United Kingdom Employment Appeal Tribunal

APPEARANCES

 

For the Appellant	MS JESSICA SIMOR (One of Her Majesty's Counsel) Instructed by: Cubism Law 1 Plough Place London EC4A 1DE
For the Respondent	MR ANDREW SHORT (One of Her Majesty's Counsel) Instructed by: Hogan Lovells International LLP Atlantic House Holborn Viaduct London EC1A 2FG


 


THE HONOURABLE MR JUSTICE KERR

Introduction

1. This is an appeal against a decision of the Registrar of this Appeal Tribunal, made on 3 January 2017, refusing to allow the appeal to proceed out of time. In her reasons she pointed out that the deadline for an appeal in this case was 13 September 2016 and that the appeal documents had, it was said, been dispatched to this Appeal Tribunal on 2 September but had, as she put it, "inexplicably … appeared back in the solicitor's in-tray without envelope"; that was on 23 or 26 September. She commented finally that the solicitor for the Appellant:

"… states there is no clear explanation for what happened and any attempt to explain would be clear conjecture."

She said she was not prepared to extend time and referred to a leaflet that includes a warning to contact this Appeal Tribunal in certain circumstances where confirmation of receipt of the appeal documents has not been forthcoming.

2. This decision of the Registrar is now appealed to the Appeal Tribunal, and it is my task to determine the appeal against her decision. I shall refer in the usual way to the Appellant as "the Claimant", as he was below, and to the Respondent to the appeal as "the Respondent", as it was below. It is accepted that the appeal was lodged out of time and not in time and that an extension of time is therefore needed.

The Underlying Claims

3. The underlying claims before the Employment Tribunal were heard by way of preliminary issues at a Preliminary Hearing in the Exeter Employment Tribunal before Employment Judge Ann Goraj. Her Decision was reserved, dated 27 July 2016 and sent to the parties on 2 August 2016. She dismissed all the claims before her for want of jurisdiction.
4. The claims related to the operation of the Respondent's pension arrangements and, in particular, the introduction of a new defined contribution pension arrangement in 1998. There was a complaint of direct age discrimination, which was said to be a "continuing act of age discrimination which commenced on 1 October 2006", that being the date on which the relevant legislation came into effect. The Respondent denied the allegations on the ground, first, that there was no actionable age discrimination and, secondly, that any less favourable treatment was in any event justified. Other claims were also brought, under section 11 of the Employment Rights Act 1996, and those related to periods of service prior to 1 September 2003.
5. It is a little difficult to follow from the Tribunal's Decision alone exactly what decisions it made, since the Tribunal cross-refers to a list of issues that is not before me nor appended to the Decision. Nonetheless, it is tolerably clear that the Tribunal dismissed all of the claims and that in doing so it made the following decisions.
6. First, the Judge decided that she did not have jurisdiction to entertain the complaint in respect of certain declarations as they were out of time. She held that it had been reasonably practicable to have presented that claim within three months of 5 September 2012 - the date of a review and notification of the Respondent's final decision (see paragraphs 92 and 97).
7. Next, she decided that if the Tribunal had jurisdiction to entertain the claims in respect of those matters it would nonetheless be appropriate to strike them out as having no reasonable prospect of success, there being no evidence to support the contention that in respect of the Claimant's service prior to 3 September 2003 the parties had reached an agreement in the terms alleged by the Claimant.
8. The Judge further decided in relation to the age discrimination claim that the Respondent's pension scheme is an occupational pension scheme for the purpose of section 1 of the Pension Schemes Act and a closed scheme for the purpose of section 61 of the Equality Act 2010. Finally, the Tribunal made certain decisions concerning the nature of the less favourable treatment for the purposes of determining the date from which the statutory limitation period ran and determined that that date was 6 September 2012 (see paragraphs 137 to 140), and the age discrimination claim, the Judge decided, was therefore out of time.
9. The Judge declined to extend time, commenting at paragraph 144, having weighed all the material factors, that it would not be just and equitable to do so. The Tribunal went on to decide obiter at paragraphs 152 and 155 that if it were wrong thus far, it would not have treated the claims as precluded either by a determination of the Ombudsman or by issue or cause of action estoppel on application of the principle in Henderson v Henderson [1843] 3 Hare 100.
10. That, in brief summary, was the underlying Decision against which the Claimant seeks to appeal. As is apparent, the issues were of some complexity and substance, but the claim failed on all counts. I do not propose to dwell further and in any more detail on the nature of the Decision appealed against and the issues that it raised.
11. I was invited in skeleton arguments by both leading counsel to take account of the potential merits of the appeal and also on the point that this is said to be a test case or lead case that may affect the outcome of other cases. I do not think that it is appropriate to accept any invitation to go into the merits of this putative appeal. As I have said, the issues are complex and substantial. At a cursory glance the merits seem to me to be neither completely hopeless nor unanswerably strong, and they therefore should carry, in my judgment, little or no weight when determining whether an extension of time ought to be granted.
12. Nor am I impressed by the point that the present claim is said to be a test case or lead case, which is relied upon as a possible exceptional circumstance that would or ought to contribute to the grant of an extension of time. The evidence of the Claimant's solicitor, Mr Robert Morfee, on that issue is at paragraph 25 of his written statement, where he said:

"25. [The Claimant] tells me he is one of about 200 employees of the respondent similarly affected. They are not parties to his litigation and they are not, with one exception, my clients. If [the Claimant] loses his case, however, they will be adversely affected because they, in effect, will lose theirs as well. Whilst [the Claimant] might have a claim against Cubism Law in respect of the loss of his own claim, those other employees will have no redress. I do not believe it is in the interests of justice that the respondents [sic] should have this huge windfall by reason of what amounts to a postal accident."

13. It was pointed out in the course of argument that in Ministry of Justice v Burton and Anor UKEATPA/1215/14/LA Langstaff P (as he then was) at paragraph 4 of his judgment attached some significance to the proposition that the Claimants in the case before him were "lead Claimants". That seems to me a very different position to that which I find to obtain in this case. In that case, the employer had been granted an extension of time having put in the appeal 11 minutes after expiry of the deadline. If the extension of time were not allowed, the Judgment below would stand as against all the other Claimants and not just the two lead Claimants.
14. Here, the potential Claimants alluded to by Mr Morfee have not brought claims at all. There is no knowing whether they would wish to bring them at all, nor whether those claims if brought would be in time, what the causes of action would be, whether their cases would be on all fours and so forth. Accordingly, I find the factor that there are other potential Claimants of negligible weight in this case. The issue therefore is the ordinary issue that unfortunately though frequently arises in this Appeal Tribunal: whether an extension of time should be granted.
15. The applicable principles are well known and they are rehearsed in the skeleton arguments. The law would not be enhanced by extensive citation of those principles. It is not surprisingly common ground that my task today is first, to ascertain what the explanation is of the default, secondly, to determine whether it provides a good excuse for the default and, thirdly, whether there are circumstances that justify this Appeal Tribunal taking the exceptional step of granting an extension of time whether or not there is good reason for the default (see United Arab Emirates v Abdelghafar [1995] ICR 65 and Jurkowska v HLMAD Ltd [2008] EWCA Civ 231, [2008] ICR 841, at paragraph 6 in the judgment of Rimer LJ).

The Facts

16. There is little or no dispute about the known facts in this case. The Decision was sent to the parties on 2 August 2016. In the usual way, there was a covering letter. In fact, the Decision and covering letter were sent by email to Mr Morfee and the Respondent's solicitors. The covering letter included hyperlinks to documents that included the Employment Tribunal website. If one clicked on one of those hyperlinks one would see a document dealing broadly with appeals to this Appeal Tribunal and containing numerous further links all about the details.
17. If one clicked on the other hyperlink, one would be taken to the website of Her Majesty's Courts & Tribunals Service and there would be a menu of PDFs available, including leaflets or documents to which I was referred; one entitled "The Judgment" (T426) and another entitled "I want to appeal to the Employment Appeal Tribunal" (T440). Those documents are of course mainly directed at litigants in person, but no doubt some lawyers may find them useful as well.
18. The next matter of substance that occurred was that at some time in August 2016 the period for an appeal was running and was due to expire after the usual 42 days on 13 September 2016. In August 2016, the receptionist at the Claimant's solicitors was a Ms Danielle Stone. It happened that her manager, a Ms Claire Rees, was dissatisfied with Ms Stone and had determined to replace her. Before that could happen Mr Morfee, for the Claimant, prepared appeal documents. He appreciated the importance of the deadline and gave instructions for them to be dispatched to this Appeal Tribunal.
19. On 5 September 2016, he departed on holiday and was not due to return until 16 September, after expiry of the deadline. It was therefore of great importance, as he appreciated, that the documents should reach this Appeal Tribunal while he was on holiday. The deadline then expired on 13 September 2016. By that time this Appeal Tribunal had not received the appeal documents. Ms Rees has given evidence that she recalls that Ms Hannah Morris of the Claimant's solicitors, a paralegal, had impressed on Ms Stone the importance of safely dispatching the appeal documents.
20. After his return from holiday on 16 September 2016, Mr Morfee was next in the office the following week, after the weekend, on 22 September, which was a Thursday. He did not find any returned documents from this case in his in-tray. His written evidence was that the staff keep an eye on his in-tray and that he would have become aware if they had been returned. He also asked Ms Stone if she was sure that she had posted the appeal papers. She said that she had, and he believed her.
21. On 26 September 2016, three things happened. First, it was discovered as a result of contact between this Appeal Tribunal and Mr Morfee that the Appeal Tribunal had not received the appeal documents. Secondly, the documents were returned and found in Mr Morfee's in-tray that day, minus the envelope in which they had been prepared for dispatch. Thirdly, when Mr Morfee asked Ms Stone if she was sure she had posted the appeal papers, she said that she was sure, and he believed her.
22. Not surprisingly, this gave rise to some consternation on the part of the Claimant's solicitors, and they felt obliged to consider reporting the matter to their insurers. The appeal papers were then lodged the following day, 27 September 2016. On 3 October 2016, Ms Stone was dismissed. On the evidence before me, that was not as a consequence of anything to do with this case; and indeed Ms Rees' evidence was, as I have said, that she had decided to terminate Ms Stone's employment before any of this happened. Ms Stone has since taken up employment in an organisation associated with the Claimant's solicitors, which is nearer her home. She has not provided a witness statement.
23. On 7 October 2016, this Appeal Tribunal wrote to the Claimant's solicitors saying that the appeal was rejected as out of time. The solicitors responded, not surprisingly, by applying for an extension of time. Unusually in an appeal of this kind I heard oral evidence as well as receiving written witness statements. I was satisfied that all the evidence given, written and oral, was given honestly and candidly.
24. I heard from Mr Morfee that he left on holiday, not unduly troubled, on 16 September believing that the documents had been posted as he had instructed; and he therefore believed he could benefit from the presumption of delivery commonly provided for in procedural rules. He said that he did not think it appropriate to chase the Appeal Tribunal for confirmation of receipt as his experience was that he would be unlikely to get a clear, if any, answer because the courts are generally bad at handling post, in his experience.
25. Asked questions by Mr Andrew Short QC, he accepted that Ms Stone would have been one of those who might deal with incoming post and therefore did have an opportunity to tamper with the returned document, but said he did not believe that was the explanation for the missing envelope. He agreed that where post is returned, the envelope is usually kept and a record made of the date of the return and that that did not happen in this case. He said that it was a complete mystery what had happened to the documents.
26. He also said that Ms Stone had been approached in mid-May 2017 via her principal who indicated that she, Ms Stone, was unwilling to give evidence and would become tearful if the subject were mentioned. He agreed that if he had read the documents ultimately obtainable by the hyperlinks I have mentioned, he would have become aware of the advice therein to seek confirmation of receipt if it were not forthcoming seven days after dispatch. He said that his specialism is that he is a pensions lawyer and he had not appeared in the Appeal Tribunal for many years, though he presented the case for the Claimant before the Employment Tribunal.
27. Ms Morris, the paralegal at the Claimant's solicitors, gave evidence about the posting system. Her evidence was that the system was unremarkable and included as usual addressing, franking and putting envelopes out for dispatch to the reception area on the ground floor by the receptionist, then Ms Stone, who took the post downstairs every day at about 5.15pm. She did not notice these appeal documents having stayed in the office and believes that they were therefore taken from the reception that day.
28. Mr David Sedgwick, the compliance officer to whom all office staff ultimately report, made a written statement, which included at paragraph 13 an explanation of Ms Stone's dismissal and the reason for it. She discharged, he said, her duties with regard to the post and DX in an entirely satisfactory manner. Her dismissal was because of failure to carry out some ancillary jobs that went along with the receptionist role, like monitoring and ordering stationery, keeping contact lists up to date and so forth and because of her demeanour, which was not appropriate to the firm's image.
29. Ms Rees gave similar evidence to that of Ms Morris about the system for posting of outgoing mail. She included in her statement acceptance that it is not unusual for post to be returned if mis-addressed. It usually comes back within days. After this incident, she gave evidence in her written statement that she questioned Ms Stone closely about it and did not accept or believe that Ms Stone had as little knowledge of matters as she was willing to divulge. Her conclusion was that the envelope containing the appeal documents (paragraph 15):

"15. … left the office on that day [2 September 2016] in the hands of Danielle Stone. I do not know where it was between that day and 26 September except that I am sure it was not in our office. It was returned to us in a way which was outside our normal procedures for returned post."

The Appeal

30. Those, then, are the unfortunate facts that have led to this appeal coming before me. Ms Jessica Simor QC, for the Claimant, submitted that the Claimant's solicitors had not acted reprehensibly and had not been negligent or careless and cautioned against the use of hindsight. She pointed out that Mr Morfee, as he had said, was entitled to assume that posted documents would have arrived. That is the whole point of the presumption as to service contained in procedural rules including Rule 35(3) of the Employment Appeal Tribunal Rules 1993 ("the EAT Rules").
31. Ms Simor submitted that the mistake was made was by administrative staff, not the solicitor, Mr Morfee, nor the paralegal, Ms Morris. She submitted that the leaflets to which references were made were not directly available through the hyperlinks referred to in the covering letter of 2 August 2016 and, even if read, did not create rules. She referred me to what was said by Peter Gibson LJ in Peters v Sat Katar Co Ltd [2003] ICR 574 at paragraph 14, to the effect that the Appellant in that case - a litigant in person - had been entitled to assume that appeal documents posted to the Appeal Tribunal well before expiry of the deadline would arrive before that deadline, even though in point of fact they did not.
32. Ms Simor submitted that it would be wrong for the Respondent to obtain the benefit of an unlooked-for windfall and that there would be no prejudice to the Respondent if the appeal were allowed to proceed. She referred me to proposition (viii) of HHJ McMullen QC in Muschett v London Borough of Hounslow [2009] ICR 424 (heard with other appeals) at paragraph 5, which reads:

"In Tribunals at first instance the fault of a legal adviser to enter proceedings in time should not be visited on the claimant, for otherwise there would be a windfall: see Steeds v Peverel Management Services Ltd [2001] EWCA Civ 419. While this rule does not apply directly in the Employment Appeal Tribunal, it is a factor which when combined with others might contribute to the exercise of discretion."

33. Ms Simor submitted that ultimately the matter was one for the discretion of the Appeal Tribunal, that each case depended on its own facts, and that on the facts before me today the case was exceptional and fit for the exercise of the discretion to allow an extension of time.
34. Mr Short QC for the Respondent made the following main points. He submitted, first, that in this case there was not a full and honest explanation for the default, still less a reasonable excuse for it. As to the facts he submitted that, on the balance of probabilities, the most likely explanation is that the appeal documents were never posted in the first place. If they had been, he reasoned, the envelope would have been kept once they were returned. That the envelope was not kept, he invited me to infer, was the result of somebody within the Claimant's solicitors covering their tracks.
35. Mr Short said the fact that the apparent error was made by administrative rather than legal staff did not make it any more excusable. There had been no system in place for unmasking errors of this kind in a timely manner before irreparable damage was done, by the simple expedient of obtaining confirmation of receipt. Mr Short submitted that it would have been relatively simple to obtain such a confirmation of receipt before, rather than after, expiry of the time limit for an appeal and certainly a good deal earlier than 26 September 2016.
36. According to Mr Short's argument, Mr Morfee was on notice of the importance of timely lodging of documents because of the contents of the covering letter emailed to him with the Decision of the Employment Tribunal on 2 August 2016, and the hyperlinks that (via other links) pointed him in the direction of T426 ("The Judgment") and T440 ("I want to appeal to the Employment Appeal Tribunal"). Those documents included an admonition to check receipt if no confirmation had been received within seven days of posting. Mr Morfee accepts that he did not do that.
37. Mr Short submitted that the facts in the case of Peters, already mentioned, were quite similar to the facts in this case, save that in Peters the Claimant had been unrepresented and at that time documents equivalent to T426 and T440 appear not to have been available. He asked me to note the opening words at paragraph 14 in the judgment of Peter Gibson LJ:

"14. If circumstances existed which showed that she knew, or ought to have known, that she should have sought confirmation from the Appeal Tribunal of the receipt of the notice of appeal before she made such enquiry, then that would be a very relevant consideration. …"

and the words at the conclusion of the same paragraph:

"14. … The Appeal Tribunal held that for a solicitor to act reasonably, there had to be a system in place for checking whether a reply to a letter sent by post had been received."

38. That was a reference to the decision of this Appeal Tribunal in Camden & Islington Community Services NHS Trust v Kennedy [1996] IRLR 381. Mr Short submitted that the contents of those citations apply in this case. Mr Morfee was, he said, on notice of the need to check receipt, and there was no system in place at his firm for doing so. The mistake, he said, was commonplace and not exceptional; it happens, unfortunately, all the time.

Discussion and Conclusions

39. I come then to my reasoning and conclusions. I must ask myself, as the parties agreed, the three questions alluded to in the decisions in Abdelghafar and Jurkowska. First, I ask myself: what the explanation for the default was and whether it was an honest and full explanation. In my judgment, on the balance of probabilities, the explanation for the default lies in some way or other in shortcomings in the performance by Ms Stone of her duties. It seems to me clear that that is the most likely explanation.
40. In forming that view I take into account: first, that she is un-cooperative; secondly, that she did not command the confidence of Ms Rees; thirdly, that she had the opportunity to tamper with incoming post on 26 September 2016; and fourthly, that no other explanation is more plausible than that one. I therefore accept Mr Short's submission that on the balance of probabilities the appeal documents were not posted.
41. There is an alternative explanation, which is that they were posted but mis-delivered by the Royal Mail before being returned and that when they were returned the system for keeping the envelope and recording the date of return broke down through some separate and unconnected mishap. That strikes me as less likely, though it is possible; but if the documents were posted and mis-delivered, it remains the fact that the solicitors did not seek confirmation of receipt before the expiry of the 42 day deadline. That is what I conclude on the question of what the explanation was for the default.
42. Was the explanation given full and honest? In my judgment, it was. The witnesses were honest. The one who might not have been could not realistically have been called. The Claimant would have been in grave difficulty putting Ms Stone forward as a witness of truth even though Mr Morfee for his part had faith in her; others within his firm did not. I do not think the obligation to advance a full and honest explanation extends as far as to the calling of a witness who cannot be relied upon as reliable by the party calling her. It suffices that the Claimant had advanced a full and honest explanation of matters within the Claimant's knowledge. He cannot explain what is outside his knowledge.
43. Secondly, I ask myself the question whether the explanation provided constitutes a good excuse for the default. I regret to say that I do not think it does. I accept Mr Short's points on this aspect of the case. First, Ms Rees accepts in her witness statement that it is not uncommon for post to be returned, for example if it is mis-addressed. In this case the solicitors entrusted the task of posting the documents, which everyone knew were very important, to a receptionist in whom Ms Rees, the office manager, had lost confidence, whom she had decided to replace and indeed for whom she had already started looking for a replacement the previous month.
44. Furthermore, there was no system for picking up errors of this type. Mr Morfee said in his evidence that he thought it was acceptable to rely on the presumption of service, which deems posted documents to be received usually two working days later, absent evidence to the contrary. That is indeed the position in this jurisdiction, under Rule 35(3) of the EAT Rules. Reliance on the presumption of service is one thing where service is on the other side; it is quite another where what is at stake is expiry of a limitation period.
45. It seems to me, with respect, naïve in this jurisdiction, where enforcement of time limits is notoriously strict, to place reliance on such a flimsy presumption. Experienced practitioners in this Tribunal would know that reliance on the presumption of posting in Rule 35(3) is a trap for the unwary. It provides:

"(3) Every document served by post shall be assumed, in the absence of evidence to the contrary, to have been delivered in the normal course of post."

However, in cases where there is "evidence to the contrary" the presumption is useless, and if there were no "evidence to the contrary" the presumption is not needed; the documents would have arrived. You only need it when it is of no help.

46. Mr Morfee's excuse that he expected no fruitful response from this Appeal Tribunal if he had asked for confirmation of receipt is, with respect, not a good one. First, it is contradicted by the seven-day warning in the documents that Mr Morfee did not read. Secondly, if you get no confirmation and the deadline is looming, a competent practitioner would walk the documents here physically and make a personal signed and dated attendance note proving physical delivery. In this day and age, when postal errors are commonplace and deadlines strictly enforced and extensions rarely granted, that is not asking too much of a practitioner solicitor filing appeals in this jurisdiction.
47. Mr Morfee's experience was as a pensions lawyer, but he was practising as a professional in this jurisdiction, and accordingly his duty was to acquaint himself with the strictness of the enforcement of time limits in it. He either should have known or did know that the consequences might well be extremely serious if the deadline was missed, as it was. The documents accessible via the hyperlinks were there to be found, but he should not have needed to find them; they are more relevant to litigants in person. Even if he had found them, they do not point to the world of difference between approaching the Appeal Tribunal for confirmation of receipt of appeal documents before the deadline, and doing so after it has expired.
48. I ask myself, finally, whether there are circumstances that justify taking the exceptional step of granting the extension of time sought, notwithstanding the absence of a reasonable excuse for the default. I accept that the discretion is open-ended and fact-specific. In favour of exercising it, I take on board the points well made by Ms Simor.
49. It is said that refusing the extension would confer an unmerited windfall defence to this putative appeal on the Respondent. It is always the case that an out-of-time appeal, in one sense, confers a windfall on the Respondent, who is not called upon to contest it on its merits. But another way of putting the point is that to grant the extension deprives the Respondent of a limitation defence that the law recognises. So, it seems to me that that point does not take one very far. The absence of any prejudice to the Respondent is, I accept, a factor and one of more than negligible weight, but it is not one that carries overwhelming weight, for if it were extensions would be routinely, not rarely, granted.
50. Next, I accept that this is not a case where the default is very grave. The duration of the period of lateness is relatively short. On the other hand as Mr Short pointed out, the case is not dissimilar to the factual position in Peters but with the added features of professional representation and availability of documents including appropriate warnings apparently not then available.
51. I am afraid that I cannot begin to accept Ms Simor's contention that this case is exceptional. I regret to say that experience shows it is commonplace. I do not think that it is right that there was no carelessness on Mr Morfee's part. He was careless for failing to ensure confirmation of receipt before and not after expiry of the deadline, holiday or no holiday. His firm was institutionally careless in two ways: (1) by entrusting to an inappropriate employee the task of posting a critical document, and (2) by failing to have a system in place to detect postal errors.
52. I find myself, accordingly, in agreement with the Registrar that the extension of time was rightly refused. Had I been otherwise persuaded to grant it and allow the appeal, I would not have declined to do so in light of the short delay between 26 and 27 September 2016 before the papers once returned were finally lodged. Despite the sympathy I have for Mr Morfee and his colleagues, the appeal must, for those reasons, be dismissed.

Costs

53. There is an application for wasted costs against Cubism Law, the solicitors for the Claimant; and Mr Short QC advances that application on the basis that the costs incurred by his client, the Respondent, would not have been incurred but for the original negligence of people working for Cubism Law, such as I have found to have occurred in the main Judgment I have just given. Mr Short relies on Rule 34C of the EAT Rules and submits that his client has incurred those costs because of that negligence, and accordingly he says it would be right to award them.
54. Ms Simor QC points out that under Rule 34A, costs are normally awarded against a paying party for conduct that is unnecessary, improper, vexatious, misconceived, comprising unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings; and that nothing of that kind is relied upon in this case.
55. I agree with Ms Simor's submissions on this point, and I refuse the application. It seems to me that it would not be right to expose the solicitors to exposure for wasted costs in bringing and pursuing an appeal, which was properly conducted, properly brought and where the only negligence on their part is that which led to the Decision against which they have properly appealed, against the Registrar's order.
56. In a sense, it would be "double-counting" to expose the solicitors in circumstances such as these to a wasted costs order. It would be a different matter altogether if any aspect of this appeal to me today had been wrongly or unreasonably conducted, but that is not suggested. I refuse the application for wasted costs.