Sood v Aquapal Ltd (In Liquidation) [1999] UKEAT 1366_96_2704

EAT

Sood v Aquapal Ltd (In Liquidation)

[1999] UKEAT 1366_96_2704 · 1999-04-27

MR JUSTICE LINDSAY : This is an appeal by Mr Pardeep Sood, who was the applicant below, in the matter Pardeep Sood -v- Aquapal Limited, Aquapal having earlier employed Mr Sood. The appeal is against the decision of the Employment Tribunal at London (South) promulgated on 17th October 1996. There had been two days of hearing, 18th April 1996 and 4th October 1996. The respondent company does not appear before us today for reasons which will become apparent.

The unanimous decision of the tribunal was that:

"(i) the application was struck out pursuant to the powers accorded to the Tribunal under Rule 13(2)(e) in that the conduct of the Applicant in pursuing this claim is scandalous;

(ii) the Applicant do pay the Respondent's cost, taxed on County Court Scale 2 if not agreed."

We need to begin by looking at Rule 13(2)(e); it reads as follows:

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

(2) A tribunal may-

. ..

(e) subject to paragraph (3), at any stage of the proceedings, order to be struck out or amended any originating application or notice of appearance on the grounds that the manner in which the proceedings have been conducted by or on behalf of the applicant or, as the case may be, respondent has been scandalous, frivolous or vexatious;

. ..

[ Subparagraph (3) makes provision that opportunity shall be given to a party to challenge why an order should be made. ]"

Looking at the background of the case, Mr Sood lodged an IT1 on 26th November 1995 claiming that he had been dismissed on 31st August 1995. In his Box 1 to the IT1 that says:

"Please give the type of complaint you want the tribunal decide ... If you have more than one complaint please list all of them."

He completed it:

"Breach of contract

Unfair dismissal

Failure to provide formal written contract"

That was met by Aquapal with an IT3 that claimed that he had not been dismissed but rather had resigned. Aquapal sent to the Employment Tribunal a copy of a letter of 1st July 1995 and Aquapal claimed that it was Mr Sood's letter of resignation. There are some notable features about that letter to which we must refer. First of all it includes Aquapal's Email address; it purports to be the Company's writing paper and includes its Email address. Secondly, its date is rendered as "1st July 1995" and the first part of that is written with a large "1" followed by a lower case "s" and a lower case "t". That lower case "s" and lower case "t" are level at the foot of the figure "1". Thirdly it is typed in a particular font. The genitive - "Company's" - is twice rendered in the course of the letter wrongly as "companies". What appears to be Mr Sood's signature appears on the letter, in a space between "Yours faithfully" slightly above it and the typed words "Pardeep Sood" slightly below the signature. But the signature appears in such a way that part of the signature either underlies or is superimposed upon the typed lower words "Pardeep Sood". All these are features of that letter of 1st July 1995 which came to be rather important.

The first day of the hearing at the Employment Tribunal was 18th April 1996 and we do have excellent Chairman's Notes and from that it appears that in his examination-in-chief Mr Sood described a number of features connected with that letter and other matters. First of all he said that he had not resigned; it was true that the letter that was produced bore his signature but he had not written the letter. He had signed some blank sheets of paper and he gave a reason for that; he said that Aquapal did not have an Email address as at 1st July 1995, which was the date of the letter, or, indeed, at 17th July 1995; he said that the font used in the alleged letter of resignation was a type used by a Mr Anthony of the Aquapal Co. but was not one used by Mr Sood; he said that when he wrote "first", as an abbreviation, he would write a "1" with a little "st" high and not with the "st" low, as the letter had it. That was the examination-in-chief. Then Mr Sood was cross-examined and he added that the sheets that he had signed with his signature were totally blank when he signed them, with no letter heading either. He did not have the software needed to produce the kind of letter which 1st July 1995 letter was; that he had only some other font than the font there used; he did not produce the letter and he did not think he was mistaken about the letter. At that point his case (and he was then represented by Counsel) concluded and Aquapal's case then began, still on day one, with the examination-in-chief of Aquapal's Company Secretary and Director or at any rate its principal officer, Mr David Anthony. Mr Anthony in evidence-in-chief said that Mr Sood had given him the letter of resignation; that although it was dated 1st July 1995 it was handed to him, Mr Anthony, on 19th July 1995; that Mr Sood had signed the letter in front of him; that he had no knowledge of Mr Sood having signed blank sheets of paper; that the Company's writing paper was produced by Mr Anthony at his home on his computer at home and that the Email address was put on the Company's writing paper from about the end of June 1995, even though the Email facility was not actually available till later. That seems to have been his evidence. His cross-examination then began and he reiterated that Mr Sood had handed him a letter of resignation and that the Email supplier was due to supply the Email from 15th July 1995. The cross-examination of Mr David Anthony on that first day was relatively brief. Some measure, perhaps, of its brevity can be derived by noticing that the Chairman's Notes of Mr Anthony's evidence-in-chief is over 3½ pages of Chairman's Notes, whereas his cross-examination on that first day was recording only within something like a third or half a page. The Chairman's Notes then record:

"The matter then adjourned for the Respondents to produce to the Applicant a copy of:-"

and then nine headings of different kinds of documents are referred to in the Chairman's Notes which were directed to be produced at the adjourned hearing. So the Employment Tribunal plainly contemplated a continuing cross-examination, including, no doubt, cross-examination on those documents yet to be produced.

As to the so-called resignation letter, the Chairman's Notes say this:

"1. The parties agree a forensic expert to examine the "resignation letter"

2. The parties to agree the terms of reference for the expert.

3. The Respondents to be responsible for the expert's costs.

4. Joint instructions to the expert to be sent to the Tribunal with necessary envelope duly stamped to send by registered post to the expert.

5. Instructions to the expert to require the original and his report to be sent back to the Industrial Tribunal, with copy of his report to both parties."

That was all on 18th April 1996.

Forensic evidence consistent with the Chairman's Notes was obtained and the matter came back to the tribunal on 4th October 1996.

In the decision of the Employment Tribunal they dealt with that new position as follows:

"5. At the end of the last hearing it was initially agreed before the parties that one way of resolving this dispute was to submit the letter for forensic examination. Subsequent to that agreement, the Applicant then objected to that course as an agreed procedure. In the event the Tribunal ordered the letter be sent for forensic examination to an expert agreed by the parties and at the Respondent's expense to test whether the signature was made, as the Applicant's claims, before the printing or otherwise and also for an expert's opinion as to whether or not the signature was the genuine signature of the Applicant.

6. Before the Tribunal today, the Tribunal has the benefit of a report from Forensic Document Services Ltd. the agreed specialist. It is not necessary for us to go into the details of the report save to say that the expert's conclusion was that insofar as the letter and signature were concerned, "the deposition of blue ball-point pen ink over the printed name is a clear evidence that the signature was made after the name" and "no significant differences were observed between the questioned and reference signature and there is evidence that the signature is genuine. I have concluded that it likely Pardeep Sood signed the 1st July 1995 letter."

That being so, Aquapal argued at this second day of the hearing, when Mr Sood was now in person, that Mr Sood's IT1 should be dismissed under Rule 13(2)(e). The tribunal deal with that at paragraph 7 of the decision:

"The Respondents sought at the commencement of the adjourned hearing to persuade the Tribunal to dismiss the application as clearly the Applicant's allegation that the Respondents had forged his resignation letter was scandalous behaviour and the Applicant should not be allowed to proceed."

Mr Sood had no explanation, and accepted that he none, for how his signature came to be over the typed words "Pardeep Sood" if he had, as he had claimed, signed a totally blank sheet of paper.

The tribunal weighed up the issues and they said in paragraph 9:

"... However, taking all matters into account we find as a fact that on the evidence before us that the document dated 1 April 1995 [ A typing error it should read 1 July 1995. ] the resignation letter was a letter signed by the Applicant after it had been typed and was handed over by him to Mr Anthony on 19 July 1995 and we find that the Applicant's conduct in insisting that that letter was not genuine and had been "forged" by the Respondents was scandalous conduct."

There was no further cross-examination of Mr Anthony. It will be remembered from the Tribunal's paragraph 7 cited above, the respondents had made this application under Rule 13(2)(e) at the commencement of the adjourned hearing.

Mr Sood has sworn an affidavit saying, inter alia, that he had expected to go on to conclude the cross-examination of Mr Anthony at the resumed hearing. Given the point at which the adjournment had occurred and given the required production of further documents, that seems to us to have been a justified expectation; indeed, the Employment Tribunal seems so to have thought itself because in their paragraph 2 they say:

"... Mr D Anthony, gave evidence and was in the course of being cross examined when the hearing was adjourned because of lack of time, the adjourned hearing was eventually listed for another two days, namely 14 and 18 October 1996."

However, without concluding Mr Anthony's cross-examination the tribunal held that the letter had been produced as Mr Anthony had said it had been, namely produced out of his briefcase and signed in front of Mr Anthony by Mr Sood. There had, it seems, been no full cross-examination of Mr Anthony on a number of points, for example, on the font styles and their use by Aquapal and by Mr Sood respectively; on the availability or not of the Email address as at the purported date of the letter or even the purported date of the handing over of the letter; the point about the spelling error of the genitive "company's/companies" had not been explored in cross-examination; Mr Sood had points which he wished to have addressed as to inconsistency between the purported resignation letter and other letters written to or from him at the time; and the way in which the "1st" had been written, had not been explored either in cross-examination.

Having heard what can only be regarded as part of what would have been and could have been expected to be a larger cross-examination of Mr Anthony, and having seen the forensic evidence, the tribunal concluded, as we have cited, that Mr Sood's conduct was "scandalous", and they went on:

"9. ... In all the circumstances this Tribunal felt that it had no option but to strike out the proceedings. Accordingly, the applications before it are dismissed."

Now of course we recognise that it is for the tribunal to decide which witnesses are to be preferred. We do not say that the tribunal could not properly have preferred the evidence of Mr Anthony. Plainly the forensic evidence that Mr Sood's signature ran over the typescript on the page was a very significant factor against Mr Sood and it was the case that he had no explanation for that. Moreover, although it will almost invariably be correct for any tribunal finally to conclude questions of credibility only at the end of a full examination-in-chief and cross-examination, we do not say that there can never be cases where those who have had the benefit of observing the demeanour of witnesses cannot cry "enough is enough". It may be that this was such a case. We do not say whether it was or was not. Nor do we say that it cannot ever be scandalous conduct within Rule 13(2)(e) for a party to lie and to persist in lies in his evidence or in her evidence. We do not say that that was the case here. But in any event, where a party or witness does lie, it is plainly better to hear the matter out to its conclusion and then to rule upon it on the merits, as by then they will have been seen to be. However, Rule 13(2)(e) is very broadly cast in its terms and we do not say that it can never be used to put an end to a case under the Rule before what otherwise would have been the end of all relevant evidence. The point that does seem to us crucial, though, in relation to that Rule, is that it confers a discretion. It begins with the words "A tribunal may ...". Even where Rule 13 is satisfied, (as, without so deciding but upon our assuming that such may be the case here) and even where, again, as we are prepared to assume, the tribunal was entitled to find that the manner in which proceedings were being conducted by or on behalf of a party had been "scandalous", even so there is a discretion to be exercised as to whether or not to visit that scandalous conduct with a striking out. If a tribunal finds that it has or regards itself as having no choice but to visit the scandalous conduct with a striking out, then that is not the exercise of a discretion. Here, as we have indicated, the tribunal felt that as Mr Sood's conduct had been "scandalous" it had no option but to strike out the proceedings. That is an error of law. It did not exercise a discretion.

There are arguable undesirable features of the case, in the sense that the cross-examination of Mr Anthony was not concluded and that a decision on the merits, which was plainly the more acceptable way of proceeding, was never arrived at, but we do not need to examine into that, nor to examine the proper boundaries to be set for Rule 13(2)(e). The error of law which we see to have occurred here was in the tribunal feeling that they had no option, once they had found scandalous conduct, but to strike out the proceedings. Therefore, we allow the appeal.

We mentioned at the outset that the reason why the respondent Company was not before us would become apparent. The reason is that Aquapal is in insolvent compulsory liquidation as from 20th January 1999. The official receiver is the liquidator. He has indicated that the Company has no assets and has liabilities of £70,937 odd. It may well be entirely futile in money terms for Mr Sood to persist with the case. That is chiefly a matter for him and his advisers. But we do see as appropriate to allow the appeal and if he wishes it to be remitted to a fresh tribunal then we shall so remit it.

Do you wish that Mr Sood?

Mr Sood : Sir, the situation regarding the Company is that though they have gone into liquidation, they are now trading with the same product and technology they have transferred over to another company.

MR JUSTICE LINDSAY : Well that is a matter you will have to take up with the Official Receiver.

Mr Sood : Indeed, it is for that reason I would like to take the option to proceed further so that that can also be looked at.

MR JUSTICE LINDSAY : So you do ask us to remit it to a fresh tribunal?

Mr Sood : That I do Sir.