Russia House Ltd & Ors v Skerry & Anor [1994] UKEAT 859_93_2107

EAT
Russia House Ltd & Ors v Skerry & Anor
[1994] UKEAT 859_93_2107 · 1994-07-21
MR JUSTICE MUMMERY (PRESIDENT): This is an appeal from an Order made by the Chairman of an Industrial Tribunal held at London (North) on 17th September 1993. The Order was made at an interlocutory hearing in proceedings commenced by two Applicants by separate Originating Applications. The Order appealed against is an Order for costs to be paid to one of the Applicants. It is an unusual point to bring on an appeal. In order to understand the point of law raised it is necessary to delve into the history of the proceedings.The Applicants were Miss Skerry and Mrs Lynchehaun.Miss Skerry presented her Originating Application to the Tribunal in which she claimed unfair dismissal and redundancy against two Respondents, the Russia House Limited and Barry Martin, both of an address in London W1, 37 Kingly Court, Kingly Street.By a Notice of Appearance dated 21st April 1993, filled in by a firm of Solicitors, Kearns & Co, it was stated that the Respondent, Barry Martin, denied that Miss Skerry was employed by him. He could not be held responsible for unfair dismissal. It also denied that the Respondent, Russia House Limited, was the employer of Miss Skerry. It could not be held responsible for unfair dismissal. Alternatively, it was submitted, that if Miss Skerry was employed by either of the Respondents, she had been fairly dismissed.The other Originating Application presented on the 17th January 1993 was by Mrs Brenda Lynchehaun. She named as Respondent the Barry Martin Group and gave an address in London W1 of 27 and 37 Kingly Court, Kingly Street. She claimed unfair selection for redundancy and unfair dismissal from her position as a senior employee, Exhibition Organiser, Travel Supervisor and General Administrator. She complained that she had been dismissed without notice on the 20th October 1992. It was suggested that she was redundant, but no consultation or redundancy statement or calculation had been produced. If she was redundant she claimed that she was unfairly selected and, if she was dismissed on economic grounds, she complains that she was unfairly selected.A Notice of Appearance filled in by the same firm of Solicitors and dated 21st April 1993 stated that the Respondent, Barry Martin Group, denied that it employed Mrs Lynchehaun and therefore denied liability for her claim. Alternatively, if she was found to be employed by Barry Martin Group she was dismissed fairly.There is a mystery about who are the employers of the two Applicants. That was the reason why an interlocutory hearing was first held on the 28th April 1993 at London (North), Mr Waud was Chairman. At the hearing Mrs Lynchehaun was represented by her Solicitor, Mr Bowden. Miss Skerry appeared "in person", Mr Kearns, a Solicitor, appeared for "the Respondents". The Respondents were named in the heading of the Order made on that hearing as three in number, first Mr Barry Martin, second, the Russia House Limited (those were the two persons named as Respondent by Miss Skerry) and thirdly, the Barry Martin Group. That was the Respondent named by Mrs Lynchehaun. The name of both Applicants appeared in the heading. The Chairman made an Order at the hearing in relation to costs. The context of the Order which he made was this: (paragraph 1)
"This Interlocutory Hearing was ordered, inter alia, to determine the triable issues. One of those issues raised in the Notices of Appearance was the true identity of the employers of the 2 Applicants."
The Chairman stated that both Applicants had been dismissed by Mr Barry Martin on the 20th October 1992 on notepaper headed with the words "The Barry Martin Group of Companies". He referred to the relevant parts of the letter addressed to each of the Applicants at the Barry Martin Group. Mr Waud stated that he had been told that the Applicants used to report to Mr Barry Martin. They were not quite sure of the identity of their true employer at the date of dismissal. That was evident from the Originating Applications. It was also apparent that, during the course of employment, both Applicants were switched from one Company to another within the Group, but Mr Waud was told that this was not properly documented to them. A number of the companies had gone into liquidation. He referred to the presentation of the Originating Applications and the Notices of Appearance. He said that on the 23rd February 1993 he ordered the interlocutory hearing, which took place on the 28th April, to resolve the question of the identity of the employers and to resolve any issue there might be about Orders for Particulars and inspection of documents. He said that on 15th March 1993 no communication had been received from the Solicitors, Kearns & Co instructed on behalf of the Respondents. A letter was written by the Assistant Secretary reminding them of an undertaking that had been given to provide particulars. There was no response. A warning letter was sent on the 14th April. The Notices were received on the 22nd April 1993. In the Notices it was stated that, in the case of the second Applicant, Mrs Lynchehaun, the grounds of resistance was that Barry Martin Group denied being the employer of Mrs Lynchehaun. The Chairman then said this:
"Unfortunately, Mr Kearns [Solicitor for the Respondents] who told me that he is primarily acting for the 1st Respondent [Mr Barry Martin] has not been able to help very much. He is without instructions on many of the relevant points, he cannot produce any documents which would provide an answer on the crucial question, and he is unable to give any explanation as to how it was that the 1st Respondent came to dismiss the Applicants and in what capacity he was acting."
In those circumstances the Chairman concluded:
"that he had no alternative but to adjourn the hearing so that the documentation can be produced, and the true identity of the employer ascertained."
Having made the Order for adjournment, the Chairman dealt with an application for costs made on behalf of Mrs Lynchehaun under Rule 11(1) of the "Industrial Tribunals (Rules of Procedure) Regulations 1985", then in force. The ground of the application was that Mr Barry Martin had conducted his defence unreasonably. The Chairman's conclusion was that:
"The undisputed facts have only to be recited to be clear that this is such a case. The hearing today [28th April] has been wasted because until the correct identity of the Respondent has been established, the case cannot proceed. Mr Kearns should have had his client in attendance if he was not seized of the full facts, and at a minimum he should have had the personnel file on this (and the other) Applicant."
Mr Bowden sought order for payment by Mr Barry Martin of £117.50p. Mr Kearns did not dispute the sum, though he disputed the liability to pay it. The Chairman said he was satisfied it was an appropriate case on which to exercise his discretion under Rule 11(1) and he ordered Mr Barry Martin, the 1st Respondent, to pay that sum to Mrs Lynchehaun. All those matters appear in the Reasons for the decision notified to the parties on the 4th May 1993.Although that is not the Order appealed against, it is a significant part of the background to the later Order which is appealed against. We have been informed that the sum of £117.50p was paid to the Applicant, Mrs Lynchehaun.The adjourned hearing came on on the 17th September 1992. The representation was not quite the same as before. Miss Skerry appeared "in person". Mr Bowden again appeared for Mrs Lynchehaun. A Legal Executive, Mr Peakall appeared for the Respondents. The Order which was made, and which is the subject of this appeal, was an Order for costs. The Chairman made an Order, again under Rule 11(1) of the 1985 Rules, that the 1st Respondent, Mr Barry Martin pay £352.50p to Mrs Lynchehaun in respect of costs thrown away on the grounds that he had conducted the proceedings unreasonably. The Chairman referred to the same issue identified in the earlier decision. The interlocutory hearing was taking place to determine the true identity of the employers of the Applicant. He referred to the earlier hearing on the 28th April. He said that he was told on the 17th September, that the position was the same as it had been on the 28th April. That is that those representing the Respondents were bereft of relevant information or documentation. The Chairman said in paragraph 3 of Reasons, notified to the parties on 21st September 1993:
"3. I am coming round to the view that the Respondents are seeking to avoid giving any information about their companies and when the Applicants were employed by each, or produce any relevant documents. In those circumstances, I shall make an Order for the production of the relevant documentation.
4. This hearing will have to be adjourned once more so that the true identity of the employer is ascertained."He heard Mr Bowden's application for costs, made on the basis that Mr Barry Martin had conducted his defence unreasonably. The Chairman repeated his view that he agreed with that. Costs had been wasted because, until the identity of the employer had been established, the case could not proceed. He exercised his discretion under Rule 11(1) to order Mr Barry Martin to pay to Mrs Lynchehaun the sum of £352.50p.There is an appeal against that. The appeal has several unusual features. First it is unusual for appeals to be made against Orders for costs, because they are in the discretion of the Industrial Tribunal. A discretion can only be appealed if it is exercised in a way that is contrary to principle or by regard to irrelevant factors or failure to have regard to relevant factors. Secondly, the Order for costs was not one made at the final hearing before the Industrial Tribunal. It was an Order made at an interlocutory hearing. Such an appeal is even more unusual. An appeal can lie, however, if it can be established that there was a point of law which arose from the decision and that the decision of the Chairman was legally flawed. Mr Kearns, who appeared today for all the Respondents to both sets of proceedings, submitted there was a flaw. It was quite simply this: that the power of the Chairman to make an Order for costs is limited to the circumstances identified in Rule 11. Rule 11 provides:
"a tribunal shall not normally make 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 . . ."
in such circumstances, an Order can be made that that party, that is the one whose conduct falls within that description, 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.Mr Kearns' point was that the Order for costs can only be made against a party in favour of another party. The Order in this case had been made against Mr Barry Martin in favour of Mrs Lynchehaun. Mr Barry Martin, though a party to the proceedings brought by Miss Skerry, is not a party to the proceedings against Mrs Lynchehaun. There was no power under the Rules for the Chairman to make an Order that Mrs Lynchehaun's costs be paid by Mr Barry Martin. That, if correct, would be a point of law and would be sufficient to undermine an Order for costs. It is clear from the Rule that the Tribunal, or its Chairman, can only make an Order for costs against a party.The question which has emerged in the course of the argument on this appeal is, who exactly was the party to Mrs Lynchehaun's application? The only person she named as a party was the Barry Martin Group. Who is the Barry Martin Group? Nobody is able to say for certain at this stage because of the continued failure of the Respondents to produce documentation. The decision on costs could only have been made by the Chairman and can only be considered by us on the basis of the information made available. The information so far made available indicates, with sufficient clarity for the purposes of the decision of the 17th September, that the Barry Martin Group is none other than Mr Barry Martin himself. There is no evidence that there is any Company called "Barry Martin Group of Companies" with a separate legal entity. The letter of the 20th October 1992, written to the two Applicants terminating their employment, was signed by Mr Barry Martin with the word " Chairman " typed underneath his name. It is headed "Barry Martin Group of Companies". In the letters written by the Respondents' Solicitors a number of companies are named. None of them is a company registered in the United Kingdom under the name "Barry Martin Group Limited". In those circumstances it appears to us that the Chairman was entitled, on the facts put before him, to come to the conclusion that the Respondent named in Mrs Lynchehaun's proceedings as the "Barry Martin Group" was Mr Barry Martin. In our view, he was, in those circumstances, making an Order against somebody who was a party to the proceedings. Therefore there was no error of law in his decision. For those reasons we propose to dismiss this appeal while at the same time making one variation in the Order to reflect the position which has emerged on this appeal. Under the Employment Protection (Consolidation) Act 1978 Schedule 11, paragraph 21(1) this Tribunal has powers for disposing of an appeal to exercise any powers of the body from whom the appeal was brought. In our view it would have been a more precise form of Order if the Chairman had said that he Ordered the 1st Respondent and the 3rd Respondent to pay £352.50p to Mrs Lynchehaun in respect of the costs thrown away on the grounds that he had conducted these proceedings unreasonably. We shall, therefore, include the words "and 3rd Respondent" and dismiss this appeal.After argument the President stated:If any clarification is needed, the reason why we have put in, as a variation to the Order, that it is against the 3rd Respondent as well as the 1st, is that seems technically correct. The 3rd Respondent was, in the view of the Chairman, (and in our view he was entitled to come to that conclusion) the name under which Mr Barry Martin was conducting his business.For reasons given earlier this appeal was dismissed with a small variation in the form of the Order to cover the 3rd named Respondent as well as the 1st Respondent. An application has now been made by Mr Bowden, a Solicitor acting for Mrs Lynchehaun, that the costs of the appeal be paid by Mr Barry Martin and the Barry Martin Group. Under Rule 34 of the Employment Appeal Tribunal Rules 1980 there is jurisdiction to order costs to be paid where it appears to this Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings. In those circumstances this Tribunal may order the party at fault to pay any other party the whole or such part as it thinks fit of the costs and expenses incurred by that other party in connection with the proceedings. The Order may take the form a sum which we assess to be paid or may take the form of a direction that the assessment take place by a taxing officer.We have heard arguments in support of the application for costs, which is opposed by Mr Kearns on behalf of his clients. We have reached the conclusion that this is a case in which we should make an Order that the costs of the appeal be paid by the unsuccessful Appellant, Mr Martin. In view of what we have already said about the third named Respondent, the Barry Martin Group, an Order of costs will also be against that Respondent, which we have indicated already appears to be Mr Barry Martin in a different guise. The reason that we order the payment of costs is that there has been unreasonable conduct in the bringing of this appeal. We have set out the background. We particularly refer to the earlier decision on the 28th April when an Order was made against Mr Barry Martin, not appealed, and payment was made. That hearing had to be adjourned because the Solicitor attending had no instructions or documents. At the adjourned hearing, at which the Order appealed against was made, the same firm appeared for the Respondents. According to the decision the representative who appeared was not able to help the Tribunal with relevant information and documentation on the crucial question of the identity of the Applicants' employers. The Order for costs was made against Mr Barry Martin. The only ground of his appeal was that he was not a party to Mrs Lynchehaun's proceedings. We have held that there is nothing in that point since the only person who could be covered by the description of the Respondent to her proceedings, Barry Martin Group, was Mr Barry Martin himself. No evidence has been produced to show that that name could be properly applied to any other legal entity, either in the form of a limited company or another individual or entity. In those circumstances Mr Barry Martin always has been a party to her proceedings. The point taken on the appeal, that the Order had been made against a non-party, was entirely misconceived. It was unreasonable to take the point to appeal.

JUDGMENT ON COSTS

We have decided that on the Order for costs it is preferable to assess the sum to be paid rather than direct a taxation which would incur further costs. We asked for a figure, Mr Bowden has provided us with details of the hours spent and the rate of charging plus VAT. That produces a total of £1,034. Mr Kearns submitted that £100 an hour would have been a more correct sum than £160. We are however satisfied that the charging rate by Mr Bowden and the figure which he has given for hours is a reasonable figure. We would therefore accept it. We therefore Order that Mr Barry Martin and Barry Martin Group pay the sum of £1,034 in respect of the costs of this appeal to Mrs Lynchehaun.We order payment of that sum and indicate that this sum ought to be paid as soon as possible. 14 days would be a reasonable period, but we are not making an Order to that effect. We include in the Order a Liberty to Apply on that. If there is a problem leading to the enforcement of the Order, because we have not specified a period, the parties can come back on notification to Mr Kearns' firm. At the moment we are not satisfied that we have power to include a deadline of 14 days in the order.We therefore make the Order for Costs against both Barry Martin and Barry Martin Group on the same basis that we have upheld the decision of the Chairman. The evidence indicates that they are one and the same person. The evidence at the full hearing may indicate otherwise, but the decision on costs is on the basis of evidence at present available.