McLaughlin v London Borough Of Southwark [1997] UKEAT 1218_97_2110

EAT
McLaughlin v London Borough Of Southwark
[1997] UKEAT 1218_97_2110 · 1997-10-21
MR JUSTICE MORISON (PRESIDENT) : This is an interlocutory appeal. It is an appeal by Mrs McLaughlin against a decision of an Industrial Tribunal which was arrived at by the Chairman sitting alone on 13th October 1997. It is an urgent matter as the case, to which I will refer in a moment, is due to be heard tomorrow, 22nd October 1997.The background to this appeal is that the appellant has made complaints against her former employers, the London Borough of Southwark who are the respondents to this appeal. She alleged that she had been discriminated against on the grounds of her sex and that she had been unfairly and unlawfully dismissed by the Borough. Those complaints were presented some considerable time ago, in 1995. The matter has still not come on for hearing. The interlocutory history in relation to this matter makes gloomy reading and it is fully set out in a decision of a Chairman, Mr Warren, which runs to some 27 pages which was sent to the parties on 4th August 1997.Essentially what has happened is that the London Borough of Southwark have singularly failed to comply with orders that have been made by the Industry Tribunal in relation to discovery. The Chairman took a serious view of their failure; looking at their conduct he said one can only conclude "that the omissions have been deliberate"; in a further passage the learned Chairman said this:
"59. ... In my view, the Applicant has been prejudiced and at this stage there has been a non-disclosure of documents which it is clear must have existed - they are documents of record which one would expect to be found in a local authority and which are crucial to the Applicant to properly present her case. It beggars belief that such important documents cannot be found. Many questions are un-answered. The Respondents have had 15 months in which to comply with the Orders. It appears from the evidence that the Respondents have failed to take with the seriousness that one would expect Order of the Tribunal. They have not dealt with this litigation professionally. ... However in this case I am satisfied that all of the information sought in the questions and the documents sought to be discovered are important to the Applicant in presenting her claim and are necessary to assist the Tribunal in disposing of the claims fairly. The Respondents' failure therefore to comply with the Orders in my view has undoubtedly prejudiced the Applicant and prejudices a fair trial."
In paragraph 60 of the decision the learned Chairman said this:
"60. In conclusion the way in which the Respondents have dealt with this litigation leaves much to be desired. The Applicant has been prejudiced by the Respondent's conduct. In my view it is not possible to conduct a fair trial and I therefore strike out the Respondents' Notice of Appearance and debar the Respondents from defending."
There was no appeal against that decision and the Chairman has not been asked to review it. Instead, the London Borough of Southwark sought directions from another tribunal Chairman as to the extent to which they would be permitted, if at all, to participate in the determination of Mrs McLaughlin's complaints. The Chairman, Mr Baron sitting alone on 13th October 1997, having heard submissions, came to the conclusion first of all that the applicant was not entitled as of right to have a decision made in her favour in respect of her claims; and secondly, that the respondents were not entitled to take any part in the hearing of the matter save insofar as it related to any question of remedy. He arrived at his conclusion by reference to what he considered to be the proper construction of the Rules of the Industrial Tribunal. It seems to me with respect to the learned Chairman, he was entirely right to approach the case in that way. He, like me, had been entertained to arguments about the County Court Rules, but he preferred as he saw it to concentrate, rather, on the Industrial Tribunal Rules.It is said on behalf of the appellant that the consequence of the Order made by Mr Warren was that thereupon the applicant became entitled as an administrative act to have judgment entered in her favour on liability. That submission was based on references to the County Court procedure and to various decision to which my attention has been drawn in relation to that procedure.It seems to me with great respect to the argument which was capably advanced, that it cannot stand scrutiny. The County Court procedure permits default judgements to be entered where there has been an act of default within the meaning of the Rules. The Rules provide as to how such default judgments are to be effected, there being a difference between a default judgment for a money sum and a default judgment for unliquidated damages where there must be an interlocutory order for judgment for damages to be assessed. It seems to me that it is a misreading of the decisions to which my attention has drawn to suggest that the entering of a judgment in such circumstances is an administrative act. That submission is based upon the decision in Haridas v Khan [1971] 1 All ER 947 at 950G where the Court said:
"With the greatest respect to the learned judge, I think he was in error. I do not think that he had jurisdiction to make the order that he did. As I have just pointed out, he had full jurisdiction to hear an appeal from the registrar; but I agree with the submission made by the plaintiff that in effect the action of the registrar in ordering judgment and striking out the first defendant's defence on 16th January was an administrative act. It was merely implementing the order which His Honour Judge Honig had made on 27th November 1969."
In that case Judge Honig had made what is described as an "unless order". There had been non-compliance with that order, and accordingly, effectively, the defendants became debarred or struck out, not as a result of the Registrar simply drawing up the order, but as a result of a failure to comply with the 'unless order' made by the Judge. Accordingly, there was no competent appeal against what the Registrar had done to the second Judge, His Honour Ifor Lloyd. If there was to be any kind of appeal, it was against His Honour Judge Honig's original decision which would have been an appeal which had to be made to the Court of Appeal and not to another County Court Judge. I do not regard that case as of any assistance because under the Industrial Tribunal's Rules there is simply no power to have a judgment entered in default.The second argument that is raised is to this effect: that the order made by the learned Chairman Mr Warren had the effect of striking out the respondent's answer and debarring them from defending which in accordance with the true meaning of the order and the Rules had the effect of debarring the respondents from taking any adversarial role either on the question of liability or on the question of quantum.The Rules of the Industrial Tribunal which are deemed to have been made pursuant to s. 7 of the Industrial Tribunals Act 1996 provide for the lodging of a Notice of Appearance by a respondent and Rule 3(2) provides:
"A respondent who has not entered an appearance shall not be entitled to take any part in the proceedings except-"
then there are five exceptions which apply. Rule 4 empowers a tribunal to make orders for discovery and particulars and Rule 4(7) provides that if a requirement of an order is not complied with, a tribunal, before or at the hearing:
"may strike out the whole or part of the originating application, or as the case may be, of the notice of appearance, and, where appropriate, direct that a respondent shall be debarred from defending altogether: but a tribunal shall not strike out or direct unless it has sent notice to the party who has not complied with the requirement giving him an opportunity to show cause why the tribunal should not do so."
It will be noted that the tribunal's power is in two parts, first, to strike out and, second, to debar from defending altogether. The power to strike out is a power to strike the whole of a document or just a part. The power to debar from defending is a power to debar from defending altogether, rather than a power to debar from defending on certain issues as had been the case in the County Court Rules back in 1971.In this case it is, I think, common ground that although the word "altogether" was not used by the learned Chairman Mr Warren, he was purporting to exercise his power under Rule 4(7) to debar the respondents from defending and his only power under the Rules was to debar them from defending altogether, and that therefore, one should approach his order on the basis that he had made an order debarring the Borough from defending altogether. It is also to be noted that the learned Chairman had struck out not just a part of the Notice of Appearance but the whole of the respondents' Notice of Appearance.The question then arises as to what the effect of such an order is. There are other powers in the Industrial Tribunal to strike out either the Notice of Appearance or the Originating Application contained in Rule 13. Rule 13(2)(d) gives the tribunal power to strike out an Originating Application or Notice of Appearance, on the ground that "it is scandalous, frivolous or vexatious". One can imagine circumstances in which it would be entirely appropriate for that Rule to be invoked; for example, if a respondent were to use the procedure as an occasion for making inappropriate racial attacks on or abuse of the other party. Rule 13(2)(e) gives the Industrial Tribunal power to strike out a Notice of Appearance where the manner in which the proceedings have been conducted by the respondent have been scandalous, frivolous or vexatious. There are examples of cases known to the Employment Appeal Tribunal where that power has been invoked in order to protect the tribunal and its members from being abused by participants in those proceedings.Where a power to strike out a Notice of Appearance has been exercised, the question then arises as to the rights, if any, of the party who is struck out from participating in the proceedings. It seems to me that a party who has been struck out in accordance with the Rules but not debarred from defending, could not be in a better position than a respondent who has failed to file a Notice of Appearance and who is then restricted to making limited applications in the course of the litigation under Rule 3(2).Mr Algazy submits to me that the words "debarred from defending" mean as the learned Industrial Tribunal Chairman thought on the second occasion - defending the merits but not defending the issue of quantum. It would be surprising, as it seems to me, if the consequences of an order made debarring a respondent from defending after his Notice of Appearance has been struck out, as in this case, was to put him in a better position than if he had not been debarred from defending in the first place. It seems to me that it must have been in Parliament's mind when the provisions of Rule 13 were made that when a Notice of Appearance was struck out the respondent had limited and specific rights remaining to him; by debarring him from defending, it cannot have been the intention of Parliament that he should thereby have better rights.Accordingly, as it seems to me, when the learned Chairman Mr Warren made an order not only striking out the Notice of Appearance but also debarring the Borough from defending, he can only have intended that Southwark should no longer be entitled to participate in resisting the claim which was made against them, whether in relation to liability or in relation to quantum. That respondent would be in exactly the same position as if Rule 3(2) applied or Rule 4(7) applied or if an order had been made under Rule 13(2)(e).I do not accept, as was submitted to me, that some other construction should be forced on the Court as a result of an analogy with the County Court procedure. It seems to me that the question as to the right of a defendant to participate at a damages hearing where a default judgment has been entered against him, will be of no assistance if the default simply consisted of his failure to take a step required by the Rules. I did not find the case therefore of Harrison v Leake and Another of any assistance. In that case the defendant had a default judgment entered against him, not because an order debarring him from defending had been made, but simply because he had failed to comply with the Rules. That case does not, therefore, bear on the question at issue here.Accordingly, I am of the view that the second Industrial Tribunal Chairman was not entitled to adapt or restrict, as I see it, the full extent of the order which was made by the first Chairman. He arrived at his conclusion on the basis simply that, as he put it, Rule 4(7), speaks of defending:
"to my mind, that refers to defending a claim on its merits, rather than dealing with remedies. I am helped somewhat by the difference in wording in Rule 3(2), but that is a secondary consideration."
That reasoning, as it seems to me, is defective. Once the Notice of Appearance has been struck out, as had happened in this case, the respondent is in no different position from that which he would have been in had he failed to enter a Notice of Appearance in the first place.The subsidiary argument that was made in this case was that effectively the second Industrial Tribunal Chairman was making an order under Rule 9 of the tribunal Rules. Rule 9(1) and (2) provides:
"9.-(1) The tribunal shall, so far as it appears to it appropriate, seek to avoid formality in its proceedings and shall not be bound by any enactment or rule of law relating to the admissibility of evidence in proceedings before the courts of law. The tribunal shall make such enquiries of persons appearing before it and witnesses as it considers appropriate and shall otherwise conduct the hearing in such manner as it considers most appropriate for the clarification of the issues before it and generally to the just handling of the proceedings.
(2) Subject to paragraph (1), at the hearing of the originating application a party shall be entitled to give evidence, to call witnesses, to question any witnesses and to address the tribunal."It seems to me that the defect in that submission is that Rule 9 applies to the parties who are entitled to take part in the proceedings, but not to persons who are not entitled to take part or any part in the proceedings. I use the words "take part in the proceedings" by reference to paragraph 3(2) of the Rules and, as I have already indicated, a respondent who has had his Notice of Appearance struck out will also not be entitled to take part in the proceedings and a person who has also been debarred from defending, will not have the right to do any of the matters referred to in Rule 3(2)(a)-(e) inclusive.Accordingly, I am satisfied that the second Industrial Tribunal Chairman erred in law in construing the Rules of Procedure, and, that on this issue the appeal must be allowed. I substitute, therefore, for the order made by the second Chairman an order that the Borough Council is debarred from defending the claim whether on the issue of liability or on the issue of quantum. The effect of that will be that the Industrial Tribunal will have to hear evidence, whether written or oral, to satisfy itself that the complaint has been made out on liability; in arriving at their conclusion the Industrial Tribunal will be entitled to take into account the fact that as a result of the breaches of the orders made by the London Borough of Southwark, the applicant has been prejudiced in the presentation of her complaint and prejudiced in having a fair trial, so that the adjudication will have to reflect the fact that there may be a lack of material through no fault of her own in dealing with the claims that she has made. It follows also, that when it comes to the question of remedy, the tribunal will have to satisfy itself by evidence that compensation is appropriate and will have to assess that compensation having heard the applicant's evidence. In weighing the evidence the tribunal will, of course, bear in mind that it has been untested by cross-examination and they will wish to scrutinise what is said with particular care. The tribunal will be entitled, if it so minded, to make an order under s.65 of the Sex Discrimination Act 1975 , if it finds that the complaint is well-founded. The London Borough of Southwark are perfectly entitled to attend the hearing if they so wish, but they will not be entitled to participate to defend their position because they have been debarred from defending. That was an order with serious consequences, but one about which no complaint can be made or has been made, bearing in mind the way the Borough has dealt with the tribunal's orders.The appeal is therefore allowed to the extent that I have indicated.I have not done justice to all your arguments, but I have taken this case in rather extreme circumstances. As you will have understood, I normally like to read carefully overnight and prepare myself.I have been asked for leave to appeal in this case, I am not minded to grant it. It seemed to me that the arguments presented on behalf of the respondents had no merit on the point on which I have found in the appellant's favour. I do not therefore regard there as being an arguable point of law fit for hearing before the Court of Appeal. It will be open to the London Borough of Southwark to seek to persuade the Court of Appeal otherwise, but I have no doubt at all that there has been undue and inordinate delay in this case, and that Mrs McLaughlin must have her case heard and determined tomorrow and that no question of an appeal should hold back that step.