Cook & Anor v Heathrow Penta Hotel [1994] UKEAT 331_92_1701

EAT
Cook & Anor v Heathrow Penta Hotel
[1994] UKEAT 331_92_1701 · 1994-01-17

JUDGE LEVY :

This is an appeal by four former employees of Heathrow Penta Hotel against a decision of an Industrial Tribunal that they should pay jointly and severally a sum in respect of costs of proceedings before the Industrial Tribunal. The hotel itself has changed its name from Heathrow Penta Hotel, we understand, to Ramada Hotel; nothing turns on that. Two of the employees have grounds of appeal running to 8F, that is Messrs Morgan and Casey who are represented by Miss Murphy. The other two former employees Mr Cook and Mr Donnelly are represented by Mr Siddle.The appeal arises pursuant to a hearing lasting four days prior to December 1991 when the Tribunal dismissed the four former employees' application for damages for unfair dismissal, finding that they had not been unfairly dismissed. There was then a further hearing in which the employers sought costs against each of the former employees in respect of the proceedings on the basis that the proceedings were frivolous. They satisfied the Tribunal that they were frivolous. Indeed at the end of the hearing as the Chairman's note shows on page 34 (Morgan and Casey bundle) which reads:
"Unanimous Decision: The proceedings had no prospect of success - the fact that there was no costs warning is not a reason for pursuing a frivolous complaint."
In the Written Reasons which came later the words "no prospect of success" have had substituted for them "little prospect of success".In the grounds of appeal of all the former employees there are four contentions. First it is said that:
"it based its decision on its view of the Appellants' behaviour prior to dismissal, rather than on the Appellants' conduct in bringing or conducting the proceedings before the Industrial Tribunal. In so doing, it failed to apply the correct test laid down in Davidson v John Calder (Publishers) Ltd & Calder Educational Trust [1985] IRLR 97 EAT. A copy of the Chairman's Notes is requested."
We have not in fact had the advantage of the Chairman's Notes from the first hearing.Secondly:
"it reached a decision which was perverse in that no reasonable tribunal properly directing itself in law and on the evidence could have reached in finding that the Appellants had acted frivolously in bringing or conducting proceedings. The correct test for determining whether or not a party has acted frivolously in bringing or conducting a case is laid down in Cartiers Superfoods Ltd v Laws [1978] IRLR 315 ; namely, that the correct test of whether behaviour is frivolous is what the party in question knew or ought to have known if he had gone about the matter sensibly. At paragraph 7 of the Decision, the Industrial Tribunal found that there the only two grounds upon which the Appellants could have persuaded an Industrial Tribunal that they had been unfairly dismissed were (a) that the Respondent failed to recognise their elected shop-steward; and (b) that a condition was imposed upon their contractual right of appeal."
The Notice of Appeal goes on and sets out other matters in which the Industrial Tribunal it is said should have taken into account.We have carefully considered the facts and matters raised sensibly and fairly by Miss Murphy and Mr Siddle on behalf of the Respondents and we have particularly considered the help given to us by Mr Justice Bristow in Davidson v John Calder (Publishers) Ltd [1985] ICR 143 at page 146(D) where he says (and this was in a case where it was held that the employer had unnecessarily resisted the employee in taking the case to the Tribunal):
"Now it is the conduct in the course of the proceedings which alone has to be considered. Was it frivolous, vexatious or otherwise unreasonable for the respondents [the employers] to have defended this case as to liability once the application was launched and they had to consider on the material available to them whether the case was reasonably defensible or not?"
We have also taken into account the test of Mr Justice Waterhouse in Carr v Allen- Bradley Electronics Ltd [1980] ICR 603 where he referred to a passage of the judgment of Sir Hugh Griffiths in E T Marler Ltd -v- Robertson [1974] ICR 72.

(H) says:

"If the employee knows that there is no substance in his claim and that it is bound to fail, or if the claim is on the face of it so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of the procedure of the tribunal to pursue it. If an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously, and likewise abuses the procedure."
This case is brought on frivolous only, not on vexatious or otherwise an abuse of the procedure. We have carefully considered all the material which was before the Industrial Tribunal and all this has been urged on us on behalf of the employees by Mr Siddle and by Miss Murphy but we are satisfied that the Tribunal had before it sufficient material on which they could properly have decided that it was improper for the case to have been brought by the employees, and it was therefore improper in the sense of being frivolous. Therefore the decision which they reached was a proper one. Alternatively if we are wrong on that we certainly do not consider it was a perverse decision and in the circumstances we consider that grounds (a) and (b) of the Notice of Appeal fail.Ground (c) of the Notice of Appeal sets out correctly that the Industrial Tribunal took account of the fact that the Appellants were not supported by their union. The Grounds of Appeal says that that was an irrelevant consideration, and therefore the Tribunal acted improperly. We agree with all of this but we consider that if the Tribunal had to take a no account of this it would have made no difference to their decision and accordingly although the fact that the Appellants were not supported by union is not something which should have been taken into account, at the end of the day we think this makes no difference to the decision. Therefore the fact that something was wrongly taken into account, does not make us come to the conclusion that the decision of the Tribunal should be altered.The fourth common ground of the appeal is:"in making a costs order of £2,000, the Industrial Tribunal failed properly to take into account the extremely limited means of the Appellants, contrary to the principle set out in Wiggin Alloys Ltd v Jenkins [1981] IRLR 275 ". [A decision of Mr Justice Browne-Wilkinson as he then was].In fact we have to put a little more skin on that particular bone because what the Industrial Tribunal did was to make each of the Appellants jointly and severally liable for that sum (something which only two of the former employees take into account in their notice of appeal). Mr

Justice Browne-Wilkinson in Wiggin Alloys Ltd v Jenkins [1981] IRLR at page 276 says:

"...In our view, the inability of the applicant to meet any order for costs is a matter which is properly to be taken into consideration and, therefore, we cannot see that they have erred in any way in law in exercising their discretion. [In that case because of the means of the applicants the Industrial Tribunal made no order of costs.] We should emphasise that it is no consequence of our decision that the mere fact that for the time being an applicant is penniless is in every case a sufficient ground for refusing an order for costs."
In this case there was very limited information as to the means of each of the applicants before the Tribunal. That limited information is set out at page 34 of the Morgan and Casey bundle where we have the Chairman's Notes. What he is recorded as saying is:
"Mr Cook earns £11,996 gross. Employment from September 1990.
Mr Morgan is self-employed. Unemployed until 1 January 1991 and then starts trading on his own account - decorative arts. He made a loss in the first year of trading.Mr Donnelly earns £374.25 gross per fortnight. He was unemployed for 5 months. He earns £296.85 net per fortnight.Mr Casey is a student nurse earning £697 per month gross - £436 per month net because of accommodation."The costs for which the Company seem to be applying is shown on page 33 where the note records:
"I [this is Mr Muir, the Company's Representative,] have invoiced £5,500 to the company - an independent firm advising the hotel. There was additional loss to the hotel in time lost."
On that limited information the Tribunal made an award of £2,000 per annum jointly and severally against each of the Respondents. Miss Murphy submits that Mr Morgan's monthly earnings were for the year after his dismissal unknown. All that was known is that he made a loss in his first year, that Mr Cook's earnings were £803 net per month, Mr Donnelly's £593 net monthly and Mr Casey's £436 net monthly ("net" being after deductions).We think that in making the award of £2,000 the Tribunal failed to ascertain and then to take sufficiently into account the means of the four former employees, the Appellants here. We think that the amount awarded is so inappropriate that it is one which, as requested by both the parties if we thought it wrong, we should correct. But before I say how we think we should correct it I would like to continue on the two grounds of appeal on which only two of the Applicants rely in their Notice of Appeal and that is the Applicants Morgan and Casey. Those further grounds are:"(e) in making a costs order which purported to be a joint and several costs order, it failed to comply with Regulation 11 of the Industrial Tribunals (Rules of Procedure) Regulations 1985, which clearly states that such an order is to be made against a "party" to proceedings, not parties. (f) in making a costs order which purported to be a joint and several costs order, it took into account irrelevant considerations; namely, that the Appellants had acted collectively in conducting proceedings, and thus failed to take account of the individual means of the Appellants: Carr v Allen-Bradley Electronics Ltd [1980] IRLR 263 ".It seems to us that in fact because of the consolidation of the proceedings there must have been a substantial savings of costs. Instead of there being four hearings there was only one, but it seems to us that the Appellants are right, not necessarily on the construction of Regulation 11, in saying that it is inappropriate in a case of this sort to make a joint and several order against a party to the proceedings. The position is that each of the employees brought its own set of proceedings and in such circumstances it seems to us that it is inappropriate for one of the parties to be ordered to pay a sum which might be in excess of a quarter of the costs incurred. For instance, if the winning parties' costs were £x for one of four applicants to be liable for more than 1 / 4 £x. It would be inappropriate for one employee to be required to pay more than one quarter of the costs here, as the employer would be entitled to do, in enforcing the joint and several order against the Respondents.In the circumstances of the case we have been asked to review the figure which was awarded. We think an order of costs against each of the former employees should have been made. We take into account their means and all that has been urged on us. We can see no reason to make any distinction between the four Appellants with their different means and we think an appropriate sum in the circumstances would be £250 per Appellant and in the circumstances we will allow the appeal to the extent of reducing the £2,000 joint and several award to an award of £250 of costs per Appellant to be paid to the Company.