Smith v John Singh & Co [1999] UKEAT 1139_98_2701

EAT

Smith v John Singh & Co

[1999] UKEAT 1139_98_2701 · 1999-01-27

MR JUSTICE MORISON : There were two grounds in an appeal which the Appellant, Miss Smith, wishes to make against a decision of an Industrial Tribunal. The first was that the Industrial Tribunal should have granted her application for an adjournment but did not. Miss McNeill, who has appeared on the Appellant's behalf, with conspicuous ability, says that that point will no longer be pursued but instead she puts forward three grounds of appeal in relation to a quite separate point. We can indicate what those grounds are once we have elaborated the background to this Appeal.

On 27 July 1998 the Applicant's case, which had alleged race discrimination against her former employer, Mr John Singh, came on before the Tribunal at London South. The case had been listed for a two day hearing commencing 27 July by a notice of hearing sent to the parties dated 4 June. By a letter dated 24 July and faxed to the Tribunal the Applicant set out a course of events which she said had taken place and said that in the light of those events she saw no point in attending the hearing on the Monday, the 27th. By this time the Respondent had appointed a Solicitor to act for him.

On 27 July the Applicant did in fact appear before the Tribunal. She said that she wished to go ahead and not withdraw because she had panicked on the previous Friday - she had not taken legal advice on the withdrawal and had had the weekend to consider it. So, through her representative she applied for an adjournment to consider her position, making it plain to the Tribunal that if she was not going to be granted an adjournment then she would withdraw her application as she had previously indicated.

The Respondent contended that it was only at 5.45pm the previous Friday that he had been informed of the proposed withdrawal. Although his witnesses were informed not to attend and he had only brought the papers necessary to deal with costs a fixed fee of £700 by way of legal costs had now been incurred. It was submitted that the whole of the proceedings had been an abuse of process and vexatious and was being used for a collateral purpose of discrediting the employer, Mr Singh and, accordingly, the representative of the Respondent asked for the costs of the proceedings.

The Applicant told the Tribunal that she had been unemployed since her dismissal, that all she had was debts rather than assets and she was in receipt of unemployment benefit of £50 odd a week which was her only income. The Tribunal concluded that it would be unjust to adjourn the proceedings and, accordingly, the Applicant's application would be dismissed on her withdrawing it. She was ordered to pay £250 in costs:

"...because it is clear she has an earning capacity, although we are bound to accept that she is presently unemployed. We do not see why she should be unemployed. The County Court is responsible for enforcement of the order and can make an appropriate order for payment by instalments if it is thought appropriate. The Tribunal finds that there has been vexatious conduct on the part of the Applicant in the last minute waste of time. The Tribunal is not, however, prepared to consider an application for costs related to the whole action, because it would be impossible to arrive at any views on that issue without a full scale trial of the merits of the case. The sum ordered to be paid is a substantially lesser amount that that claimed and which has been incurred by the Respondent, but that is intended by the Tribunal to be a reflection of the financial position of the Applicant."

Miss McNeill takes three points in relation to the costs order. First she submits that is was wrong in principle, because where a party in a difficult case of discrimination decides, even at the last moment, that it would be better not to proceed with it such a party should be encouraged not to pursue it and to either settle it or, as here, to withdraw it. Where an applicant for one reason or another decides not to go ahead with such an application, to punish them in costs would be a discouragement and would cause parties who otherwise wanted to withdraw from the proceedings to go ahead with them knowing that the Tribunal's powers to award costs at the end of the day would be circumscribed.

Secondly, and importantly, she says that the order for costs was made against the Appellant without her having had an opportunity to address the Tribunal as to whether a costs order should have been made. In support of that contention we have been supplied with an affidavit from her representative, a Mr Ibekwe, who was present on her behalf at the Industrial Tribunal. His account is that the Solicitor representing the Respondent made an application for costs. Following that application he sought from the Employment Tribunal clarification of the grounds on which the costs application was being made and further asked that he be afforded opportunity to advance argument to show cause why such order should not be made.

The Chairman of the Tribunal, Mr Lamb, promised that he would be afforded an opportunity to speak or make submissions on behalf of the Applicant after a short break or recess - but that on the resumption of the proceedings immediately following the short recess the Employment Tribunal proceeded to announce its decision without any further submission from the parties.

That account is, so Miss McNeill submits, supported by the notes of what took place at the hearing made by the Appellant which, if they are accurate, confirm the sequence of events outlined by her representative. In other words, what is being submitted, is that there has been a procedural mishap; the Tribunal having adjourned over lunch came back and were hasty in their decision and had forgotten that they were due some representations from the other party.

The third ground of appeal was that the Tribunal were wrong in any event to make a costs order against the Appellant, even if they were satisfied or entitled to be satisfied that she had been acting vexatiously because of her means. The argument being that no Tribunal should make an order of this sort, to pay £250, when the person's only means are public funds running at the rate of £50 per week. The suggestion that "we do not see why she should be unemployed" without enquiring further of her seems to us arguably unfair and may represent an improper approach to the question of a costs order. It is true that she had passed the solicitors exams but she has not qualified as a solicitor. It is further true she has managed to obtain some part-time work as of the date of the preliminary hearing before us.

We have to say that we regard all those three points as being arguable. It is most unfortunate that there should be a further hearing in relation to this issue as the sum of only £250 is involved. We would invite both parties to consider their positions most carefully in the light of this decision. We would hope that good sense will prevail and that there will be no need for the Employment Appeal Tribunal to consider this matter again. In all the circumstances, therefore, we allow this to proceed for a full hearing, expressing the hope that no such hearing will in fact take place.