United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR DAVID MONK (of Counsel) Instructed by: Messrs Josiah Hincks Son & Bullough Solicitors The Manse 22 De Montfort Street Leicester LE1 7GB
For the Respondent	No appearance or representation by or on behalf of the Respondent

SUMMARY

8Q

Practice and Procedure - review

Application of ET Rule 33 review procedure. Mandatory requirement for written application for review not fulfilled. Review refused. Appeal allowed; case remitted to consider (1) whether time for review application should be extended and (2) if so, whether default judgment should be set aside.


 


HIS HONOUR JUDGE PETER CLARK

1. This is an appeal by Direct Timber Ltd, the Respondent before the Leicester Employment Tribunal, against the refusal of a Chairman, Mr C J Goodchild, sitting alone on 15 August 2005, to review a default judgment promulgated on 2 August. The Judgment under appeal was promulgated with reasons on 14 September 2005.
2. The Claimant, Mr Hayward, presented a claim to the Employment Tribunal on 18 May 2005, complaining of unfair dismissal, failure to provide Particulars of his Terms and Conditions of Employment and failure to give written reasons for dismissal. He was employed by the Respondent as a panel maker from January 2004 until his summary dismissal on 2 March 2005.
3. The claim form was sent by the Tribunal to the Respondent at different addresses, on 23 May and 24 June 2005. Wrongly believing that the claim was for just £300.43 the Respondent took no steps to instruct solicitors or to enter a Response to the claim. As a result judgment in default of response was entered.
4. The case was listed for assessment of compensation on 15 August. On 8 August an ACAS officer contacted the Respondent's solicitors, who had acted in previous tribunal cases involving these Respondents, alerting those solicitors to the forthcoming assessment hearing in this case. On 12 August ACAS informed those solicitors that the Claimant's claim stood at some £15,000. At the last minute the Respondent instructed their solicitors to act.
5. Although not entitled to be heard at the assessment hearing the Respondent's solicitors sent a trainee solicitor to observe the proceedings, armed only with a letter which was shown to the Chairman. The letter gave notice of intention on the part of those solicitors to make application for the default judgment to be reviewed. The letter added:

"This application will be made and lodged as soon as the necessary formalities have been complied with."

6. Rule 33 of the Employment Tribunal Rules of Procedure 2004 provides as follows:

"Review of default judgments

 33.  - (1) A party may apply to have a default judgment against or in favour of him reviewed. An application must be made in writing and presented to the Employment Tribunal Office within 14 days of the date on which the default judgment was sent to the parties. The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.

     (2) The application must state the reasons why the default judgment should be varied or revoked. When it is the respondent applying to have the default judgment reviewed, the application must include with it the respondent's proposed response to the claim, an application for an extension of the time limit for presenting the response and an explanation of why rules 4(1) and (4) were not complied with.

    (3) A review of a default judgment shall be conducted by a chairman in public. Notice of the hearing and a copy of the application shall be sent by the Secretary to all other parties.

     (4) The chairman may  -

(a) refuse the application for a review;

(b) vary the default judgment;

(c) revoke all or part of the default judgment;

(d) confirm the default judgment;

and all parties to the proceedings shall be informed by the Secretary in writing of the chairman's judgment on the application.

(5) A default judgment must be revoked if the whole of the claim was satisfied before the judgment was issued or if rule 8(6) applies. A chairman may revoke or vary all or part of a default judgment if the respondent has a reasonable prospect of successfully responding to the claim or part of it.

     (6) In considering the application for a review of a default judgment the chairman must have regard to whether there was good reason for the response not having been presented within the applicable time limit.

(7) If the chairman decides that the default judgment should be varied or revoked and that the respondent should be allowed to respond to the claim the Secretary shall accept the response and proceed in accordance with rule 5(2)."

7. Pausing there: it is clear that on the morning of 15 August time was about to expire for lodging the mandatory written review application containing the information required by rule 33(2). The question then would be, if such application were made, whether time for making the application should be extended under the just and equitable principle provided for in rule 33(1). At that stage, it seems to me, no properly constituted review application was before the Tribunal.
8. However, the Chairman did not immediately proceed to the assessment hearing. Instead, according to the affidavit of Lewis Addison, the trainee solicitor who was sent along as an observer, the Chairman, having read the letter, required any review application to be made prior to the assessment hearing. The hearing was adjourned for 15 minutes so that instructions could be taken. Mr Addison subsequently returned and made an oral application for review on the basis that the Respondent believed that the claim was for £300 rather than £15,000 and had taken a commercial view of such claim. As the Respondent had only recently been notified of the true extent of the claim it should be allowed to dispute it. I should add, from the draft response which is now before me, although it was not before the Chairman, that it is the Respondent's case that the Claimant was summarily dismissed for gross misconduct, that is, he was falsifying the number of panels which he produced, thus influencing his level of pay.
9. The Chairman considered that oral application and rejected it. He observed in his reasons for so doing that the Respondent had a history of failing to lodge their response in time to earlier claims. The claim itself had been clearly pleaded; there were allegations of breach of the statutory grievance procedure (I think that should be Statutory Disciplinary Procedure) leading to an automatically unfair dismissal. The Chairman concluded that it was too late at this stage to defend the issue; the company made a risk judgment on a commercial basis.
10. Having refused to review the default judgment the Chairman went on to assess the Claimant's compensation in the total sum of £13,246.06.
11. In this appeal Mr Monk submits that in refusing to review the default judgment the Chairman fell into procedural error. Mr Monk points out that the requirements for the written application for review under Rule 33(1) containing the information set out in Rule 33(2) is mandatory. No such application was before the Chairman. Consequently, he had no power to refuse to review the default judgment. On the face of it that submission appears deeply unattractive. It seems that the Respondent is seeking to rely on its own default in making application under Rule 33 to have set aside the Chairman's decision.
12. That said I must closely examine the structure of Rule 33. It seems to me clear that there was no review application before the Chairman. It was not open to him to require the Respondent's representative to make an oral application for review; conversely if he was so entitled then in carrying out the exercise of determining whether or not to allow the judgment to be set aside, the Chairman failed to consider the merits or otherwise of the Respondent's defence to the claim (see the observations of Burton P in Pendragon v Copus UKEAT/0317/05/CK 11 July 2005 and my own comments in The Pestle & Mortar v Turner UKEAT/0652/05/ZT 9 December 2005).
13. I raised with Mr Monk, in the absence of representation on behalf of the Claimant for understandable economic reasons, this question; did the Chairman at paragraph 6 of his Reasons in saying this:

"It is too late to make an application at this stage to defend the issue especially when the respondents have been fully aware of the case."

intend to convey that any application for an extension of time to lodge a written application for review ought not to be granted on the just and equitable principle?

14. Mr Monk points to the comments made by the Chairman on the affidavit of Mr Addison, dated 13 February 2006 in which he said:

"I was not aware or made aware of the efforts made by the respondents described in the affidavit to settle the matter; if I had been aware then I would almost certainly have set aside the default judgment."

15. I find that a curious observation since the copy of the affidavit which is before me gives no indication that the Respondent gave instructions to its solicitors to attempt a settlement of this claim. However, I accept Mr Monk's broad submission that it is unclear whether or not the Chairman was addressing the extension of time question under Rule 33(1) and, if he was addressing it, what answer he would give to it.
16. In these circumstances I am left to conclude that the Chairman did fall into error in purporting to dismiss a review application which was not properly constituted and was not before him. To that extent I shall allow the appeal and set aside the Chairman's judgment.
17. The question then arises as to what is to be done. It seems to me that the appropriate course, particularly in the absence of the Claimant's representative today, is not for me to exercise my discretion under section 35(1) of the Employment Tribunals Act 1996 in relation to the questions first whether it is just and equitable to extend time for a written application for review, none yet having been formally made and secondly, if it is, whether or not to grant that review, bearing in mind particularly the factors raised in Rule 33(5) and (6), again, considered and dealt with by Burton P in Pendragon.
18. In these circumstances I shall remit the matter to the Employment Tribunal. I shall direct that within 7 days of the seal date of this EAT's order the Respondent shall lodge a properly constituted written application for review with the Employment Tribunal. The application will then be considered by a different Chairman at Leicester. The issues will be first whether or not it is just and equitable to extend time for the application to be made and, secondly, if so, whether or not to grant the application and set aside the default judgment.