arguments in answer to the appeal, and a number of other documents responding to various documents in the appeal papers including, what he describes as "a true record of his employment" and his answers to the proposed defence of RAM. It is not necessary, for reasons which will become apparent in the course of this judgment, to refer to the details of the documents save in one respect. In his documents, backed by two letters received from Companies House earlier this year, Mr O'Brien cast doubt on the authority of Mrs Wilkins and her Solicitor to appear on behalf of RAM. Mr O'Brien pointed to evidence that the Company was no longer trading and to the fact that a Mr MacIver had ceased to take an active part in the affairs of RAM of which he was a Director. He referred, in particular, to a passage in the letter sent to him by Companies House on the 28th March 1994. The writer of the letter, a Mrs Rowe, stated that she had contacted Mr MacIver and RAM's Solicitor and that it had been confirmed that Mr MacIver and also a Mr Frid, who was Company Secretary, had ceased to be involved with the Company during the latter part of 1992. The letter stated that the Company is no longer in business or operation. A third person was charged with completing the necessary paperwork.

Mr O'Brien submitted that he believed that, in those circumstances, Counsel and Solicitors did not have authority to represent RAM as they had not been duly authorised and instructed by recognised officer of the Company.

Mrs Wilkins had not been given any advance notice of this point. She asked for a short adjournment to enable her and her Solicitors to make enquiries of Mr MacIver. She informed us, after those enquiries were made, that Mr MacIver was a Director, indeed, the only Director of the Company; Mr Frid had resigned as Company Secretary in 1992, but had not been replaced as originally contemplated by a Mr Quaid; Mr MacIver had given instructions, purportedly on behalf of RAM, for the appeal to proceed. In those circumstances, and on those statements about instructions, the appeal has gone on to a full hearing.

Before dealing with the one point of law raised by the appeal it is necessary to fill in the background to the claim by Mr O'Brien and to the course of the proceedings. Mr O'Brien claimed to have been employed first by ITC Services and then by RAM as a Field Service Engineer from November 1989 until 2nd January 1992. He claims that he was then unfairly, constructively dismissed and that unauthorised deductions were made from his wages in contravention of the Wages Act 1986. On the 19th March 1992 he presented a complaint to the Industrial Tribunal. No Notice of Appearance was entered by RAM. That is, and has been, for the last eighteen months, the serious difficulty in the proceedings.

A date was fixed for the hearing of Mr O'Brien's complaint, on the 23rd October 1992. Mr MacIver appeared at the hearing saying that he was a Director of the RAM. When it was pointed out to him that the Company had not given a Notice of Appearance he made an application for an extension of time. The application was made under Rule 12 of the Industrial Tribunals (Rules of Procedure) Regulations 1985 under which:

"A tribunal may, if it thinks fit, -

(a) extend the time appointed by or under these Rules for doing any act notwithstanding that the time appointed may have expired;"

There was, an application to extend the time even though the time for entering an appearance had expired.

The Tribunal refused the application. The Tribunal considered Mr O'Brien's claim on the merits. The Tribunal found that his claims were established and made an order for payment of compensation to him in excess of £10,000. There was no appeal by RAM against the decision of the Tribunal refusing to extend the time for entering the Notice of Appearance. The decision on the merits was notified to the parties on the 6th November 1992.

What then happened was that on 18th November 1992 an application was made by Mr MacIver on behalf of RAM for a review of the Tribunal's decision. That application came on for hearing on the 26th March 1993. In support of his application Mr MacIver swore an affidavit dated 25th March 1993. He said he was a director of RAM and was duly authorised to make the affidavit on the Company's behalf in support of the application for review of the decision of the 23rd October. He stated in the affidavit:

"I have no recollection of receiving the IT1 form, or the reminder from the Tribunal. I did receive notification of the hearing (IT4) but did not appreciate that that document was intended to put me or the Respondent on notice that we had no right to attend the hearing or to be heard. . . The part of the form stating `for information only' appears only in the bottom left hand corner. I did not appreciate the significance of this note. The body of the form indicated that I could attend."

He explained that at the time when he appeared before the Tribunal he had a serious eye infection and was tired. He was nervous. He had no representation. He was taken aback when told the Company could not be heard. He mentioned that at that time RAM was involved in civil proceedings with Mr O'Brien and that he had passed to RAM's Solicitors information which he had received from ACAS. He stated that he had assumed that the Solicitors had failed to respond to those documents passed to them. On that assumption he told the Tribunal that it was the Solicitors' failure to deal with the forms correctly which had caused the error. He stated that he had prepared a document setting out RAM's case and had sent by fax two days before a copy of the document to Mr O'Brien's Solicitors, who were, according to the IT4 form, a firm called Maxwell Entwistle & Byrne. The affidavit concluded:

"[Mr MacIver] I apologise unreservedly to the Tribunal for misleading them when I stated that the reason for the failure to enter a Notice of Appearance was the fault of my solicitors for I now know this was not the case. However at the time I genuinely believed that they must have been responsible."

The Tribunal considered the question of jurisdiction. In the decision they set out the background to the dispute. They referred to submissions made by Mrs Wilkins, on behalf of RAM, on the further application at the outset of the hearing under Rule 12(1) of the Rules of Procedure to extend the time to enter a Notice of Appearance. That application had to be made at the outset because the Rules of Procedure provide in Rule 3(2) that a Respondent who has not entered an appearance shall not be entitled to take any part in the proceedings except to apply for an extension of time appointed by the rule for entering an appearance or to do various other things not relevant for today's purposes.

It is common ground that RAM had no entitlement to apply for a review of the Tribunal's decision of the 23rd October 1992, unless, and until an extension of time had been granted to enable it to put in a Notice of Appearance. The Tribunal considered Mrs Wilkins' submissions and referred to the strong resistance which Mr O'Brien made to the application. The Tribunal came to the conclusion that, on the proper interpretation of the Rules, they had no jurisdiction to determine RAM's application for a review of the decision of the 23rd October unless they granted the further application made by RAM to extend the time period for them to enter an appearance and RAM then did so enter an appearance. The Tribunal also came to the conclusion that it had no power to entertain the further application to extend the time. The Tribunal said this in paragraph 12 of the decision:

"However in the case before us the respondents had previously made an application to an Industrial Tribunal on 23 October 1992 to exercise its powers under Rule 12 and to extend the time period for them to enter a Notice of Appearance. That Tribunal had determined after hearing everything which the parties had wished to say on that matter that that application should be refused. We also noted that the Rules of Procedure do not confer any statutory power upon an Industrial Tribunal to grant a subsequent application to extend the time period when a previous application has been refused. Moreover there has not been any decision of the Employment Appeal Tribunal reversing the Tribunal's decision of 23 October 1992 in relation to this matter. In these circumstances we were satisfied that we had no power to grant the further application by the respondents to extend the time period. We therefore refused the further application by the respondents to extend this time period. We also found that as the respondents had not entered an Appearance to the applicant's complaints an Industrial Tribunal has no jurisdiction to determine the respondents' application for a review of the Tribunal's decision of 23 October 1992."

This appeal is against the ruling that the Tribunal had no power to grant the subsequent application to extend the time after the refusal of the first application on the 23rd October 1992. It is important to note that the Tribunal stated that, having studied the contents of RAM's application for review, the contents of Mr MacIver's affidavit and the submissions made on behalf of the parties, if they were wrong in saying they had no power to grant the further application to extend time, and did in fact have such power, they would not have granted the application. RAM had not put forward any good cause or reasonable excuse for their failure to enter an appearance in time or for their failure to apply for an extension of time to do so until the 23rd October 1992. It was merely said to be an oversight.

On the appeal Mrs Wilkins submitted that the error of law of the Tribunal was in holding that they had no jurisdiction to grant application for an extension of time. Mrs Wilkins accepted that if she is wrong on that point no further points arise for decision. Her submissions, helpfully set out in a clear outline argument, are that the Tribunal erred in these respects. Rule 12(2) of the 1985 Rules then in force provided that a tribunal had a discretion, as it thought fit, to extend the time for doing any act notwithstanding the time appointed may have expired. St Mungo Community Trust v. Colleano [1980] ICR 225 was authority for the proposition that the fact that judgment had been entered in favour of a party did not debar an application for an extension of time. In that case the Appellant was permitted to apply for an extension of time under Rule 13(1) notwithstanding a failure to enter a Notice of Appearance. Mrs Wilkins submitted that the Rules do not contain any express limit on the number of applications that may be made for an extension of time. No implied limitation should be made since it was not necessary to do so for the purposes of making the Rules efficacious. Rule 13(1) refers to "an application" to a tribunal. Those words do not, without more, limit the number of applications that may be made. She pointed out that it was decided in Raybright Television Services v. Smith [1973] ICR 194 that in connection with applications for a review the expression "an application" did not have the effect of limiting review applications to just such one application. By analogy there was nothing in the Rules on applications for extension of time which limits the application to just one application. It was pointed out that under Rule 12(1) the Tribunal may regulate its own procedure. There was nothing in the Rules to prevent the Tribunal exercising that power to hear and grant a second application for extension of time. The fact that the Company had not appealed against the decision of the 23rd October 1992 was irrelevant to the question whether the Tribunal had jurisdiction to consider the second application for an extension on the 26th March 1993.

One further authority cited by Mrs Wilkins was the decision of the Court of Appeal in Atwood v. Chichester [1878] 3 QBD 722, for the proposition that, where no irreparable harm will be done to a party who has obtained a judgment, a lapse of time was not a bar to an application to set aside the judgment. She referred to a passage in Bramwell LJ's judgment where he said:

"When sitting at chambers I have often heard it argued that where irreparable mischief would be done by acceding to a tardy application, it being a departure from the ordinary practice, the person who has failed to act within the proper time ought to be the sufferer, but that in other cases the objection of lateness ought not to be listened to, and any injury caused by the delay may be compensated for by the payment of costs. This I think is a correct view."

It was on the basis of that general statement of principle that Mrs Wilkins submitted that, if jurisdiction was assumed in this case, then the only proper way in which it could be exercised would be in favour of granting the extension. She pointed out that the grant of the extension would cause minimal prejudice to Mr O'Brien. If he had a good case he would win. If he did not have a good case, why should he have victory by default? A refusal of an extension would cause serious prejudice to RAM, because the case would have been decided against it without it having a chance to put its side of the dispute. In line with the authority of Atwood v. Chichester Mrs Wilkins submitted that any prejudice that might have been suffered by Mr O'Brien could be compensated in costs.

We are grateful to Mrs Wilkins for these arguments put with commendable lucidity and firmness. But they have not been of sufficient strength to persuade us that the Tribunal erred in law on the question of jurisdiction. Mrs Wilkins is right in saying there is nothing in the Rules which expressly forbids a person from making more than one application for an extension. In order to interpret the Rules, however, it is necessary to look at them as a whole and see how they fit into the scheme and structure of hearings and appeals. Prima facie a person is entitled to only "one bite of the cherry" at each level. He makes an application. It is argued. It is decided. Once it is decided the tribunal which makes the decision is functus officio. The remedy of a person aggrieved by the decision is to bring an appeal to this Tribunal on a question of law under Section 136 of the Employment Protection (Consolidation) Act 1978.

Mrs Wilkins' argument that there is a right to go back to the Tribunal and make another such application runs counter to the scheme of the Rules and the legislation. The fallacy in her argument was exposed by a point put by Mr Dawson to her in the course of the hearing. He asked whether, if an application were granted, would the only remedy to the Respondent to the application be to appeal? Mrs Wilkins agreed that that was so.

In those circumstances it would seem odd and unfair that a person who asked for an extension, but was unsuccessful, should be entitled to serve on the respondent notice of a fresh application of the same kind. The clear course open to RAM on the 23rd October 1992, when the application for extension was refused, was to appeal. The right of appeal is restricted to questions of law. It may, as Mrs Wilkins pointed out, be difficult to persuade this Tribunal on appeal to interfere with the exercise of the Tribunal's discretion. She referred to the case of Ryan Plant International Limited v. Price & Others [1976] ICR 426. That is a restriction placed on an appeal by the legislature. The anomaly which would exist if Mrs Wilkins is right is that a litigant out of time for putting in a Notice of Appearance might gain an advantage by not appealing when the prospects of success were slim because of the difficulty of persuading an Employment Appeal Tribunal to interfere with the discretion. On Mrs Wilkin's submissions the Applicant could go back to the same Tribunal (or to a Tribunal differently constituted) and seek to have the same application decided as had already been decided.

We reject Mrs Wilkins' interpretation of the Rules. It is not consistent with the general principle that each application is heard and decided once and once only, subject to an appeal or, in certain cases, to a review. It would give rise to injustice in that an applicant who had failed to put in a Notice of Appearance could make serial applications putting the respondent and the tribunal to time and expense; whereas the respondent to such applications would not have a similar right to make serial applications to set aside grants of extension of time, but would be confined to appeals. The submission would give rise to anomalies.

For all those reasons we reject the interpretation of the Rules. In our view on the true interpretation of the Rules a person who is out of time for entering an appearance has the right to make one application to extend the time. If that is unsuccessful, the only right is to appeal to the Employment Appeal Tribunal against that refusal. On that reasoning the Industrial Tribunal were correct in stating that they had no power to entertain the application of the Company to extend time on the 26th March 1993. It is not necessary for us to express any view on the way in which the Tribunal would have exercised its discretion. The position seemed so clear to us on the Rules, statutory provisions and the authorities, that we have not thought it necessary to ask Mr O'Brien to make any submissions in response to the appeal. We will now hear any application which he may wish to make in relation to costs or any other matters. We will then hear any counter submissions which Mrs Wilkins wishes to make on behalf of the Company.

JUDGMENT ON COSTS

For reasons given earlier this afternoon we dismissed the appeal without calling on the Respondent. The Respondent, Mr O'Brien, has made an application for costs. The costs which he asks for are, first, the costs in relation to this appeal. Although he appeared "in person" today he retained solicitors with whom he is now in dispute on matters of costs incurred in other proceedings. Those solicitors prepared a Respondent's answer dated 6th October 1993. They also wrote a number of letters to the Tribunal on behalf of Mr O'Brien.

Secondly, he asks for costs incurred on another aspect of this dispute, not mentioned in our decision. RAM launched an appeal on the 13th April 1993 against the Tribunal's decision. That appeal was out of time. On the 16th September 1993 the Registrar refused an extension of time for appealing. There was no appeal against that decision. When the questions of costs arose on that matter a letter was written by the Registrar to Mr O'Brien's solicitors saying that his application for costs on that matter would be put before this Appeal Tribunal on the hearing of the appeal dealt with today. He asks for costs to be paid by RAM on both those matters.

The application is opposed by Mrs Wilkins on behalf of the Company.

In determining the dispute about costs this Tribunal is governed by Rule 34(1) of the Employment Appeal Tribunal Rules 1993. That provides:

"(1) Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings the Tribunal may order the party at fault to pay any other party the whole or such part as it thinks fit of the costs or expenses incurred by that other party in connection with the proceedings.

(2) Where an order is made under paragraph (1) of this rule, the Appeal Tribunal may assess the sum to be paid or may direct that it be assessed by the taxing officer, from whose decision an appeal shall lie to a judge."

Mrs Wilkins submitted that it would not be proper under that Rule to order costs to be paid by RAM simply because the appeal had been unsuccessful. Unlike the Rule which governs costs in the ordinary courts, costs in the industrial tribunal and the Employment Appeal Tribunal do not follow the event. She submitted that the case brought on this appeal had been arguable. There was no authority, prior to this decision, on the question whether a person who had not put in a Notice of Appearance was entitled to make more than one application for an extension of time. As the matter was arguable it could not be said that the appeal was unnecessary, improper, vexatious or unreasonable.

We follow that argument, but do not accept it. In order to decide the question of costs on both this appeal, and the other appeal which was out of time, it is necessary to look at the conduct of RAM in relation to these appeals.

The position is that RAM did not put in a Notice of Appearance within the time limit required by the Rules. It did not make an application to extend the time until the first hearing date of the 23rd October. On that hearing date the only reason put forward for not having entered a Notice of Appearance or applied for an extension earlier was that blame was to be laid with the Company's solicitors. That reason was later withdrawn in an affidavit made by Mr MacIver. It was withdrawn with apologies. No other satisfactory reason was given to the Industrial Tribunal at the second hearing on the 26th March 1993 for failure to put in the Notice of Appearance in time. In those circumstances, it appears to us, that the conduct of the Company has been unreasonable. It has been compounded. Instead of producing a satisfactory reason, which it seems to be unable to do, RAM has litigated further and unsuccessfully first, an out of time appeal and an application for extension which was unsuccessful, and then appealed to this Tribunal on a point which has proved unsuccessful. In our view, there has been unreasonable conduct by RAM in conducting these proceedings without any real prospect of success especially in view of its inability to explain its failure to comply with the all important rule that a Respondent must put in a Notice of Appearance within the time fixed by the Rules or within such time as may be extended by the Rules or by order of the Tribunal. We shall order the costs of both the other appeal and this appeal to be paid by RAM. In view of the fact that Mr O'Brien has appeared "in person" without solicitors, and in view of the fact that he is in dispute with his former solicitors on matters of costs, we are in no position to make an assessment of the sum to be paid. We direct that the amount of costs to be paid should be assessed by the Taxing Officer.