Olaleye v. Commission for Racial Equality & Anor [1999] UKEAT 55_99_2901

EAT
Olaleye v. Commission for Racial Equality & Anor
[1999] UKEAT 55_99_2901 · 1999-01-20
MR JUSTICE CHARLES : The parties to this appeal are Mr Olaleye who is the Applicant and the Commission for Racial Equality and Mr C Boothman who are the Respondents.The Applicant appeals from an Order of the Employment Tribunal sitting at London (South) on 24 November 1988. The Order is dated 2 December 1998.The Applicant was represented before us by Counsel, Mr Damian McCarthy, who also represented him before the Employment Tribunal. Mr McCarthy settled the Notice of Appeal and he has provided us with a skeleton argument.We understand that Mr McCarthy and those instructing him had only become involved in these proceedings shortly before the application to the Tribunal on 24 November 1998. In this judgment we have concluded that some basic steps in respect of the applications referred to under Heads (2) and (3) below were not taken. We do not know, and can make no informed observations as to, why this occurred but record that we appreciate that difficulties and pressures arise when advisers come into a case late in the day which could explain it.The appeal was under five headings. We dismissed the appeal save for two points agreed before us by the Respondents, namely that:(a) the words "by direct discrimination or" should be added before the word "victimisation" in the penultimate line of paragraph 5(e) of the Order, and(b) the Order inaccurately records that the directions contained in paragraph 5 were "agreed" and therefore that the word "agreed" should be removed from the introductory line of paragraph 5 of the Order. This point would only have been a point of substance if it had been argued, which it was not, that an appeal did not lie in respect of this part of the Order because it had been made by consent.

Head (1) - Costs Paragraph 2 of the Order

The Tribunal reserve the costs of the adjournment granted. It did so on the basis that the costs so reserved would be considered at the end of the hearing listed for February 1999. In our judgment this Order was plainly within the ambit of the Tribunal's discretion and we are surprised that an appeal on this point was pursued.It was said by Mr McCarthy that an implication of this decision to reserve costs was that when they came to be considered the Tribunal would apply the wrong test because it would take into account the merits of the case as found subsequent to the grant of the adjournment. In our judgment this argument has no force. As and when the Tribunal come to consider the costs reserved, it is open to the Applicant to make such representations as he thinks fit concerning the approach and test to be applied in respect thereof. We reject the submission that there is any implication in the decision to reserve costs as to the test that the Tribunal will apply in determining the reserved question.Head (2) - The denial of the application to reopen the Order of the Chairman (Ms Taylor dated 20 January 1998 concerning proceedings settled in September 1996 and those proceedings themselves - paragraph 3 of the Order).The background to this head of appeal is that by an Originating Application issued in 1996 by the Applicant against the Respondents, and one other individual, the Applicant claimed that he had been the subject of race discrimination. In those proceedings the decision of the Tribunal was that the application be dismissed on withdrawal by the Applicant of his allegations on terms agreed between the parties in writing. Those terms stated that the allegations made by the Applicant were withdrawn. The agreement which founded the settlement and dismissal of these earlier proceedings was in writing and was signed by the Applicant and on behalf of all the Respondents. That document was before us and it provided that the Commission for Racial Equality was to do certain things. The Applicant alleges that it has failed to do so.In January 1988, Ms Taylor (the Chairman) decided that it would not be just and equitable for the Tribunal to consider complaints in these proceedings based on acts alleged to have taken place between 1992 and 1996 which had been relied on in the 1996 proceedings that had been dismissed upon withdrawal of the complaint by the Applicant. That decision was not appealed and was plainly, and in our judgement correctly, based on s.68 of the Race Relations Act 1976 .As we understand it, Mr McCarthy in his skeleton accepted that the Applicant could not seek to raise in these proceedings the allegations covered by Ms Taylor's Order but still submitted that the parts of the 1996 application that are potentially excluded from these proceedings only by reason of the settlement agreement and the dismissal of those proceedings based thereon should be reopened.However the Notice of Appeal goes wider because it includes an assertion that the Tribunal erred in denying the Applicant's application to reopen the Order of Ms Taylor. It is thus apparent from the Order appealed against that at the hearing on 24 November 1998, (some 11 months after Ms Taylor's Order). The Applicant tried again to obtain a Direction or Order that in these proceedings he could reopen all the complaints made in the 1996 proceedings, or argue that he could reopen all those complaints, and that this application was refused.His basis for reopening, or seeking to reopen, and introduce into these proceedings the complaints made in the 1996 proceedings (or on the basis of Mr McCarthy's concession in his skeleton for introducing some of those complaints into these proceedings) is an allegation that the agreement upon which the settlement and dismissal of the 1996 proceedings was based is voidable in that "it was made under a misrepresentation by the Respondents and/or under economic duress".These are serious allegations against the present Respondents (or one of them) and in our judgment, it is, and always has been, incumbent upon the Applicant to set out the allegations upon which he seeks to rely as grounds for having the settlement agreement set aside fully and precisely. Further it is, and always has been, the duty of the people representing him to ensure that the relevant allegations are properly identified, particularised and put before the Tribunal.No document purporting to be the grounds, or particulars, of the alleged misrepresentations, or economic duress, upon which the Applicant sought to rely has been served on the Respondents or put before us.However in his skeleton argument (paragraphs 10-12), Mr McCarthy sought to set out what the Applicant relied on. These paragraphs did not obtain any allegation of economic duress, and although that ground remained in the Notice of Appeal it was not advanced orally before us.Paragraph 12 of that skeleton is in the following terms:
"12. The Appellant relies on those facts and matters raised in his second and third applications and the Further Particulars to support his allegation that the Respondent's misrepresented their intentions at the time the agreement was drawn up."
Paragraph 10 of the skeleton refers to an allegation that the Applicant says that following the settlement he was almost immediately subjected to treatment by Mr Boothman, the second Respondent, which caused him feelings of hurt, humiliation and embarrassment. Paragraph 11 refers to evidence of the Applicant's union workplace representative to the effect that following the compromise agreement there had been a lack of progress and that the Applicant's case was not being addressed honestly and frankly for some reason.We put it to Mr McCarthy that it seems that what the Applicant was seeking to assert was that the Respondents had acted dishonestly in that he was saying that at the time they entered into the settlement agreement they had no intention of performing it.When we put this to Mr McCarthy he responded that he appreciated the duties of Counsel, and a litigant, when asserting dishonesty to do so fully and clearly but as he had difficulties in this respect he was only asserting that there was a misrepresentation.Naturally we accept that when it is open to a party to rely on a negligent, or innocent, misrepresentation there is no need to assert dishonesty. But here the misrepresentation that the Applicant seeks to rely on cannot have been made innocently, or negligently, because it relates to the subjective intention of the Commission for Racial Equality not to perform the settlement agreement. This was confirmed by the passage in Chitty on Contracts that Mr McCarthy sought to rely on after the luncheon adjournment. As we understood it he referred us to this passage to support his submission that the Applicant, and he as Counsel acting for him, could properly assert simply that there was a misrepresentation without asserting, and particularising, dishonesty and thus who it was alleged had the relevant dishonesty intent and why. The passage Mr McCarthy referred us to is at the end of paragraph 6-004 of Chitty and reads as follows:
"With regard to a statement of intention, this may be looked upon as a misrepresentation of existing fact if, at the time when it was made, there was not the will or the ability to put the intention into effect; for the promisor's state of mind was not what he led the other party to believe it to be. Thus, where a man ordered goods having at the time the intention not to pay for them, he was held to have made a fraudulent misrepresentation. There is no doubt that a statement as to the intention of a third party is a statement of fact and can constitute a misrepresentation in the ordinary way."
Here the Commission for Racial Equality had the ability to perform the settlement agreement and therefore this passage confirms that what the Applicant says he wants to assert is that it, through its representatives made a fraudulent or dishonest misrepresentation.In our judgment such a case must be properly put and particularised and it is not good enough for the Applicant to make, or seek to make, such allegations in a general way, or to submit that all that is being asserted is a misrepresentation.We also raised with Mr McCarthy the question whether the Tribunal would have jurisdiction to set aside the settlement agreement and the dismissal of the 1996 proceedings based thereon. The reason for this question was that in many other areas it is necessary to start new proceedings to set aside a settlement on the basis of misrepresentation and/or economic duress.Mr McCarthy sought to answer this point in his skeleton argument, and orally, by relying on the construction put on the term "agreement" in s.203 of the Employment Rights Act 1996 in Hennessy v. Craigmyle & Co. Ltd and Another [1985] IRLR 446 [1986] ICR 461, namely that the term "agreement" therein was subject to all qualifications by which an agreement can be voided at common law. Mr McCarthy went on to submit that this interpretation should be placed on the "agreement" referred to in Rule 13(2)(b) of Schedule 2 to the 1993 Regulations . In our judgment this argument does not answer the point because it does not deal with the question: How does the Tribunal have jurisdiction in these proceedings, or otherwise, to determine the issue whether the earlier settlement agreement and dismissal can be avoided? Rather this argument was directed to the undisputed point that the settlement agreement and the dismissal based thereon could be avoided at common law. In the Hennessy case the Tribunal had jurisdiction because the extent and effectiveness of the agreement referred to in s.203 of the Employment Rights Act was an issue before it under its statutory jurisdiction.However, in answering our own question, we have concluded that the Tribunal would have jurisdiction to determine whether this settlement agreement and consequent dismissal of the 1996 proceedings was voidable and should be set aside or disregarded in determining, pursuant to s.68(6) of the Race Relations Act 1976 ,whether it was just and equitable to hear the complaints that were the subject of the 1996 proceedings out of time.In our judgment on what was presented to it in January and November 1998 the Tribunal did not err in law in refusing to allow the Applicant to make complaints in these proceedings out of time based on matters alleged in the 1996 proceedings which were dismissed pursuant to the settlement agreement reached in 1996.In our judgment before the Applicant can properly invite the Tribunal to exercise its discretion under s.68(6) in this respect he must properly set out and particularise his case as to why he asserts that the settlement agreement is voidable. By failing to do this the Applicant failed to take an initial and basic step to enable him to make an application that the complaints made in the 1996 proceedings should be reopened and introduced into these proceedings, or that one of the issues in these proceedings should be whether this could be done.Further even if this basic step was to be taken other issues would arise which the Applicant would have to deal with before he could properly make such an application. These include the provision of the explanation for the delays which have occurred and why it would be fair to introduce such matters at this stage. Also the point made by Mr McCarthy that the Applicant wishes to bring in the allegations made in 1996, in effect, as a "fail safe", if his main allegations in these proceedings fail, needs to be considered. The main allegations in these proceedings are that there is a pattern, or a continuum, of discrimination against the Applicant, or alternatively that the allegations post 1996 are individually unlawful. The "fail safe" is that if those main allegations fail and the 1996 allegations had been let in as the subject matter of complaints the Applicant might succeed on one or more of them as individual unlawful acts. This "fail safe" argument does not seem to us to be a strong one in favour of extending time.Further it seems to us, on the information we have, that to have any realistic chance of establishing that the settlement agreement should be set aside the Applicant would have to show that the Commission for Racial Equality has failed to perform it at all, or has failed to perform substantial parts of it. Mr McCarthy submitted that evidence as to such matters would be part of the background he would seek to put before the Tribunal and, as was pointed out during the course of the hearing, it seems that it would be a comparatively simple exercise to examine the questions whether the settlement agreement has been performed, or substantially performed, and if not, why not. If the Applicant was to demonstrate that it had not been performed, or substantially performed, we are unclear, and it was not explained, why the Applicant would gain any appreciable benefit by going further back into the history of disputed allegations which might take a considerable time and therefore put the parties to expense.Head (3) - The denial of the application to add Mr Ousley, Miss Rayworth and Mr Cousins as Respondents - paragraph 4 of the Order .Mr Ousley is the Chairman of the Commission for Racial Equality and is still employed by them. Mr Rayworth and Mr Cousins are no longer employed by the Commission for Racial Equality.The claims that the Applicant would make against these individuals would be under s.33 of the Race Relations Act 1976 , which provides that when a person knowingly aids another to do an act made unlawful by the Act he shall be treated as himself doing an unlawful act of the like description. A claim under s.33 is a complaint within s.54 and therefore the time limit in s.68(1) applies to it. The fact (if it be the case) that the allegations would be made against the individuals to found liability under s.33 are already being made against the existing Respondents does not mean that that a new and additional complaint is not being added to the proceedings if the individuals, or some of them, are joined as additional Respondents.Mr McCarthy opened his submissions on this appeal to us by dealing with this Head first. He submitted that the reason the Applicant wanted to join these additional individuals as parties and why the Applicant will be prejudiced if he could not do so was because it had been indicated that the existing Respondents were not calling them as witnesses. Mr McCarthy further submitted that if the Applicant called them he would not be able to cross examine these individuals in an attempt to support or found his case notwithstanding that the normal rules of evidence do not apply in a Tribunal and it has a duty to make enquiry of witnesses (see Rule 9 in Schedule 2 to the 1993 Regulations). We do not regard this collateral purpose as one that should be given any significant weight in the determination of whether the additional individuals should be joined as Respondents.It was only in response to questions from us as to what could be recovered from, or obtained against, the individuals it was sought to add as Respondents in addition to the remedies available against the existing Respondents that this issue was addressed.As to this the Commission for Racial Equality had not pleaded, and through Counsel undertook to us that it would not seek to rely on, the statutory defence contained in s.32(3) of the Race Relations Act 1976. That left the possibilities that(a) a declaration could be made against the individuals, and(b) damages over and above those awarded against the existing Respondents might be recovered, (see Prison Service v Johnson [1997] ICR 275 in particular at 285 A/F). There one of the individual Respondents had acted out of sheer malice and another had victimised the Applicant. Here no exceptional factors, or allegations of malice, were expressly advanced in respect of the claims against any of the individuals that the Applicant seeks to add.The lack of any emphasis on what the Applicant wanted to claim against the individuals if they were to be added gave rise to uneasy feeling in our minds that the real reasons why the application to add these Respondents was being made was not to seek a remedy against them over and above the remedy being sought against the existing Respondents and in particular the Commission for Racial Equality.This feeling of unease increased when we asked Mr McCarthy to explain the reasons why this application was being made so late. He assured us that he had taken oral instructions from the Applicant and that the reason for the delay was that the Applicant had filled in the Originating Application himself. In many instances such an assertion would carry with it by inference a reason for delay, or the late making of such an application, namely that the Applicant as a litigant in person did not know that he could make such a claim, or that it was necessary for him to do so within a given time limit. But in this case such inference does not arise for two reasons. First the Applicant joined two individuals in the Originating Application. The claim against one of them has now been struck out. Secondly the Applicant has legal qualifications and some experience in the relevant field of law.It follows that the assertion, or the fact, that the Applicant completed the Originating Application himself does not provide a reason, or explanation, why the individuals who he now seeks to join as Respondents were not added as Respondents in the first place or for the delay. Rather, as mentioned earlier, it increases the uneasy feeling that the real reason for the application is not to seek additional relief against them.It was submitted to us in reliance on Cocking v Sandhurst (Stationers) Ltd [1974] ICR 650, and British Newspaper Printing Corpn (North) Ltd v Kelly [1989] IRLR 222 that in deciding whether or not to join the individuals pursuant to the application made by the Applicant the test to be applied is as set out in the head note of the British Newspaper Printing case namely:
"In deciding whether or not to allow an amendment to an Originating Application the test to be applied is that laid down by the NIRC in Cocking v Sandhurst Limited "What are the relevant hardships expected to be suffered by the parties if the amendment is or, as the case may be, is not allowed?" and "What would be the injustice to the parties respectively, again, if the amendment is or is not to be allowed?"
From that Mr McCarthy, as we understood him, submitted that the amendment should be allowed because to refuse it would plainly cause the Applicant to suffer greater hardship or injustice than the Respondents because the Applicant would not be able to pursue claims against the individuals he seeks to join, and derive such advantages as might flow directly, or indirectly, from their joinder and the matters, or most of the matters, upon which the Applicant seeks to base those claims are already before the Tribunal. This is not an approach that has regard to all the circumstances of the case in determining where the balance of injustice or hardships lies and in our judgment it is therefore incorrect, and it is not supported by the authorities relied on by Mr McCarthy. Also it is not supported by the decision of this Tribunal in Selkent Bus Co Ltd v Moore [1996] ICR 836 to which we were not referred by Mr McCarthy.The British Newspaper Printing case is not concerned with the addition, or substitution of a party but an addition of an additional claim of unfair dismissal against the same Respondent. The passage in the head note only sets out and applies part of the approach described in Cocking v Sandhurst and does not decide that the relevant time limits are to be ignored by the Tribunal in the exercise of its discretion (see paragraph 14 of the judgment of the Master of the Rolls).Cocking v Sandhurst is a case concerning the substitution of a party for another who was sued by mistake. In that case authorities relating to the amendment of a writ outside the relevant limitation period were taken into account. This provides support for the view (if such support were needed) that the cases relating to amendments in actions are relevant. At [1974] ICR 656H to 657C seven steps are set out by Sir John Donaldson (then President of the EAT) to describe how a Tribunal should proceed which include:
"(6) In deciding whether or not to exercise their discretion to allow an amendment which will add or substitute a new party, the Tribunal should only do so if they are satisfied that the mistake sought to be corrected was a genuine mistake and was not misleading or such as to cause reasonable doubt as to the identity of the person intending to claim or, as the case may be, to be claimed against. (7) In deciding whether or not to exercise their discretion to allow an amendment, the Tribunal should in every case have regard to all the circumstances of the case. In particular they should consider any injustice or hardship which may be caused to any of the parties, including those proposed to be added, if the proposed amendment were allowed or as the case may be, refused (our underlining)."
It is clear from that passage that an explanation as to why the need to seek the amendment, and relevant extension of time arose is something that should be given and taken into account. If the explanation is unsatisfactory, or is incomplete or does not provide a good reason for the delay this does not mean that an extension will not be granted but such matters are relevant factors to be taken into account in the exercise of its discretion by the Tribunal. This approach is in line with authority in other fields where an extension of time is sought (see for example The Secretary of State for Trade and Industry v Davies [1996] 4 AER 289 (at 299J to 301B). Also in our judgment one of the circumstances to be taken into account is the reason why the amendment is sought.Further it is clear from the passage cited from Cocking v Sandhurst that when considering the balance of hardship the position of the persons sought to be added as parties is relevant, but as we understood Mr McCarthy's submissions he did not have regard to this but only to prejudice that might be suffered by the existing parties. We accept that an application to add parties to proceedings before a Tribunal can be made without serving them with the application. However in our judgment if in this case the individuals were to be added in their absence, they would have to be given the opportunity to set aside that Order and therefore given the very late date of this application the Applicant should have notified the persons he seeks to add of his application to do so.In Selkent Bus Co Ltd v Moore [1996] ICR 836 this Tribunal set out the approach to be adopted to amendments to Originating Applications and refer inter alia to the Cocking v Sandhurst case. The Selkent case shows that in common with the exercise of similar discretions in other areas the Tribunal has to exercise its discretion judicially having regard to all the relevant circumstances which will potentially include a number of competing factors. In the Selkent case at 842F to 844C this Tribunal set out the procedure and practice to be applied in respect of amendments. The following passage appears at page 843F to 844C:
"(4) Whenever the discretion to grant an amendment is invoked, the Tribunal should take into account all the circumstances and should balance the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it.
(5) What are the relevant circumstances? It is impossible and undesirable to attempt to list them exhaustively, but the following are certainly relevant:(a) "The nature of the amendment" . Applications to amend are of many different kinds, ranging, on the one hand, from the correction of clerical and typing errors, the addition of factual details to existing allegations and the addition or substitution of other labels for facts already pleaded to, on the other hand, the making of entirely new factual allegations which change the basis of the existing claim. The Tribunal have to decide whether the amendment sought is one of the minor matters or is a substantial alteration pleading a new cause of action.(b) "The applicability of time limits." If a new complaint or cause of action is proposed to be added by way of amendment, it is essential for the Tribunal to consider whether that complaint is out of time and, if so, whether the time limit should be extended under the applicable statutory provisions, eg. in the case of unfair dismissal, s.67 of the Employment Protection (Consolidation) Act 1978 .(c) "The timing and manner of the application" . An application should not be refused solely because there has been a delay in making it. There are no time limits laid down in the Regulations of 1993 for the making of amendments. The amendments may be made at any time - before, at, even after the hearing of the case. Delay in making the application is, however, a discretionary factor. It is relevant to consider why the application was not made earlier and why it is now being made: for example, the discovery of new facts or new information appearing from documents disclosed on discovery. Whenever taking any factors into account, the paramount considerations are the relative injustice and hardship involved in refusing or granting an amendment. Questions of delay, as a result of adjournments and additional costs, particularly if they are unlikely to be recovered by the successful party, are relevant in reaching a decision."This case therefore makes it clear that in exercising its discretion and thus in determining where the balance of injustice and hardship lies the Tribunal should have regard to all the circumstances of the case and should not take a narrow approach such as that which Mr McCarthy submitted was appropriate.The point made in (5)(b) of the citation brings us back in this case to the time limit imposed by s.68(1) and the discretion to extend it conferred by s.68(6) of the Race Relations Act 1976 and thus whether it would, in all the circumstances, be just and equitable to allow the Applicant to add the individuals as Respondents at this late stage. In determining what is just and equitable under s.68(6) the Tribunal is directed by the sub-section to have regard to all the relevant circumstances of the case and would consider the competing interests of the relevant persons.Further in the Selkent case at 843A it is stated as follows:
"It may be a proper exercise of discretion to refuse an application for leave to amend without seeking or considering representations from the other side. For example, it may be obvious from the face of the application and/or the circumstances in which it is made that it is hopeless and should be refused. If the Tribunal forms that view that is the end of the matter, subject to an appeal. On an appeal from such refusal, the Appellant would have a heavy burden to discharge. He would have to convince the Appeal Tribunal that the Industrial Tribunal had erred in legal principle in the exercise of the discretion, or had failed to take into account relevant considerations or had taken irrelevant factors into account, or that no reasonable Tribunal properly directing itself could have refused amendment: (c) Adams and Taylor v West Sussex County Council [1990] ICR 546."
In our judgment in refusing this application the Tribunal did not err in law and the Applicant cannot demonstrate any of the other factors listed in that citation from the Selkent case.In our judgment in making the application to the Tribunal, and in effect during submission remaking it to us, the Applicant was doomed to failure because he had failed to take initial basic steps which were required to enable him to make it properly by ensuring that the Tribunal was in a position to consider all the relevant circumstances. For example, he failed to(a) provide a full and clear explanation why the individuals were not added in the first place and for the delay,(b) set out or describe the relief sought against each individual and why it would, or might, benefit the Applicant if he was to succeed,(c) set out precisely the basis of the claims against each of the individuals and how it is proposed to establish the knowledge required by s.33 and(d) set out in respect of each of the individuals precisely why if the application was not granted the Applicant would be prejudiced, and why if it was granted, that individual would not be prejudiced or would not be greatly prejudiced.Further in our judgment before any final Order could be made adding the additional individuals they would have to be given the opportunity to be heard so that the balancing of the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it can be properly assessed.

Head (4)

This related to the fact that paragraph 5 of the Order stated that the issues to be addressed by the Tribunal were agreed. As already mentioned this head was dealt with by agreement before us.

Head (5)

It was properly accepted by Mr McCarthy that the appeal in relation to sub-paragraphs 5(a) and (d) of the Order stood or fell with his appeal under Head (2). They therefore fail.That leaves the appeal against sub-paragraph 5(e) which as mentioned earlier has been dealt with by consent.Additionally in his submissions Mr McCarthy asserted, particularly as to the application that was the subject of Head (3), but also that covered by Head (2), that he was cut short by the Tribunal and this constituted an error of law. We do not agree. Applications of this type have to be dealt with speedily by the Tribunal. In our judgment in making them on behalf of the Applicant Mr McCarthy, and those instructing him, had failed to take initial basic steps required of them so that they could make the applications properly and it would therefore have become apparent quickly to the Tribunal that they should be refused.Finally we mention that in stating that the Applicant should particularise his case that the settlement agreement is voidable, and should take the basic steps referred to above in respect of the application to join the additional individuals, we have not forgotten the need for flexibility and informality in proceedings before the Tribunal. However in our judgment fairness to the existing Respondents, and in the case of the application to join the other individuals those individuals, requires that such information should be provided in a full and clear form.