MS A MCDONALD v LONDON BOROUGH OF EALING [2001] UKEAT 406_99_1602

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2001] UKEAT 406_99_1602Case No Appeal No. EAT/406/99Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MS A MCDONALDAPPELLANTLONDON BOROUGH OF EALINGRESPONDENT
Before
Mr Justice Charles Mr J C Shrigley Mr N D WillisDate 16 February 2001
[1]APPEARANCES For the Appellant MR STUART BARBER Representative UNISON 1st Floor Congress House Great Russell Street London WC1B 3LS For the Respondent MR TERRY GALLIVAN (of Counsel) Instructed By: The Legal Department London Borough of Ealing Percival House 14-16 Uxbridge Road London W5 2HL MR JUSTICE CHARLES : Today we have an application before use pursuant to a direction contained in a note I wrote, on 12 June 2000. The relevant background is as follows. On 2 February 2000 we heard an appeal by Miss McDonald against a decision of an Employment Tribunal that sat at London North, who had sent their Extended Reasons to the parties on 27 January 1999. The Respondent to that appeal was the London Borough of Ealing. Our judgment and the Order that we made was handed down on 3 April 2000. At the end of the Hearing, we announced that we were going to dismiss the appeal with reasons to follows.[2]We have been reminded this morning by Mr Gallivan who represented the London Borough of Ealing on the appeal and now that at the end of the hearing he raised an issue relating to costs but did not pursue an application for costs at that stage. There was also a discussion as to whether or not this Tribunal had power to make a wasted costs Order. What then happened was that by a letter dated 2 May 2000 the Solicitors at the London Borough of Ealing, wrote to this Tribunal asking for their costs. That letter was in the following terms:
"Dear Sir, MS A MCDONALD –V- LONDON BOROUGH OF EALING Thank you for your letter of 12 th April enclosing a copy of the sealed order in the above matter. The Respondents wish to apply for an order that the Applicant pay the Respondents' costs of resisting the appeal on an indemnity basis. The Respondents consider that the prosecuting of this appeal was improper, unnecessary, vexatious and/or unreasonable on the following grounds. 1 Of the two points contained in the Amended Notice of Appeal one (the victimisation point) was abandoned at the outset of the hearing (Judgment para 7). 2 As presented the appeal sought to challenge the findings of fact of the tribunal (Judgment paras 13, 16 & 17). The decision of the tribunal was lengthy and careful and these attempts were characterised by the EAT as 'hopeless' (Judgment paras 19 and 25). 3 In giving leave at the preliminary hearing a differently constituted EAT expressly recorded its warning to the Applicant's representative, Mr Barber, that the giving of leave did not necessarily mean that the EAT considered that the points were likely to succeed 'and that it will be open to the Respondent … in the event that [the appeal] is unsuccessful to apply for an order for costs'. 4 The Applicant's union representatives either knew or ought to have known from the outset that the appeal would fail. In the case of Beynon v Scadden [1999] IRLR 700 the EAT upheld a costs order against an Applicant who had been supported by her union in bringing a claim. The EAT found that the tribunal had been entitled to make an order on the basis that the union knew or ought to have known that the claim had no reasonable prospect of success. The tribunal order expressly took into account the involvement of and means of the union."
[3]On its face, that letter did not make an application for an oral hearing. What happened then was that this Tribunal considered that application which could be classified as being made under paragraph 17(4) of our practice direction, or simply as a free standing application, on paper.[4]The internal note that I wrote to the two members was in the following terms: In my view the application should be refused for the following reasons: - 1. The application could and should have been made at the hearing when Mr Barber could have responded to it on behalf of Miss McDonald and himself, and thus the Union. As to this I think we said we were going to dismiss the appeal but even if we did not it was clear it was going to be or was likely to be the result. 2. No order could be make without giving Miss McDonald through Mr Barber or otherwise an opportunity to respond to it. 3. In any event the letter from the London Borough of Ealing does not refer to the points covered under the heading other points raised by Mr Barber on behalf of the Appellant and in particular the issue raised in paragraph 3 of the hand written notes of appeal (see paragraph 6 of the judgment) and paragraph 1C of the amended Notice of Appeal (see paragraph 10 of the judgment) - which contains a transcription error in that it misses out the second line of that ground which read, the 1995 Act relating to the Code of Practice for the Elimination of) and dealt with in paragraphs 31 to 33 of the Judgment. In my view although wrong that ground did not fall within Rule 34 having regards the statements in the cases referred to in paragraph 31. 4. In all the circumstances including the judgment of this Tribunal in the Preliminary hearing and the warning and reservation in paragraph 3 thereof this is not a case which warrants the exercise of discretion under Rule 34 to award costs. The two lay members agreed that we should not award costs.[5]The result was that on 16 May 2000 we made an Order refusing the application for costs.[6]Returning to that internal note, it is apparent that I had forgotten when I wrote it that there was an exchange about costs at the end of the hearing. However it remains my view that it would have been open for an application for costs against Miss McDonald to have been pursued at that time. I however accept that there is some force in the reasoning that it was appropriate in this case to await the written reasons and to consider whether or not this Tribunal had jurisdiction to make an order for costs directly against Unison. Mr Gallivan's researches have confirmed my understanding that there is no such jurisdiction.[7]Following the Order for costs on 16 May2000 the solicitors for the London Borough of Ealing wrote promptly to this Tribunal on 19 May 2000, and I understand that that letter followed a telephone conversation. That letter is in the following terms: I write to confirm that the Respondents to the above appeal wish to apply for an oral hearing of their application for costs. The grounds for making such an application are set out in my letter of 2 May. That was followed by my note of 12 June 2000, which is in the following terms:
"1 In their letter dated 2/5/00 the London Borough of Ealing state that ' they wish to apply for an order that the Applicant pay the Respondents' costs of resisting the appeal on an indemnity basis '. They set out their grounds for applying for such an order and do not expressly request an oral hearing. 2 Notwithstanding the order on costs made by this Tribunal and the lack of any formal application for a review of that order, or for permission to appeal against it, in their letter dated 19/5/00 the London Borough of Ealing use the same phraseology and state that they ' wish to apply for an oral hearing of their application for costs '. Again they do not expressly ask for an oral hearing of that application and on this occasion they do not (as I read their letter) give grounds for their request for an oral hearing. Presumably therefore if the application for an oral hearing was to be refused they would ask for an oral hearing of it, or they are inviting the Tribunal to convene an oral hearing to deal with this application. 3 In my view the London Borough of Ealing, the Appellant and UNISON should be told that (a) the application of the London Borough of Ealing for an oral hearing of their application for costs will be listed for an oral hearing (on a date that I and the members can hear it) on the basis that if that application is granted an oral hearing of their application for costs will follow immediately, and (b) on that occasion the Tribunal will also deal with the costs of and occasioned by that oral hearing. 4 This note should be sent to the parties and UNISON."
[8]I now pause to refer to the relevant rules of the Employment Appeal Tribunal. These are Rules, 33 and 34, which deal with review and costs respectively. They are in the following terms:
"33 Review of decisions and correction of errors (1) The Appeal Tribunal may, either of its own motion or on application, review any order made by it and may, on such review, revoke or vary that order on the grounds that – (a)the order was wrongly made as the result of an error on the part of the Tribunal or its staff; (b)a party did not receive proper notice of the proceedings leading to the order; or (c)the interests of justice require such review. (2)An application under paragraph (1) above shall be made within 14 days of the date of the order. (3)A clerical mistake in any order arising from an accidental slip or omission may at any time be corrected by, or on the authority of, a judge or member. 34 Costs or expenses (1)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 such part as it thinks fit of the costs or expenses incurred by that other party in connection with the proceedings. (2)Where an order is made under paragraph (1) of this rule, the Appeal Tribunal may assess the sum to be paid or may direct that it be assessed by the taxing officer, from whose decision an appeal shall lie to a judge. (3)Rules 21 and 22 shall apply to an appeal under paragraph (2) of this rule as they apply to an appeal from the Registrar. (4)The costs of an assisted person shall be taxed or assessed in accordance with regulation 149(7) of the Civil Legal Aid (General) Regulations 1989."
[9]Pursuant to my note, the matter has come before us this morning firstly for us to hear argument as to whether we would hear oral argument on the issue of costs, and then if we were minded so to do to proceed to deal with the issue of costs having heard oral submissions.[10]Points have been advanced on behalf of the London Borough of Ealing based on the Human Rights Act 1998. We confess that we are not persuaded by those points having regard to the provisions of Sections 6, 7, 9 and 22(4) of the Human Rights Act 1998. We accept that the effect of Article 6 may be that for the future this Tribunal should convene an oral hearing on the issue of costs. We are not proposing to decide that today but I would record that it seems to us that there are powerful arguments against that conclusion as a general practice particularly when the Applicant does not expressly ask for an oral hearing.[11]However so far as the present position is concerned, it seems to us that the combined effect particularly of sections 9 and 22(4) of the Human Rights Act 1998 is that the point based thereon is not open to the London Borough of Ealing in this case because we made the relevant order before the coming into effect of the Human Rights Act 1998. It follows that what is being complained of is that before that Act came into force this Tribunal acted with procedural unfairness, or procedural irregularity, in making an order without having an oral hearing. In those circumstances it seems to us that the routes opened to the London Borough of Ealing were either to appeal our order or to seek a review of it. There has been no appeal and no formal application for a review. However, our power of review is one that we can exercise of our own motion and there is no time limit in respect of that exercise of the power. Mr Gallivan put to us this morning, that the letter from the Solicitors for the London Borough of Ealing dated 19 May although not formally asking for a review should be treated as an application for a review. In the circumstances, we see some force in that notwithstanding what can I think be described as judicial frustration appearing from my note that no formal application was actually made.[12]Against that background, we have concluded that the proper course for us to take would be to exercise our own power to review the order as to costs and to treat the present application for costs as being before us as if it were being made for the first time today. In that context we have a heard oral submissions from Mr Gallivan and during the course of those submissions, I put to him the internal thinking, if I can so describe it, which I have set out above and which led to the first costs order.[13]We start by recording that having regard to the history of this case we can understand why the London Borough of Ealing thought it appropriate to apply for costs. The background of the case is demonstrated by the lengthy Extended Reasons given by the Employment Tribunal to which we paid tribute when giving our substantive judgment. There then followed a 41 page notice of appeal, which was honed down on the preliminary hearing before this Tribunal. The grounds identified in that notice of appeal were not pursued in full before us on the substantive hearing of the appeal. Firstly, because the ground relating to victimisation which raised a point based on the House of Lords decision in the Nagarajan case was abandoned. Secondly, as appears from our judgment, because in presenting his arguments, Mr Barber on behalf of Miss McDonald did not stick to those grounds of appeal but sought to raise other matters which were in effect an attempt to re-argue findings of fact.[14]Another reason we can understand why the London Borough of Ealing have thought it appropriate to bring this application for costs is that we described two of the arguments actually advanced by Mr Barber on behalf of Miss McDonald as being hopeless. That was and remains our view and it seems to us that having regard to(i) the fact that those arguments were presented, and(ii) the manner in which that was done, it would not be unfair to describe those parts of the appeal as parts thereof that were conducted in an unreasonable manner.[15]The point which Mr Gallivan had dealt with in writing, and expanded on orally, was that the point identified in my internal note and which related to the reference that should be made to the Code effectively added nothing to the other points and was an adjunct thereto. In that context he specifically reminded us of the passage at page 12 of our judgment in paragraph 33 at letter G.[16]However we are not persuaded that it is fair to describe this third point, which was one raised in the notice of appeal as amended at the Preliminary Hearing, as simply an adjunct to the other points albeit that it was connected to them. As presented (and indeed as we understood it as pleaded in the amended notice of appeal) this point had a free standing element to it particularly having regard to(i) the trilogy of cases referred in paragraph 31 of our judgment which cases contained obiter dicta from the President (Mr Justice Morison), and(ii) the fact that the decision in Heinz v Kenrick was not referred to on the appeal. It is unclear to me whether a report of it was then available. The report I have found is published in the Industrial Cases Reports of June 2000, which would put it after the hearing of this appeal. In any event, at the time, that decision can be said to be one that was not generally known and had not been reported in the Industrial Cases Reports.[17]It therefore still seems to us that the inclusion of that third issue on the appeal raised points that were reasonably arguable.[18]The question then arises as to whether or not we should exercise our discretion to award part of the costs having regard to the issues we described as being hopeless. We have given this anxious consideration but have concluded that having regard to the existence of the arguable point, and the newness of this legislation at the time, that it would not be correct for us to exercise our discretion under Rule 34 to order that Miss McDonald pay all or any part of the costs notwithstanding our view that aspects of this appeal were conducted in an unreasonable manner.[19]We would finally comment that we feel sure that Mr Barber and his Union will wish to reflect on the manner in which this appeal was conducted.[20]We therefore dismiss the application for costs.