TELEWEST COMMUNICATIONS v MR BRETT SMALLCOMBE [2000] UKEAT 1496_98_1805

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2000] UKEAT 1496_98_1805Case No Appeal No. EAT/1496/98 & EAT/238/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
TELEWEST COMMUNICATIONSAPPELLANTMR BRETT SMALLCOMBERESPONDENT
Before
Mr Justice Nelson Mrs J M Matthias Mr S M SpringerDate 18 May 2000
[1]APPEARANCES For the Appellant MR R MASEFIELD (of Counsel) Instructed by: Messrs M J Kusel 124 Aldergate Street London EC1A 4JA For the Respondent MR R BRADBURY Solicitor Instructed by: Messrs Attwood & Co Solicitors 20 London Road Grays, Essex RM17 5XY MR JUSTICE NELSON: This is an appeal against the decision of the Employment Tribunal at Stratford on 3 November 1998 deciding that the Respondent employee had been constructively and unfairly dismissed and also against the decision of the same Employment Tribunal when it determined on 14 January 1999 that the Respondent was entitled to £8,843 compensation. The Appellant contends that since the hearings, fresh evidence has come to light which is relevant, both to the issues of liability and quantum; that this evidence is relevant, credible and would have had an important influence on the hearings. The fresh evidence contended for by the Appellant consists of various attendance notes, setting out discussions between the Appellants instructing solicitor and a Mrs Sharon Kerstein of Netcomm Group Ltd. It was in fact Mrs Sharon Kerstein who approached the Appellant to give them the information, which she subsequently did and which is recorded in the attendance notes of Mr Neil Keartland. In addition there are various letters, one from the Respondent himself of 26 January 1999 and from his solicitor of 9 March 1999, putting forward and admitting various matters.[2]In summary the fresh evidence as far as Mrs Kerstein is concerned is as follows: It is said that she contacted the solicitors for the Appellants and informed them that the Respondent had been appointed by them as a self employed consultant in their telephones business as early as May of 1998. The letter of 26 January 1999 is signed by Michael Kerstein the other owner of the firm, Netcomm and by Mr Smallcombe the Respondent himself, and states as follows:- "This letter is to confirm that since May 1998 when you started working as a Part-Time Commission Only Agent for Netcomm Group Ltd, you have been paid commission up until 7 January 1999 of approximately £3250.00." There is also evidence on the face of the attendance notes, the Appellants contend, to the effect that the Respondent first spoke to Mrs Kerstein when he was still in fact working for Telewest. Her company had held a seminar at the Starkis Hotel in Dartford at a date, which she could not precisely remember, when both the Respondent and Isabelle Adey who was another Telewest employee had attended. Both those employees had left Telewest and started working for Netcomm in May 1998 as self-employed consultants on a commission only basis. Both were paid on account and in the letter from the Respondents solicitor at page 87 in the bundle, the letter of 9 March 1999 it is said: - "Payments on account were made to our client by Netcomm on 9 July £500.00; 6 August 750.00 and 28 August 750.00 and then subsequent payments (outside the Tribunal's three months) to make up the commission figure. It was only in about November that the commission entitlements were confirmed to our client by Netcomm and at that stage he was able to formally render an invoice."[3]Mr Smallcombe the Respondent set up a company called Extel Ltd some time in the period in question and started to invoice Netcomm for commission and then, later on another employee, Mr Owen, also from Telewest, joined Netcomm and the Respondent and Isabelle Adey. This fresh evidence it is submitted challenges the findings made in both the liability and the remedies hearings. In its liability decision of 3 November 1998 the Tribunal described the complaint and said that the Respondent complained that during April 1998, Mr Marston, the Respondents Regional Sales Manager purported to take away the Respondents responsibilities as Sales Manager which in effect was demotion and therefore a repudiatory breach of contract. In setting out its approach to considering the matters before it the Tribunal set out the law by saying in paragraph 7 of its decision that if the Applicant was to succeed in his claim of constructive dismissal, he must first prove that the Respondent was guilty of a serious repudiatory breach of the employment relationship. He must then illustrate that he resigned in response to that breach, that he did so promptly and in so resigning communicated the reason for his resignation and that he was treating himself as constructively dismissed. In other words, it is submitted, the Tribunal were correctly directing themselves to the issue of causation; namely whether the repudiatory breach was the cause of the resignation.[4]In paragraph 15 of their decision the Tribunal said this: - 15. "We are prepared to accept also that it was entirely reasonable for Mr Smallcombe, who is clearly a cautious and thoughtful man to take the opportunity during his sickness absence, to reflect with great care on his position, before submitting his resignation letter on his return to work on 7 May. We accept what he says, namely that he spent that time at home considering the "enormity" of his proposed action and that in resigning, he did so in the certain knowledge that he had no immediate job to go to. That, we think, reflects to a large degree the distress he felt at his treatment by Mr Marston on 14 April." It had been the Respondents case that he was treated by Mr Marston in such a manner by in front of some 20-30 other fellow employees by having his demotion as he described it announced to them, that he felt deeply embarrassed and hurt by that. In relation to these matters the Appellants submits that if in fact the Respondent had been in contact with Netcomm before he left Telewest and if in fact he did have some work, albeit part time, to go to or if he was in fact undertaking work at that time or about that time, those were plainly matters that were important for the consideration of the Tribunal. If the Tribunal had had such material before it, it might well have formed a different view as to the true cause of the resignation. If for example, as the fresh evidence suggests, the business that he had set up or at least his working for Netcomm had commenced in May 1998 at about the time that he left Telewest then that could be highly relevant to the Tribunal's decision. It might also, it is submitted by the Appellant demonstrate that the finding that he had "no immediate job to go to" may simply be incorrect.[5]There may of course have been several factors in the resignation, but the Appellants submits that the fresh material now before this Tribunal demonstrates that the Employment Tribunal hearing the matter did not have all the relevant material before it and had it done so, may well have come to a different conclusion. The other main point of relevance in relation to the liability decision is not merely causation and why the Respondent left when he did and whether it was dominantly due to the breach of contract which had been found, but whether there were other reasons too. Credibility is relevant in this respect. Relevant because the Employment Tribunal found that Mr Smallcombe, the Respondent was a credible reliable witness, where as they did not so find in relation to Mr Marston and Mr Henry called on behalf of the Appellants. Had this fresh evidence been before them, they might well have come to a different conclusion on the issue of the overall credibility of the witnesses appearing before them. In so far as quantum is concerned it is submitted that this too is likely to be effected by the fresh evidence. The Appellants point to the findings in paragraph 5 of the remedies decision in which the Employment Tribunal said as follows: 5. "Mr Smallcombe is clearly an intelligent and articulate man and has had the benefit of Mr Bradbury advising him throughout the duration of these proceedings. Accordingly, today we are somewhat surprised that there is no written nor other evidence before us to confirm the efforts Mr Smallcombe says he has taken to recover from his unfair dismissal and seek other work. It seems he has maintained no records whatsoever and his oral evidence has been particularly vague. Yet there is nothing in what he has said or otherwise to lead us to the view that he is an unreliable or dishonest witness. We did not make that finding at the hearing on 15 October 1998 and we do not make it today." In the written evidence before them on that occasion for the remedies hearing, the Industrial Tribunal had a statement from Mr Smallcombe, which said:
"Since the beginning of November 1998 I have been trying to earn my own living as a self employed person, selling telephone systems and service. In particular the services called "least cost routing."
[6]If the letter of 26 January 1999 co-signed by the Respondent himself is correct, he in fact at least started work for Netcomm in May 1998 and had started obtaining commission from them in July 1998. As we understand the evidence before us, that relates to the work that he was performing in the business he set up. The Respondent through his solicitor accepts that the fresh evidence is relevant to the issue of quantum but simply says that he hopes that that matter can be dealt with by way of discussion rather than by way of a Tribunal ruling. The submission of the Appellants is that this is a case where the requirements, as set out in Ladd v Marshall are all as satisfied. It submitted that when one looks at the notes of evidence, we only have those relating to the remedies issue, which are particularly at pages 60-64 of the bundle, we can see that the Respondent said that he was trying to establish his own business and that he was doing work for that under about 16 hours a week and yet when specifically cross-examined about setting up his business he replied:
"In May 1998 I did not set up my own business. I did a lot of research."
And his letter of 26 January 1999 suggests, as I have already indicated that the start date was May 1998 not November 1998 and his solicitors letter also shows that he was earning money from July 1998, whereas he made no such mention of that fact at the hearing.[7]The well known case of Ladd v Marshall which was applied to proceedings before the Employment Appeal Tribunal in the case of Wileman v Minilec Engineering Ltd [1988] IRLR at page 141 shows a three-fold test for admitting fresh evidence. Firstly that the evidence could not have been obtained with reasonable diligence for use at the trial. Secondly that the evidence would probably have an important influence on the result of the case and thirdly the evidence must be apparently credible. It is submitted here that those three tests are adequately demonstrated. The Respondent however, submits that that is not so. He submits that there is in reality no fresh evidence as such, there is only what he described it "fresh material." He points out that there is no signed statement from Mrs Kerstein but in accepting that there is fresh material he concedes the following: ? The phone attendance notes of the discussions with Mrs Kerstein ? The letter from Netcomm Ltd at page 73 of the bundle, which indicates and I quote:- "As we have mentioned previously, Mr Smallcombe only worked on a part time basis and was working for other people at the same time as ourselves, and had set up a dealership with Samsung for telephone equipment (please contact them for any information)."[8]Mr Bradbury also concedes the letter of 26 January 1999 from his client and his own letter of March 1999, also constitutes as he puts it "fresh material." We are satisfied having looked at this that this is properly described as "fresh evidence" within the Ladd v Marshall rule and as such can be considered by the court in order to ascertain whether it satisfies the three-fold test. The Appellant did in fact seek to invite this Tribunal to decide, not merely whether the Ladd v Marshall tests were satisfied but also whether the evidence demonstrated that the Respondent had deliberately supressed the correct information from the Tribunal hearings. That is not however a decision which this Tribunal is able to make. It has not heard any evidence on oath and it would be inappropriate for it to make such a decision. We must however determine, as we do, whether this fresh evidence satisfies the three-fold test.[9]Firstly the Respondent says that the evidence could have been obtained for the hearing at the Employment Tribunal, with reasonable diligence. He points to a paragraph in the statement of Mr Henry which, was before the Tribunal, stating that he discovered that Mr Smallcombe was on sick leave and was told by the supervisor Kim Bean, that he was contacted by Mr Smallcombe and invited to leave Telewest to work in a new business venture, that he the Respondent was involved in selling smart boxes. Mr Henry also said that he had understood that Isabelle Adey another Telewest former employee was involved in business with Brett Smallcombe and he had also been told that an advance had been paid to Mr Smallcombe, as it takes months to build a client base in this new venture. That indicates that there was a chain of enquiry, the Respondent submits, that if the Appellants had followed diligently, they would have been able to pursue and obtained the evidence they now have, before the original hearing.[10]The Appellant responds to this by saying that it was on the basis of that evidence from Mr Henry that they cross-examined Mr Smallcombe about when he had started up his business but could go no further than his reply which I have already quoted and which is set out at page 64 of the bundle that in May 1998 he did not set up his business but he did a lot of research. They could go no further than that it is said because Isabelle Adey had started her own proceedings against them in the Employment Tribunal and it was quite impracticable for them to be able to compel her to give evidence on their behalf in the proceedings in so far as the Respondent was concerned. We are satisfied that the Appellants contentions in this respect are correct, that the evidence was not obtainable with reasonable diligence by them at that time, and that therefore the first test in Ladd v Marshall is satisfied.[11]The second test, namely whether the evidence would probably have an important influence on the result of the case is, the Respondent contends not satisfied because it does not really go to the issue of liability at all. It is at best a peripheral and does not descend to detail as to why and when the resignation took place. We have considered the written and oral submissions of both parties and we are satisfied that the evidence is relevant to whether the Respondent had a job or not, if he in truth started his business in May 1998 and hence one of the reasons for his resignation as found by the Tribunal. We find that it is relevant to the question, therefore of resignation and the reason for that resignation and taken as a whole, we are satisfied that it is so relevant. We are also satisfied that it is relevant to the issue of credibility. In both instances, insofar as the evidence available to the Tribunal is concerned we are fully satisfied that the fresh evidence would have had an important influence on the result (and when I say both instances I mean at the liability hearing and the quantum hearing.[12]As far as the third test is concerned whether the fresh evidence is itself credible it is not really disputed that it is credible. It is said that some of the evidence in fact, in particular the letter of 26 January 1999, comes from the Respondent himself as well his solicitor. Indeed it is not really in essence disputed that that evidence is credible. It is also said as a final submission by Mr Bradbury that it is now too late; there has been too long a lapse of time, well over a 1½ years in liability and just under 1½ years in relation to quantum and that in those circumstances, it is inappropriate to order a fresh hearing, even if the tests of Ladd v Marshall are satisfied. We reject that submission. We are unanimously satisfied that each of the three requirements of the test have been shown and proved by the Appellants. We consider that this is pre-eminently a case which should be remitted to the Employment Tribunal for rehearing on the basis of the 'fresh evidence' now available. We do not seek to address, in the circumstances, the secondary point made by the Appellants, which was that there was in effect a late amendment to the proceedings, in that the Respondent was allowed to present his case in a different manner and that that prejudiced them and that they did not have a fair hearing. It is unnecessary for us to decide this point and we do not.[13]I will now invite the parties to deal with an address to the Tribunal on what directions ought to be given now in relation to the rehearing by the Employment Tribunal. (Further argument followed). After the conclusion of the decision of the Tribunal, the Respondent rather than having a rehearing of his applications has decided to withdraw his claims and he has told us that he wishes to do and that withdrawal is accepted by the Appellants. The Appellants nevertheless seek costs. They seek their costs of today, they do not seek their costs below and they do not seek their costs on an indemnity basis because they recognise that that this court has not made any findings about the deliberate suppression of material by the Respondent and in those circumstances, it would not be appropriate to ask for costs either below or on an indemnity basis. They do however ask costs of today on two alternate basis: - 1. That there should have been full disclosure below and it matters not whether that is culpable not innocent, as far as they are concerned there wouldn't have been an appeal and on the assumption for the purposes of the application that they make, namely that this is an negligent failure to produce the material, that alone should entitle them to their costs of this hearing. 2. The alternative basis upon which they put it is that this appeal has been improperly resisted because once the nature of the evidence that was being put forward by way of fresh evidence was clear it was plain and obvious that it fell within the Ladd v Marshall rules and there was no reason why the Appellant should have been obliged to attend and have to argue the matter for a substantial part of today, in order to succeed.