PROFILE ANALYSIS LIMITED v MR SHAUN CASSIDY [2003] UKEAT 0586_03_1311

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2003] UKEAT 0586_03_1311Case No Appeal No. EAT/0586/03 & EAT/0587/03Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
PROFILE ANALYSIS LIMITEDAPPELLANTMR SHAUN CASSIDYRESPONDENT
Before
His Honour Judge J R ReidDate 13 November 2003
[1]APPEARANCES For the Appellant MISS JANE GILBERT (of Counsel) Instructed by: Messrs The Endeavour Partnership LLP Solicitors Richard House Sorbonne Close Stockton on Tees TS17 6DA For the Respondent MR STEPHEN ELLIOTT (Solicitor) Messrs Ward Hadaway Solicitors Sandgate House 102 Quayside Newcastle upon Tyne NE1 3DX HIS HONOUR JUDGE J R REID QC This is an appeal against a decision of an Employment Tribunal held at Thornaby on Tees on 28 and 29 April 2003. By its decision the Tribunal held that the notice of appearance by the Appellants ("Profile") should be struck out because of the scandalous and unreasonable behaviour of Profile in the conduct of the proceedings. There are other appeals and applications which follow on from what happened after the Tribunal's decision to strike out, but in the light of our decision on this appeal those appeals have become moot. We have heard no argument on any of them and the fact that we have not heard argument on any of them means we express no views as to the correctness or otherwise of the decisions.[2]The background to this appeal is that Mr Cassidy was employed by Profile. His employment had come about as the result of various a transfer of staff from a company called Arenavenue Ltd by whom he had been employed since September 1999. On 1 August 2001 he left Profile and on 27 September filed an application alleging unfair dismissal.[3]The liability hearing in respect of his claim took place over a number of days in 2002, and eventually he was successful. In the course of the hearing Profile adduced evidence from a Mr Brown, a man with a substantial criminal record, who was roundly disbelieved by the Tribunal. The Tribunal also had concerns about other evidence adduced on behalf of Profile, though it also appears to have had concerns about some of Mr Cassidy's testimony. The case was adjourned for a remedies hearing.[4]On the first day of the remedies hearing, 28 February 2003, Mr Timothy, the chief executive of Profile conducted the case on behalf of Profile, its solicitors having come off the record. On that occasion Mr Timothy sought to adduce evidence from an accountant, Mr Tindle, which had not been disclosed to Mr Cassidy in advance of the hearing. It was not the first time during the case that Profile had attempted to adduce last minute evidence. Mr Tindle, to the great displeasure of the Tribunal, was unable to be at the Tribunal after the lunch break. This, together with the need for Mr Cassidy to have the opportunity of considering any evidence to be adduced by Mr Tindle so he would not be ambushed by it, were factors in causing the hearing to be adjourned. Profile were ordered to pay the costs of the day.[5]In the course of his submissions to the Tribunal Mr Timothy said (to quote the Tribunal's decision) "that Mr Tindle would not provide a statement unless the Tribunal made an Order." It appeared to the Tribunal that there was "an issue of a potential breach of confidentiality or other professional obligation." The Tribunal orally told Mr Timothy that it would not make any order "for the purpose of providing shelter for the respondents and Mr Tindle."[6]On 6 March the Tribunal issued an order for directions following on the hearing of 28 February. By paragraph 1 the Tribunal directed: (1) "The new evidence proposed to be offered by Mr R R Tindle shall be in the form of a written statement to be served on the applicant (with a copy to the Tribunal Office at Quayside House, 110 Quayside, Newcastle upon Tyne, NE1 3DX). Service of the new supplementary statement of Mr Tindle is to be effected on or before Monday 10 March 2003. However, the Tribunal makes no order in respect of this proposed witness statement in that whether or not this evidence is presented or not is at the volition of the respondent only. In particular the Tribunal makes no order binding on Mr Tindle to disclose any information which would be in breach of any obligation of confidentiality or subject to any professional privilege."[7]By paragraph 6 the Tribunal directed: (6) "In relation to direction (1) above the Tribunal confirms that the Tribunal could only consider making an order under Rule 4 in circumstances where the witness statement and any supporting documentary evidence was disclosed in full to the Tribunal. It would then be possible to determine whether it was appropriate to make an order under Rule 4 having regard to the issues of confidentiality and professional privilege raised in his matter. If this application was contested by the applicant the Tribunal would have to hold a Directions hearing."[8]Following receipt of those directions Mr Tindle provided a witness statement. That witness statement began "I am a Chartered Accountant and Fellow of the Institute of Chartered Accountants in England and Wales, and I have been requested by the Chairman of the Employment Tribunal at the hearing on 28 February 2003 to prepare a second witness statement in connection with information which may be pertinent to the hearing." The witness statement was received by the solicitors for Mr Cassidy on 10 March and on 14 March those solicitors wrote to the Tribunal complaining that the witness statement constituted a breach of Mr Tindle's duty of confidentiality to Mr Cassidy and that it showed he had continued to act where a conflict of interest had arisen. They also complained that Mr Tindle's reference to his being "requested" to provide his statement was "a cynical attempt to evade compliance with his professional rules of conduct." They asserted that this was "abusive" and amounted to "scandalous and entirely unreasonable conduct", and asked for an order pursuant to rule 15 (2) (d) of the 2001 Rules of Procedure striking out Profile's notice of appearance.[9]On 21 March Profile wrote to the Tribunal in response to the solicitor's letter. The letter indicated that Mr Timothy and Mr Tindle's recollection was that before Mr Tindle had left the hearing on 28 February the Chairman had asked Mr Tindle if he would provide a written witness statement, that Mr Tindle had asked if he was being instructed to do so, and the Chairman replied in the affirmative. It was pointed out that this was somewhat different from the terms of Directions Order, and indicated that it was thought correct to refer to this "anomaly" in the statement. The letter went on to say that Mr Tindle had reviewed his position and did not consider he owed any duty of confidentiality or was in any conflict of interest.[10]This letter crossed with a letter the Tribunal wrote to Profile on 21 March (amounting to a Directions Order) as a result of the solicitor's letter. The Tribunal's letter contained the following passages:
"I am directed to require of you the following: 1 To provide an assurance in writing from Mr Tindle that the statement he has made could be freely made by him without any requirement, order or direction of this Tribunal. If so, specific confirmation from him is required that the phrase in the proposed statement identified by the applicant's Solicitors and attributed to Mr Tindle that he has been "requested by the Chairman of the Employment Tribunal" to make that statement is in fact entirely superfluous and unnecessary and 'will be omitted. Similarly an undertaking will be required that other words to the same effect will not be introduced into an amended statement and that no attempt will be made to offer such evidence at the Tribunal subject to any oral qualification of that kind. 2 In accordance with the Directions you have been given the statement of Mr Tindle must be one he can offer unconditionally and that he has a right to give. Therefore Mr Tindle must formally confirm in writing to the Tribunal that he is in a position to offer evidence without breach of any obligation which would constrain him from so doing and that he can do so in the absence of any request or order of the Tribunal. Mr Tindle's specific assurances in this regard are required. 3 If these written assurances are provided and subsequently the proposed statement is admitted Mr Tindle will be required to confirm any assurances he has given in writing in his sworn evidence to the Tribunal. 4 If the words noted in paragraph 1 above do in fact appear in Mr Tindle's statement this would seem to be a deliberate breach of the Directions issued to you. Both Mr Timothy and Mr Tindle were present at the Tribunal when the Chairman made the position abundantly clear. The terms of the Direction are unequivocal. An explanation is required."
[11]Profile wrote to the Tribunal on 26 March pointing out that the letters of 21 March had crossed and asking for clarification of the position. The Tribunal replied and sent at the same time a further Directions order. The letter contained the following passage:
"However, Dr Watt [the chairman] has indicated you were specifically advised in the clearest possible terms regarding the proposed evidence of Mr Tindle and that this guidance was subsequently recorded in unequivocal terms in a formal order of the Tribunal. In the circumstances, it is suggested you should immediately withdraw the wholly erroneous observations in this regard which are contained in your letter."
There was then a further exchange of correspondence in which it was pointed out to Profile that it was open to it to prepare a further statement from Mr Tindle contingent on the possibility that his statement might be ruled inadmissible. Mr Tindle did prepare a second version of his statement which omitted the first paragraph which had offended Mr Cassidy's solicitors.[12]The next hearing took place on 28 April. Effectively the morning was devoted to hearing the strike out application. The Tribunal was, according to its extended reasons "concerned that the respondents appeared to be in serious non-compliance" with the order of 6 March, and the "requirements issued to the respondents by the Tribunal dated 21 March and 1 April."[13]The supposed non-compliance appears to amount to this:(1) the opening paragraph of Mr Tindle's statement, containing a reference to his being "requested" by the Chairman to prepare a second witness statement;(2) (according to Mr Cassidy's solicitors) the reference to the "request" being "a cynical attempt to evade compliance with his professional rules";(3) the failure to provide an assurance "formally confirmed in writing" by Mr Tindle that his statement could be made freely by him without provided any requirement order or direction from the Tribunal and "specific confirmation" by him that the offending phrase was "in fact entirely superfluous and unnecessary and will be omitted" and an undertaking that no similar phrase would be introduced in any amended statement; and(4) the failure to comply with the "suggestion" that Profile should immediately withdraw "the wholly erroneous observations" contained in its letter of 21 March.[14]The entire morning was devoted to exploring these issues. After the lunch break counsel for Profile made her submissions which were to the effect (according the Extended Reasons) that Profile could not see what it had done wrong, although (according to a later passage in the Extended reasons) the acts of non-compliance were admitted. Counsel then, according to the extended reasons, went on to say that if the Tribunal did not accept the justification, then Profile apologised profusely.[15]The Tribunal took the view that the attitude of Profile could "only be regarded as deliberate defiance" and was "contumelious conduct" "best described as a contempt and one unfortunately repeated in the face of the Tribunal despite the clearest possible opportunity provided by the Chairman for the respondents to purge their contempt". The Tribunal concluded: 26 "The Tribunal then considered the previous history of these proceedings in particular the events of 28 February and its previous findings at the liability hearing particularly in relation to those instances where the Tribunal had expressed concern regarding the veracity of the evidence offered by the respondents. The Tribunal did not reach a hasty decision with deliberations on 28 April followed by an overnight adjournment that gave time for reflection and further deliberations on the morning of 29 April. It is a matter of regret that the respondents did not follow the very clear indication they were given but they did not do so. Accordingly, intolerable conduct of this kind cannot be overlooked and the Tribunal is left with no alternative but to conclude that this is an appropriate case for the exceptional use of the striking out provisions. 27 In reaching the view that the conduct of the respondents has been scandalous and unreasonable the Tribunal has had regard to Harvey at Division T paragraph 650 and the judgment of Sedley LJ in the case of Bennett v London Borough of Southwark [2002] IRLR 407 . The Tribunal was satisfied that striking out was a proportionate response given the history of these proceedings and the previous misconduct of the respondent which had been further emphasised by the seemingly deliberate decision of the respondent not to offer an unqualified apology for its further misconduct. In these circumstances the Tribunal had a very substantial apprehension that a fair trial of the remaining issues would not be possible in the face of such intransigence, particularly as sanctions such as costs or the findings of untruthful testimony seemed to have had no effect whatever on this respondent. Therefore, only the ultimate sanction of strike out was left to the Tribunal."[16]Before the Employment Appeal Tribunal counsel for Profile contended that the Tribunal had been wrong in taking into account the previous history of the case, in particular the Tribunal's findings as to the veracity of witnesses on the merits hearing. The matters taken into account should have been limited to matters occurring on and after the remedies hearing of 28 February. The matters complained of were, she submitted, not such as could properly be described as contumelious or as being contempt in the face of the Court. In any event the penalty of striking out the appearance was out of all proportion to the offence.[17]On behalf of Mr Cassidy his solicitor submitted that the Tribunal had been entitled to act as it did. The decision could not be described as perverse. There was contumelious conduct. The remedy was one to be assessed by the Tribunal. It had a "very substantial apprehension that a fair trial of the remaining issues might not be possible" and so was justified in holding that the only course available was to strike out.[18]We were referred to a number of authorities: Bennett v Southwark LBC [2002] ICR 881 (to which the Tribunal had referred), Bolch v Chipman (unreported, EAT, 19 May 2003), de Keyser v Wilson [2001] IRLR 324 , Logicrose v Southend United FC (5 Feb 1988, transcript, Times 5 March 1988), and Arrow Nominees v Blackledge [2000] BCLC 167. It seems to us that the principles to be drawn from those authorities, so far as relevant to this case, are:(1) It does not automatically follow from a finding that proceedings have been conducted by a respondent in a manner which is scandalous, frivolous or vexatious that the notice of appearance will be automatically struck out.(2) Wilful, deliberate or contumelious disobedience to an order of the court can lead straight to a strike out.(3) Striking out should only be ordered if it is a proportionate response to the conduct.(4) Except in exceptional cases (such as wilful, deliberate or contumelious disobedience to an order), a strike out will not be ordered unless a fair trial is no longer possible.[19]In the present case it seems to us that the Tribunal was in error in describing the conduct of Profile as being contumelious, deliberate defiance, and contempt repeated in the face of the Court.[20]It was perfectly clear that the suggestion that the offending words in paragraph 1 of Mr Tindle's witness statement were not put in, as Mr Cassidy's solicitors suggested, in "a cynical attempt to evade compliance with his professional rules of conduct". Mr Tindle's view was that he was not in breach of any rule of professional conduct in making his statement. Indeed, it is difficult to see how the offending words could be said to be in breach of any order. The requirement of the order was that if Mr Tindle was to give evidence, he must provide a witness statement. It may be that paragraph 1 of his witness statement was not well expressed and the offending words were unnecessary, but it seems to us that the fault with the paragraph goes no further than that. We can well understand why counsel was putting her client's position in relation to this in terms that her client did not see that it had done anything wrong, but if it had, it offered profuse apologies.[21]So far as the Tribunal was basing its decision on the failure of Profile to "withdraw the wholly erroneous observations" in its letter of 21 March, we take the view that this could not properly form a basis for striking out the appearance. The remarks may or may not have been wholly erroneous, but the Tribunal made no order relating to the remarks or the letter. It merely "suggested" in a letter that the remarks be withdrawn. Failure to follow a "suggestion" in a letter cannot properly be characterised as failing to obey an order. If it the Tribunal had held that the letter was a contempt and suggested the withdrawal as a step towards purging the contempt, then failure to withdraw it would have been a factor to be taken into account in determining the appropriate penalty for the contempt, but that was not the case here.[22]The orders with which Profile had failed to comply were (when the position is properly analysed) the following:(1) it had failed to provide an assurance from Mr Tindle himself that his statement could be freely made;(2) it failed to provide an undertaking from him that in any further statement the offending words in paragraph 1 of his statement would not re-appear in any guise;(3) following receipt of the "requirements" in the letter of 21 March, it failed to give an explanation of how the offending words came to be in the statement.[23]So far as these matters were concerned:(1) Profile had informed the Tribunal by its letter of 21 March that "Mr Tindle says he has reviewed his position and does not consider that he owes any duty of confidentiality or is in any conflict of interest." It then ignored the requirement of confirmation from Mr Tindle himself. Thus the default was that the information was given to the Tribunal at second hand.(2) The undertaking was not provided but Mr Tindle did produce a second version of his witness statement which did not contain the offending passage.(3) An explanation of how the offending words came to be in the first statement was proffered in Profile's letter of 21 March 2003 which crossed with the letter requiring it. The explanation was one which the Chairman regarded as unsatisfactory and which the Tribunal suggested should be withdrawn by its letter dated 1 April.[24]Clearly the Tribunal took a strong view as to the conduct of Profile and formed the view that it had been messed about on the merits hearing and was being messed about on the remedies hearing. In our view it was entitled (contrary to the submission of Profile's counsel) to take into account Profile's past conduct when determining how it was appropriate to deal with the issues before it on 28 April. A tribunal dealing with failure to comply with its orders can look at the overall picture. It is not obliged to look at each instance divorced from its context. However we take the view that even allowing for the past history the Tribunal could not properly have come to the conclusion that that Profile's conduct was so scandalous and unreasonable that striking out was a proportionate response. To do so was, in our view, plainly wrong.[25]The question then arises whether a fair trial of the remedies issue could now take place. The Tribunal expressed "very substantial apprehension" as to whether it was possible "in the face of such intransigence". It gave no reasons as to why this should be the case. In our view there is no reason why it should not be possible to achieve a fair hearing. There might be problems arising out of evidence from Mr Tindle if he were permitted to give evidence, but that is all that appears from the papers.[26]In our view the proper order for the Tribunal to make would have been to exclude any evidence from Mr Tindle. This would have been proportionate and would have addressed the real complaint of failure to provide confirmation from Mr Tindle himself that he could give the evidence which Profile wished him to give without breach of any professional obligations to Mr Cassidy.[27]In these circumstances we allow the appeal against the striking out of Profile's appearance, and as a consequence set aside the award of compensation made in the absence of evidence and representations on behalf of Profile. We direct that the matter be remitted for the re-hearing of the remedies issue before a different tribunal and direct that such hearing shall be on the evidence which would (but for the striking out) have been before the original tribunal save that Mr Tindle's evidence shall be excluded. The parties are to be at liberty to apply to the Employment Tribunal for leave to adduce further evidence if so advised (for example to bring matters up to date).