United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellants	THE APPELLANTS APPEARED IN PERSON AND WERE NOT REPRESENTED
For the Respondent	MR SIMON DEVONSHIRE (of Counsel) Instructed By: Messrs GSC Solicitors 31-32 Ely Place London EC1N 6TD


 


THE HONOURABLE MR JUSTICE BURTON (PRESIDENT):

1. This was the hearing of two appeals by Mr Richard John Bezant ("Mr Bezant") and Dr Lanning May Bezant ("Dr Bezant") (collectively "the Bezants") against Decisions of the Employment Tribunal held at Ashford, Kent. At the first hearing, which was the hearing of a preliminary issue, with witnesses called, in July and August 2001, as to whether the contracts of employment of the Bezants by the Respondent, Tertiary Enterprises Ltd (formerly Wadhurst Park Ltd) (now in liquidation), were vitiated by illegality, the Tribunal concluded, in a Decision handed down on 19 September 2001, that the contracts were so vitiated, and that the Bezants therefore could not proceed with their claims for unfair and wrongful dismissal, which were dismissed. Dr Bezant was entitled to proceed with her claim for sex discrimination, which would be unaffected by the illegality of the contract, but, by the time she did so, the company had gone into liquidation and her claim was unopposed. The second hearing, before the same Tribunal, was of an application for Review of that Decision, heard on 19 November 2001, and the Tribunal refused that application in a Decision handed down on 6 December 2001.
2. The two appeals were conjoined and heard together at a preliminary hearing before a panel of this Tribunal chaired by Nelson J on 8 July 2002, when some, but not all, of the grounds of appeal put forward by the Bezants were permitted to proceed to a full hearing. It is clear from the reasoned judgment of Nelson J that there were in essence three grounds, which thus went forward in the two conjoined appeals. Unlike the practice since the new Practice Direction (Employment Appeal Tribunal – Procedure) 2002, there was no requirement made for the lodgment of an amended Notice of Appeal to reflect the basis upon which the appeal was permitted to proceed, and it appeared to us therefore that it was sensible to encourage the parties at the outset of this hearing to agree a precise form of the amended Notice of Appeal, so that there could be no dispute about the basis of, and grounds for, the two appeals being heard before us. At the Tribunal's initiative, a document was formulated by the Bezants and agreed by the Respondent, for which we then gave permission. As appears from that document the three grounds can be summarised as follows:

(i) The First Ground: that the Tribunal was confused as to which items should have been disclosed to the Inland Revenue and which did not require disclosure. In the end this ground was only briefly relied on by the Bezants, and did not form any substantial part of the hearing.

(ii) The Second Ground: namely that the Tribunal did not properly consider or take into account the internal contradictions of the Respondent's case.

(iii) The Third Ground: this related to fresh evidence and fell into two parts. The first matter consisted of the existence and content of a P11D prepared on the Respondent's behalf after the Bezants' dismissal and, minimally, the evidence of a Mr Andrew Hill, the Bezants' accountancy expert and former employee of the Respondent's auditors, ("Honey Barrett") about it. The second category consisted of more substantial evidence from Mr Hill contained primarily in a series of commentaries by him on the audit files of the Respondent, which he inspected. We shall call the first category the P11D evidence, and the second the Audit Files. So far as the fresh evidence ground is concerned:

(a) Neither the P11D nor any evidence of Mr Hill was actually put before the Tribunal on the application for Review. By reference to a description of the nature of such evidence, the Tribunal concluded that there was no fresh evidence such as to justify a Review. Although there is on the face of it an appeal before us against the Tribunal's refusal to review on that ground, it would appear difficult to challenge the exercise of the Tribunal's discretion in that regard.

(b) However, irrespective of the Review application, the evidence is now relied upon by way of an application to put in fresh evidence on the appeal before us. Although the particulars required by the Practice Direction (paragraph 8), in order to satisfy the requirements of an application for fresh evidence in order that the principles by reference to Ladd v Marshall [1954] 1 WLR 1489 can be applied, were not complied with by the Bezants, we have permitted them, exceptionally, to give such explanations orally, and we have had the opportunity of careful consideration of the fresh evidence in the course of the Bezants' submissions, so as to be able to fully understand the alleged relevance of the documents in the context of the appeal.

3. The Bezants were employed for many years by the Respondent, Mr Bezant since 1979 and Dr Bezant since 1982. The Respondent Company, part of a group controlled by Professor Hans Rausing, a very wealthy man indeed, operated Morghew Farm, a large farm of some 1800 acres just outside Tenterden in Kent. Mr Bezant was Managing Director, and responsible also for farming operations at the Wadhurst Park Estate in East Sussex, about 40 minutes journey from Morghew Farm. Dr Bezant was her husband's secretary/PA with responsibility for the creation, development and running of the Respondent specialty food business and for the marketing of that business.
4. The Tribunal described the nature of the business as follows:

"11. … As well as farming operations, the Company had an operation raising wild boar at Morghew Farm and selling the meat as part of its specialty foods operation. Similarly, deer were raised at Wadhurst Park, and the sale of venison also formed part of the specialty foods operation, the other part of which was the breeding and sale of crayfish. These goods were sold at the farm shop, which came to exist at 4 Morghew Farm. Before there was a farm shop, they were sold from the farmhouse know as Heronden New House, at which Mr Bezant, Dr Bezant and their family lived. It was common ground that Mr Bezant and Dr Bezant were required to live there for the better performance of their duties. It was 'tied accommodation'. We have already described Dr Bezant's responsibilities in connection with the specialty food operation, which was not confined to sales on site, but also included selling the food to restaurants in London and elsewhere.

13. As well as his responsibilities at Morghew Farm and at Wadhurst Park Estate, Mr Bezant was also responsible for the management of Professor Rausing's farm operation at Valle De Lama in Portugal. Mr Bezant told us, and we can well accept, that the discharge of his responsibilities kept him extremely busy."

5. The Bezants were dismissed in September 2000, in circumstances briefly summarised by the Tribunal in paragraph 14 of its Decision. They issued Originating Applications in November 2000 (adding the claim for wrongful dismissal by amendment in January 2001). As part of their claim, the Bezants served separate Schedules of Losses in March 2001, claiming substantial sums, totalling respectively £38,489.39 and £33,302.27. The Respondent defended and justified the dismissals. By Employer's Counterclaim, the Respondent counterclaimed against Mr Bezant in respect of invoices totalling £29,999.92 for "goods and services which do not appear to be for the benefit of the Respondent and for which the Applicant has failed to account or obtain authorisation". Mr Bezant put in a Notice of Appearance to the Respondent's counterclaim dated 13 March 2001 (which we shall call the "Grounds of Resistance"). The Respondent served a Request for Further and Better Particulars of Dr Bezant's Schedule of Losses, to which she replied by letter dated 26 April 2001 ("Dr Bezant's Answers"), and on 27 April 2001 Mr Bezant replied to the Respondent's Request for Further and Better Particulars of the Grounds of Resistance ("Mr Bezant's Answers"). By pleading dated 11 May 2001 described as "Further Grounds of Resistance to the Claims" of the Bezants, the Respondent pleaded as follows in paragraph 1:

"1. The Respondent … contends that on the basis of their own pleaded cases … Mr Bezant and … Dr Bezant:

1.1. have knowingly operated their contracts of employment in a way which involved a fraud on the Revenue; and

1.2 as such they cannot rely upon those contracts for the purpose of advancing complaints of wrongful and unfair dismissal."

The Bezants responded to that pleading in a further pleading settled by Counsel on their behalf dated 20 June 2001 ("the Bezants' Amended Reply"). By an Order on the second hearing for directions on 1 June 2001, a preliminary hearing, to resolve the issue of whether or not the contracts of employment of either or both applicants were vitiated by reason of illegality, was fixed. It is this hearing which is the primary subject of appeal before us, on the three specified grounds.

6. The Schedules of Losses prepared and lodged by the Bezants were in similar form, and we propose to quote only that of Mr Bezant, indicating where there was a difference in that of Dr Bezant. The relevant section is headed up "(e) Applicant's Losses: Income, Perquisites and Benefits in kind 08.09.00 07.03.01". After setting out matters of pay and pension contributions (and in the case of Mr Bezant director's fee and employer's permanent health insurance contributions) there are the following items:

"Private medical insurance £644 [each]

Travel insurance £49.50 [each]

Council Tax £686 [each]

Water Rates £152.59 [each]

Kerosene heating oil £1,157.68 [each]

Telephone £186 [each]

Mobile telephone £768.09 [Dr Bezant £48.59]

Use of farm vehicles £7,560 [only Mr Bezant]

Vehicle maintenance, service and repairs £343.62 [each]

Cleaning services £2,256 [each]

Gardening services £2,400 [each]

Firewood £250 [each]

Turkey £30 [each]

Farm produce £10 [each]

Dog, cat and horse supplies £259.79 [each]

Veterinary expenses £41.13 [each]

Subscriptions £311.60 [only Mr Bezant]

Accountants' services £58.75 [only Mr Bezant].

7. The Grounds of Resistance signed by Mr Bezant included the following passage:

"All the goods and services referred to in the Employer's Contract Claim were for the benefit of the Company … in terms of savings in tax or salary increases or holiday pay, job satisfaction, employees' goodwill, all contributing to the efficient and smooth running of the Company. All these benefits to the Company saved more than they cost to the Company. It must be remembered that the Chairman, Hans Rausing, by virtue of his exceptional wealth, kindness and generosity, was magnanimous, often spontaneously so, in his approach to his management staff, particularly towards his Managing Director, Richard Bezant, and on some occasions to other employees. There are many examples of this. …

As Managing Director of Wadhurst Park Ltd, I had the complete authority, vested in me by the Chairman of the Board and ultimate owner of the Company, Hans Rausing, to pay invoices, approve ex gratia payments, payments in kind, salary increases, out of pocket expenses, payments in lieu of untaken holidays, charitable donations and any other payment or benefit to myself as Managing Director, or other Directors, permanent members of staff, casual workers, individuals or organisations, as I saw fit …

Full opportunities were available to all Directors of the Company and to the auditors on the occasions of the Board Meeting, at which the previous year's annual accounts were presented, and at the subsequent Annual General Meeting, to bring to the notice of the Board any items of goods and services which the Managing Director had approved, which might not properly be considered either as a justifiable agricultural business expense, where VAT could be reclaimed or tax advantages gained or as a perquisite, benefit in kind or benefit in lieu of unclaimed holiday pay, unclaimed statutory holiday pay or a justifiable but untaken salary increase in line with inflation or as a result of increased responsibility …

It was common knowledge and approved by the Chairman of the Board and Directors that these perquisites and benefits in kind would be taken at the complete discretion of the Managing Director. It should be noted that other Directors of the Company received benefits in kind, including the Chairman, and this was an accepted, long standing and common practice. It should be noted that the Chairman of the Company, Hans Rausing, agreed, saying (I quote), "Richard, this is our farm. We must take advantage of avoidance of VAT and personal taxation and gain discounts for ourselves. But remember that each year it is you who have to present the accounts to the Board, not me. It's your baby" …

In view of this I … cannot understand why the Chairman and ultimate owner of the Company is now suddenly, after 22 years and subsequent to my dismissal, disputing an approved agreement of very long standing. Because of Hans Rausing's intimate involvement in the matters under dispute, his close participation in the discussions is necessary to analyse the details of each individual invoice in the Schedule and this will ensure a speedy and satisfactory explanation of each of the 177 individual invoices presented in the Schedule.

It also should be noted that, in order fully and correctly to clarify the situation with the Respondent … and the Chairman and ultimate owner of the Company, Hans Rausing, it may be found necessary to discuss certain aspects of this case with Her Britannic Majesty's Inland Revenue and Customs and Excise."

8. The gist of the Respondent's Request for Further and Better Particulars, to which Dr Bezant's Answers were the reply, was to seek confirmation "that it is your case that you were contractually entitled to receive those 'perquisites and benefits in kind' during the subsistence of your employment". By paragraph 1 of her Answers she confirmed that that was her case. She was then asked "if it is your case that you were contractually entitled to receive those perquisites and benefits in kind during the subsistence of your employment … when and how do you allege that that entitlement arose … if you allege that your entitlement arose pursuant to an oral agreement … with whom was such agreement made, where and in what circumstances … and what were the words used or the gist of those words?" She replied that her case was that such contractual entitlement arose pursuant to an oral agreement with Hans Rausing, when she started working for him in 1982 at Morghew Farm, and she continued as follows:

"Hans Rausing generously agreed that as I would be giving up my academic career and any possibility of advancing this career in order to work for him and as I would be receiving from him a salary considerably inferior to that which my academic qualifications would entitle me to, I would receive, in addition to my salary, the perquisites and benefits in kind listed in my Schedule of Losses, with the exception of the medical insurance. This was agreed by Hans Rausing at a later date when he generously offered this additional perquisite … Since I trusted Hans Rausing as a gentleman and therefore a man of his word, I did not consider it appropriate or necessary to confirm our oral agreement in writing."

9. Mr Bezant's Answers responded to a Request for Particulars of Mr Bezant's Grounds of Resistance. They included particulars of Mr Bezant's case that the taking of the perquisites and benefits in kind at the complete discretion of the Managing Director was common knowledge and approved of by the Chairman and the Directors and of the words ascribed to Professor Rausing, namely as follows:

"8.1. Ask Hans Rausing. He said it.

8.2. Ask the Directors. They received perquisites and benefits in kind.

9. The perquisites and benefits associated by long standing custom and practice with the agricultural industry.

10. Ask Hans Rausing. He has an excellent memory.

11. I did not allege that the Chairman agreed to a suggestion of mine. He made the suggestion himself."

10. Paragraphs 4, 5, 7 and 8 of the Respondent's Further Grounds of Resistance were in terms admitted in paragraphs 22 and 23 of the Bezants' Amended Reply. They read as follows:

"4. By his Schedule of Losses made on or about 9 March 2001, Mr Bezant has claimed (in effect) that he was contractually entitled to receive the Benefits in Kind pursuant to his contract of employment (and has formulated his claim for Loss on that basis) …

5. In his capacity as an officer of [the Respondent] Mr Bezant signed P11D forms in relation to the expenses and benefits he received in the years ending April 1997 to April 2000 (as indeed he had done in all previous years from at least 1992). In doing so he confirmed that:

"all details of expenses, payments and benefits that have to be returned on forms P11D for the [relevant] year are enclosed with this declaration" and "that the details on these forms are fully and truly stated to the best of my knowledge and belief".

In truth and in fact, those P11D forms … disclosed none of the benefits in kind which Mr Bezant alleges he received and was entitled to receive pursuant to his contract of employment between 1997 and the termination of his employment." [That is not entirely correct: it is certainly the case in relation to the substantial majority of the items, but it was accepted that Mr Bezant disclosed in the P11D private medical insurance in 1998-9, £200 in respect of mobile telephone in the years 1997-8 and 1998-9, a sum in respect of vehicle maintenance, service and repairs in 1994-5, and sums in respect of firewood, turkey and accountant's services.]

"7. By her Schedule of Losses dated 9 March 2001, Dr Bezant has claimed that she was contractually entitled to receive many of the Benefits in Kind pursuant to her employment contract with [the Respondent]. …

8. By further particulars to her Schedule of Losses dated 27 April 2001 … Dr Bezant has asserted that her entitlement to these Benefits in Kind arose pursuant to an oral agreement with Professor Hans Rausing that "as I would be receiving from him a salary considerably inferior to that which my academic qualifications would entitle me to, I would receive, in addition to my salary, the perquisites and benefits in kind listed in my Schedule of Losses, with the exception of medical insurance [which was agreed at a later date]."

Paragraph 9 of the pleading recited (inter alia) that "no P11D forms were completed by Dr Bezant for the financial years ending April 1997 to April 2000 disclosing receipt of such benefits in kind." The balance of the paragraph asserted knowledge and participation in this regard by Dr Bezant. The Amended Reply, while denying the latter assertion, admitted that there were no such forms.

11. It is in the light of that case, put forward in terms by each of the Applicants, as to their contractual entitlement, orally agreed with Professor Rausing, to benefits and perquisites in kind, that the plea of illegality was put forward by the Respondent, which led to the preliminary hearing.
12. Paragraph 1 of the Tribunal's Decision recites:

"The Applicants' case is put three ways: firstly that many of the perquisites and benefits in kind were in fact mis-described, and should have been described as proper expenses of the Respondent's business; secondly, in any event, that neither of the Applicants knew that they had to declare perquisites and benefits in kind for tax; and thirdly that they relied on the advice of the Company's auditors, and of the Finance Director/Company Secretary of the Respondent Company Mr A Hyde, (as to the correct filling in of form P11D, the Inland Revenue form on which a company declares what benefits in kind its employees, who earn more than the threshold figure of £8500, have received."

13. Oral evidence was given before the Tribunal by the Bezants and, for the Respondents, by Mr Beckhurst, a partner in the Honey Barrett, by four other witnesses and, at the instance of the Tribunal, by Mr Hyde. Reliance was placed by the Respondent on three documents in particular:

(i) A letter from Mr Beckhurst to Mr Bezant dated 24 May 1996, which enclosed the form P11D "which needs to be completed to record any benefits in kind which you have received from Wadhurst Park Ltd during the year. In previous years we have shown goods supplied to you free or below market value which I assume to be farm shop goods. Please can you let me know the approximate amount of goods during the year to 5 April 1996 … Incidental expenses incurred whilst staying away on business are also classed as a benefit in kind … there are tax free limits for these personal expenses … I do not know whether any personal expenses are paid for or if indeed they are above these tax free limits, but I feel I should let you know the requirements … Subject to the above, if you are satisfied that the form is a correct and complete record of all the benefits provided to you then please sign the attached declaration where indicated and return both forms to me for submission to the Inland Revenue. Can you also confirm that there are no other similar benefits provided to any other Director of Wadhurst Park Ltd, or an employee earning over £8500 per annum." Enclosed with that letter was the declaration P11D(b) which Mr Bezant in that year, as in other years, signed on behalf of the Respondent, and which confirmed the accuracy of the P11D, in the form recited in paragraph 10 above.

(ii) A letter from Wendy Moss, a manager at Honey Barrett, to Mr Bezant, dated 27 May 1999, including the following:

"P11D RETURN AND BENEFITS IN KIND.

I enclose your P11D return and declaration for the year ended 5 April 1999. The benefits disclosed on the return are the same as for last year, the flat rate charge for the mobile phone of £200 and private accountant's fees of £50. I would be grateful if you read carefully through the return and consider whether there are any other items which need to be disclosed. Once satisfied the return is correct and complete would you please sign the declaration form and return it to me together with the P11D … We discussed the position regarding the provision of accommodation which is customary in the farming industry and no benefit in kind arises on the grounds that the accommodation is necessary for the proper performance of the employees' duties. The exemption does not however extend to expenses paid in connection with the accommodation, such as heating, lighting, cleaning, redecoration and internal repairs including the provision of furniture but excluding council tax. There is a limit on the amount that can be assessed on the employee and that limit is 10% of the employee's net emoluments … I enclose a standard P11D check list which you may like to look through to see if there is anything else that comes to mind that may be a problem. [The letter enclosed an 8-page 'Form P11D Checklist]."

(iii) A letter of representation dated 17 June 1999 signed by Mr Bezant and Mr Hyde, addressed to the Respondent's auditors, confirming that "all emoluments paid to directors from the Company or any person are included in the accounts and consist of the following items … R Bezant .. Benefits in Kind £250."

14. The closing submissions of Simon Devonshire of Counsel, who represented the Respondent below, as he has before us, read as follows in paragraph 7.4:

"'Perquisites' and 'benefits in kind'. Everyone (including Mr Bezant) knows that these words refer to additional rewards (in addition to salary) from a person's employment. Mr Bezant's original Defence to Contract Claim implicitly recognises as much. His Schedule of Losses necessarily recognises as much. Dr Bezant's further particulars of her Schedule of Losses in terms acknowledge the contractual nature of the claims being made to 'Perquisites' and 'Benefits in Kind' (and Mr Bezant agreed in cross examination … that he and his wife had worked together in the preparation of their cases). Mr Bezant (grudgingly) acknowledged the contractual nature of a 'perquisite' or 'Benefit in Kind' in his cross examination e.g.:

7.4.1. To the Tribunal's suggestion that perquisite or benefit in kind was, to put it a neutral way, 'part of the reward for your employment, something that went with your employment', Mr Bezant said 'So be it if the Chairman says so';

7.4.2. Asked whether he accepted that a benefit in kind is part of the 'reward from your job not in salary form' he said 'sometimes'.

7.4.3. Questioned about his Schedule of Losses he is claiming 'perquisites' and 'benefits in kind', he said 'That is what I lost. Tribunal draw your own conclusions'."

15. The Tribunal set out its assessment of the witnesses in paragraphs 19 to 24 of its Decision. As the Tribunal put it, "on the whole, we accepted the evidence of the witnesses for the Respondent'. In paragraph 20 it turns to consideration of the Bezants:

"20. We had more difficulty with the evidence of Mr Bezant and Dr Bezant, although we say immediately that we do not think that they were deliberately trying to deceive us. We are sure that they have deeply convinced themselves of the truth of the evidence that they were [giving], but to the extent that they could not tell when they were being accurate and when they were not. Their evidence suffered from an inherent improbability, namely that two intelligent people, as they clearly were (and Dr Bezant has the degree of Ph.D) should be entirely unconscious of their tax obligations and equally insouciant about them. We cannot accept the proposition that they relied blindly on Mr Beckhurst's firm to advise them. Moreover, when Mr Bezant came to give evidence, it seemed to us that, although he was entirely articulate, he was using his articulacy very frequently to avoid giving answers to questions that he would rather not have answered.

21. However, we were not at all favourably impressed by Mr Bezant's replies to questions about documents which were not favourable to his case, such as a check list relating to form P11D … sent to him under cover of a letter dated 27 May 1999 … from the accountants. Further, when he was questioned about another letter from the accountants asking for instructions on the company's accounts for the year ending 30 March 2000 … containing manuscript notes recording the phone instructions given by him, his reaction was to seek to cast doubt on the genuineness of the letter and notes, although not going quite so far as logic would have dictated, which would have been to say that the accountants had produced a false document.

22. At this point, as in several points throughout his evidence, Mr Bezant showed himself 'willing to wound, but yet afraid to strike'. Much of his explanation of his failure to disclose benefits on the form P11D consisted in trying to blame the accountants or to blame Mr Hyde. Although Mr Bezant was articulate and entertaining as a witness, we could not finally accept his evidence where it was uncorroborated, and, in particular, where his evidence conflicted with that of Mr Beckhurst we preferred the evidence of Mr Beckhurst. It is fair to say that Mr Bezant did not seek to challenge the evidence of Mrs Morton that he was involved in the accounting to the extent that he allocated the cost code to which individual invoices should be allocated. Many of the invoices in Volume 3 bear a code number in his hand writing. This cast doubt on his argument that he was not involved in the financial affairs of the farm, and left matters to Mr Hyde or to the accountants.

23. Similarly we have found it impossible to accept Dr Bezant's argument that she was totally ignorant of tax matters, or financial matters generally, and was not interested in money. We could not accept her statement that she did not know from one year to another that she had received a series of pay increases (set out in her Forms P60 …). Dr Bezant was closely involved in the marketing of the specialist food operation, and spent a considerable amount of her evidence in chief telling us what she did in connection with that operation. It is clear that she had a lively commercial understanding of what she was doing, which makes it basically improbable that she would not have know or, as she would have had us believe, even suspected, that she might have had to pay tax on benefits in kind. We find it impossible to accept her evidence that she was totally ignorant and naïve about such matters, and entirely reliant on the accountants."

16. The Tribunal then records, in paragraph 24 of its Decision, that it accepted, and found of considerable assistance, the evidence of Mr Hyde.
17. The Tribunal found, among others, the following facts in paragraph 25 of its Decision:

"(i) On a number of occasions, Messrs Honey Barrett wrote to Mr Bezant, either individually or collectively with the other directors …, warning him of the need to complete Form P11D.

(ii) On 5 December 1988, Honey Barrett & Co wrote to Mr Bezant setting out their terms of engagement as auditors for the company. … there appears the passage … 'Assisting you with the preparation of forms P35, P11D and other matters relating to the operation of your PAYE scheme. Please note that whilst we can give you guidance with regard to the completion of your form P11D, we are not prepared to complete it on your behalf in view of the comprehensive nature of the information required on this form and the detailed review of records that would be required to ensure a full and complete disclosure'.

(iv) When forms P11D were prepared, they were signed by Mr Bezant as Managing Director.

(v) Form P11D for 1994/1995 … declares £503 for car mileage and allowance; £200 for goods and services supplied free or below market value and £70 for accountancy services.

(vi) Mr Bezant's form P11D … for 1996 discloses £200 for goods or services provided free or below market value, and £50 for accountancy services supplied by the company …

(vii) The return for 1997/1998 … discloses £200 for mobile telephones and £50 for private accountancy. The form P11D for 1998/1999 … discloses £200 for the cash equivalent of mobile telephones provided, £990 for private medical treatment or insurance and, again, £50 for accountancy.

(viii) None of the other perquisites or benefits in kind claimed by Mr Bezant in his Schedule of Losses … are declared in any form P11D which has been produced to us.

(x) the company made no P11D returns for perquisites and benefits in kind in respect of Dr Bezant, although at all material times … her earnings were above the tax threshold of £8,500 a year at which perquisites and benefits in kind have to be disclosed to the Inland Revenue.

(xii) We are satisfied:

(a) That Mr Bezant was sent the [P11D] check list [enclosed with the accountant's letter of 27 May 1999] and

(b) That he saw it. We infer that he chose to ignore it and the advice contained in the letter.

(xiii) Mr Bezant, together with Mr Hyde, signed a letter of representations to Messrs Honey Barrett… dated 17 June 1999… That letter includes a statement that 'We confirm that we have taken all appropriate steps to ensure that the company has complied with all relevant laws and regulations as applicable to its activities and are unaware of any breaches'.

(xiv) As far as Mr Bezant was concerned, that representation was not true, although we are satisfied that Mr Hyde believed it to be true.

(xv) On 20 June 2000, Messrs Honey Barrett wrote to Mr Bezant … a letter concerning the accounts of the [Respondent] which contains the following paragraph … 'Would you please read carefully through the return to consider whether any other items apply either to yourself or other employees of the company. I know that we have discussed benefits in kind over the last year but call me [Mrs Moss] if there is anything that may be relevant. … A similar letter with a similar passage had been sent to Mr Bezant the previous year' [the Tribunal then quote from the letter of 27 May 1999 from which we have cited at paragraph 13(ii) above].

(xvii) We are satisfied that Mr Bezant involved himself in the detailed financial matters of the company …

(xviii) Dr Bezant did not directly involve herself in the detailed … financial and tax affairs of the firm, but was closely involved in the commercial operations of the speciality food business with particular reference to marketing.

(xix) We reject Dr Bezant's evidence that she was not aware that she had to declare to the Inland Revenue goods and benefits in kind which she received.

(xxi) We believe, despite their denials, that Mr Bezant and Dr Bezant did from time to time discuss their tax position with each other, and we are satisfied that Dr Bezant consciously participated in the series of decisions which we find Mr Bezant made year by year not to make a full disclosure of the matters which he claims as perquisites and benefits in kind (whether or not he and his wife jointly and/or severally were entitled to such benefits).

(xxii) We are satisfied that the financial affairs of the company were not the responsibility of Mr Hyde, despite Mr Bezant's claims that they were.

(xxv) We find that, so far from Mr Bezant relying on Mr Hyde for the correctness of the forms P11D, Mr Hyde relied on Mr Bezant."

18. After setting out the law and the submissions of Counsel, Mr John, on behalf of the Bezants, and of Mr Devonshire, the Tribunal then records its conclusion, first recording, in paragraph 43, that they "have approached the Respondent's submissions with care. We are conscious of the fact that, if we accede to them, the consequences for Mr Bezant and Dr Bezant will be serious, in that they will be prevented from carrying on their claims for unfair and wrongful dismissal, both of which are potentially very substantial claims indeed. It seems to us that it is necessary to approach a defence of illegality with scepticism and caution. A tribunal which is being asked to say that applicants should not be heard on the merits of their claims is not being asked to do a light thing". Their approach with reference to the law, which has not been challenged before us, is, in the light of the authorities and particularly the seminal passage in the judgment of Peter Gibson LJ in Hall v Woolston Hall Leisure Ltd [2000] IRLR 578, to "look for knowledge of what was being done and evidence of participation", bearing in mind that "ignorance of the law is no excuse" and that "a party cannot excuse himself or herself by deliberately shutting his/her eyes to their legal obligations". The Tribunal deals first with the position of Mr Bezant in paragraphs 46 to 49, reaching the conclusion in paragraph 50 that his claims for unfair and wrongful dismissal cannot proceed:

"46. We unanimously reach the following conclusions. It seems to us that there is clear evidence that Mr Bezant knew that he was not declaring for tax most of the items which he subsequently claimed in his Schedule of Losses to be perquisites and benefits in kind. We have found some of those to be legitimate company expenses (in which case they would not be claimable as perquisites and benefits in kind) but it is clear that Mr Bezant was not declaring those benefits to which the Respondents accept he was entitled such as travel insurance, council tax, water rates, heating oil, telephone, cleaning and gardening services. Private medical and health insurance was claimed only in Mr Bezant's last P11D, but we were not told when that benefit came into existence. It may be that it was a recent benefit, so we leave that out of the count. But it is clear that Mr Bezant did not declare the other benefits, and that he knew that he did not declare them, because he signed the various forms P11D on behalf of the company.

47. We are satisfied that Mr Bezant received the P11D check list from his accountants in 1999, and that he knew or ought to have known of the matters which he should include in the form P11D. Moreover in June 2000 he ignored the request of the auditors (Mrs Moss) to identify whether any other benefits in kind should be included in the P11D. We do not accept his argument that he relied solely on the advice of the accountants, who had made it clear to him that they were not prepared to complete form P11D on behalf of the company and that it was the company's responsibility to give them all the necessary information. Similarly we were not impressed by Mr Bezant's arguments that he relied on Mr Hyde for advice in these matters. As we have found, although Mr Hyde was Company Secretary and had the title of Financial Director, he was not responsible for day to day financial operations, but more for advising Mr Bezant and the other members of the board of the larger, macro-economic business picture relating to the farm.

48. Nor can we accept Mr Bezant's claim that he was simply too busy to deal with matters of tax … Mr Bezant was not entitled to pretend ignorance of his tax responsibilities, and, in so far as he told us in evidence that he was ignorant of them, we regard that, at best, as a self-delusion on his part; nor was he entitled simply to ignore his responsibilities to the Inland Revenue in respect of his own perquisites and benefits in kind, but we are afraid that we find that he did ignore it.

49. Lastly, in respect of Mr Bezant, it is clear that he regarded the coding of invoices to their various expenditure codes as something that was his responsibility. It is clear that he was closely involved with the day-to-day financial activities of the company, and he cannot now say otherwise. We are entirely satisfied that it was far more likely than not that Mr Bezant knew what he was doing or failing to do; that he was deliberately shutting his eyes to whether what he was doing was illegal or not, and we have no doubt that he was participating in the illegality."

19. The Tribunal, rightly, deals separately with the case of Dr Bezant, and does so in paragraphs 51-54:

"51. We had more difficulty with the claim that Dr Bezant was acting illegally. There was not a great deal of direct evidence of participation, and we can understand how she says that she was merely acquiescing in what the company (in the person of her husband) was doing. We do not accept that Dr Bezant's signature on various invoices as collecting goods, many of which we have found were n any event legitimate business expenses, is reliable evidence of participation; we are inclined to think that it does not amount even to prima facie evidence.

52. But, that said, we regard it as being in the highest degree unlikely that so intelligent a lady as Dr Bezant would not have realised that she was receiving very substantial benefits in kind. The fact that she has claimed those benefits in kind as her independent entitlement, and not just in common with her husband, shows that she realised the situation very clearly. We cannot believe that she did not know that, once someone is earning more than £8,500 a year, benefits in kind have to be declared to the Inland, Revenue, and tax becomes due on them. Even if she did not know the detail of when she became liable, it is such common knowledge that benefits in kind may be liable to tax, that we think that Dr Bezant, despite her denials, must have been aware of that situation. But even if she was not so aware, then once again, ignorance of the law, or ignoring the possibility of a liability to tax, cannot be an excuse for a failure to declare to the Inland Revenue the perquisites and benefits in kind that have been received.

53. Dr Bezant must have known, at the lowest, that she and her husband were living in accommodation for which the company paid council tax and water rates, which is a very substantial benefit. She admitted in evidence that she knew that having the house cleaned (see the invoices from Scrubbers Ltd …) was also a very considerable benefit to her. We are satisfied that she knew that those benefits were not being declared for tax, and that she did not just acquiesce in that situation, but actively participated in it. In her case too, it seems to us to be far more likely than not that she, as someone who was actively dealing with one of the major commercial activities of the company, would not be very well aware of such matters.

54. So in Dr Bezant's case also, we are satisfied that she knew of what was being done or not being done – we cannot accept that she and Mr Bezant never discussed the tax situation – it is beyond belief that husband and wife would not do so – and actively participated in it. We do not accept that Dr Bezant was ignorant of her obligations as she claimed, but even if she was, that is no defence. We think that Dr Bezant, like her husband, was deliberately shutting her eyes to her tax liabilities. The same remarks apply to Dr Bezant as to her husband: she was not entitled to rely on the company's accountants to tell her what her tax liabilities were. Although her case is not as straightforward as that of her husband, we are satisfied, having applied to her case the same strict standard of proof as we apply to Mr Bezant's case, that Dr Bezant's contract of employment was also vitiated by illegality …"

20. The Tribunal consequently rejected all three elements of the Bezants' case set out in paragraph 12 above. Before us, the Bezants represented themselves, and took it in turns to address us on the three grounds of appeal. The oral submissions, spearheaded by Mr Bezant, were thorough and courteous. Dr Bezant, however, sought to present and put before us what she described as a "statement", which we regarded as a note of her oral submissions, containing 27 pages, which contained a substantial diatribe directed personally against Mr Devonshire of Counsel. It is understandable that the Applicants, having lost their case, should feel strongly, but there was no justification whatever for the personal attack on Mr Devonshire. Dr Bezant described the attack as not being personal, but it is quite plain from its content that it was. We hasten to say that we have seen no justification whatever for any of such personal attack, and indeed, as can be seen from what we have recounted above, the circumstances in which the case of illegality was put forward directly arose out of the letters, answers, and pleadings of the Bezants themselves. However, we read Dr Bezant's note to ourselves, benefiting from the submissions that were there contained, but excluding from our minds those passages which are objectionable for the reasons we indicate.
21. The First Ground. It was common ground between the parties before us that there was an incorrect reference by the Tribunal in paragraphs 46 and 53 to council tax and water rates. As indeed was apparent from the very letter dated 27 May 1999 upon which the Respondent, and in the event the Tribunal, relied, payment of council tax – and indeed water rates – in respect of tied accommodation does not require to be included in a P11D, and the Respondent did not and does not dispute the Bezants' entitlement. This error may have arisen as a result of the incorrect pleading of the Further Grounds of Resistance to which we have referred in paragraph 10 above. However, in argument, Mr Bezant himself described this first ground as marginal, or on the periphery, and little emphasis was placed upon it. Rightly so, for it appears clear to us that this error goes nowhere near to undermining or vitiating the Decision of the Tribunal. The Bezants' case rested upon an entitlement to all the perquisites or benefits in kind listed in their Schedules of Losses, of which council tax and water rates were only an example, and to justification of the non-inclusion in a P11D (save in respect of the minor items which Mr Bezant did include) of all the items in their Schedules of Losses, of which council tax and water rates were but two. The incorrect reference to these two items neither evidences sufficiently or at all "confusion" on the part of the Tribunal, nor detracts from the number, weight and materiality of the other items which were not disclosed so as to question the conclusion of the Tribunal that their non-inclusion could not be justified, or that the contract was vitiated by illegality.
22. The Second Ground. It is apparent that the assertion by the Bezants of their entitlement to benefits in kind first arose in their Schedules of Losses quantifying the value of their claim for unfair and wrongful dismissal but then, and more vehemently, in their defence to the Respondent's counterclaim. There were thus benefits in kind to which the Respondent accepted that the Bezants were entitled, and benefits in kind to which the Respondent did not accept they were entitled, both affected by the argument of illegality. The Bezants asserted that there was an inconsistency in the Respondent's case by virtue of their in addressing an illegality defence in relation to non-declaration of benefits in kind by reference, in substantial part, to benefits to which in fact the Respondent did not admit that the Bezants were entitled. Hence the case which formed the basis of the second ground of appeal, which Nelson J summarised, as put forward by the Bezants at the preliminary hearing, as follows:

"Thirdly, the Respondents have apparent contradictions in their case. On the one hand they say that the benefits were contractual benefits, which should have been disclosed to the Inland Revenue, and on the other hand they say that they were not in fact benefits at all but dishonest misappropriations to which the Applicants were not entitled at all. This inconsistency, it is submitted, was not considered or dealt with by the Tribunal."

23. However, particularly in the context of a hearing of a preliminary issue on illegality before the Tribunal, there is no inconsistency. The position from the Respondent's point of view is clearly set out in paragraphs 6 and 10 (one paragraph directed to each of the Applicants and we shall quote that directed to Mr Bezant) of its Further Grounds of Resistance:

"6. For the avoidance of doubt, it is expressly denied that (i) Mr Bezant was contractually entitled to the Benefits in Kind or (ii) Professor Hans Rausing or the other directors authorised or encouraged the fraud on the Revenue which he alleges. However on the basis of Mr Bezant's own case:

6.1 He has knowingly participated in performing his contract of employment in a manner involving a fraud on the Revenue;

6.2 As such, his contract is vitiated by illegality, and the Tribunal cannot allow him to enforce the same."

24. In Mr Devonshire's written submissions before the Tribunal it was put on the Respondent's behalf as follows:

"1.3 For the avoidance of doubt, [the Respondent] does not accept that the Applicants were contractually entitled to receive a number of the benefits put in issue by the Illegality Amendment. [The Respondent] contends that by taking those benefits, the Applicants have been guilty of misappropriation. However, save to the extent indicated below, the Tribunal is invited to assume that the Applicants' evidence on their entitlement to receive such benefit is true, in considering the Illegality Amendment.

25. This is entirely in accordance with a proper approach to the law, which the Tribunal accepted, by reference to what the Tribunal referred in paragraph 32 of its Decision to being the "historical root of the Ex Turpi Causa principle" in Holman v Johnson [1775] 1 Cowp 341 at 343, cited by Peter Gibson LJ in Hall at paragraph 28:

"No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa or from the transgression of a positive law of this country then the court says he has no right to be assisted."

26. It is on the basis of an assessment of the Applicant's own case that the illegality is tested. The other party is entitled to deny those facts, but nevertheless to invite the court to conclude (or the court may of its own motion conclude) that the claim as put forward by the applicant, on his or her own case, is a claim to enforce a contract vitiated by illegality: Coral Leisure Group Ltd v Barnett [1981] ICR 503 is an example of just such a case.
27. There is therefore no objectionable inconsistency in the position of the Respondent. The case that the Bezants put forward "that the Tribunal did not properly consider or take into account the internal contradictions of the Respondent's case" could thus only be supported by showing that the Tribunal in some way did not understand the nature of the case that it was addressing; or that it was confused by the decision it had to take, by virtue of the fact that the evidence before it included reference not only to those benefits which the Respondent accepted that the Bezants had, and the appropriateness or otherwise of their tax treatment, but also benefits in kind to which the Respondent did not accept that the Appellants were entitled, and in particular the invoices, the subject matter of the counterclaim, as to which (in part) the Bezants were putting forward an argument that the goods and services, the subject of those invoices, were benefits to which they were entitled, pursuant to the alleged oral agreement with Professor Rausing.
28. The issue as to whether the Tribunal misinterpreted its task revolved around a consideration of paragraphs 17 and 18 of the Decision, and the Tribunal's findings of fact at paragraph 25(xxviii) to (xxxvi). Paragraphs 17 and 18 read as follows:

"17. Much time was taken in evidence and argument in discussions of whether or not the Applicants were entitled to these perquisites and benefits in kind, or to any of them, or whether, as it was suggested, the Applicants were simply procuring the company to discharge the cost of many matters for which the Applicants should have paid themselves. But since the issue of illegality was put squarely on the basis that, given that the Applicants were entitled to some benefits, either directly, as part of their contracts of employment, or that there were, as it were, benefits referred between them (so that Dr Bezant would, as we have said, benefit from Mr Bezant's entitlement to have council tax paid by the company and Mr Bezant would benefit from Dr Bezant's entitlement to the supply of firewood) such benefits in kind were not declared, except to a very limited extent, on the Inland Revenue P11D.

18. It seems to us that the only issue which arises as a primary matter at this hearing is whether the failure of both Applicants to declare their benefits on form P11D amounts to an illegality: for that we shall refer in due course to the evidence we heard and to the authorities which were cited to us. The chief relevance of the evidence on whether or not the various invoices which the company discharged over the years were indeed for benefits in kind or whether they represented the discharge by the company of expenses, which should have been the private responsibility of the Bezant family, seems to us, in this connection, to be a matter which goes chiefly to the Applicants' credibility. Insofar as we make findings of fact about the invoices referred to principally in the employer's claim … it will be as a matter which will show the extent of the illegality contended for by the Respondents, if illegality is established. It does not seem to us relevant to determine, invoice by invoice, whether the Respondents can prove that the Applicants have, in effect, misappropriated the company's funds. That is not necessary to the decision we have to reach at this hearing."

29. We invited the Bezants to indicate where in those paragraphs the Tribunal can be shown to have erred in law or to have adopted an incorrect approach. The paragraphs appear to us to show clearly that the Tribunal did indeed understand the purpose of their consideration of that part of the evidence which went to the disputed invoices and benefits, namely:

(i) so as to reflect upon the credit or otherwise of the oral witnesses they were to hear, obviously particularly in the circumstances the Bezants, on the main matters which they had to decide.

(ii) for the purpose of consideration of the categories of benefits, particularly those categories which were fully reflected in the invoices but only appeared partially or by inference in the Schedule of Losses, so as to show, as the Tribunal put it, "the extent of the illegality contended for by the Respondent, if illegality is established". This of course would not apply to any of the invoices which the Bezants themselves were not asserting to have been part of their entitlement (e.g. those invoices which they accepted were in respect of personal expenditure but were asserting were to be, or had been, reimbursed).

30. The Bezants, so invited, were not able to identify any error of law or approach in the paragraphs, but rather in the event asserted that the Tribunal did not follow that approach. We can see no indication from the Decision that that is the case, or that the Tribunal was in any way confused, or departed from its own self-direction. There is certainly nothing in the subparagraphs of paragraph 25 to which we referred above which so indicates. In subparagraphs (xxix) and (xxx) the Tribunal accepts the evidence of Mr Bezant. In other subparagraphs it did not accept the evidence of the Bezants; for example in subparagraph (xxviii) it found that the cleaning services should have been declared as a benefit, and were not a legitimate business expense, on the basis asserted; similarly so in subparagraph (xxxi), in respect of the purchases of clothing, which the Tribunal did not accept to be protective clothing which could be regarded as a company expense, subparagraph (xxxii), in which the argument that expenditure on a television aerial was a company expense, incurred so that Mr Bezant could watch the long-range weather forecast, rather than expenditure for the Bezant family was rejected, and subparagraph (xxxiii) in which it rejected a similar assertion that certain travel expenses were a company expense. There is no indication either there, or anywhere else in the Decision, that the Tribunal was approaching its resolution, in certain respects, of issues between the parties on any other basis than as part of assessing the credibility of the Bezants' explanation for their non-disclosure of the benefits listed in their Schedules of Losses, as to which it reaches its conclusion at the end of the Decision. We are satisfied there is no substance in the Second Ground.
31. We turn finally to the application to put in fresh evidence. We have referred to the Bezants' application for a Review. By an Order dated 22 October 2001 the Bezants were ordered to disclose, on or before 5 November 2001, all documents on which they sought to rely in support of their application for a Review on the grounds of fresh evidence. They did not do so, and a further Order was made by the Tribunal on 9 November 2001 that unless by 4pm on 15 November 2001 the Bezants complied with the Tribunal's earlier Order their application for Review would be struck out. Notwithstanding this, the Bezants did not produce their P11D evidence nor any statement or commentary from Mr Hill (or indeed any other document which at that stage they were seeking to rely upon) prior to or indeed even at the hearing. The Tribunal at paragraph 3C of its second Decision recorded the contention of the Bezants that they had thought they did not have to produce the documents because the Chairman had said that no evidence would be heard at the Review application. This explanation was not accepted by the Tribunal, which regarded the Bezants as having deliberately disregarded the Order, recording in paragraph 29 of the Decision that "even if there might have been some confusion in the Applicants' minds (and we do not see how there could have been) arising from the combination of the wording of the order of 22 October 2001 for disclosure and the Tribunal letter of 29 October 2001 [stating that the hearing would be limited to arguments by both sides on the application for a Review and that no evidence would be heard] … , it must have been clear to the Applicants from our 'unless' order that the Tribunal expected those orders to be complied with." Nevertheless the Tribunal permitted the Bezants to summarise the nature and content of the evidence they sought to adduce.
32. The relevant paragraphs of the second Decision are as follows:

(i) As to the P11D evidence:

"13. We asked Dr Bezant to expand on why the new form P11D might be relevant and might have an effect on the result of the case. She replied that the contents of the P11D were incorrect, and, Dr Bezant, commented it was remarkable that the form prepared by Messrs Honey Barrett did not set out the benefits which Mr Bezant had been criticised in our Decision for not having disclosed.

14. The 'New form P11D' was not produced for our consideration, so we had to rely on Dr Bezant's description of what it contained.

20. Mr Devonshire submitted … that … Even if the new form P11D contained misstatements, and there were omissions from it, it was difficult to see how it could have affected the outcome of the case, and the Applicants have not said in what respect it could have affected the outcome.

26. … Dr Bezant said that … [the] contents of [the P11D] were not right and it did not set out any of the benefits in kind which the Respondents had said that Mr Bezant was not declaring. The P11D had indeed not included the benefits in kind, because it had always been the Respondent's contention that Mr Bezant was not entitled to such benefits in kind, and that, insofar as he might have acquired those benefits, it was by misappropriation.

29. … [the orders] have not been complied with, consequently the "new" form PL11D has not been produced to us, and, again, we are in no position to say whether or not its contents could have an important influence on the result of the case. But from a description of its contents given to us by Dr Bezant and set out above, we do not see that it could have an important influence. What is at issue is whether the applicants performed their contracts in an illegal manner: we have found that they did so. That cannot be affected by the drafting of a document at some time in the year 2001, after the Applicant's employment has come to an end."

(ii) As to the Audit files:

28. … "we do not know what evidence it is alleged that Mr Hill can give. Since the Applicants have disregarded our order to say what evidence he can give, we are in no position to conclude that, even if his evidence could not reasonably have been available at the original illegality hearing … it would have an important influence on the result of the case."

33. As indicated in paragraph 2(iii)(a) above, it is in our judgment impossible to say that the Tribunal erred in the exercise of its discretion at the Review hearing to refuse to allow an application on the basis of the suggested fresh evidence, and no other ground of appeal in respect of the Review decision is put forward. The documents in question however have now been put before us, and we have heard an application to put in fresh evidence for the purposes of the appeal, effectively by way of an appeal against the first decision of the Tribunal. Before we discuss that application and give our conclusions, it is perhaps helpful to make two general points:

(i) The Bezants, who have been prevented from bringing their claims, have understandably emphasised their criticisms of the Respondent. They have sought to assert that, for example, the apparently erroneous "new" form P11D itself shows, among other things, an improper attitude towards the Revenue by the Respondents. Even if that be right, that is not to the point in relation to the issues before the Tribunal and now before us. It is clear, on the basis of the Appellants' case which the Tribunal has found to be one which based itself on a contract of employment vitiated by illegality, that the Respondent was a party to that alleged illegality; but this could not affect the outcome of a case in which the issue decided against the Bezants was that they knew of and participated in illegality, on their own case.

(ii) The fresh evidence sought to be relied upon, even if we have as set out in paragraph 2(iii)(b) above, shortcircuited the ordinary procedures, and allowed oral argument at the hearing although particulars ought to have been given in advance, nevertheless requires our satisfaction as to the elements in Ladd v Marshall and/or Wileman v Minilec Engineering Ltd [1998] ICR 318, namely that:

(a) The evidence could not have been obtained with reasonable diligence for use at the Employment Tribunal hearing.

(b) It is relevant and would probably have had an important influence on the hearing

(c) It is apparently credible.

34. We turn first to the P11D evidence. There is some dispute about whether this would qualify under (a) above, but we are prepared to accept that, on the balance of probabilities, it did not come into existence until after the hearing before the Tribunal, and that the Bezants could not by the exercise of reasonable diligence have obtained it earlier than September 2001, when it was sent by Honey Barrett to Mr Hill. We have now, unlike the Employment Tribunal at the Review application hearing, been shown the content of the P11D, which, although again there was some issue about this, appears to have been prepared by Honey Barrett prior to their so sending it to Mr Hill: and we have heard the Bezants' submissions on it, and on the fact that no P11D was produced for Dr Bezant.
35. They pointed out that the P11D for Mr Bezant contained virtually none of the items which appear in Mr Bezant's Schedule of Losses nor those in the Employer's Counterclaim. The omission of the latter items is of course (as recorded in paragraph 26 of the Tribunal's second Decision, quoted in paragraph 32 above) consistent with the Respondent's case that the Bezants were not entitled to have such items as benefits in kind, such that it would not be appropriate to include them in the P11D. But the P11D does not appear to have included items which it is common ground ought to have been included, such as the private medical insurance, which had been included in 1998-1999. Mr Devonshire has no instructions as to the explanation for the inadequacy of the P11D. But it is difficult to see what relevance it has to the appeal. The comment made by the Tribunal in paragraph 29 of its second Decision, also quoted in paragraph 32, above still seems apt. The issue which the Tribunal resolved against the Bezants was that on the basis of their own case they were asserting a contract which gave them an entitlement to benefits in kind instead of or by way of an enhanced salary, which were not disclosed in P11Ds, and that they participated in and had knowledge of such practice. Incompetence, or even deliberate continued illegality, by the Respondent would be of no relevance to that issue. We are not therefore persuaded that the case of fresh evidence by reference to the new P11D form is made out, because we are not satisfied that such evidence is relevant to any issue on the appeal, or would probably have had an important influence on the outcome of the hearing.
36. As for the second category, Mr Hill's commentary on the audit files, we are not satisfied that this amounts to fresh evidence at all, in the sense of its not having been available, or capable of being obtained with reasonable diligence, at the first Tribunal hearing. The explanation which the Bezants gave to the Tribunal at the Review application was put, in general terms, that they had not expected that they would lose at the first Tribunal, and consequently had not thought it would be necessary to call witnesses of their own. This is obviously no answer. A party is expected to bring forward his own case at his one and only opportunity to do so: an appeal is not intended to be a rehearing, and fresh evidence is restricted to that not reasonably available at the first hearing. But in any event Mr Hill's commentary. which is no better or no worse than an enlightened summary of what was contained in the audit files upon which he was commenting, falls within the general category to which the Tribunal referred in paragraph 19 of its second Decision:

"When properly analysed, the basis of their request for a Review was not that they had new evidence but … they wished to adduce evidence all of which would, with the exercise of reasonable forethought, have been available at the time of the hearing. … Many of the documents … had been disclosed in the Respondent's list of documents … e.g. extracts from Honey Barrett's audit papers from 1988 onwards – but the Applicants did not exercise their right to inspect these documents."

37. The Bezants did not seek to dispute that the documents were available for inspection prior to the hearing, but explained that they had not instructed Mr Hill at that stage. Although it was clear to us that in those circumstances that the documents did not qualify as fresh evidence, we nevertheless considered the commentary, to which we were referred in detail by the Bezants. The entries commented on by Mr Hill showed involvement by Honey Barrett in the preparation of the P11Ds, but they certainly did not show an absence of involvement of Mr Bezant, and in any event they must be set against (i) the handwritten comments by Mr Bezant which the Tribunal did consider and found to be particularly unhelpful to the Bezants' case, as referred to in paragraph 21 of its first Decision quoted in paragraph 15 above and (ii) the extract from the Honey Barrett handwritten audit notes which we have also seen and which were before the Employment Tribunal at the first hearing and which contained a considerable number of specific instructions given to Honey Barrett by Mr Bezant. We are as satisfied now we have seen this commentary as were the Tribunal was without sight of it that (paragraph 19 of its second Decision) "the Applicants could not show that the alleged new evidence (which was not new at all) would have an important or any influence on the result of the case." We would consequently not have allowed admission of such fresh evidence on the appeal, but having, in any event, considered it we in any event reject the third ground of appeal.
38. At the close of the hearing on 1 April 2003 we indicated that it was our unanimous decision to dismiss the appeal for reasons which would be given later. These are those reasons.