ARRIVA NORTH WEST LTD v MR J J LESTER [2001] UKEAT 1159_01_2809

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 1159_01_2809Case No Appeal No. EAT/1159/01Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
ARRIVA NORTH WEST LTDAPPELLANTMR J J LESTERRESPONDENT
Before
His Honour Judge Peter ClarkDate 28 September 2001
[1]APPEARANCES For the Appellant NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE APPELLANT For the Respondent NO APPEARANCE OR REPRESENTATION BY OR ON BEHALF OF THE RESPONDENT JUDGE PETER CLARK: I have before me an interlocutory appeal in this case, currently proceeding before the Liverpool Employment Tribunal, by the respondent employer, Arriva North West Ltd, against a decision of a chairman, Miss E.R. Donnelly, made on 24 September and promulgated with extended reasons on 25 September 2001, striking out the respondent's notice of appearance for their non-compliance with an order of the tribunal for disclosure. I shall describe the parties as they appear below. Background and History[2]The applicant, Mr Lester, was employed by the respondent as engineering manager on their bus fleet. On 1 August 2000 he was summarily dismissed. On 28 October he presented an originating application to the tribunal complaining of unfair dismissal and breach of contract. The claim was resisted in a notice of appearance entered by the respondent on 20 November.[3]From the correspondence placed before me by both parties as part of their written representations in this appeal it seems that initially disclosure by the respondent took the form of a draft bundle of documents prepared by the respondent. However, on 28 June 2001 the applicant's solicitors wrote to the respondent, setting out a list of additional specific documents of which disclosure was sought. By his response dated 27 July Mr Kevin Smith, representing the respondent, took issue with the relevance of certain of those documents. Dissatisfied with that response the applicant's solicitors wrote to the tribunal on 31 July seeking an order for specific disclosure. They particularly submitted that it was not enough for the respondent to limit disclosure to those documents on which they intended to rely.[4]That request was considered by an unidentified chairman, who declined to make the order sought by the applicant, but instead made this general order by letter dated 9 August (the disclosure order):
"That, within 14 days, the respondent provide a list of all documents relevant to the material issues in the case."
[5]Pausing there, that order begs the very question in dispute between the parties. Which documents were relevant and which were not; more broadly, what further disclosure if any was necessary for the fair disposal of the proceedings?[6]The letter concluded with the standard warning that failure to comply with that direction may lead, among other things, to the Notice of Appearance being struck out.[7]On 22 August the respondent wrote to the applicant, adding a further document to the existing index to the bundle and stating that it did not intend to rely on any other documents.[8]Still dissatisfied the applicant's solicitors wrote to the tribunal on 4 September, complaining that the respondent had failed to comply with the disclosure order, in that no list had been provided within the 14 day limit.[9]As a result a chairman, again unidentified, caused two letters to be written, dated 10 September. The first, to the applicant's solicitors, confirmed that "relevant" (presumably in the disclosure order) meant relevant irrespective whose case a document may or may not support. The second, to the respondent, is important; it reads:
"The case file relating to this matter has been referred to a Chairman of the Tribunals, who has requested me to inform you that he proposes to make an Order that the Notice of Appearance be struck out on the grounds of your failure to reply to our letters. The Chairman has also requested me to inform you that if you wish to say anything as to why such an Order should not be made, you are to do so by writing to this office before Monday 24 September 2001 setting out your reasons or, alternatively, you can attend before him at this address on that date at 9.45 am when you will be given the opportunity to state your reasons in person."
[10]I shall refer to that letter as the "show cause" letter.[11]Mr Smith chose the former option. He wrote to the tribunal promptly on 11 September, contending that he had complied with the disclosure order by providing an index to the bundle and submitted that the Notice of Appearance should not be struck out.[12]Asked by the tribunal for their comments on that letter the applicant's solicitors responded by letter dated 18 September. They submitted that the respondent had not complied with the disclosure order, setting out their position.[13]Having considered both parties representations a chairman, Mr Homfray Davies, caused a letter dated 20 September to be sent to the applicant's solicitors, copied to Mr Smith, in which he said this:
"Your letter of 18 September 2001 has been referred to a Chairman of the Tribunals, Mr M. Homfray Davies, who has instructed me to write and ask you to let us know what you believe has not been disclosed. Alternatively, the Chairman suggests that you may wish to interrogate the respondents. The Chairman does not believe any further intervention by the tribunal will assist the fair and expeditious disposal of this case. However if it be the case that material documents have not been disclosed at the hearing and costs are wasted as a result then any guilty party should expect to have to pay such costs thrown away."
The strike-out order[14]It seems that on 24 September a different chairman, Miss Donnelly, conducted a hearing at which neither party appeared. She considered the correspondence, save that no reference is made in her extended reasons to Mr Homfray Davies' letter of 20 September, and concluded that it was clear from the correspondence of the applicant's representatives that documents remained to be disclosed; that the respondent's representatives had not disclosed them as required by the disclosure order; therefore she struck out the Notice of Appearance under the power invested in the tribunal by rule 5(8)(b) ( sic ) of the 2001 Rules of Procedure for non-compliance with the disclosure order. The applicant's case was to proceed to a hearing on the days appointed, 1 and 2 October 2001. The Employment Tribunal power to strike-out[15]The 2001 Rules (the Rules) contain a specific power to strike-out under rules 4(8)(b) and 15(2). Such an interlocutory order is a decision within the meaning of regulation 2(2) of the 2001 Regulations (SI 2001/1171). The following provisions are of potential relevance in this case: Rule 4[16]Rule 4(5)(b) empowers the tribunal to order one party to grant to another disclosure or inspection (including the taking of copies) of documents as might be granted by a court under rule [Part] 31 of the CPR 1998.[17]By rule 4(8), if a disclosure order is not complied with the tribunal may(a) make an order for costs or(b) strike-out the notice of appearance, subject to the proviso that "a tribunal shall not exercise its powers under this paragraph unless it has sent notice to the party who has not complied with the requirement giving him an opportunity to show cause why the tribunal should not do so, or the party has been given an opportunity to show cause orally why the powers conferred by this paragraph should not be exercised." Rule 15[18]Rule 15(2)(c)(d) and (e) set out three separate circumstances in which a notice of appearance may be struck out, again subject to the "show cause" proviso (rule 15(3)). Of possible relevance here is rule 15(2)(d), striking out on the grounds that the manner in which the proceedings have been conducted by or on behalf of the respondent has been scandalous, unreasonable or vexatious.[19]Certain principles in the application of these powers have been developed in the case law, in particular:(1) The proviso to rule 4(8) is mandatory, so that the notice of appearance can only be struck out if the respondent has been given a proper opportunity to show cause. Beacard v Day [1984] ICR 837, decided on the earlier equivalent of rule 4(8). The same applies to a strike-out order made under rule 15(2) by virtue of rule 15(3).(2) Striking out is a draconian step. The power should generally only be used where a fair trial is no longer possible as a result of the respondent's default, unless there is deliberate contumacious conduct such as deliberate suppression of a document; even then a strike-out order will not necessarily follow. National Grid Co Ltd v Virdee [1992] IRLR 555; De Keyser Ltd v Wilson [2001] IRLR 324 . The Appeal[20]Appeals against interlocutory orders of the Employment Tribunal can only succeed where an error of law in the tribunal's approach is made out. I do not have a general power of review of such orders. Medallion Holidays v Birch [1985] ICR 578, cf. British Library v Palyza [1984] ICR 504.[21]In Adams & Raynor v West Sussex County Council [1990] IRLR 215 Wood J identified three potential issues in appeals such as the present:(a) whether the order was made within the powers given to the tribunal(b) whether the discretion had been exercised within "guiding legal principles" and(c) whether the tribunal's exercise of discretion could be attacked on Wednesbury principles.[22]It is convenient to consider the present case, bearing in mind the written submissions of the parties, under those three heads. (a) was the strike-out order made by Miss Donnelly within the powers given to the Employment Tribunal? In my judgment it was not, for these reasons: (i) the proviso to rule 4(8) is mandatory; see Beacard . Was the respondent given a proper opportunity to show cause before the strike-out order was made? It is important to note that the notice to show cause must be a notice to show cause why the powers conferred under this paragraph should not be exercised. Reverting to the "show cause" letter it did not refer to making a strike-out order on the grounds that the respondent had failed to comply with the disclosure order, but their "failure to reply to our letters". It is not clear to me under what provision the proposed strike-out order was to be made; it could only be rule 13(2)(d). Leaving aside the fact that, on the correspondence put before me, there is no evidence that this respondent has at any time failed to reply to the tribunal's letters, such a notice to show cause would not comply with the requirement under rule 4(8), which is directed solely to the tribunal's powers conferred by that paragraph. Indeed, I have wondered whether the wrong grounds were inserted into the show cause letter. It follows that there was no compliance with the mandatory requirement of rule 4 before the strike-out order was made by Miss Donnelly. (ii) Even assuming that the show cause letter complied with rule 4, and was in fact directed to the respondent's alleged failure to comply with the disclosure order, the letter gave the respondent a choice; either show cause in writing to the tribunal office by 24 September or attend before the chairman to show cause orally on that day. The respondent chose the first option; Mr Smith wrote to the tribunal the following day. (iii) having received the parties' written representations dated 11 and 18 September a chairman, Mr Homfray Davies, declined to strike-out the notice of appearance, whether under rule 4(8) or 15(2). He asked the applicant's solicitors to say what documents had not been disclosed by the respondent; indicated that there would be no further intervention by the tribunal and warned the parties of the costs implications if the substantive hearing (fixed for 1-2 October) had to be adjourned because material documents had not been disclosed. In my judgment the respondent was entitled to believe and did believe that the threatened strike-out would not take place and further that there was no need to attend on 24 September. The matter had been concluded in correspondence. (iv) Turning to Miss Donnelly's hearing on 24 September it is, perhaps, significant that she makes no mention in her reasons of Mr Homfray Davies' letter of 20 September. Either it was not on the file placed before her or it was overlooked. In either event it was a highly material development, putting an end to any question of a strike-out before the substantive hearing. It is further clear to me that Miss Donnelly misinterpreted the show cause letter in two material respects. In paragraph 1 of her reasons she says this:
" …the Tribunal wrote to the respondent that it was minded to strike-out the notice of appearance for non-compliance with its order [ the disclosure order ]. The respondent was given until 24 September 2001 in which to make written and/or oral representations as to why this should not be done."
The errors in that summary are, first that the letter does not inform the respondent that the tribunal was minded to strike-out the notice of appearance for non-compliance with its order, but for a failure to reply to its letters. In my judgment a show cause letter must identify clearly the rule 4 order which the party in default is said to have breached. Secondly, the respondent was not given until 24 September to make written and/or oral representations as to why the notice of appearance should not be struck out; they were alternatives. Having taken the first option, apparently to the satisfaction of Mr Homfray Davies, the respondent was not required, it seems to me, to attend the tribunal on 24 September. Neither, it would seem, did the applicant's solicitor feel it necessary to attend on that day. It was in these circumstances that Miss Donnelly proceeded to conduct a hearing, which in my judgment ought not to have taken place and to strike-out the notice of appearance without the respondent having had a proper opportunity to show cause why that should not be done. The proviso to rule 4(8) was not complied with. The order must be set aside on this ground alone. (b) was the discretion to strike-out exercised within guiding legal principles? In my judgment it was not. Perhaps due to the unsatisfactory nature of the hearing conducted by Miss Donnelly in the absence of the parties she failed (i) to investigate whether in fact the respondent was in breach of the disclosure order, something which Mr Smith contested in his letter of 11 September. The chairman appears to have simply accepted the applicant's solicitors' assertion that it was so. (ii) to investigate whether, if the respondent was in breach of the order, its conduct was deliberate and contumacious, and (iii) to consider whether or not a fair trail was possible. For these reasons also, in my judgment, the strike-out order cannot stand. (c) The Wednesbury question If it were necessary I would hold that the chairman failed to take into account a highly relevant factor in reaching her decision, namely the letter of 20 September to the parties from Mr Homfray Davies. Disposal[23]It follows that this appeal must be allowed and the strike-out order made on 25 September be set aside. However, that is not the end of the matter.[24]It is clear to me that a genuine dispute has arisen between the parties as to whether or not the respondent has given proper disclosure in this case. That dispute must be resolved, not by me, in the absence of the parties' representatives, but by the full tribunal empanelled to hear the substantive application on 1 October.[25]For the avoidance of doubt, the respondent should be given an opportunity, at that hearing, to show cause why the notice of appearance should not be struck-out for failure to comply with the disclosure order of 9 August. It will be for the full tribunal to determine whether or not the respondent is in breach of that order and if so, whether an adjournment is necessary, with consequent costs implications or indeed, whether the notice of appearance ought to be struck out in accordance with the principles earlier set out in this judgment.[26]Such a course, it seems to me, safeguards the right of both parties to a fair trial under Article 6 ECHR. The applicant is entitled to a hearing following proper disclosure by the respondent; the respondent is entitled to a proper opportunity to show cause before any strike-out order is made.