MS H M CHADWICK v BAYER PLC [2002] UKEAT 1110_01_1406

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2002] UKEAT 1110_01_1406

Case No Appeal No. EAT/1110/01

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

MS H M CHADWICKAPPELLANT

BAYER PLCRESPONDENT

Before

Mr Justice Wall Mr P A L Parker

Date 14 June 2002

[1]APPEARANCES For the Appellant MR JACQUES ALGAZY (of Counsel) Bar Pro Bono Unit For the Respondent MS J McCAFFERTY (of Counsel) Instructed By: Ms T Dolan Messrs Eversheds Solicitors 115 Colmore Row Birmingham B3 3AL MR JUSTICE WALL : This is an appeal by Ms Helen Chadwick (the Appellant) against one of two decisions of a Chairman of Employment Tribunals made by separate letters dated 3 August 2001 sent from the Regional Office of Employment Tribunals at Reading. In the first letter, Miss L M Lynch on behalf of the Regional Secretary of the Tribunals for the Regional Office of Employment Tribunals at Reading wrote to Messrs Eversheds, solicitors for the First Respondent to the proceedings, Bayer Plc (Bayer) advising them that the Chairman had directed that "The Notice of Appearance be amended accordingly". Secondly, and on the same day, Miss Lynch wrote to the Appellant advising her that Miles Ltd (Miles) had been added to the Appellant's Originating Application as a Second Respondent.

[2]The Appellant appeals the first of the Chairman's Orders. There is no appeal pending against the joinder of Miles. The Facts

[3]The circumstances in which Bayer came to apply to the Tribunal to amend its Notice of Appearance to the Appellant's Originating Application are highly unusual. The facts are as follows. The Appellant worked for a company called Ames UK Ltd, latterly Miles Ltd (Miles) as a Sales Representative. According to her Form IT1, that employment commenced in February 1977. Between February 1977 and 31 May 1982 the Appellant worked full-time. Between 1 June 1982 and May 1989, the Appellant worked part-time. She returned to full-time work in May 1989. In April 1994 the Appellant's employment with Miles was transferred to Bayer under the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). Bayer says this occurred on 1 January 1992, but nothing turns on the point for the purposes of this appeal. The Appellant was made redundant by Bayer in January 2000.

[4]On 17 July 2000, the Appellant lodged her Originating Application with the Reading Employment Tribunal. This was comfortably within the six month time limit from the date of the cessation of her employment required for such applications. She claimed that she had been discriminated against "contrary to Article 119 of the Treaty of Rome and the Equal Pay Act 1970 (as amended) and the Sex Discrimination Act 1975 ". Her case is that when she had transferred from full-time to part-time work in 1982, she had been told by a Personnel Manager that she had to withdraw from Miles' pension scheme. She had, however, rejoined the pension scheme when she returned to full-time work in May 1989, and her claim before the Tribunal consisted of non-payment of pension benefits relating to the period 1 June 1982 – 1 May 1989.

[5]The Appellant's Originating Application was duly served on Bayer by letter dated 18 July 2000. Bayer was informed by the Regional Office of Employment Tribunals at Reading that there was no need to file a Notice of Appearance at that stage unless it wished to, as all cases of this nature were being adjourned generally pending the outcome of similar, test-case litigation in Nottingham.

[6]Despite the invitation not to file a Notice of Appearance, Bayer did so on 9 May 2001. In the Notice it stated that it did not intend to resist the application. It accepted that the Appellant had been dismissed by reason of redundancy and that the dates she had given for her employment were correct. That employment began on 7 February 1977 and ended on 31 January 2000. The box in paragraph 7 of the Notice contained these words: "We are currently in discussions with ACAS and Helen Chadwick to settle this case".

[7]Attached to the Notice was a letter from Bayer dated 22 September 2000 and addressed to Miss Gooding at the Regional Office of Employment Tribunals in Reading. We say "attached to the Notice" because it is the next document in our bundle. On any view, however, the letter was sent to the Employment Tribunal and was amongst the papers which the Chairman must have seen when he made his decision on 3 August 2001.

[8]In our view, this letter is of the greatest importance in the context of this case, and we propose to cite it in full. It is written on Bayer's notepaper and is from Julia Lamb, Human Resources Adviser. It is addressed to Miss Gooding at the Regional Office of the Employment Tribunals at Reading. It reads:

"Dear Miss Gooding Case Number: 2701659/2000 Please find enclosed the paperwork relating to Helen Chadwick's claim for backdated pension rights. The Bayer Group Pension Plan Trustees have agreed the backdated pension rights and we are in the process of calculating the relevant contributions. You will note from the enclosed documents that we have already informed Helen of the good news and will continue to keep her updated on the progress. If you require any further information please do not hesitate to contact me on (number given). Yours sincerely."

[9]Enclosed with that letter are two documents which we have not seen, namely a memo dated 26 July 2000 and a letter to the Appellant dated 22 September 2000.

[10]On the basis of the Originating Application and the Notice of Appearance by Bayer in its original form, there was no issue on liability. The Bayer Group Pension Trustees had agreed the Appellant's right to a backdated pension. The only issues between the parties were(1) what sum should the Appellant pay Bayer as her contribution towards those backdated pension rights? and

(2) whether or not the Appellant was entitled to a backdated pension for any period when she could have rejoined the pension scheme but had not done so. A hearing was fixed before the Tribunal for 17 July 2001 for those two issues to be resolved.

[11]On the day before the hearing, Eversheds, solicitors on behalf of Bayer, wrote a lengthy letter to the Tribunal asking for the matter to be adjourned. Two reasons were put forward. The first was so that Bayer could apply to amend its Notice of Appearance. The second was to prevent the Tribunal reaching a decision which was inconsistent with the "common issues" identified as the issues to be decided in the Nottingham litigation.

[12]The amendment sought to be made by Bayer was, as Miss McCafferty for Bayer accepted before us, a complete volte-face . Instead of an admission of liability, Bayer sought to deny that it was liable to the Appellant in respect of her "alleged entitlement to benefit under its Occupational Pension Plan" whether under Article 119 of the EEC Treaty , the Equal Pay Act 1970 , the Sex Discrimination Act 1975 or at all. There could not be a more dramatic about-turn.

[13]The proposed new grounds of resistance admitted that the refusal to allow part-time workers to join the Miles Pension Scheme at the relevant time had an adverse effect on women workers and was contrary to the Equal Pay Act 1970 . Bayer denied, however, that the scheme discriminated against the Appellant from 1 April 1988 onwards, since the Appellant was eligible at that stage to join the scheme, but had not done so. Bayer argued that any loss of pension benefits between 1 April 1988 and 30 April 1999 was not the result of the Applicant being excluded from the membership of the scheme by reason of any alleged discriminatory provisions of the scheme.

[14]Bayer also sought to argue that although, on 1 January 1992, the Appellant's employment had been transferred from Miles to Bayer under the provisions of TUPE, pension benefits were expressly excluded from TUPE under Regulation 7 and did not transfer over. Bayer denied that it was liable for the discriminatory acts of the transferor Miles during the period from 1 June 1982 to 1 April 1988 when the Miles scheme excluded part-time workers. It further denied that any alleged liability on the part of Miles in respect of excluding the Applicant from its pension scheme had transferred over to Bayer under the 1992 TUPE transfer. The amended grounds of resistance, which were settled by counsel, concluded with this paragraph:

"In the alternative, if Bayer is found to be liable for the discrimination of the transferor, Miles, it will say that the applicant is obliged to contribute the sums she would have contributed had she been a member of the relevant pension scheme during the relevant period and such additional sum as is held to be necessary to prevent the applicant receiving more favourable treatment than if she had been a member during the relevant period. … ."

[15]Neither in Evershed's letter of 16 July 2000 to the Tribunal, nor in the amended grounds of resistance is any explanation of any kind is given either for Bayer reneging on the agreement made with the Appellant in Julia Lamb's letter of 22 September 2000, or for the complete transformation in Bayer's position. The nearest one comes to it is the following passage in Evershed's letter of 16 July 2000: - "(Bayer) was unrepresented when it presented its Notice of Appearance, which simply states that "We are currently in discussions with ACAS and Helen Chadwick to settle this case". Although not technically a formal admission of liability, the Respondent accepts that until today, the applicant thought that the respondent was admitting liability and that she would not have to prove her case on liability." Given Bayer's status as a multi-national company, and given the status of its Trustees, we are unimpressed by the suggestion that it did not have legal advice when presenting its original notice of appearance.

[16]As it happened, the hearing fixed for 17 July 2001 had to be adjourned. Various reasons were given to us for this, one of which was the non-availability of a Chairman. In any event, the hearing did not proceed for reasons unconnected with Bayer's application for permission to amend.

[17]On 18 July 2001 Miss Lynch sent the Appellant a copy of the letter from Eversheds dated 16 July 2001 and told her that the Chairman would like her comments regarding the following points raised by Eversheds:(1) whether Bayer should have leave to amend their Notice of Appearance and

(2) if the case should not be re-listed pending the outcome of the lead cases.

[18]The Appellant replied on 26 July 2001. She reluctantly accepted that her case would have to await the outcome of the lead cases. However, she wished to object in the strongest terms to Bayer's application for leave to amend the Notice of Appearance at this stage. This is what she said:

"Over a year has elapsed since my application was submitted to the tribunal. During that time [Bayer] indicated that they did not intend to resist the claim (see box 3 of the Notice of Appearance) and proceeded to negotiate openly on that basis. You will see from the attached correspondence that I was clearly led to believe that liability had been conceded and that the only remaining question to be resolved was the exact amount of compensation due to me. I believe that it would be a great injustice if [Bayer] was now allowed to amend their Notice of Appearance at this stage of proceedings. I believe that in considering the request for amendment the tribunal should consider the nature of the amendment (which in this case is a substantial alteration by any standards); as well as the timing and manner of the application (a year later, the day before the proposed date of the hearing) – see Selkent Bus Co v Moore [1996] IRLR 661 . Given that [Bayer] has acted throughout as though liability is conceded, I believe they should be estopped from now completely changing their position and I would therefore ask that the Chairman refuse [Bayer's] request for leave to amend. Finally, given the argument concerning TUPE outlined in the proposed amended Notice of Appearance, I wish to apply to join Miles Ltd to the proceedings, in order to protect my position. In considering this request, I wish to draw to the Chairman's attention that Miles have already been cited in Box 5 of the Originating Application. Yours faithfully."

The reference to Box 5 of the Originating Application is a reference to the fact that the Appellant had referred to the transfer from Miles to Bayer in her Originating Application in answer to the request on Box 5 of the form: "Please give the place where you worked or applied to work if different from above".

[19]On 3 August 2001, Miss Lynch wrote to the Appellant advising her that Miles had been added to her Originating Application as a Second Respondent, and as we have already stated, on the same day, the Chairman issued his direction that Bayer's Notice of Appearance be "amended accordingly" to plead its lengthy defence.

[20]On 23 August 2001 Eversheds, this time acting on behalf of Miles, sent Miles' Notice of Appearance to the Tribunal. The second paragraph of the letter states:

"We would draw the Tribunal's attention to the fact that the Applicant's claim against [Miles] was filed outside of the six month time limit applicable to cases of this nature. We therefore submit that the Tribunal does not have jurisdiction to hear the Applicant's claim and request that this matter be listed for a Preliminary Hearing to deal with this point."

[21]On 31 August 2001 the Appellant wrote to the Tribunal in the following terms:

"… I had continuous employment with firstly Miles and then Bayer plc following the TUPE transfer. I was dismissed on 31 January 2000. Following the recent House of Lords decision in the Preston case my claim should have been submitted by 30 July 2000. As the Tribunal will be aware my claim was submitted in good time on 14 July 2000. In fact the Tribunal wrote to (Bayer) on 13 July 2000 confirming that there was no need to file a Notice of Appearance at that stage. [Bayer] gave no indication that it was going to contest my claim. It even went as far as to write to the Tribunal on 22 September 2000 informing the Tribunal of "the good news" that my backdated pension rights had been agreed and that they were in the process of calculating the relevant contributions. This position only recently changed when [Bayer] applied to amend the ET3. It then became apparent that liability was going to be denied on a TUPE argument. I applied to have Miles added as quickly as I could. This application was granted. I understand the Chairman has discretion to grant such an application. Once granted I believe it is not then open to Miles to argue lack of jurisdiction on a time limit point. In the light of the above, I believe that a preliminary hearing on this point would be a waste of time and money and I would ask that the Tribunal refuse Miles' application…… I also question whether Eversheds have a conflict of interest in acting for both the Respondents given the history of the case to date."

[22]On 1 September 2001 the Tribunal gave notice that it had ordered a preliminary hearing on whether or not the Appellant's application against Miles was presented within the time limit. In the event, however, on a review of that decision at the request of Eversheds, a direction was made on 18 September 2001 that the Originating Application be stayed pending the determination of the lead cases, and the hearing fixed for Friday 2 November 2001 was vacated.

[23]On 20 September 2001 the Appellant sought a review of the Chairman's decision to allow amendment of Bayer's Notice of Appearance, and on 8 October 2001 Miss Lynch wrote to the Appellant in these terms:

"A Chairman (Mr J G Hollow) instructs me to reply as follows. The Chairman takes your point that the request to amend came at a very late stage in the proceedings and that (Bayer) led you to think that the application would not be opposed. To an extent this was unfortunate in that the Notice of Appearance, as submitted, did not really make the position clear until solicitors were consulted. However, the Chairman notices that he sent you a copy of the request to amend and obtained your views before deciding. The Chairman took the view that the important point was to identify the real issues in the case. He appreciates that many lay applicants are finding these claims difficult and confusing to prosecute and, in this case, you have not been helped by the fact that (Bayer) has been in correspondence with you in an attempt to try and agree figures when they are now seeking to withdraw from that position entirely. However, the Chairman has taken the view, on balance, that (Bayer) ought to have the opportunity to be heard on the merits (apart from anything else, the point is taken that the application is out of time) rather than being denied the chance to do so at all. For these reasons, the Chairman granted leave. Having reconsidered the matter, he has refused the request for a review."

The argument

[24]For the Appellant, Mr Algazy invited us to find that, in the particular circumstances of the present case, the Chairman's decision on 3 August 2001 to allow the amendment of the grounds of resistance was: -(1) perverse and/or

(2) procedurally unfair and/or

(3) made without any or any proper consideration of the consequences of allowing such an amendment and/or

(4) an exercise of discretion that failed to have regard to the requirements of relevance, reason, justice and fairness.

[25]Mr. Algazy submitted that, as a consequence of the permission to amend, the Appellant now finds herself, through no fault of her own, in a position whereby she may have no justiciable cause of action against either Respondent. From an agreed position where the only unresolved issue was the level of the Appellant's contribution, Bayer has been permitted to argue that it has no liability and that any liability which may exist attaches to Miles, whilst Miles seeks to avoid liability on the basis that it was joined outwith the applicable time limit. Such a position, Mr Algazy argued, is patently not just.

[26]For Bayer, Miss Jane McCafferty argued robustly that the Chairman's decision could not be impugned. She submitted that he had a discretion to permit the amendment of the Notice of Appearance, which he was entitled to exercise and exercised appropriately. She argued that the discretion was exercised in a judicial manner; that it took into account all the circumstances and balanced the injustice and hardship of allowing the amendment against the injustice and hardship of refusing it. She submitted that this was a case in which the Chairman was obviously aware of the implications both ways, either of allowing or refusing the amendment, and that in these circumstances his exercise of discretion was unimpeachable.

[27]With equal robustness, Miss McCafferty argued that not only was the Chairman perfectly entitled not to hold a hearing to investigate the rival arguments, he was equally entitled not to give reasons. She pointed out that pursuant to section 2(2) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001 (the Regulations), the definition of the word "decision" in the Regulations did not include "any other interlocutory order or any other decision on an interlocutory matter". The Chairman's grant of permission to amend the notice of resistance in the instant case was not, accordingly, a "decision" for which reasons had to be given under rule 12 of Schedule 1 of the Regulations. Miss McCafferty submitted, accordingly, that the decision was not only not perverse: it was the only decision which in the circumstances the Chairman could properly reach. Selkent Bus Company Ltd v Moore

[1996] ICR 836

(Selkent)

[28]Both Counsel referred us to the well known decision of the Employment Appeal Tribunal in a constitution chaired by Mummery J (as he then was) in Selkent. That case, of course, concerned an application by the Applicant in the proceedings to amend his Originating Application to plead a new claim which arose out of additional facts not contained in the Originating Application and which was out of time. Allowing an appeal from the Industrial Tribunal which had given permission to amend, Mummery J summarised the EAT's understanding of the practice and procedure governing amendments in what was then the Industrial Tribunal. He pointed out that the discretion of the Tribunal to regulate its procedure included a discretion to grant permission for the amendment of an Originating Application and/or a Notice of Appearance. That discretion was usually exercised on an application to a Chairman alone, prior to the substantive hearing by the Tribunal. He also pointed out that there was no express obligation in the Regulations requiring the Tribunal to seek or consider written or oral representations from each side before deciding whether to grant or refuse such an application. It was, however, he stated, common ground that the discretion to grant leave was a judicial discretion to be exercised in a judicial manner, i.e. in a manner which satisfied the requirements of relevance, reason, justice and fairness inherent in all judicial discretions (our emphasis).

[29]Mummery J also pointed out that whenever the discretion to grant an amendment was 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. Whilst it was both impossible and undesirable to attempt to list the relevant circumstances exhaustively, Mummery J identified three which were certainly relevant. These were: - "(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 additions 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 1978 Act. (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 Rules 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."

[30]In exercising its discretion to refuse the claimant permission to amend in Selkent, the EAT was influenced by a number of factors. The first was that the amendment pleaded new facts not previously pleaded in support of a new positive case of automatic unfair dismissal for trade union reasons, with the result that fresh primary facts would have to be established by evidence. Secondly, no explanation was provided to the Tribunal or to the EAT why those facts, which must have been within the applicant's knowledge, were not alleged in the original application. Thirdly, the refusal of permission to amend did not prevent the applicant from pursuing his case for unfair dismissal.

[31]In relation to the second of these points, the EAT said:

"Mr Symonds, on behalf of Mr Moore, accepts that no explanation was provided to the industrial tribunal and no explanation has been provided to this tribunal why these facts, which must have been within Mr Moore's knowledge, were not alleged in the original application. It was not said, for example, that Mr Moore had failed to plead these facts because he was ignorant of the right to make a complaint of dismissal on those grounds. In our view, an application for amendment made close to a hearing date usually calls for an explanation as to why it is being made then, and was not made earlier, particularly when the new facts alleged must have been within the knowledge of the applicant at the time when he was dismissed and at the time when he presented his originating application."

[32]The EAT concluded that, on balance, the risk of hardship was greater if the amendment was granted than if it was refused. The judgment ends with this passage: - "As the new allegations were made late, it must have been foreseeable by Mr Moore or those advising him that an adjournment would be requested and would probably have to be granted. That increases costs which will probably not be recovered, even if ordered. Further costs are likely to be incurred if the amendment is made, because the nature of the allegation will add to the length of the hearing, even perhaps to the number of witnesses, without necessarily affecting the result or conferring any additional benefit on Mr Moore."

[33]Whilst there are clearly differences between an application to amend a Form IT1 and an application to amend a Notice of Appearance, it seems to us that the principles laid down by Selkent must apply to both. We accept that for the EAT to interfere with the exercise of a Chairman's discretion to permit the amendment of an Originating Application or a Response to an Originating Application, the Chairman's decision must fall foul of the criteria for the exercise of that discretion identified by Mummery J in Selkent. As Mummery J. put it in Selkent , an appellant has to convince the EAT 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 the amendment. See Adams v West Sussex County Council [1990] IRLR 215."

The absence of reasons

[34]Before applying the principles derived from Selkent to the facts of the instant case, we wish to deal with the difficulties caused by the absence of reasons for the Chairman's decision. We accept, of course, that, under the Rules, there is no obligation on the Chairman to give reasons for an interlocutory "decision" such as that currently under appeal. The consequence, however, is that the absence of reasons make it impossible for us to know what factors influenced the chairman, how he balanced them and what weight (if any) he gave, in particular, to the fact that the consequences of the amendment might be to deprive the Appellant altogether of her cause of action. In our judgment the absence of reasons makes it impossible, in the circumstances of this case, for us to accept the principal submission made by Miss McCafferty on Bayer's behalf, which we set out in paragraphs 26 and 27 above.

[35]We accept, of course, that many "decisions" to allow amendments are purely formal. Others are uncontroversial. Others still may be minor. We accept Miss McCafferty's submission that many "decisions" of this nature are made under pressure of time, and that the system could not function if Chairmen were required to give detailed reasons for every interlocutory "decision" they make. We recognise the practical difficulties, and note that the current Regulations post-date the Human Rights Act 1998. However, in this case, the decision was not purely formal, uncontroversial or minor, nor was it made "on the hoof". The Chairman, quite properly, wrote to the Appellant asking for her response. It is clear therefore, that the decision was a considered one.

[36]Moreover, in this case, the Appellant replied in the full and well reasoned letter of 26 July set out in paragraph 18 above. From the Appellant's perspective, the absence of reasons means that she has no idea why she lost. In a "decision" as important to the proceedings as this, such an outcome is, in our view, unsatisfactory.

[37]Miss McCafferty pointed out that there is no appeal against the refusal of the Chairman to review his decision for the reasons set out in the letter to the Appellant of 8 October 2001. In our judgment, this does not affect the issue. We are concerned here with the original exercise of the discretion on 3 August 2001. If the original exercise of the discretion was wrong, the refusal to review it must also be wrong. Furthermore, the review decision (there was no "review" as such) does not address the fundamental issue in the case, namely that by virtue of an amendment which seeks to renege on an agreement in order to avoid liability and pass it to Miles, the Appellant is placed in a position whereby she may have no justifiable cause of action against either Bayer or Miles. Finally, we note that in the letter of 8 October 200, the Chairman appears to confuse the issue. He expresses the view that, on balance, Bayer "ought to have the opportunity to be heard on the merits (apart from anything else the point is taken that the application is out of time) rather than being denied the chance to do so at all." This of course, is not a point taken by Bayer, nor could it be. The application of Selkent principles

[38]We extract from Selkent two points which, in our judgment, are directly applicable to the instant case. The first is the nature of the amendment. It could not have been of a more fundamental nature, involving as it did a complete volte face , and Bayer reneging on an agreement freely entered into. But it was more than a volte face . The inevitable consequence of allowing such a fundamental amendment was that the Appellant was left with no alternative but to apply for Miles to be joined (the orders were made on the same day) with Miles taking the point that the application against them was out of time. In other words, the nature of the amendment meant that the Appellant ran the risk of losing her cause of action against both Respondents through no fault of her own.

[39]The second point is the delay in making the application. The Form IT1 had been issued on 14 July 2000. It was served on Bayer on 18 July 2000. The original notice of appearance is dated 9 May 2001, and appends Bayer's letter dated 22 September 2000, which recorded that agreement had been reached, and that there was no issue on liability. The application to amend it was made on the eve of the hearing fixed for 17 July 2001. The amendment fundamentally altered the direction of the case. No explanation was given for this radical change of stance.

[40]In our judgment, had the application to amend been made at the final hearing due to take place on 17 July 2001 it should and would have been refused on Selkent principles. Conclusion

[41]In our judgment, it is fundamental to the exercise of a judicial discretion in a case such as the present, that there should be good reasons advanced for its exercise, and that the discretion should only be exercised for good reason. Whilst this appeal is not, of course, a rehearing, we are left in no doubt that on a proper application of the balancing exercise required by Selkent to the facts of this case, the decision on 3 August 2001 to permit Bayer to amend its notice of appearance was plainly wrong. In our judgment the injustice and hardship involved in granting the amendment is very much greater than the injustice and hardship which would have been involved in refusing it.

[42]On the one hand, the Appellant runs the risk of losing her cause of action against both parties. On the other, Bayer and the Bayer Pension Plan Trustees had agreed the Appellant's backdated pension rights. The injustice to the Appellant of depriving her of that agreement is manifest. The injustice of holding Bayer and the Pension Trustees to their agreement, by contrast, is not manifest at all. There is no suggestion that the agreement was a mistake.

[43]We are quite unpersuaded by the reference to Bayer being unrepresented when it filed its initial notice of appearance. A multi-national and responsible Plc with equally responsible Group Pension Plan Trustees and with access at all times to the best legal advice must be deemed to know what they are doing, and to have good reason for doing it.

[44]The position might, we think be different, if Bayer and Miles were in dispute – as between themselves – as to which of them was liable to the Appellant. In that case, the injustice to the Appellant of permitting the amendment would be less. She would be entitled to recover: the question would be against whom. That, however, does not appear to be the position adopted by Bayer and Miles.

[45]In these circumstances, we are satisfied that the principles set out by Mummery J in Selkent for the exercise of a judicial discretion set out in paragraph 33 above are not satisfied by the Chairman's decision in this case. As a consequence, his order permitting Bayer to amend its Notice of Appearance cannot stand and must be set aside.

[46]This leaves us with the difficult issue about what we should do. Two courses were said to be open to us. The first was to set aside the Chairman's decision and remit the matter to a different Chairman for reconsideration. The second was to substitute our own discretion for that of the Chairman. This would, as we understand it, involve setting aside his grant of permission to amend, with the result that the proceedings would be constituted by the Appellant's Originating Application, the Notice of Appearance (as originally drafted) and the joinder of Miles.

[47]Whilst we see no good reason in the instant case why Bayer should be permitted to resile from the stance set out in the original notice of appearance, we nonetheless take the view that the proper course in this case is to set aside the order of 3 August 2001 which permitted Bayer to amend its notice of appearance, and remit the matter to a different chairman to reconsider the constitution of the proceedings in the light of this judgment, and the events which have occurred since 3 August. Quite how this occurs, in the light of the stay granted by the Tribunal on 18 September 2001 we must leave to the parties. However, unless there is agreement that the matter can proceed along the lines envisaged in paragraph 44, we would suggest that there should be a hearing, and the Tribunal should give reasons for any decision it reaches.

[48]The appeal will, accordingly, be allowed and the matter remitted