United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MR MARTIN FODDER (of Counsel) (appearing via the Bar Pro Bono Unit)
For the Respondents	MR MATTHEW BRADLEY (of Counsel) Instructed by Hertfordshire County Council Legal Services County Hall Pegs Lane Hertford Herts SG13 8DE


 


SUMMARY

PRACTICE AND PROCEDURE: Striking-out/dismissal / Review

Non-compliance with unless order. Automatic strike-out under ET Rule13(2). Additional strike-out order under Rule 18(7)(e) a nullity. Whether automatic strike-out reviewable – if so, whether CPR 3.9 factors need to be applied. Failure to do so rendered review decision erroneous. Appeal allowed; case remitted for review hearing.


 


HIS HONOUR JUDGE PETER CLARK

1. There are before me today two appeals, brought by Mr Neary, the Claimant before the Watford Employment Tribunal. The first is an appeal against the Employment Appeal Tribunal order made by the Deputy Registrar and seal-dated 28 July 2008, granting the Respondent an extension of time for filing an answer to the Claimant's substantive appeal (ARO).
2. The second is the substantive appeal brought against two orders made by Employment Judge Mahoney on 8 October 2007; the first is an order refusing the Claimant's application for a review of a strike out order, that is automatic strike out under Employment Tribunal Rule 13(2), following the Claimant's non-compliance with an unless order made by the same Employment Judge on 5 September 2007 (the Review Order); the second is an order made under Rule 18(7)(e) striking out the Claimant's claim for non-compliance with an Employment Tribunal Order (the strike out order).
3. I can deal shortly with the ARO. It is not pursued by Mr Fodder and accordingly I shall dismiss it.

History

4. I begin with the chronology of relevant events leading up to the review and strike-out orders made by Employment Judge Mahoney. The Claimant obtained positions as a supply teacher in schools falling under the aegis of the Second Respondent, Hertfordshire County Council, the relevant LEA, between 7 September 2006 and 2 February 2007. On that day his provisional offer of supply teaching work at St Alban's Girls' School whose Governing Body is the First Respondent to these proceedings, was withdrawn.
5. On 28 February 2007 he commenced these proceedings by a form ETI alleging disability discrimination and sexual orientation discrimination against these Respondents. The claims were resisted.
6. On 31 July a CMD took place before a then Chairman sitting alone, Mr R G Griffiths. Prior to that hearing the Respondents' representative, Ms Donner, had prepared a draft CM order and a Request for Further and Better Particulars (further information) of the form ET1 pleading (the Request) dated 5 July.
7. At the CMD Mr Griffiths made various orders, later contained in a written order dated 22 August (the CMD Order). Among other directions the Chairman granted leave to the Respondents for the Request, deleting paragraphs 4 and 6 of the Request and ordered the Claimant to respond by 14 August 2007. A copy of the Request, as varied, was not attached to the CMD Order.
8. The Claimant did not answer the Request by 14 August and on 16 August the Respondents applied to the Employment Tribunal for an unless order requiring him to answer the Request by 24 August. That application came before Employment Judge Mahoney on 5 September and he made an unless order. Under the terms of that order, which referred back to the CMD Order, the Claimant was required to provide the further information ordered by 26 September, failing which his claim would be struck out, in short, under Rule 13(2), to which I shall return.
9. Further, on 5 September, Employment Judge Mahoney directed that a PHR would be held in this case on 15 November 2007. The Claimant did not provide the further information ordered by 26 September. He applied, unsuccessfully, for a postponement of the PHR on 8 September. He was then teaching in Germany. However, on 26 September 2007 he faxed the Employment Tribunal, contending that the outcome of Mr Griffiths' CMD was confusing and then said this:

"I did get an Unless Order a week or so ago telling me that the 26th i.e. today was the day agreed for compliance with the Order. But WHAT Order? And which parts of it are to be complied with by today?"

10. The matter came back before Employment Judge Mahoney on paper on 8 October, when he made the strike out and review orders the subject of the substantive appeal now before me. I shall set out in full the Judge's reason for the Review Order:

"The Claimant's application for a review of the strike out order is refused. The Claimant admits receiving the Tribunal's Unless Order dated 5 September 2007, which clearly states at paragraph 2 the order to be complied with. Further the Claimant was present when the initial order was made. In those circumstances, the failure of the Claimant to comply justifies striking out his claim."

11. The strike out order under Rule 18(7)(e) is self-explanatory. On 19 October 2007 the Claimant sought reasons for the strike out, or more likely the review order; that letter is not before me.
12. At all events, on 25 October the Employment Tribunal responded. Judge Mahoney there said:

"The reasons for the strike out order have already been supplied to the Claimant by the Tribunal's letter dated 8 October 2007."

As a result of the claim being struck out, one way or the other, the PHR fixed for 15 November was aborted.

13. On 19 November the Claimant entered a home-made Notice of Appeal. That was rejected under EAT Rule 3(7) by Underhill J for reasons stated in the EAT's letter of 21 December. Dissatisfied with that outcome the Claimant exercised his right to an oral hearing before a Judge under Rule 3(10). That hearing took place before me on 26 June 2007, on which occasion the Claimant had the benefit of representation by Mr Martin Fodder of Counsel under the ELAAS pro bono scheme.
14. Mr Fodder applied for permission to amend the grounds of appeal in terms of a draft which he had prepared. On the basis of those amended grounds I permitted the appeal to proceed to this all parties Full Hearing.

The Strike Out Order

15. I am satisfied that the strike out order made under Rule 18(7)(e) is a nullity and must be set aside. I say so for a number of reasons. First a strike out order under Rule 18(7)(e), for non-compliance with an order (or P.D) can only be made at a PHR or a Hearing (Rule 18(6)). The PHR in this case, fixed for 15 November, never took place. There was no Hearing, as defined in Rule 26, on 8 October. The order was made on paper. I should also draw attention to Rule 17(2) which provides that orders and Judgments listed at Rule 18(7) may not be made at a CMD. Secondly, no notice, as required by Rule 19(1) was sent to the Claimant before the strike out order under Rule 18(7)(e) was made on 8 October. Thirdly, and in any event, the claim stood automatically struck out under Rule 13(2) following non-compliance with the unless order made on 5 September. There was no claim to strike out under Rule 18(7)(e) as of 8 October. It follows that I accept grounds 2(a)-(e) of the amended grounds of appeal. Mr Bradley, on behalf of the Respondents, does not argue to the contrary.

The Review Order

16. This lies at the heart of this appeal. As I understand Judge Mahoney's reasons contained in the Employment Tribunal's letter of 8 October and recited earlier, the Judge treated the Claimant's letter of 26 September as an application for a review of the automatic strike out resulting from his non-compliance with the Judge's unless order of 5 September 2007.
17. It is convenient at this point to set out the provisions of Rule 13(2), so far as is material:

"An order may also provide that unless the order (ie an order made under the Rules; see Rule 13(1)) is complied with, the claim ... shall be struck out on the date of non-compliance without further consideration of the proceedings or the need to give notice under Rule 19 or hold a PHR or Hearing."

Thus the consequences of failing to comply with an Employment Tribunal unless order are draconian. Unlike a Rule 18(7) strike out there need be no notice to the Claimant and no hearing of any sort; the claim automatically stands struck-out for non-compliance. What steps, if any, can a party take to obtain relief from the sanction of automatic strike-out?

18. The first question is whether an automatic strike-out under Rule 13(2) is capable of review under Employment Tribunal Rules 34-36. That question arose directly for determination by a full division of EAT on which I sat in Uyanwu - Odu v Schools Office Services Ltd (UKEAT/0294/05/ZT, 5 October 2005). Rule 28(1) draws a distinction between a 'judgment', which is, among other things, a final determination of the proceedings and an 'order, which may be issued in relation to interim matters and will require a person to do or not do something. That distinction is potentially material here, because Rule 24(1) provides that whereas a judgment (as well as certain decisions) is reviewable by the Employment Tribunal, other orders are not.
19. In Uyanwu – Odu, paragraph 25, we accepted a submission made on behalf of the appellants that a Rule 13(2) unless order amounts to a conditional judgment. It becomes a final determination of the proceedings if the party fails to comply with the underlying order. It is, in these circumstances, capable of review.
20. In this appeal Mr Bradley raises the issue as to whether Judge Mahoney's review order was properly made under Rule 35 or whether he revisited his unless order under Rule 10(2)(n); the power to vary or revoke other orders. Mr Fodder submits that the automatic strike out was capable of review.
21. Having reconsidered the point I see no reason to depart from my approach in Uyanwu - Odu. An unless order, when made (here, on 5 September) is an order within the meaning of Rule 28(1)(b) which is not capable of review by virtue of Rule 34(1). However, once the sanction of strike-out automatically takes effect following non-compliance that is a final determination of the proceedings under Rule 28(1)(a) allowing of a review application under Rules 34-36.
22. I derive some support for that view from the judgment of Elias P in EB v BA (UKEAT 0139 and 0138/08/DM, 4 July2008). In that case, two issues arose for determination before the Employment Tribunal. First, whether the Claimant was in breach of an unless order; secondly, if so, whether she should have relief from sanction (automatic strike-out). Having answered the first question in the affirmative the Employment Judge proceeded to hold a review hearing. At paragraph 19 of his judgment in that case the President referred to a passage in my judgment in Uyanwu - Odu without dissent.
23. I therefore conclude that Judge Mahoney was entitled to treat the Claimant's fax of 26 September as an application for review of the automatic strike-out. I should add that in practice the point is academic, since even if the automatic strike-out retains the character of an order not susceptible to review, the Employment Judge has power under Rule 10 to grant relief from sanction. In addition to Rule 10(2)(n), to which Mr Bradley referred me, I note that Rule 10(2)(e) permits the Judge to extend any time limit, whether or not expired. That is effectively the form of relief sought by the Claimant in his review application.
24. Perhaps the correct approach to an automatic strike out under Rule 13(2) can be put in this way. It is open to a party to apply for a review. That application will be first considered by a Judge on paper (Rule 35(3)). If he considers that there are no grounds for the [strike-out] to be reviewed under Rule 34(3) or there is no reasonable prospect of the strike-out being varied or revoked he will dismiss the application. That is effectively what happened in this case by Judge Mahoney's review order. Alternatively, the matter will proceed to a review hearing under Rule 36. The question, both at the initial paper application stage and later at the review hearing focuses on whether the party in default ought to be granted relief from sanction; the critical question in this appeal to which I now turn.

Relief from Sanction

25. In civil proceedings the effect of non-compliance with an unless order has long resulted in the action coming to an end without more. See the historical analysis by Moore-Bick LJ in Marcan Shipping (London) Ltd v Kefalas [2007] 3 AER 365, paragraph 11, going back to Whistler v Hancock [1878] 3 QBD 83.
26. Under the Civil Procedure Rules (CPR), Part 3.8 provides that where a party has failed to comply with among others a court order (including an 'unless' order) that order has effect unless the party in default applies for and obtains relief from sanction.
27. CPR 3.9 is headed 'Relief from Sanctions' and provides as follows:

"(1) On an application for relief from any sanction imposed for a failure to comply with any rules, practice direction or court order the court will consider all the circumstances including--(a) the interests of the administration of justice; (b) whether the application for relief has been made promptly; (c) whether the failure to comply was intentional; (d) whether there is a good explanation for the failure; (e) the extent to which the party in default has complied with other rules, practice directions, court orders and any relevant pre-action protocol; (f) whether the failure to comply was caused by the party or his legal representative; (g) whether the trial date or the likely trial date can still be met if relief is granted; (h) the effect which the failure to comply had on each party; and (i) the effect which the granting of relief would have on each party.

(2) An application for relief must be supported by evidence."

A question raised in this appeal by Mr Bradley is the extent to which, if at all, the specified factors in CPR 3.9 must be considered by an Employment Judge or Tribunal, whether at the preliminary Rule 35 stage or at a review hearing. The point is not free from Employment Appeal Tribunal authority.

28. In Maresca v Motor Insurance Repair Research Centre [2005] ICR 197 an Employment Judge summarily dismissed a review application after the claim was struck out for non-compliance with an order for disclosure. It was not an 'unless' order. On appeal Rimer J, allowed the appeal, holding that in dismissing the review application the Judge had misdirected herself in failing to have regard to all the factors required to be considered by CPR rule 3.9, whilst making it clear that CPR 3.9 was not implicitly incorporated into the Employment Tribunal Rules (paragraph 37); nevertheless, since the express incorporation of the overriding objective into the then 2001 Employment Tribunal Rules, his Lordship agreed with the view I expressed in Goldman Sachs v Montali [2002] ICR 1251 that Employment Tribunals must now exercise their powers under The Employment Tribunal Rules in accordance with the same principles which apply under the CPR. He concluded that in failing to take account of all relevant factors under CPR 3.9 the Judge fell into error. The matter was remitted for a full review hearing.
29. That approach has since been consistently followed at EAT level; see BSM v Fowler (UKEAT/0059/06/ZT, 24 February 2006) at paragraph 11 of my judgment; Royal Bank of Scotland v Soper (UKEAT/0080/07/LA, 1 May 2007), para 15, per Cox J; McGuire v Centrewest London Busses Ltd (UKEAT/0576/06/DM, 4 May 2007), my judgment, para 23 (where reference is made to British Coal Corporation v Keeble [1997] IRLR 336, Janet Smith J); Tisson v Telewest Communications Group Limited (UKEAT/0607/07/LA 19 February 2008), per Beatson J, paragraph 10 and EB v BA (ibid.), paragraph 25. In both Tisson and EB v BA the Employment Judges considered the factors listed in CPR 3.9 in arriving at a conclusion upheld on appeal. In Maresca, BSM v Fowler, RBS v Soper and McGuire they did not; those appeals were allowed.
30. Faced with that consistent line of authority Mr Bradley submits, if it is necessary for him to do so, that Maresca and the subsequent authorities cited were wrongly decided because in none of those cases was the Court of Appeal decision in LB of Southwark v Afolabi [2003] IRLR 220 cited. One issue in Afolabi was whether the Employment Tribunal was wrong in law to exercise its discretion to extend time under s68(6) Race Relations Act 1976 (the just and equitable extension) in circumstances where the relevant claim of unlawful discrimination was brought some nine years after the events complained of. Peter Gibson LJ (with whom Sedley and Rix LJJ agreed on this issue) said, para 33:

"Nor do I accept that the ET erred in not going through the matters listed in s33(3) of the 1980 [Limitation] Act. Parliament limited the requirement to consider those matters to actions relating to personal injuries and death. Whilst I do not doubt the utility of considering such a checklist (or that in CPR 3.9(1)), in many cases I do not think it can be elevated into a requirement on the Employment Tribunal to go through such a list in every case, provided of course that no significant factor has been left out of account by the Employment Tribunal in exercising its discretion ..."

The reference to s33(3) Limitation Act is a reference to the approach of Smith J in Keeble, where she invoked the factors there set out in considering the just and equitable discretion to extend time under the discrimination statutes.

31. The question for me is whether the Maresca line of authority conflicts with what was said in Afolabi. In my opinion it does not; to explain that conclusion it is useful to review some of the Court of Appeal authorities on the direct application of CPR 3.9 in the civil jurisdiction. In Bansal v Cheema (CCRTI 99/1245/B1. 2 March 2000) Brooke LJ, in considering the application of CPR 3.9(1) said, at para 22:

"... it is essential for courts, exercising their discretion on an occasion like this, to consider each matter listed under CPR 3.9(1) systematically in the same way as it is now well known that courts go systematically through the matters listed when an application is made for the exercise of the court's discretion under s33 of the Limitation Act 1980."

His Lordship continued,

"... there is no sign in the judge's brief ex tempore judgment that he took(?) into account the matters which he was bound to take into account under the rules which are set out in 3.9(1)(g), (h) and (i)."

The appeal in Bansal was allowed.

32. Brooke LJ repeated that guidance in Sayers v Clarke Walker [2002] 3 AER 490, paragraph 22, and Woodhouse v Consignia Plc [2002] 2 AER 737, para 33, an approach endorsed by Moore-Bick LJ in Marcan, paragraph 28, and adopted by Arden LJ in Stolzenberg v CIBC Mellon Trust Co Ltd [2004] EWCA Civ 827, para 155. Her Ladyship went on to observe in that case, paragraph 167, that the fact that an unless order has been made inevitably means that there is an additional factor to consider.
33. In Jones v Williams [2002] EWCA Civ 897, Buxton LJ said, paragraph 26,

"... before taking the step of, in effect, non-suiting the Defendant, it was necessary for him [the first instance Judge] in accordance with guidance given on a number of occasions by this court, most recently in the case of Bansal ... to consider the criteria set out in ... CPR R 3.9 relating to the circumstances relevant to relief from sanction.

I am far from saying that it is incumbent on a judge ... to go pedantically through this list and say, item by item, what his view of it was ... However, if one looks at that list it becomes apparent that there is one striking element in the list that the judge did not refer to and which, in my judgment, has to have considerable weight. That is item (i), the effect which the granting of relief would have on each party..."

That omission led to the appeal being allowed, Hale LJ agreeing entirely with the judgment of Buxton LJ. The purist may thus detect a difference between the structured decision-making approach (see Woodhouse, paragraph 33) of Brooke LJ, requiring the Court to consciously go through all the items in the CPR 3.9(1) list before arriving at a conclusion on whether relief from sanction ought to be granted and the views of the Court in Jones v Williams and Afolabi that what is important is that the first instance Judge does not, on the face of his reasons, leave out of account a material factor listed in the Rule.

34. It seems to me, respectfully, that the apparent differences in approach can be reconciled. Whilst it is necessary for the Judge to consciously consider all nine factors in CPR 3.9(1), if in his reasons he omits to mention one or more of the nine factors he will only fall into error if the omission is relevant to the facts of the particular case. If it has no application he will not be corrected on appeal simply because he has failed to mention all those factors. That accords with the well-established principles for interference on appeal with a case management decision. In this jurisdiction the approach based on Wednesbury principles was formulated by Arnold J in Bastick v James Lane [1979] ICR 778, approved by the Court of Appeal in Carter v Credit Change Ltd [1979] ICR 908; has the Employment Tribunal taken into account an irrelevant factor or failed to take into account a relevant factor or otherwise reached a perverse decision?

The present case

35. Mr Bradley submits that even if Judge Mahoney was obliged to consider the CPR 3.9(1) factors (and I am satisfied that he was), he did so in arriving at his conclusion that the review application failed at the preliminary, R 35 stage. Thus no error of law is evident in this appeal.
36. I am unable to accept that submission. Invited to provide further reasons, Judge Mahoney was content to rely on the reasons given in the Employment Tribunal's letter of 8 October 2007. I have earlier set them out in full. Looking at those reasons, in the light of the CPR 3.9(1) factors, I accept Mr Fodder's submission that the Judge failed to take into account those factors to the extent that no consideration was given to the Claimant's explanation for non-compliance with the unless order, that he was confused as to precisely what he was required to do and further whether he consciously intended to breach the order (3.9(1)(c) and (d)), nor has consideration been given to factors (h) and (i). Those were material omissions, in my judgment.
37. Nevertheless, contends Mr Bradley, it is open to me, exercising my powers under s35(1) ETA 1996) to go through the CPR 3.9(1) exercise and conclude that the Claimant's review application provides no grounds for the automatic strike out to be reviewed, alternatively that there is no reasonable prospect of the decision being varied or revoked (Rule 35(3)). Yet further, that the Judge's decision to summarily dismiss the (deemed) review application was plainly and unarguably correct; see Dobie v Burns International [1984] ICR 812.
38. In support of those alternative ways of supporting the decision below, Mr Bradley invites me to consider the procedural history and to reject the Claimant's explanation that he was confused. He also invokes the careful reasoning of Underhill J at the Rule 3(7) stage. As to the latter point, I wish to make it clear that a subsequent hearing under Rule 3(10) is a fresh look at the appeal. The EAT Judge hearing an oral application is in no way bound by the paper sift views expressed by another Judge. Equally, at a subsequent full hearing the Judge or division hearing both parties may well form a different view to that of the earlier Judge.
39. As to the prospective merits of the review application I am unable to say, applying the CPR 3.9(1) factors, that it fails the test under R 35(3). Before permitting the automatic strike out to stand I am satisfied that an oral review hearing is required at which evidence may be heard.
40. In allowing this appeal I am far from saying that, after proper consideration of all the relevant factors, relief from sanction will necessarily follow. I refer to the outcome in Tisson, by way of example, subject to this observation; Tisson appears to have proceeded on appeal on the basis that the relevant order was a strike out order made under Rule 18(7) on 1 May 2007, when in fact a seven day unless order was made on 18 April and not complied with. It follows that on the facts of that case the claim was automatically struck out under Rule 13(2) on 25 April, prior to the strike out order made on 1 May.

Disposal

41. This appeal is allowed and the Claimant's review application is remitted for hearing by a different Employment Judge to be appointed by the Regional Employment Judge (who may, herself, hear the matter if thought appropriate); see Tisson. I bear in mind that a PHR was listed for hearing in this case and not proceeded with in light of Judge Mahoney's Orders of 8 October 2007. It will be a matter for the Regional Employment Judge to determine, following representations by the parties, as to whether the review hearing should be combined with the originally proposed PHR (which was to consider, among other issues, whether the claims fell to be struck out under Rule 18(7)(b)) or whether the hearings should be sequential.