Cooper & Anor v Weatherwise (Roofing & Walling) Ltd [1992] UKEAT 562_92_0710

EAT

Cooper & Anor v Weatherwise (Roofing & Walling) Ltd

[1992] UKEAT 562_92_0710 · 1992-10-07

MR JUSTICE KNOX: This is an appeal by Mr Cooper and Mr Edwards who were the Applicants before the Industrial Tribunal in claims for unfair dismissal from a decision by way of Interlocutory Order of the Industrial Tribunal sitting at Shrewsbury on the 24th July 1992, which was sent to the parties on the 28th July 1992.

The Order which is the subject of appeal reads as follows:

"i.This case be adjourned to a date to be fixed. . . .

ii.The Applicants' do pay the Respondents' costs of and incidental to today in a fixed sum of £4,000.00 plus VAT such sum to be paid in any event on or before the 31st October 1992 and if it is not so paid there shall be no right to Applicants to restore their applications.

iii.The Respondents may pursue the question of witness expenses and allowances of today against the Applicants if and when the applications are restored to the list."

and iv. does not matter for present purposes.

The factual background is that there was an application for an adjournment made by the Applicants which, as will appear from the Order which I have read, was in fact granted. The Order for costs, quite clearly, was made because of the very late hour at which that application was made. The chronology is as follows: on the 31st March 1992 notice was given for the hearing to take place of the applications on the 23rd and 24th July, and that was sent to the Solicitors for both sides. In fact the Applicants' Solicitors changed on the 30th June 1992. It was only at 2 o'clock on the 22nd July that the Applicants' Solicitors contacted the respondent Company's Solicitors, the Respondent being Weatherwise (Roofing & Walling) Ltd to say that they thought that it was no longer a two day case and should be adjourned, and a request for an adjournment was made to the Tribunal by fax at 4.15 that same afternoon, which was of course the day before the hearing was due to start. The Chairman rejected that by fax at 4.45 and although there was a response by the Applicants' Solicitors it came after working hours and was only received the following morning, the morning of the hearing. The Solicitors for the Applicants had, it appears, advised their clients to turn up and ask for an adjournment, although no Solicitor or Counsel was going to attend on their behalf and indeed no Solicitor or Counsel did attend on their behalf, nor indeed did the clients themselves attend. In those circumstances it does not surprise this Tribunal that an Order for Costs was made under the relevant rule which it was accepted by both parties before us was Rule 11(2) of the Industrial Tribunal Rules of Procedure in the Schedule to the Regulations of 1985 that govern such matters. Rule 11(2) reads:

"Where the tribunal has on the application of a party to the proceedings postponed the day or time fixed for or adjourned the hearing, the tribunal may make orders against or, as the case may require, in favour of that party as at paragraph (1)(a) and (b) of this Rule as respects any costs or expenses incurred or any allowances paid as a result of the postponement or adjournment."

and the reference to paragraph 1(a) or (b) is a reference back to the general rule regarding costs which, omitting irrelevances for present purposes, reads as follows:

"a tribunal shall not normally made an award in respect of the costs or expenses incurred by a party to the proceedings but where in its opinion a party . . . has in bringing or conducting the proceedings acted frivolously, vexatiously or otherwise unreasonably the tribunal may make - (a)an order that that party shall pay to another party . . . either a specified sum in respect of the costs or expenses incurred by that other party . . . or the whole or part of those costs or expenses as taxed (if not otherwise agreed);" (b) is not relevant for present purposes because it deals with allowances with which we are not primarily concerned today.

The Rules also contain the power to postpone and adjourn hearings. That is contained in Rule 12 which reads:

"(1)Subject to the provisions of these Rules, a tribunal may regulate its own procedure.

(2)A tribunal may, if it thinks fit, -

. . . .

(b)postpone the day or time fixed for, or adjourn, any hearing"

and there is a passage in brackets which is not relevant for present purposes, which I omit. It is to be observed in passing that two of the powers that are specifically conferred on industrial tribunals by Rule 12(2) are subject to a proviso that before making any Order under those two paragraphs the Tribunal is to send notice to the party against whom it is proposed that any such Order should be made giving him an opportunity to show cause, why such an Order should not be made and those two paragraphs are the provisions which confer power to strike out matter which is scandalous, frivolous or vexatious, putting it shortly, and to strike out an Originating Application for want of prosecution.

The Industrial Tribunal, as appears from the facts already stated, did not have before it either the Applicants or their representatives. Counsel had been briefed on behalf of the respondent Company and he sought to persuade the Tribunal to deal with the matter in the absence of the Applicants and their advisers and representatives and in that was unsuccessful. There is no appeal against that eminently fair and reasonable decision which is expressed in the decision as follows:

"The tribunal retired and, very reluctantly, the Chairman informed Mr Dowse [Counsel for the Company] that it would be unfair and contrary to natural justice to hear the case in the absence of the applicants."

and then, Counsel made submissions with regard to costs and as a result of that the Tribunal made the Order which I have already read and need not repeat.

In our view, the appeal against this Order succeeds for the following three reasons: It seems to us first, that there has been an error of law in that the jurisdiction conferred by Rule 11(2) has been exceeded by the form of the Order that is made. It will be recalled that 12(2) allows Orders to be made as respects any costs or expenses incurred, or any allowances paid, as a result of the postponement or adjournment. In this case the Order that was made was that the Applicants should pay the Respondents costs of, and incidental to, that day, in a fixed sum of £4,000 plus VAT. That was accepted by Miss Cole, who appeared for the respondent Company, and I interpose - said everything that could be said on their behalf - to include Counsel's brief fee, as indeed one would expect, and the brief fee not only, of course, covers the attendance of Counsel for the first day's hearing, but also contains an element, sometimes very properly, a very substantial element in respect of the general preparation and conduct of the proceedings. That element, the general conduct and the preparation, would be something which would be carried over to the adjourned hearing and an Order, which it was accepted this Order did, which included the whole of Counsel's brief fee for the first day, will in our view, be an Order which went significantly beyond costs or expenses incurred as a result of the postponement or adjournment. In that respect therefore, it seems to us that the jurisdiction that the Tribunal was seeking to exercise was exceeded.

The second point on which we feel that an error of law is present is the imposition of the condition that if the costs were not paid before the 31st October there should be no right to the Applicants to restore their applications. The power to adjourn, I have already read in Rule 12(2)(b). It does not, in terms, allow for conditions to be attached, either with regard to the payment of costs or otherwise and it seems to us logically to be difficult to justify the imposition of a condition with regard to the payment of costs to the requirements of natural justice that the case be heard in the presence of both parties. Miss Cole has submitted to us that the matter was covered by Rule 12(1) which it will be recalled gives a tribunal power to regulate its own procedure subject to the provisions of the Rules. We do not accept that that does confer the power to impose the condition that was imposed for two reasons. First, we are not satisfied that this was a question of regulating procedure. Regulating procedure, in our view, refers to the way in which the proceedings are conducted and although it is of course a wide expression and we do not seek to define it, we do not accept that it does go so far as to permit the imposition of a condition regarding the payment of costs on an Order for an adjournment that is required by the dictates of natural justice. Secondly, we doubt whether Rule 12(1) is intended to fill gaps that there might be thought to be in the specific provisions of the remainder of that Rule. In other words, it seems to us that the power to postpone and adjourn is to be found in Rule 12(2)(b) and that Rule 12(1) was intended to cover the ground which other Rules do not cover. For those two reasons we do not accept that Rule 12(1) confers the power to impose that condition.

The third reason is that we are satisfied that there must have been a punitive element in the Order that was made for a figure as large as £4,000 plus VAT if it was, as it should have been, intended to cover costs or expenses paid as a result of the postponement or adjournment. We accept, of course, that disregarding questions of errors of law it is necessary for there to be a very strong case shown before this Tribunal could properly interfere with what is, undoubtedly, a matter within the discretion of an industrial tribunal. The point is put by Lord McDonald in the Lothian Health Board v. Johnstone

[1981] IRLR 321

at 322 paragraph 3, where he said:

"He also accepted [he being the appellant's solicitor] that expenses [which of course is the Scottish expression for what we call `costs'] are a matter of discretion for the Tribunal and an appeal against the exercise of the discretion can only succeed if it can be shown on the face of the decision that the Tribunal had misdirected themselves in law as to the manner in which the discretion should be exercised, or alternatively that the facts point so overwhelmingly to the exercise of the discretion in one manner that any other decision can only have been arrived at through a failure to exercise the discretion judicially Marler Ltd v Robertson [1974] ICR 72,"

What His Lordship is saying is that in a case where there is an overwhelming case for the exercise in a particular way, any other different exercise must, ex hypothesi, have been arrived at through a failure to exercise the discretion judicially.

More generally, we were also referred to the decision in Keskar v. The Governors of All Saints Church of England School

[1991] ICR 493

. That was a case where there was an appeal by an applicant who had failed before the industrial tribunal and the industrial tribunal had specifically found that the proceedings were motivated by resentment and spite At p.497 I said:

"There are at least three elements of the industrial tribunal's process of reasoning on this score. The first element is the applicant's sincere belief"

pausing there, that was in the virtue of his case, and going on with the quotation:

"The second element is that his motive was one of resentment and spite in bringing the proceedings. The third element is that there was virtually nothing to support the allegations,"

The case before the industrial tribunal went on for some six days, as appears at p.494 (F) of the Report, and the Order that was made was one, by coincidence, of exactly the same figure of £4,000 which was the industrial tribunal's reduced figure having been told that the total costs to the Governors were of the order of £5,000, the reduction being made in the light of the fact that the applicant's basic salary was over £15,000. The applicant submitted that that Order was perverse as to quantum and at p.500 I said this:

"It was pointed out that effectively the order was an order to pay the whole of the probable taxed costs to the governors and that the means of the applicant were such that this involved a payment by him of a sum equal to one-third of his net income for one year. It was submitted that when one took account of the fact that he had a sincere belief in the validity of his allegations, it was perverse to make an award on the scale that the industrial tribunal did make.

We are not satisfied that this is so. For there to be shown perversity in a matter which is essentially one of discretion, there would need to be a case of much greater strength than this. We have in particular in mind the specific finding that this was a proceeding that was motivated by resentment and spite and that is capable of being material upon which a tribunal, at first instance, can legitimately impose quite a severe sanction.

Again, of course, it is not a question of whether or not we would have made such an award. What has to be shown is that there has been something ordered which no reasonable tribunal could have ordered, and we are quite unable to reach such a conclusion."

We have given careful consideration to that principle which we see no reason to depart from, but we are satisfied that this a case of much greater strength than the Keskar case. The differences are obvious, the figure in costs is the same, but our costs are concerned, or should be, with the costs and expenses incurred as a result of the postponement or adjournment, whereas Keskar's case was concerned with a six day hearing, with Counsel appearing for the Governors, in the industrial tribunal. So that there is an enormous difference in the ambit of the subject matter of the Order for Costs. It was not disputed, and rightly not disputed, that it is wrong in principle for there to be an award of costs on a punitive as opposed to compensatory basis. Authority for that was cited Davidson v. John Calder (Publishers) Ltd

[1985] IRLR 97

at p.99. The proposition was not disputed. We can not escape the conclusion that there was, and must have been, a punitive element in this particular award, if one is taking Rule 11(2) as defining the matter in respect of which the Order was made.

For those three reasons it seems to us that this Order can not stand. The discretion that has to be exercised is the discretion of the Industrial Tribunal and this is not one of those cases where we feel that only one answer is possible, it is a matter in which the discretion needs to be judicially exercised and in those circumstances, the only Order that we can make is to remit the matter to, we think, a differently constituted tribunal, for the matter to be reconsidered in the light of this decision.