Appeal No. UKEAT/0538/11/ZT
EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX
At
the Tribunal
On
9 March 2012
Judgment handed down on 16 May 2012
Before
HIS HONOUR JUDGE PETER CLARK
MRS J M MATTHIAS
MRS L S TINSLEY
MR
K BAKER APPELLANT
TOTE
BOOKMAKERS LTD T/A TOTESPORT RESPONDENT
Transcript of Proceedings
JUDGMENT
HIS
HONOUR JUDGE PETER CLARK
1.
This is the full hearing of a costs appeal for which I gave permission
on the paper sift. The parties before the Birmingham Employment Tribunal were
Mr Baker, Claimant and Tote Bookmakers Ltd t/a Totesport, Respondent. We shall
so describe them. The Claimant brought various claims against the Respondent,
his former employer. All claims were disputed. The substantive hearing of
those claims took place before an ET chaired by Employment Judge Pauline Hughes
between 13-21 September 2010. By a Judgment with Reasons promulgated on 3
November 2010 the claims of unfair dismissal, disability discrimination and for
a protective award were dismissed. A claim for breach of contract succeeded,
with remedy adjourned. An appeal by the Claimant against those findings
adverse to him was rejected by HHJ David Richardson on the paper sift under EAT
rule 3(7). Accordingly, that judgment (“the Liability Judgment”) stands.
2.
The Respondent applied for its costs, limited to 75 per cent of costs
incurred in the proceedings. The total costs are estimated at about £120,000.
The ET made the order as asked, subject to a detailed assessment in the County
Court, by a costs judgment dated 15 July 2011, following a costs hearing held
on 21 March. That assessment has yet to take place, given the present appeal,
however we proceed on the basis that, under the ET costs order, the Claimant
faces a bill of approximately £90,000.
Background
3.
The Claimant commenced his employment with the Respondent on a permanent
basis in 1997. Later he was appointed Head of Machine Operations, notionally based
at their head office in Wigan but in fact working from home in Solihull. He travelled the country on business extensively, covering some 30,000 miles
each year.
4.
In 1998 he had major intestinal surgery and in 1999 bowel surgery. At
about that time he was diagnosed with MS (multiple sclerosis). That affected
his driving ability. On 4 October 2000 Linda Bellis, HR Director, following a
meeting between them on 28 September, wrote to the Claimant. She confirmed, as
permanent, the arrangement whereby he used his home as an office. She also
addressed his driving difficulties and the temporary arrangements made to
resolve that problem.
5.
In 2004 and 2006 he was hospitalised due to cardiac problems. However,
the medical evidence was that his MS did not present significant problems at
work. He continued working as before, clocking up the same annual mileage.
6.
In June 2007 Mr Beaumont, the Respondent’s Chief Executive decided that
a review of the Machine Operations should be undertaken against a background of
a potential buy-out of the Tote. The upshot was that the Head of Machine
Operations would henceforth be physically based at the Wigan head office. It
was the Claimant’s case that here the driver was Mr Beaumont’s antipathy to
home-working and the ET noted (Liability Judgment (LJ) para. 15.15) an email
from Mr Scanlon, his then line manager, to the Claimant dated 14 August 2007, in
which Mr Scanlon stated that Mr Beaumont “is dead against the principal (sic)
of anyone working from home”. Mr Paul Nicholls, now appearing on behalf of the
Claimant, drew particular attention to that email during the course of his
submissions to us.
7.
The Claimant was not prepared to be based at Wigan. The Respondent
insisted. In the event, he was dismissed, on grounds of redundancy, on 5 March
2009. He left with a severance package worth in the order of £70,000.
The Liability Judgment
8.
Material to the subsequent costs judgment the ET found:
(1) That at
the forefront of the Claimant’s case was the contention that his dismissal came
about as a result of a conspiracy orchestrated by Mr Beaumont due to his
dislike for home-working and due to the Claimant’s disability. The ET firmly
rejected the Claimant’s case on this aspect of the matter (LJ, para. 8).
(2) They did
not find the Claimant to be a credible witness; he had a propensity to distort
the facts to suit his arguments (para. 9). By way of example, they rejected
his evidence that requiring him to work from Wigan involved removing a
reasonable adjustment (working from home) to take account of his MS.
(3) Whilst it
was common ground that the Claimant was disabled by reason of his cardiac
condition and MS, an issue arose as to whether he was also disabled by reason
of depression, a mental impairment, following the Respondent’s decision to move
his base to Wigan. The ET resolved that issue in favour of the Claimant.
(4) The
Claimant was fairly dismissed by reason of redundancy (LJ, para. 51).
(5) All claims
of direct/disability-related discrimination, victimisation and of failures to
make reasonable adjustments contrary to the Disability Discrimination Act
1995 were dismissed.
(6) The
protective award claim was abandoned by the Claimant and the Respondent
conceded that by making a payment in lieu of notice rather than giving
contractual notice it was in breach of contract. The resulting loss consisted
of (a) loss of health care cover (conceded by Respondent) and (b) pension loss;
the only remaining issue as to remedy.
The Costs
Judgment
9.
The Respondent limited its costs application to 75 per cent of the costs
incurred to cover all of the disability discrimination complaints (but not the
fact of disability) and so much of the unfair dismissal complaint as related to
the Claimant’s conspiracy theory (which put in issue the redundancy reason for
dismissal advanced by the Respondent).
10.
The ET was referred to a number of authorities including Marler v
Robertson [1974] ICR 72 (NIRC), and Yerrakalva v Barnsley MBC
(EAT/0231/10 Underhill P); see now the later judgment of the Court of Appeal
[2012] IRLR 78 and Daleside Nursing Home v Matthew (EAT/0519/08
Wilkie J).
11.
Applying ET rules 40-41 the ET held:
(1) The
Claimant had advanced allegations in support of his allegations of conspiracy
and disability discrimination which were, as he knew or ought to have known,
untrue. Some of the allegations made were vexatious: overall these allegations
were wholly unreasonable.
(2) The
Claimant’s evidence as to his means was wholly inadequate. Someone with his
background (the ET noted; LJ para. 8; that he had worked at a senior level in
an international bank prior to working for the Respondent; Mr McCluggage, who
has represented the Respondent throughout, told us that he had been
Vice-President and Managing Director of a merchant bank in the City of London)
would have a substantial portfolio of investments. The ET took into account
his redundancy package from the Respondent and the fact that he could deploy
£50,000 worth of legal representation in these proceedings through a legal
insurance policy.
(3) In
conclusion, it was unacceptable that parts of the Claimant’s evidence given at
the main hearing was untruthful; he had behaved unreasonably in the conduct of
the proceedings; it was appropriate to make an order for costs in favour of the
Respondent.
(4) As to the
amount of that award, the ET entirely accepted the Respondent’s case that only
25 per cent of its costs were attributable to defending the tenable parts of
the Claimant’s case, indeed that apportionment was, in their view, generous to
the Claimant. Accordingly the ET awarded 75 per cent of the Respondent’s
costs, subject to a detailed assessment in the County Court.
The Costs
Appeal
12.
It remains the position that costs orders in the ET are exceptional: see
Lodwick v Southwark LBC [2004] ICR 884. However, the power to
order costs is provided for in ET rules 40-41 and an appeal against a costs
order will be doomed to failure unless that order is vitiated by an error of
legal principle (per Mummery LJ Yerrakalva (CA) para. 9).
13.
In challenging this ET costs order Mr Nicholls first seeks to unpick the
ET’s reasoning in the Liability Judgment. He contends that the ET there
overstated the Claimant’s reliance on the so-called conspiracy theory. We
disagree. Mr McCluggage has taken us to the Claimant’s witness statement put
before the ET at the main hearing, in which he speaks of a “totally sham
process” (para. 43); “the entire (pre-dismissal) consultation process… was a
premeditated act by Respondent… (and) was a sham” (para. 53); “part of the
conspiracy I was facing” (para. 92); the Respondent engaged in a ‘duplicitous’
process (para. 115). In these circumstances the ET was entitled to make a
judgment on the case expressly advanced by the Claimant and, as the judges of
fact, to reject it.
14.
In relation to the direct/disability related/victimisation claims Mr
Nicholls seeks to draw a distinction between those allegations which failed at
the first Igen v Wong hurdle (LJ para. 41) and those which the ET
found failed in the light of the explanation given by the Respondent (LJ para.
42), thus indicating that the Claimant at least raised a prima facie
case so far as those three allegations were concerned. We think that is a
misreading of para. 42; the ET found that, in the light of their findings of
fact, there was no less favourable treatment of the Claimant on the prohibited
grounds.
15.
As the Claimant’s credibility, there are a number of findings in the
Liability Judgment (see paras. 8, 9 and 15.2, 15.32 and 15.42 and 15.40) where
the Claimant’s evidence was rejected by the ET. At Costs Judgment para. 12 the
ET articulated the basis on which they had, implicitly rejected his evidence in
those respects. This was not a case of a party holding a genuine but mistaken
belief.
16.
We bear in mind the recent observations of the Court of Appeal in Arrowsmith
v Nottingham Trent University [2012] ICR 159 (per Rimer LJ, paras.
32-33) that Daleside lays down no point of principle of general
application; that where a party lies about a central allegation in the case an
award of costs must follow. Each case will be fact-sensitive.
17.
In the present case we are satisfied that the ET took into account, as
it was entitled to do, its earlier findings as to the Claimant’s credibility,
but did not fall into the legal error of concluding that an award of costs
necessarily followed. Its conclusion in the present case cannot be
characterized as being obviously wrong.
18.
An ET is not bound to take into account a party’s means to pay costs but
in the present case such evidence as the Claimant saw fit to give was taken
into account. That the ET was correct in finding the Claimant’s evidence as to
means wholly inadequate (CJ para. 15) is borne out by the Claimant’s own
original grounds of appeal (Mr Nicholls subsequently prepared summary
grounds). At para. 20.15 he states that he has two large mortgages, one for
£451,367 (on his UK home) and a second from Santander for £400,000 on his
property in Spain. Those mortgages were taken out, Mr Nicholls told us on
instructions, in 2004 and 2006 respectively, when interest rates were higher
than today. In these circumstances, given the Claimant’s employment before
joining the Respondent, it is unsurprising that the ET inferred that he had a
substantial portfolio of investments. It seems to us inherently unlikely that,
even in the more liberal lending regime of those pre-Lehman Brothers days, the
banks would advance loans totalling £850,000 on the basis of a salary which,
following complaints by the Claimant, ranged from £45,675.17 on 1 October 2004
to £61,920 on 1 October 2006 (according to the Claimant’s own chronology in
this appeal).
19.
In summary, we are not persuaded by Mr Nicholls that any error of law is
shown in the ET’s approach to costs. The ET was careful not to take a retrospective
view of the Claimant’s case, save insofar as their primary findings of fact
were based on the whole of the evidence which they heard and those findings
permissibly informed their judgment as to whether in part although not in
whole, the bringing and conducting of these proceedings was unreasonable.
Based on those findings, an award of 75 per cent costs was a permissible
conclusion, bearing in mind what they had heard (and not heard) from the
Claimant about his means. It is not for us to tinker with such an
apportionment: see Yerrakalva, para. 49, per Mummery LJ.
Disposal
20.
It follows that this appeal fails and is dismissed.
