LORD FAIRHAVEN v MR D BERMUDEZ [2000] UKEAT 629_00_0112

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2000] UKEAT 629_00_0112

Case No Appeal No. EAT/629/00

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

LORD FAIRHAVENAPPELLANT

MR D BERMUDEZRESPONDENT

Before

Mr Justice Bell Mrs T A Marsland Mr B M Warman

Date 1 December 2000

[1]APPEARANCES For the Appellant MISS C DAVIS (of Counsel) Messrs Mills & Reeve Solicitors Francis House 112 Hills Road Cambridge CB2 1PH For the Respondent THE RESPONDENT BEING NEITHER PRESENT NOR REPRESENTED MR JUSTICE BELL : This is an appeal by Lord Fairhaven against the refusal of a Chairman of the Employment Tribunal sitting at Bury St Edmunds on 10th March 2000 to strike out an Originating Application by Mr Bermudez complaining of unfair dismissal from his post as Lord Fairhaven's butler. Mr Bermudez has not attended the Employment Appeal Tribunal today. He was called both immediately outside this courtroom and on the ground floor in the common parts of the Employment Appeal Tribunal building and there was no response. On 24th November 2000 he wrote a letter to an officer of the Employment Appeal Tribunal as follows:

"So sorry about the delay but I thought my solicitor was dealing with it but it was not so. On their advice I am writing to say that I rely on the grounds referred to in your answer to the appeal but I am not in a position to play any part in the appeal itself."

The reference to "your answer to the appeal" in a letter addressed to an officer of this Appeal Tribunal is not immediately easy to understand, but we think that Miss Carol Davis, who appears this morning for Lord Fairhaven, must be correct in deducing that that is a reference to the Chairman's extended reasons when he made the decision which he did that Lord Fairhaven's application to strike out Mr Bermudez' application should not succeed. In any event it is clear not only that Mr Bermudez has not attended to oppose the appeal but has not intended to do so. Nevertheless, striking out applications are not usual and we must deal with the merits of this appeal on all the material before us.

[2]Much of the history is common ground. Mr Bermudez was employed as Lord Fairhaven's butler from 13th August 1980 to 2nd October 1999, during which period he had worked at Lord Fairhaven's home in Cambridgeshire and had been a valued and trusted member of the household. He was provided with free accommodation in a substantial farmhouse on the estate, for which Lord Fairhaven paid all associated bills. In August or September 1999 Mr Bermudez went off sick with depression. At some time Lady Fairhaven found some of Lord Fairhaven's property in the farmhouse occupied by Mr Bermudez. She did not tell Lord Fairhaven who is apparently, or was at least, very attached to Mr Bermudez, and who was not in the best of health himself. Soon after that however Lady Fairhaven received information that Mr Bermudez had taken the savings of a housekeeper employed by Lord Fairhaven, purportedly to invest them, but without providing the housekeeper with information as to the nature of the investment he had in mind. By that time Lord Fairhaven, if we have the chronology correct, had agreed to Mr Bermudez going on prolonged leave of absence in the hope that he would recover his health. He went to Spain; he did not leave an address or telephone number where he could be contacted. In any event, Lady Fairhaven told Lord Fairhaven of the property she had seen in the house as well as what the housekeeper had told her. They decided to call in the police. A thorough search of the farmhouse occupied by Mr Bermudez was undertaken and a considerable amount of property belonging to Lord Fairhaven, some of it of sentimental value and the whole of it together worth something in excess of £20,000, was found. Some of that had been stolen by Mr Bermudez who subsequently pleaded guilty on 21st February 2000 to theft of a number of specified items. It was in those circumstances and with no means of contacting Mr Bermudez more directly, that on 2nd October 1999 Lord Fairhaven left a note at Mr Bermudez' farmhouse in the following terms:

"Dear Domingo As from the above date [ 2nd October ] you are hereby dismissed from my service for gross misconduct and unsatisfactory performance. Should you wish to discuss this letter or its principles you can telephone me."

[3]Mr Bermudez did not discuss the letter or its principles with Lord Fairhaven. Instead, on 11th December 1999, he made an Originating Application for unfair dismissal to the Employment Tribunal. The details of his complaint were that Lord Fairhaven was aware that he suffered from stress and depression and had agreed that he should take sick leave in his home country of Spain. He suggested that Lady Fairhaven had seen property in his tied accommodation before he left. That clearly is accurate. The letter of dismissal he said came without warning. He complained that it merely said that he had been dismissed for gross misconduct and unsatisfactory performance. He complained that it gave no reasons for his dismissal and that there was no consultation or opportunity for discussion or opportunity for him to give his side of the story.

[4]Lord Fairhaven's representatives applied to have the Originating Application struck out on the grounds that it was scandalous, frivolous and vexatious.

[5]The Employment Tribunal has power to strike out an Originating Applications in such circumstances under Rule 13(2)(d) in Schedule 1 to the Employment Tribunal (Constitution and Rules of Procedure) Regulations 1993 . It is a power which it is to be sparingly exercised because someone who complains of unfair dismissal under the terms of Part X of the Employment Rights Act 1996 puts the burden on the employer respondent to show the reason for the dismissal (or if more than one, the principal reason) and that he acted reasonably in treating it as a sufficient reason for dismissing the employee – see section 98 of the 1996 Act. Even then the dismissal may be unfair if the employer's procedures or lack of them have led to unfairness. Nevertheless the power exists and we accept the submission of Miss Davis that the appropriate test of what amounts to "scandalous, frivolous or vexatious" for the purposes of Rule 13(2)(d) is best and most succinctly described in a passage from the judgment of Sir Hugh Griffiths, sitting in the National Industrial Relations Court in E T Marler Ltd v Robertson

[1974] ICR 72

, at page 76D:

"If the employee knows that there is no substance in his claim and that it is bound to fail, or if the claim is on the face of it so manifestly misconceived that it can have no prospect of success, it may be deemed frivolous and an abuse of the procedure of the tribunal to pursue it. If an employee brings a hopeless claim not with any expectation of recovering compensation but out of spite to harass his employers or for some other improper motive, he acts vexatiously, and likewise abuses the procedure."

That statement has been approved in a number of cases including cases in the Court of Appeal and in this Appeal Tribunal. It appears to us that it really has three limbs, any one of which may lead the Employment Tribunal to strike out a claim. The first is where the employee knows that there is no substance in his claim and that it is bound to fail, in which case the tribunal may deem the claim to be frivolous and abuse of the procedure of the tribunal. The second is where the claim is on the face of it so manifestly misconceived that it can have no prospect of success, in which case again in may be deemed to be frivolous and an abuse of the procedure of the tribunal. The third limb is where an employee brings a hopeless claim, not with any expectation of recovering compensation, but out of spite to harass his employer, or for some other improper motive he acts vexatiously and likewise abuses the tribunal's process.

[6]Lord Fairhaven's application was rejected by the decision under appeal. The Chairman's decision appears to have been influenced by five particular factors. Firstly, that it was of no relevance in the Chairman's view that Lord Fairhaven might find publicity distressing, in the absence of evidence that Mr Bermudez brought the Originating Application to cause such stress. Secondly, that in the Chairman's view there was a tenable case of absence of consultation. Thirdly, that in the Chairman's view the note of 2nd October 1999 gave no detailed reasons or that those reasons were confused. Fourthly, that in the Chairman's view, there was no evidence that the application was brought for improper motives. Such information as the Chairman had indicated to him that the application was brought in accordance with advice given by Mr Bermudez' solicitors. Finally, that in the Chairman's view, whether or not he considered that the application was likely to succeed was irrelevant. The extended reasons included in paragraph 8:

"… The points raised by the applicant are capable of giving rise to a decision that the applicant was unfairly dismissed. … I have to ask myself whether this is an abuse of process or whether the claim is being progressed vexatiously. There is no evidence upon which I can conclude that there are improper motives in bringing this case. An issue had been identified in relation to the absence of consultation. Accordingly I refuse the application to strike out."

However, the Chairman ordered Mr Bermudez to make a deposit as a precondition of pursuing his case. The deposit was a mere £50 but that was because of the limited means of Mr Bermudez. The Chairman made that order at a pre-hearing review on 10th March 2000 immediately after hearing and rejecting the striking out application. He did so in the following terms:

"1 I do not consider that the applicant has a chance of success in this case. That is my opinion. The applicant has accepted elsewhere that he has used his position of trust to steal from his employers. There may be explanations for that in relation to his mental condition but that is unlikely to lead to a reasonable employer accepting that an employee who has run of the household and who has a tendency to steal goods should be allowed to remain in employment whatever the reason for it, medical or otherwise. The absence of consultation allegation is extremely likely to result in a Tribunal concluding that Lord Fairhaven, faced with the information that he put in his letter to the applicant on 16 November confirming that he was dismissed for stealing property worth in excess of £20,000 over a number of years and with no address for the applicant who was to be in Spain until January, could reasonably conclude that a meeting with the applicant at which his views would be sought, would have made absolutely no difference to the result and accordingly my view is that this case has no reasonable prospect of success. That is very different from saying that I consider it to be an abuse of process but accordingly I will order a deposit if such be appropriate."

[7]Miss Davis' submissions amount to the contention that what was said there did amount saying that the Originating Application was an abuse of process and moreover frivolous, because in the Chairman's view, it had no chance of success. In her argument Miss Davis raises the question of just what tenable case of unfair dismissal the Chairman had in mind. It appears to us, as in effect we have already indicated, that the tenable case, if there was one in the Chairman's mind, was based on lack of consultation and lack of reasons in the 2nd October note from Lord Fairhaven to Mr Bermudez. But the decision which the Chairman gave when ordering Mr Bermudez to make a deposit of £50 made it clear that in his view there was in fact no tenable case. In our view that was clearly correct. Clearly Mr Bermudez must have known what his gross misconduct complained of in the 2nd October note was because he must have known by that time that he had stolen a significant amount of Lord Fairhaven's property. The reason for his dismissal must have been absolutely obvious. Even if there was any doubt about that, perfectly adequate reasons were given in a letter dated 16th November 1999 only some six weeks later. The argument that there was lack of appropriate consultation can in our view carry no weight whatsoever for the reasons which the Chairman gave, and the additional reason that one might well ask how any consultation could be carried out if Mr Bermudez was away in Spain and uncontactable either by telephone or letter. Mr Bermudez' Originating Application stated that he had no opportunity to say what his side of the story was. It is difficult to see what it might have been in the light of the eventual pleas of guilty to theft.

[8]Secondly, Miss Davis argues that the Chairman was wrong to direct himself that the question of whether he thought the applicant was likely to succeed was irrelevant. Clearly the Chairman's judgment that the claim had no chance of success was tantamount to saying it was bound to fail. We agree with that and that is clearly a matter which is particularly relevant when considering the second limb of the test in Marler .

[9]Thirdly, Miss Davis submits that the Chairman fell into error in considering it of relevance that Mr Bermudez was represented by solicitors and that he was acting on their advice. If the Chairman had good reason to believe that the Originating Application had been brought in accordance with the advice of the solicitors, that might be a matter which is relevant to ground 1 and ground 3 of the test in Marler , but it could not, in our view, be relevant to the test in limb 2. The advice might be bad. In any event, there is no evidence put before us, and none that we can see which was put before the Chairman, that the Originating Application was made and pursued on legal advice. It might equally well have been made against the advice of the solicitors but with their assistance upon express instructions that it was to made whatever the solicitors thought of it. We just do not know; nor did the Chairman in our view.

[10]It does seem to us, in all the circumstances which we have set out, that it is absolutely clear on the information available, which is essentially common ground between the parties, that the claim made by Mr Bermudez in his Originating Application is on the face of it so manifestly misconceived that it can have no prospect of success, and in our view, that being so, it is indeed frivolous and an abuse of the process of the tribunal. The Chairman should have exercised his power to strike it out. He was wrong not to do so. We have all the information and material which he had and we allow this appeal and order that it be struck out. There is absolutely no point remitting the matter to a fresh tribunal for further consideration.

[11]It also appears to us that Lord Fairhaven has a strong case that this application was made by Mr Bermudez knowing that it would cause distress to Lord Fairhaven and knowing that even it succeeded it was not going to result in any compensation so far as Mr Bermudez was concerned. It is difficult in our view to see what Mr Bermudez had to gain from making the application in those circumstances unless it was to embarrass or distress Lord Fairhaven.

[12]For all those reasons, this appeal is allowed and the Originating Application of Mr Bermudez is struck out. Costs

[13]Miss Davis applies for an order for costs in Lord Fairhaven's favour against Mr Bermudez. Rule 34(1) of the Employment Appeal Tribunal Rules 1993 provides:

"Where it appears to the Appeal Tribunal that any proceedings were unnecessary, improper or vexatious or that there has been unreasonable delay or other unreasonable conduct in bringing or conducting the proceedings the Tribunal may order the party at fault to pay any other party the whole or part or such part as it thinks fit of the costs or expenses incurred by that other party in connection with the proceedings."

For the reasons which we have given in the main body of our judgment, we consider that Mr Bermudez' proceedings fall firmly within the compass of Rule 34(1). There is the additional feature that he was written a perfectly decent letter by his employer which invited him to contact him by telephone if he wished. He did not do so. He put the matter in the hands of solicitors and these proceedings followed. There will be an order for the whole of Lord Fairhaven's costs but as assessed by the taxing officer in such proper sum as he or she sees fit unless the figure of costs is otherwise agreed. Of course the matter of execution or not of the costs order is entirely a matter for the appellant.