United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR C BAYLIS (of Counsel) Messrs Sharples & Co Solicitors 108 Beaufort Street London SW3 6BV
For the Respondents	MISS J BEALE (of Counsel) Messrs Bindman & Partners Solicitors 275 Grays Inn Road London WC1X 8QF


 


JUDGE J HICKS QC: The Appellant, Dr Peter Draper, made an application to the Industrial Tribunal complaining of unfair dismissal and breach of contract. That application was lodged on 4 September 1995 and there were interlocutory hearings, including one of 26 February 1996 when an agreed order was made providing, among other things, for a hearing listed for 10 days starting on 2 December 1996.

We must come back to what had happened meanwhile, but we start by stating that on 2 December 1996 the hearing came on. An application was made by the Applicant, Dr Draper, for the adjournment of the breach of contract claim, but the hearing of the unfair dismissal claim. The order made by the Tribunal was that the whole matter was to be "adjourned pending resolution of matters in the High Court", to use the exact wording of the order. And then, as paragraph (ii) of the Industrial Tribunal's Decision, this order was made:

"The Applicant is ordered to pay costs thrown away for the period 23 September up to and including the date of this hearing forthwith on scale II such costs to be taxed."

September 23, although it does not give a year, manifestly means 1996 and we start by making it clear that, in our view, the meaning of that order is quite plain and is governed by the words "thrown away", in other words, this is an order for the costs thrown away by reason of the adjournment, the starting date from which costs so thrown away are to be considered being 23 September.

However, the Respondents in preparation for the taxation of those costs, a taxation which has not yet occurred, have prepared a bill and made it clear that they are advancing an argument - and still pursued that argument before us - that the meaning of the order is that they are to have all of the costs from 23 September to the date of the hearing without regard to the words "thrown away", which they say are to be taken as merely reflecting a finding by the Industrial Tribunal that all of those costs since 23 September truly were thrown away.

We take the view that the order means what I have just said it means and we must come back to that point after dealing with the grounds for appeal against the order advanced on behalf of Dr Draper.

The first of those grounds, as argued, is that in their Reasons, which by way of summary amount to a finding that there had been unreasonable conduct of the application on the part of Dr Draper, the Tribunal recites, among other matters, in paragraph 2 that there was an interlocutory hearing on 2 August 1996 when, as they say:

"... Mr Baylis was in attendance on behalf of the Applicant and at that hearing Mr Baylis conceded that there had been delay in dealing with the Tribunal."

There is no dispute that that concession was indeed made. The complaint on this appeal is that by that reference the Industrial Tribunal are showing that they are treating what happened on 2 August 1996 as unreasonable conduct and that that is in some way improper when, in fact, they by their order treat the unreasonableness as running only from 23 September. There is truly nothing in this point whatsoever. The Tribunal are manifestly entitled to take into account in their finding of unreasonable conduct the whole history of the application and, in any event, all they do in paragraph 2 is simply to recite a concession which admittedly was made and which they then do not further refer to thereafter.

The next submission was that 23 September 1996, which is the date from which the order for costs is expressed to run, was not a date on which there was any unreasonable conduct on behalf of the Applicant and the Tribunal therefore erred in law, it is said, in finding that there was. What did happen on 23 September was that the Applicant's Solicitors wrote a letter to the Tribunal as follows:

"This matter is listed for a 10 day hearing commencing 2 December 1996. The case is a claim for Breach of Contract and Unfair Dismissal.

We now have instructions to pursue the Breach of Contract claim in the High Court, primarily because the amount of damages that can be claimed in the Industrial Tribunal is limited.

In these circumstances we are minded to withdraw the claim for Unfair Dismissal but we do not wish to prejudice the High Court claim. In these circumstances we take the view that the most appropriate solution should be for the Tribunal to hold the Breach of Contract claim in abeyance.

We would be very grateful for the Chairman's views on this matter prior to making our decision."

No copy of that letter was sent to the Respondents and the Tribunal, in our view, was fully entitled to take that letter into account as part of the unreasonable conduct which they found. In the first place the letter says "We now have instructions to pursue the Breach of Contract claim in the High Court" and is therefore stating a firm decision on the part of the Applicant. In fact, no such action in the High Court had then been commenced. That, of itself, would not be unreasonable. The issue of the writ might take a little time after the receipt of instructions, but the truth of the matter is that proceedings still had not been issued at the date of the hearing in December and we understand, in fact, were not issued until May of this year. Notwithstanding that firm decision communicated by this letter of 23 September the Respondents were not told. The letter goes on "we are minded to withdraw the claim for Unfair Dismissal"; in fact it has never been withdrawn. The application at the hearing was not that it be withdrawn but that it be heard. It then further goes on to say, "the most appropriate solution should be for the Tribunal to hold the Breach of Contract claim in abeyance", but no application to that effect was made, nor again was the Respondent informed that that was the view of the Applicants, or the reason for it. Finally they ask for the Chairman's views on the matter, as if the function of the Industrial Tribunal was to give advice to parties as to the tactics they should pursue in advancing their claims.

There is absolutely no reason whatsoever why the Industrial Tribunal should not find that that was a pattern of unreasonable conduct which then continued, as they manifestly find, in the failure to make any application to give effect to this decision to pursue the High Court claim until very shortly before the date fixed for the 10 day hearing.

The next point made by Mr Baylis for the Appellant is that costs orders should be compensatory, not punitive, and for that proposition he relies on the case of Cooper & Another v Weatherwise (Roofing and Walling) Ltd [1993] ICR 81 and we, of course, accept that proposition but, in so far as it goes to the effect of this Tribunal's order, as we believe it is properly understood, there is no punitive element.

It may be that if the order, properly understood, did mean that all the costs from 23 September should be included, whether or not thrown away or wasted by the adjournment, that might well have included a punitive element but that, as we have said, is not in our judgment what this order means, or was intended by the Industrial Tribunal to mean, and we are fortified in that conclusion by the fact that, as Miss Beale very fairly and properly told us, at the hearing before the Industrial Tribunal they were never asked to make an order for all the costs from 23 September, thereby prejudging the question whether they were all thrown away. What they were asked for was all the costs of the proceedings, to which they did not accede, or failing that for all the costs thrown away by the unreasonable conduct leading to the adjournment and it is clear, in our view, that it was the latter alternative application to which they acceded, which does not involve any punitive element.

The next submission made by Mr Baylis is that on the basis that the costs order does cover everything since 23 September it is unreasonable and should be limited to those thrown away in any event and, as we have made clear, that is a complaint which does not truly arise when the Tribunal's order is properly understood.

Finally there is a complaint about the passage in the Tribunal's reasons in which they deal with the Applicant's means. It appears that, having decided to make an order for costs the question was raised by somebody, maybe Mr Baylis, as to whether the Applicant's means were not material and the Tribunal agreed to hear such evidence, which was given by Dr Draper, who was cross-examined by Miss Beale.

The extent to which the means of the party at risk of having to pay costs are material has been dealt with in at least two cases cited by Miss Beale, but Mr Baylis agrees that it is sufficient for this purpose to look at the passages quoted in Miss Beale's Skeleton, so we have not gone through the whole of the reports. The important passage in Wiggins Alloys v Jenkins [1981] IRLR 275 is that, although the Appeal Tribunal there upheld the refusal of an Industrial Tribunal to order costs against an Applicant who was serving a lengthy prison sentence and therefore not in a position to make any payment - although upholding that decision this Appeal Tribunal did so on the ground that the matter was within the discretion of the Industrial Tribunal and that inability to meet any order for costs was a matter which could properly be taken into consideration. Therefore, they could see no error in law on the part of the Industrial Tribunal, but they went on to say this: "We should emphasise that it is no consequence of our decision that the mere fact that for the time being an applicant is penniless, is in every case a sufficient ground for refusing an order for costs. Each case depends upon its own circumstances and lies within the discretion of the Tribunal."

The other case referred to also emphasises that the award of costs is a discretionary matter, and that it would be wrong for the Employment Appeal Tribunal to attempt to lay down general rules governing the exercise by Industrial Tribunals of the discretion given to them, that being also a matter concerning means in a case in that instance where an applicant was represented by a union.

Against that background the passage in this Industrial Tribunal's Reasons which is criticised runs as follows:

"11 We heard evidence from the Applicant about his means and we conclude from his evidence that although he appears not to have an income he accepted in evidence that his brother was providing him with about £13 - £15000.00 during the preceding year and he admitted that he had previously owned a property in Kent and was living in a house on an estate belonging to his brother. In those circumstances we have no hesitation in making an order ..."

And then they go on to the detailed terms of the order.

We see no ground for finding that the Tribunal there erred in law or were perverse. They did take account of the evidence of means and they were perfectly entitled to conclude that, notwithstanding that evidence, in so far as it was evidence to the effect that the Applicant had no income, they were justified in exercising their discretion by making the order. They, on the face of it, concluded that, although the Applicant appeared not to have an income he in fact was living perfectly comfortably. They also appeared to have concluded that the fact that he had previously owned a property in Kent was a material circumstance and, in our view, they were entitled to that view. Whether it was that he had sold the property and there would be proceeds, or whether it was that he had chosen to give away property and thereby denuded himself of assets which would otherwise have been available for meeting obligations such as orders for costs, they do not speculate about, and there was no need for them to do so.

We are satisfied that, having heard that evidence and given it that consideration, they were acting within their discretion in proceeding to make an order for costs.

We come back therefore to the wording of the order because although, as we have said, we are clear as to what it means, it is apparent that there is a dispute between the parties and we think it would be unsatisfactory that the matter should go before the taxing officer on the basis of such a dispute and therefore, for the assistance of the taxing officer and in view of the fact that both Mr Baylis and Miss Beale agree that we have jurisdiction to amend the wording of the order in the interests of clarity, we think it would be helpful to amend the wording so that there can no longer be any dispute, in so far as there is one at the moment, as to what its effect is.

We propose therefore to amend paragraph (ii) of the order made by the Industrial Tribunal, taking the wording from the decision document so that it reads:

"The Applicant is ordered to pay forthwith the Respondents' costs on Scale II for the period 23 September 1996 up to and including the date of this hearing so far as wasted or thrown away by reason of the adjournment, such costs to be taxed."

Since that is an amendment of the Industrial Tribunal's order, and not our own order, it is quite clear and it is our intention that "this hearing" should mean the hearing before the Industrial Tribunal and not the hearing before us, and that is our decision.

I think that means that we are dismissing the appeal, because in substance that is what we are doing, although we are varying the order to that extent. It would seem unreal to say that we are allowing the appeal by making that amendment, since we are of the view that that is what the order means anyway. Having said that, the Associate or Counsel may be able to help us. If we have no jurisdiction to make that amendment once we have dismissed the appeal, then of course that may mean that technically we have to allow the appeal to that extent, but we nevertheless amend the order in the interests of clarity.

[After discussion with Counsel and the Associate]. The appeal is dismissed, save that for purposes of clarification only the order of the Industrial Tribunal is amended as specified above.