THE HONOURABLE LADY SMITH
Introduction
1.
Mr Greig’s claim of unfair dismissal against his former employers,
Shields Automotive Ltd, was dismissed and he was found to have acted
unreasonably in bringing and conducting the proceedings. By a judgment
registered on 10 March 2010, an Employment Tribunal sitting at Glasgow, Employment Judge R Gall, ordered that he pay the Respondent’s expenses,
restricted to the sum of £4,000.
2.
The ‘agent- client’ legal expenses incurred by Shields Automotive
totalled £21,460.20 excluding VAT. They have appealed against the
Employment Judge’s award, submitting that it is too low.
3.
We will, for convenience, continue referring to parties as Claimant and
Respondent.
Background
4.
Shortly stated, the Claimant’s claim for unfair dismissal was based on
an allegation that the reason for his dismissal was that he had made protected
disclosures, one in respect of racial discrimination and another in respect of
sexual harassment (as were his associated claims for deductions from wages,
bonus and pension contributions). He had less than one year’s service when his
employment came to an end.
5.
The Employment Tribunal was not persuaded that the Claimant’s departure
from the Respondent’s employment had anything to do with protected
disclosures. Indeed, they were not satisfied that any such disclosures were
ever made. They found that he had resigned from his post as general manager on
24 May 2008, after about six months, in circumstances where the Respondent had
reasonable grounds to dismiss him for misconduct. At paragraph 5 of their
judgment of 10 March 2010, they explain:
“5. The claimant was not regarded by the Tribunal as being at all
credible. The Tribunal did not accept that either of the alleged protected
disclosures said to have been made had in fact been made. It had regard in
particular to the general credibility of the claimant and to inconsistencies in
the claimant’s evidence together with the fact that the claimant had referred
to an email which he said constituted the protected disclosure in relation to
racial harassment when setting out his position in the claim form. No such
email existed. The claimant accepted that at the Hearing. The first mention
of protected disclosures had been made almost 3 months after termination
of the claimant’s employment when the deadline for lodging the claim was almost
at hand, notwithstanding the fact that the claimant had, prior to that time,
instructed solicitors who had interacted with the respondents.”
6.
They return to the matter of the Claimant’s credibility at
paragraphs 54, 55 and 60:
“54. The Tribunal did not accept the claimant’s evidence that he
had reported to the respondents the two matters which he said he had reported
to the respondents. This was not however a case where the Tribunal simply
preferred one party’s evidence to the other and had concluded, on balance, that
the claimant had not made the protected disclosures.
55. Rather, the Tribunal concluded that the position in this
case went beyond that. The Tribunal was of the view in relation to the report
said to have been made by the claimant to the respondents of racial harassment
having taken place, that the claimant could not have made this report as
alleged by him. Further, the Tribunal concluded that it must have been known
to the claimant both in making the claim and in giving his evidence at
Tribunal, that the alleged disclosure of racial harassment within the respondents’
organisation had not been made by him. The claimant had therefore in the view
of the Tribunal lied under oath and must have realised that he was lying under
oath.
60. In the circumstances, the Tribunal’s clear view was that
there had been no such disclosure and further that the claimant was fully aware
that no such disclosure had been made given the inconsistencies and
contradictions in his evidence and admissions made in cross-examination,
together with the weight and clarity of evidence to the contrary from other
witnesses.”
7.
Separately, they observed:
“The Tribunal heard substantial and entirely credible evidence
as to outlandish statements which the claimant was said to have made in the
workplace as to his own achievements in various fields and as to people he had
met and friendships he had. Whilst the claimant denied elements and aspects of
these statements which were aired in evidence, the Tribunal accepted that he
had made various claims as to his achievements, friendships and encounters with
well known individuals and that these were on balance and on the evidence
heard, unlikely to be true. The claimant was in general terms therefore not
regarded by this Tribunal as credible. That general impression informed the
Tribunal’s view on the evidence in relation to the making or otherwise of the
protected disclosures.”
8.
The Claimant accepted, at the expenses hearing, that he had made
allegations which were unfounded; he apologised for having done so.
9.
At the CMD on 31 October 2008, the Respondent’s agents had indicated
that they would be seeking an award of costs if the Claimant persisted with his
claim. Following the hearing, they wrote to the Claimant by letter dated 18
November 2008, warning him that they would be seeking a full award of costs.
Their letter included the following terms:
“… our clients … intention is to seek an Order for a full award
of costs because the evidence which we have recovered on behalf of our clients
indicates that your claim has been raised vexatiously. A Claimant is held to
have acted vexatiously if he brings a hopeless claim out of spite to harass his
employer or for some other improper motive.”
10.
They then set out that the Respondent’s position was that he had, at no
time, made any whistleblowing allegations. Thus, the Claimant had been clearly
and expressly warned that if he persisted in his claim and, as the Respondent
confidently predicted, it failed, they would have no hesitation in seeking an
award of expenses against him.
11.
The Tribunal had little hesitation in finding that the Claimant’s
conduct in bringing and conducting the proceedings was unreasonable.
12.
It is notable that the Tribunal concluded that the Claimant had not told
the truth in bringing his claim nor when giving evidence; he had lied under
oath.
13.
Turning to the Claimant’s financial circumstances, the Tribunal reached
its decision by having regard only to his income and outgoings. He had
provided information that his gross earnings for the 12 months beginning
in February 2010 would be £60,000–65,000. He also provided a list of
his monthly outgoings totalling £4303. At paragraph 17, in the section of their judgment dealing with the Claimant’s means, the Tribunal state:
“The claimant has monthly outgoings at present which total
approximately £4,300. Those outgoings are higher than was formerly the
case as the claimant and his wife are currently separated. The claimant’s wife
intends raising an action of divorce. Document 9 for the claimant was a letter
of 21 January 2010 from the claimant’s wife’s then solicitors intimating that
intention. The claimant’s wife has consulted fresh solicitors and instructed
them in connection with divorce proceedings. The list of outgoings includes
payments of rent for accommodation currently occupied by the claimant together
with support in respect of his wife and children. His wife does not work. There
are 3 children of the marriage aged 6, 4 and 2. Document 8 for the claimant
was a list of those monthly outgoings….”.
14.
The list of monthly outgoings was a manuscript document written by the Claimant
and included the following entries:
“Nursery £ 250
Food and Nappies – Family Allowance £1,000
Clothes for children £ 150
Gymnastics, swimming and golf lessons £ 60
Rent £ 654”.
15.
It also included entries in respect of his wife’s car loan, mortgage on
the former matrimonial home, insurances, Council Tax, and various utility bills
relating to the former matrimonial home totalling about £1,500.
16.
The Claimant also produced bank statement pages at the expenses hearing
which showed that he had withdrawn £3,000 (using a cash card) from his
bank on 21 January 2010 and withdrawn £1,500 ( again, using a cash card)
from his bank on 22 February 2010, three days before the hearing. He was left
with a balance in his account of £702.02 and the Tribunal concluded that
he had no savings. He advised the Tribunal that the £3,000 withdrawal was
money that he had paid to his wife.
17.
As the Tribunal records, at paragraph 19, the Claimant had capital
in the form of his reversionary interest in the former matrimonial home which
amounted to £135,000:
“The former matrimonial home in which the claimant’s wife
continues to reside at present is as anticipated as realising a sale price of
around £330,000. His secured loan of (sic) that property such that having
repaid the loan from the sale proceeds it is likely that around £135,000
will be the net proceeds.”
Relevant law
18.
The relevant parts of the Employment Tribunals (Constitution and
Rules of Procedure) Regulations Schedule 1 are:
“When a costs or expenses order may be made
This section has no associated Explanatory Memorandum
40—(1) A tribunal or chairman may make a costs order when on the
application of a party it has postponed the day or time fixed for or adjourned
a Hearing or pre-hearing review. The costs order may be against or, as the
case may require, in favour of that party as respects any costs incurred or any
allowances paid as a result of the postponement or adjournment.
(2) A tribunal or chairman shall consider
making a costs order against a paying party where, in the opinion of the
tribunal or chairman (as the case may be), any of the circumstances in paragraph (3)
apply. Having so considered, the tribunal or chairman may make a costs order
against the paying party if it or he considers it appropriate to do so.
(3) The circumstances referred to in paragraph (2)
are where the paying party has in bringing the proceedings, or he or his
representative has in conducting the proceedings, acted vexatiously, abusively,
disruptively or otherwise unreasonably, or the bringing or conducting of the
proceedings by the paying party has been misconceived.
(4) A tribunal or chairman may make a costs
order against a party who has not complied with an order or practice direction.
The amount of a costs or expenses order
This section has no associated Explanatory Memorandum
41—(1) The amount of a costs order against the paying party shall be
determined in any of the following ways —
(a) the tribunal may
specify the sum which the paying party must pay to the receiving party,
provided that sum does not exceed £10,000;
(b) the parties may
agree on a sum to be paid by the paying party to the receiving party and if
they do so the costs order shall be for the sum so agreed;
(c) the tribunal may
order the paying party to pay the receiving party the whole or a specified part
of the costs of the receiving party with the amount to be paid being determined
by way of detailed assessment in a County Court in accordance with the Civil
Procedure Rules 1998(1) or, in Scotland, as taxed according to such
part of the table of fees prescribed for proceedings in the sheriff court as
shall be directed by the order.
(2) The tribunal or chairman may have regard
to the paying party’s ability to pay when considering whether it or he shall
make a costs order or how much that order should be.
(3) For the avoidance of doubt, the amount of
a costs order made under paragraphs (1)(b) or (c) may exceed £10,000.”
19.
The following are of particular note. First, an Employment Tribunal
must consider making an award of expenses if it concludes that a party has
acted unreasonably in bringing and/or conducting the proceedings. The
Employment Tribunal so concluded in this case. The Tribunal, accordingly,
required to consider making an award of expenses. Secondly, if an Employment
Tribunal decides that an award of expenses should be made, it may have regard
to the paying party’s ability to pay but does not require to do so. As
observed by HHJ Richardson in Jilley v Birmingham and Solihull
Mental Health NHS Trust and Others UKEAT/9584/06/DA, a case
where the claimant had conducted herself unreasonably:
“44. Rule 41(2) gives to the Tribunal a discretion whether to
take into account the paying party’s ability to pay …
53. The first question is whether to take ability to pay into
account. The Tribunal has no absolute duty to do so. … In many cases it will
be desirable to take means into account before making an order; ability to pay
may affect the exercise of the overall discretion, and this course will
encourage finality and may avoid lengthy enforcement proceedings. But there
may be cases where for good reason ability to pay should not be taken into
account: for example, if the paying party has not attended or has given
unsatisfactory evidence about means.”
20.
Thirdly, an Employment Tribunal has the power to fix the amount of the
award, up to a limit of £10,000. The Employment Tribunal also has power
to remit the matter of the amount to be awarded as expenses for taxation – that
is, in Scotland, the matter may be remitted to the Auditor of the Sheriff Court, for determination by him. In that event, there is no upper limit.
The Tribunal’s Reasons
21.
Whilst having no difficulty in reaching the view that an award of
expenses should be made, the Employment Tribunal restricted the award.
22.
Their reason for restricting the award to £4,000 (less than one
fifth of the legal expenses incurred by the Respondent) is explained at
paragraph 80:
“80. The claimant has very little, if any, free income on a
monthly basis at present. His ability to pay costs is therefore not good.”
The appeal
Application for fresh evidence
23.
Two grounds were set out in the Notice of Appeal. The first was that
the Tribunal had acted perversely in that they had failed to have regard to a
relevant factor, namely the Claimant’s capital, represented by £135,000 in
the former matrimonial home. The second ground was that new evidence had
become available. The new evidence is summarised at paragraphs xii to xv and,
insofar as was relied on before us, was said to be:
·
Evidence given to the Tribunal by the Claimant about having paid
money to his wife from money withdrawn from the bank was not true; and
·
Evidence given to the Tribunal about his making payments to his
wife of money for childcare/ nursery fees was not true.
24.
The evidence had come to the notice of the Respondent via a private
investigator who had contacted them on 15 April 2010.
25.
By email dated 20 June 2011, the Respondent’s solicitor presented an
application to have the oral evidence of the Claimant’s wife Mrs Caroline
Greig, heard by this Tribunal. An affidavit from her, sworn on 17 June 2011, was attached to the application. The application was objected to for the
reasons set out in Mr Woolfson’s email dated 1 July 2011 and since the application came so late in the day, it was decided that it should be determined
after having heard oral submissions regarding it, at the appeal hearing.
Before turning to those submissions, we would, however, observe that, in his
email of 1 July 2011, Mr Woolfson stated, amongst other matters, in
relation to the allegation that the Claimant had misled the Tribunal regarding
his disposal of cash withdrawn from his bank account, that the Claimant “cannot
recall what, if anything, was stated during the costs hearing about the
withdrawals in question”.
26.
In support of the application, Mr Hardman explained that it could
not have been made earlier as the Claimant’s wife’s affidavit was not
available; it was only on 17 June 2011 that she had provided an affidavit.
There had been earlier unsuccessful attempts to contact her. It was only once
her affidavit was available that the Respondent could properly represent that
the fresh evidence they sought to present was apparently credible (see: Ladd
v Marshall [1954] 1 WLR 1489 and Employment Appeal Tribunal
Practice Directions paragraph 8.2). Although they had, previously, lodged
a review application, it was withdrawn at a time when the Claimant had stopped
making the agreed monthly payments towards payment of the award of £4,000
and could not have properly proceeded in the absence of the Claimant’s wife’s evidence
which they did not, at that time, have albeit that they had had an indication
from the private investigator of what it might be.
27.
Mr Woolfson opposed the application. He questioned whether the
fresh evidence was “apparently credible” as all that there was Mrs Greig’s
affidavit and there were “problems” with it. He referred to various parts of
it and sought to explain how her evidence might be challenged. He said that he
did not consider that the allowance of fresh evidence would be an appropriate
use of process. He referred to the case of Adegbuji v Meteor Parking
Limited UKEATPA/1570/09/LA and submitted that this
Tribunal was not the appropriate forum for the hearing of fresh evidence; the
appropriate procedure was to apply to the Employment Tribunal for a review.
The Respondent’s had chosen to withdraw their review application and could not
now proceed in this way. Mr Woolfson made a subsidiary motion that if the
fresh evidence was to be allowed, the Claimant should also be allowed to give
evidence.
Decision on application for fresh evidence
28.
Having adjourned to consider the application, we decided that, given the
unusual circumstances of this case, it should be allowed. We were mindful of
the views expressed by Underhill P in the case of Adegbuji to
the effect that where a party seeks to challenge the decision of an Employment
Tribunal on the basis of fresh evidence, the appropriate course of action will
normally be for him to apply to the Employment Tribunal for a review under
rule 34 of the 2004 Rules. However, the Respondent here had followed that
course but, for reasons which are entirely understandable, withdrawn their
application. It was only now that the Respondent was in a position to present
a case that the fresh evidence was apparently credible, the witness having very
recently sworn an affidavit. We would add that we reject Mr Woolfson’s
suggestion that an affidavit is not sufficient for that purpose. Further, we
were satisfied that the Respondent could not, on the information before us, be
criticised for the fact that the affidavit was not sworn at an earlier stage.
29.
We also granted Mr Woolfson’s motion that the Claimant should be
permitted to give evidence.
Fresh evidence
30.
We heard evidence from Mrs Caroline Greig and from the Claimant.
We found the following facts to have been admitted or proved.
·
The Claimant and Mrs Caroline Greig are spouses and have
three young children. On 13 November 2009, they ceased cohabiting as man
and wife although the Claimant continued living in the former matrimonial home
until 13 February 2010, when he left.
·
After leaving the former matrimonial home, the Claimant spent
some time living in ‘Bed & Breakfast” accommodation and some time living
with his mother. At some point he moved into other accommodation.
·
Divorce proceedings have now been raised and are pending in Glasgow Sheriff Court but they had not commenced as at the date of the expenses hearing.
·
The Claimant did not pay £3,000 to his wife in January or
February 2010.
·
As at 25 February 2010, the Claimant was not paying any
nursery fees for the children, nor was he paying his wife £1,000 per month
for nappies, food and other costs relating to them, nor was he paying £150
per month for their clothes, nor was he paying £60 per month for gymnastics,
golf and swimming lessons. The nursery fees had always been paid by his wife,
the Claimant’s approach being that it was her responsibility. She received
cash from him of £100 – 150 every couple of weeks or so after their
separation on February 13th 2010, depending on what he had in his wallet
although, as at 25 February 2010, the date of the Tribunal hearing, all
that she had received that month was cash of £40 which the Claimant gave
her on 13 February, when he left. She was paying the gymnastics fees.
·
The Claimant was not renting any property as at 25 February
2010.
·
The Claimant had no rental liability as at 25 February 2010.
·
The Claimant had not entered into any lease as at
25 February 2010, nor had he become liable to pay any deposit to any
landlord.
·
The monthly costs involved in paying the mortgage, Council Tax,
insurances, and utility bills in respect of the former matrimonial home, and
the car loan and insurance for the car driven by the Claimant’s wife were, as
at 25 February, of the order of £1,500.
·
The Claimant’s wife’s solicitor emailed the Claimant’s solicitor
on 26 February 2010 (the day after the expenses hearing) indicating that
his understanding of the outcome of discussions that had taken place between
solicitors earlier that week was that, in principle, the Claimant’s ongoing
liabilities would be that (a) he would continue to pay the monthly costs
relating to the former matrimonial home and the Claimant’s wife car as outlined
in the penultimate bullet point above i.e. costs totalling about £1500,
(b) he would pay £150 per week as interim aliment for the children
(in circumstances where all that had been paid since the Claimant left the
former matrimonial home, was £40), and (c) he would make a proposal
regarding ongoing maintenance for the Claimant’s wife herself. That email
stated: “If matters cannot be agreed in principle then my client reserves the
right to proceed straight to court in terms of an action of divorce ...”. It is
not known how the Claimant’s solicitor responded to that email.
·
The Claimant made a representation to the Tribunal of the nature
and extent of his outgoings as at 25 February 2010 by placing before them
a handwritten list which he had prepared on or about 24 February 2010.
·
That list was a misrepresentation. In particular, it represented
that the Claimant’s outgoings in respect of support of his wife and children
totalled almost £3,000 per month at that time. They did not. They
totalled no more than about £1,500. Further, it represented that he was paying
rent of £654 per month. He was not. He did not occupy rented property at
that time and had not entered into any lease.
·
At some point, the exact date of which is unclear but may have
been around 25 February 2010, the Claimant indicated his willingness to
pay his wife £150 per week in addition to the monthly support totalling
about £1,500, referred to above. He did not always make those payments or
make them timeously.
31.
It was suggested to Caroline Greig in cross examination that the Claimant
had “come to the house with £3,000 cash in an envelope on a Sunday towards
the end of January 2010.” No other details of that alleged event or of any
events said to have led up to it were put to her. She was adamant that no such
payment had ever been made. It was also put to her that at some point, an
agreement was reached between solicitors that the Claimant would pay
her £150 per week. She confirmed that there had been such an agreement
but reiterated that the money was not regularly paid. The agreement was not
said to have been reached by 25 February 2010 or prior thereto.
32.
We found Caroline Greig to be a credible witness. She gave her evidence
in a straightforward fashion, was not shown to be unreliable and none of the
points put to her in cross examination demonstrated that we should have any
reason to doubt her credibility. Indeed, Mr Woolfson made no submission
that she was not a credible and reliable witness. His approach was confined to
submitting that we should accept the Claimant’s version of events.
33.
The Claimant’s evidence regarding his liabilities and what was
represented to the Tribunal was vague, contradictory and confusing. He
prevaricated at times. We did not find him to be a credible or reliable
witness.
34.
He could not remember exactly what was said about the £3,000
withdrawal from his bank account, at the Tribunal hearing, although his
position ultimately seemed to be that it had been said to them that the money
had been paid to his wife. He asserted in examination-in-chief that, at a
discussion in “a guest house in Ayr” in January 2010, his wife had said she had
new things on order – curtains - and a bill for solicitor’s fees and she had no
money to pay for items and if he loved his children, he would have to pay for
them. She specifically requested £3,000. He said that he attended at the
matrimonial home with the cash in an envelope and put it on a table in the
lounge, beside a takeaway pizza menu. He was also keen to try to use the
opportunity to criticise, in his evidence, the state of the house and describe
the standard of his wife’s housekeeping in derogatory terms, an unimpressive
attempt which served only to demonstrate that he was ill-disposed towards his
wife. The money was, he said, in cash, because his wife would not give him her
bank details. He could not explain why he did not, in that case, write a
cheque. In cross examination, he added that his wife had said she
required £3,000 because she had run up debts and the money was also for
nursery fees.
35.
The Claimant’s explanation of his representations on the list of
outgoings he had put before the Tribunal was confusing. He referred to it
being “on the back of” the solicitors’ agreement that he would cover the
running costs of the house and pay his wife £150 per week, referring to
the email of 26 February 2010 from his wife’s solicitor, to which we refer
above. That is, he sought to rely on an agreement which post-dated the
hearing. He said that the nursery fees were to be paid out of the £3,000
without being specific as to how much of the £3,000 was for nursery fees,
although at one point he referred to the whole of it as being advance payment
for the nursery fees. Further, he accepted that there had been correspondence
between solicitors in which the request was made, on his behalf, for his son
not to be sent to nursery, because of his financial position. He accepted that
he was not actually paying the nursery fees as at the date of the hearing
before the Tribunal. He also said that he thought it was “given as read” that
everything on the list of outgoings that he put before the Tribunal was
correct. He also, at one point, said that his actual outgoings were higher.
At another point, he said that he paid all the bills to about £1500 and he
had given his wife £3,000. At some unspecified date, his mother had
handed over £300 to her, on his behalf, when his wife collected the
children. He could not remember when he had paid his wife the £3,000; he
would “go with” 21 January, which was the date that the money was taken out of
the bank. At another point, his evidence was to the effect that a number of
days had elapsed between the money being withdrawn and it being paid over to
his wife.
36.
We could not accept the Claimant’s evidence that he had given his
wife £3,000 in cash or his general assertion that he was incurring all the
items of expenditure on the list put before the Tribunal. First, the
allegation that his wife had demanded the payment for the purposes spoken to by
the Claimant in evidence had not been put to his wife in cross examination nor
had the details of the circumstances in which the money was alleged to have
been delivered to her nor had the allegation that she had refused to disclose
her bank details. Secondly, the Claimant’s evidence as to what the payment was
actually for was confused and internally contradictory – it could not, for
instance, all have been for nursery fees and, at the same time, have been for
nursery fees, solicitor’s fees and curtains. Thirdly, the items on the list
for those expenses covered by his wife’s solicitors’ email (household etc
expenses) totalling about £1,500 was not explanatory of his allegation
that he had made a global payment of £3,000 – quite apart from
anything else, the email postdates the hearing and shows that the agreement had
not been finalised as at 25 February. We would also observe that the
items for nursery, food etc, children’s clothes and gymnastics etc lessons
total a further £1460 and it was clear from the evidence before us
that the Claimant was not paying them as at the date of the hearing before the Tribunal.
Whatever may have been his ultimate commitment to providing support for his
wife and children, it was not shown to have amounted to almost £3,000 (as
is represented in the list put before the Tribunal) and was certainly not of
that order as at 25 February 2010. We also noted that although, in
evidence, the Claimant accepted that he had told the Tribunal, when they asked
him what had happened to the £3,000 he had withdrawn from the bank, that
he paid it to his wife, in Mr Woolfson’s written opposition to the fresh
evidence motion, it was stated that the Claimant could not remember what, if
anything, was said to the Tribunal about that matter.
37.
Regarding the withdrawal of £1500 cash from his bank on 22 February
2010, the Claimant said it was advance rental for a house he was “looking at”
at that time. He had, however, not entered into any lease. He said he had
entered into a “verbal agreement” in respect of a house in the country in
Ayrshire. He did not say where the house was, who the landlord was or give any
details of the alleged agreement. He did not go ahead with taking the house as
he was persuaded not to do so by his family. He was, he said, paying for Bed
& Breakfast accommodation in Ayrshire at the time of the hearing before the
Tribunal. He alleged that it cost £20 per day. He also said that he paid
“rent” to his mother, of an unspecified sum. He accepted that he was not,
however, paying rent of £654 per month. Whilst it was clear that,
whatever the Claimant’s outgoings in respect of accommodation, he was not
paying £654 in monthly rent and had not paid any rental deposit, we could
not reach any conclusion as to what truly had been the position regarding his
outgoings for accommodation as at the date of the hearing, given the
contradictions in the Claimant’s evidence, the manner in which it was given,
and the fact that none of his case on these matters had been put to his wife
when she was cross examined.
Submissions for the Respondent
38.
The first ground of appeal was that the Tribunal had failed to take
account of the Claimant’s ability to pay, adequately. They had reached a
perverse conclusion: Stewart v Cleveland Guest (Engineering) Ltd
[1994] IRLR 440 applied. The decision was shown to be fundamentally
wrong because the Tribunal had plainly ignored the Claimant’s capital in the
former matrimonial home, which amounted to £135,000. Whilst a Tribunal
was not bound to consider means, if it did, it required to take account of the
paying party’s whole means. The Claimant’s capital of £135,000 was
plainly a relevant factor.
39.
The second ground of appeal related to the fresh evidence and was the
basis of Mr Hardman’s primary submission, namely that this was a case in
which the only proper approach was to take no account of the Claimant’s means
because his evidence about them required, in all the circumstances, to be
viewed with suspicion. He referred in support of his submission, to the case
of Jilley v Birmingham and Solihull Social Work Department. The
evidence of Mrs Greig should be accepted. She had no “axe to grind”, her
evidence was consistent and it was clear. The Claimant’s evidence, on the
other hand, was characterised by prevarication, confusion and vagueness. No
account should, in the circumstances, be taken of his ability to pay.
40.
Mr Hardman’s motion was that we should uphold the appeal and remit
the case to the Tribunal with a direction that they remit the assessment of
expenses to the Auditor of the Sheriff Court.
Submissions for the Claimant
41.
Mr Woolfson, under reference to Piggot Bros & Co Limited
v Jackson [1991] ITLT 312, Yeboah v Crofton [2002] IRLR 634, McPherson v BNP Paribas [2004] IRLR 558, Retarded
Children’s Aid Society v Day [1978] IRLR 128, Jilley v Birmingham
and Solihull Social Work Department, and Stewart v Cleveland
Guest (Engineering) Limited, said that he thought that the judgment of
the Tribunal was far from being a perverse one. It was not to be assumed that,
just because they had not mentioned taking account of the Claimant’s capital in
the former matrimonial home, they had not in fact taken it into account. He
also, in apparent contradiction of that submission, suggested that it was of
little relevance because its value could not be used.
42.
The Tribunal had made an assessment of expenses and that was a matter
for the Tribunal of first instance. It would inequitable to expose the Claimant
to a further amount. It would have an enormous impact on him. This Tribunal
should be reluctant to interfere. So far as the fresh evidence was concerned,
the Claimant had acknowledged that he was wrong to state that he was paying
rent of £654 but he had been paying for Bed & Breakfast
accommodation. The Claimant was, he said, very clear that he was making global
payments to cover the costs over which questions had been raised. He had paid
a lump sum of £3,000 which was meant to be for nursery fees
(Mr Woolfson made no reference to the Claimant’s claim that the sum was
also to cover curtains and debts such as for solicitor’s fees) . He was
paying £150 per week. £300 was paid via his mother. Mr Woolfson was
concerned that “there was a cloud” over the handwritten list of outgoings and
said that he did not believe that we had heard evidence that showed that the Claimant’s
evidence of outgoings should not have been accepted by the Tribunal. The Claimant
was, he said, making global payments which, “in effect” covered all the items
on the list.
43.
Whilst at one point Mr Woolfson suggested that it would equitable
to refer the whole matter back to the Tribunal, his instructions ultimately
were that the Claimant wished the issue of his liability for expenses to be
determined by this Tribunal. It should not be remitted back to the Tribunal or
to the Auditor for taxation.
Discussion and Decision
44.
Having heard the fresh evidence and made the findings in fact to which
we refer above, we are readily persuaded that the Tribunal’s judgment cannot
stand. The nature and extent of the Claimant’s outgoings were a highly
material factor in the Tribunal’s reasoning (see: paragraphs 17 and 80)
but, unbeknown to the Tribunal, their considerations were based on a factual
hypothesis which was wrong. They were based on a list which contained
misrepresentations and was, to the extent of over £2,000 (£1460 re: family
outgoings and £654 re: rent), an exaggeration. We would refer, in that
regard, to our explanation above.
45.
Further, the Tribunal proceeded on the basis of the Claimant’s statement
that the £3,000 cash he had removed from his bank account had been paid to
his wife but, as we explain, that too was a misrepresentation. We would add
that, whilst no evidence was given regarding what, if anything, was said about
his withdrawal of £1500 three days prior to the hearing before the Tribunal,
we could not accept the Claimant’s explanation that it was to pay a rental
deposit. His evidence about that matter was too vague and uncertain. No
satisfactory explanation for withdrawal of that cash sum has been provided.
46.
As observed in Jilley, a Tribunal is not obliged to
take account of the paying party’s means. In all the circumstances, we
conclude that this is case in which no tribunal could properly reach a
conclusion as to the nature and extent of the Claimant’s means, given the
inherently unsatisfactory and misleading nature of his whole evidence about
that matter. We reject Mr Woolfson’s submissions – it is plain that had
the Tribunal had the whole picture before them, as completed by the fresh
evidence we heard, they could not have reached any firm conclusion about the
nature and extent of the Claimant’s means. That being so, this is a case where
the paying party’s ability to pay cannot be taken into account. The only
limitation to be applied to the liability for expenses is that it be assessed
on a party – party basis; that is the usual basis on which litigation expenses
are payable by one party to another and Mr Hardman did not make any submission
that some other basis should apply. It follows that the appeal falls to be
upheld on the fresh evidence ground alone.
47.
Turning to the second ground of appeal, we are also readily persuaded
that it is well founded. It is plain from paragraph 80, that the Tribunal
only had regard to the Claimant’s income and outgoings. They took no account
of his capital assets when reaching their decision. The Stewart v Cleveland example of perversity being where the response “that must be
wrong” is elicited, comes to mind (see: Stewart at
paragraph 33). We also observe that paragraph 26 of McPherson
v BNP Paribas, which was specifically relied on by Mr Woolfson,
cites circumstances where a discretion has been exercised “in disregard of the
principle of relevance” as being an example of perversity. Assessing a
person’s ability to pay involves considering their whole means. Capital is a
highly relevant aspect of anyone’s means. To look only at income where a
person also has capital is to ignore a relevant factor. We would add that we
reject Mr Woolfson’s submission to the effect that capital is not relevant
if it is not in immediately accessible form; a person’s capital will often be
represented by property or other investments which are not as accessible as
cash but that is not to say that it should be ignored. In any event, no case
was made to the Tribunal that the Claimant would have difficulty in realising
his interest in the house or using its value in some other way so as to meet
his liability for expenses. We, accordingly, uphold the appeal on this ground
also.
Disposal
48.
Whilst we are satisfied that the award made by the Tribunal was
inadequate, for the reasons explained above, we do not consider it appropriate
that we fix the amount to be paid by the Claimant. Nor, in all the
circumstances, do we consider that it would be appropriate for the Tribunal to
fix those expenses. It seems to us that this is a case where justice will best
be achieved by the expenses due being as taxed, on a party-party basis, by the
Auditor of the Sheriff Court. We will, accordingly, pronounce an order
upholding the appeal, setting aside paragraphs 2 and 3 of the
judgment of the Tribunal, substituting for them an order that the Claimant pay
to the Respondent the whole expenses occasioned to the Respondent by the Claimant’s
bringing of and conducting his claim before the Employment Tribunal, as taxed
on a party-party basis by the Auditor of the Sheriff Court, and remitting the
case to the Tribunal with a direction to remit the assessment of the expenses
due by the Claimant to the Auditor of the Sheriff Court, on the foregoing
basis.
