DR L BEZANT v TERTIARY ENTERPRISES LTD (FORMERLY WADHURST PARK LTD) (IN LIQUIDATION) [2004] UKEAT 0348_04_1907

EMPLOYMENT APPEAL TRIBUNAL

BAILII case number: [2004] UKEAT 0348_04_1907

Case No Appeal No. UKEATPA/0348/04

Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

Between

DR L BEZANTAPPELLANT

TERTIARY ENTERPRISES LTD (FORMERLY WADHURST PARK LTD) (IN LIQUIDATION)RESPONDENT

Before

Mr Justice Burton

Date 19 July 2004

[1]APPEARANCES For the Appellant THE APPELLANT IN PERSON SUMMARY Claim brought against WPL for sex discrimination. Judgment obtained in the sum of £159K but WPL put into liquidation. Claim that Professor Rausing was the real employer sought to be brought, which ET found barred by estoppel and/or election and/or abuse of process, and no genuine mistake established within Cocking v Sandhurst (Stationers) Ltd . No error of law by ET. THE HONOURABLE MR JUSTICE BURTON (PRESIDENT) This is a really totally unsatisfactory situation, in which Dr Bezant finds herself. She was employed for many years as she asserted in the Originating Application that she brought in the Employment Tribunal, by Wadhurst Park Ltd, which, on the face of it, was a reputable and solvent company, owned, directly or indirectly, and no doubt financed, by the extremely well known financier, Professor Hans Rausing.

[2]She has obtained an award for sex discrimination against the company, now known as Tertiary Enterprises Ltd (formerly Wadhurst Park Ltd) in a sum of £159,120.07, but the company has been put into liquidation, as the Appellant would no doubt assert, deliberately, to avoid liability to her in respect of what this community regards as a very serious matter, namely sex discrimination. In those circumstances, she is aghast, understandably, at the injustice of her position, and understandably concerned that it seems as though a legal system which has condemned the conduct of a company run by Professor Rausing is unable to give her any compensation, notwithstanding the manifest solvency of Professor Rausing.

[3]She sought to enforce the judgment obtained against the company in liquidation against Professor Rausing, but the appropriate legal position was taken on his behalf to prevent any payment, and, extremely surprisingly, there has been no voluntary payment by Professor Rausing, who one would have expected to comply with his moral obligations in respect of the award made. Consequently, Dr Bezant has, without benefit of legal advice, looked around to see what steps she could try and take to enforce the judgment. In my judgment, the route she has taken is one that was bound to fail, did fail, and having failed, does not have any chance of success on appeal.

[4]This is an application by her under Rule 3(10) of the Employment Appeal Tribunal Rules. By the statute, the Employment Tribunals Act 1996 , under which this Appeal Tribunal operates, an appeal only lies on a point of law, and the Registrar concluded that, as she is entitled and indeed obliged to do in an appropriate case under Rule 3(7) of the Employment Appeal Tribunal Rules 1993, there was no jurisdiction of the Employment Tribunal in this case. Rule 3(7) provides:

"Where it appears to the Registrar that the grounds of appeal stated in the notice of appeal ….do not give the Appeal Tribunal jurisdiction to entertain the appeal, he shall notify the appellant ….. accordingly informing of the reasons for the opinion and, subject to paragraphs (8) and (10), no further action shall be taken on the appeal."

[5]The Appellant is entitled to take further steps, pursuant to either of those paragraphs, and Dr Bezant has chosen to exercise her right, pursuant to Rule 3(10), to challenge the Registrar's decision, and since the new Practice Direction in December 2002, such challenges have been brought before a judge in open court, as a matter of course, and that is what is before me today.

[6]The case that was put before the Employment Tribunal was that in fact Wadhurst Park Ltd was not the employer of Dr Bezant, but the real or true, as she put it, former employer of Dr Bezant was Professor Hans Rausing. The Tribunal, at Ashford, records, in its unanimous Decision, after a hearing on 14 and 15 October 2003, in a Decision handed down on 29 January 2004, as follows in paragraph 1 of its Extended Reasons. "1. On 23 September 2002, the Employment Tribunal decided unanimously that the Respondent unlawfully discriminated against the Applicant on the grounds of her marital status. It ordered the Respondent to pay the Applicant the sum of £159,120.07 as compensation. This decision was sent to the parties on 15 October 2002. On 15 January 2003, Dr Bezant sent an e-mail to the Tribunal stating that she wished "to make a formal application to join Hans Rausing to the proceedings, as the former Chairman and Director of Wadhurst Park Limited (now known as Tertiary Enterprises limited), and as my true former employer"

[7]The basis on which it was sought to join Professor Rausing was simply and clearly that he was her true employer, and thus although, strictly speaking, it was an application to join Dr Rausing, in essence, as the Tribunal at one stage recorded in the course of its judgment, the purpose was to substitute Dr Rausing because, of course, an applicant, absent some kind of joint venture, can only have one employer, and her case was that it was not Wadhurst Park Ltd but Professor Rausing, because Wadhurst Park Ltd was simply a tax efficient shell through which she was really employed by Professor Rausing. It appears quite clear that there was in this case, as the Tribunal found, an election or estoppel, by virtue of the award she had previously obtained against the company.

[8]The Appellant brought an Originating Application against Wadhurst Park Ltd asserting that Wadhurst Park Ltd was her employer when she knew that the facts were such as I have already indicated. She did not join both of them, both the company and Professor Rausing, from the beginning, on the basis of an assertion that she did not know which of them was her employer, as she could have done. She did not join Professor Rausing from the beginning on the basis that he was her employer. The case was brought solely on the basis that the company was her employer, and originally the claim was not only for unlawful sex discrimination but also, together with her husband Mr Bezant, for unfair dismissal, claims which foundered on the rocks of illegality.

[9]She brought an appeal against the finding dismissing her unfair dismissal claim, which came before the Employment Appeal Tribunal, presided over by me on 1 April 2003, and in a judgment delivered on 10 April 2003, we dismissed her claim for unfair dismissal, because the contract of employment, between her and Wadhurst Park Ltd, was unenforceable for illegality. But at all times, in the Tribunal and on that appeal before the Appeal Tribunal and back again in the Employment Tribunal when the discrimination claim was found unanimously in her favour, her case was that she was employed by Wadhurst Park Ltd.

[10]The Tribunal refers, in the Tribunal Decision, in paragraph 13 of their Decision, to the fact that "At the hearing, [on 13 November 2000] … Dr Bezant gave evidence which was based on the premise that Wadhurst Park Ltd was her employer." At paragraph 14 the Tribunal recites that:

"At a preliminary hearing in July and August 2001, at which Dr Bezant and M Bezant were legally represented, an Employment Tribunal determined that … (1) The contracts of employment between the Applicants [Mr Bezant and or Bezant] and the Respondent [Wadhurst Park Limited] were vitiated by illegality"

At paragraph 16 the Tribunal records:

" On 12 November 2002, a preliminary hearing of the Employment Appeal Tribunal decided that the Applicants should have limited permission to go to a full hearing. On 10 April 2003. the Appeal was dismissed. The matter had been argued before the Employment Appeal Tribunal on the basis that Wadhurst Park Limited was the proper Respondent. and Dr Bezant's employer"

At paragraph 22 the Tribunal records Dr Bezant's e-mail, to which I have referred, which stated as follows:

" I wish to make a formal application to join Hans Rausing …. He is therefore the person liable for the payment of the award for compensation, which was ordered by the Tribunal on 23 September 2002. because it was he, and not the company who committed the breach of the Sex Discrimination Act by dismissing me on 8 September 2000."

It was that case which the Tribunal concluded the Appellant could no longer make.

[11]In paragraph 35 the Tribunal said as follows:

"It follows from the facts which we have found, and the conclusions which we have drawn above that Dr Bezant is in any event estopped from advancing at this stage the claim that Professor Rausing should be joined as Second Respondent. This is because, on her own case. she claims that she could have joined Professor Rausing to an earlier set of proceedings, but did not do so. Her attempt to join Professor Rausing to the proceedings now is therefore prohibited by the rule in Henderson v Henderson, as applied in Johnson v Gore Wood, and in Gleeson v J Wippell and Company Limited (1977] 1WLR 510. The latter two cases are authority to the effect that the rule in Henderson v Henderson can be relied upon where there is a sufficient degree of identity between the defendant in the first action, and the putative defendant in the second action. On Dr Bezant's case, the defendant and the putative defendant are identical, and hence they must satisfy the test of "privity of interest" set out by Sir Robert McGarry VC in Gleeson. so as to carry the inevitable implication that she is estopped from adding Professor Rausing as Second Respondent to the proceedings now."

The doctrine, to which the Tribunal refers, has various headings to it, and they all intertwine.

[12]There is the doctrine of election, whereby the party, particular when it brings litigation by way of making a choice as to who to sue, for example between principal and agent, can and does elect to sue one rather than the other, if that is the course he or she takes, and is held to do so irrevocably. There is estoppel, whereby a party is prevented from going back on an earlier decision where such act is irrevocable and would cause prejudice, and there is the concept of abuse of the process which is an overriding concept referred to in Henderson -v- Henderson . Dr Bezant refers to the concept of privity of interest as if it assisted her by saying "well there you are, if they are privy then they must be one and the same, consequently I shall now be allowed to sue the second party on the basis that it is the same as the first"; but of course that begs the question, as indeed the Tribunal makes clear itself. It is just because it is her case, although heavily denied by the Defendant, but certainly not yet decided by a Court, that the two parties are identical, that her decision to sue one and not the other and assert that one was her employer and not the other, rather than to leave it to the Court to decide who the employer was from the outset, which prevents her now from having litigated an issue which she could and should have litigated at the outset.

[13]There is a route whereby the Tribunal could have excused the Applicant from the consequences of such abuse of the process election or estoppel and that is the route of finding that she was, when she made the election, or when she took the act which has now become the subject of an estoppel, or the countermanding of which would be an abuse, labouring under a genuine mistake; and that is why the Tribunal considered, as it did in its Decision, the question as to whether the Applicant had made a genuine mistake, in the sense conveyed within the principle of the case of Cocking -v- Sandhurst (Stationers) Ltd

1974 ICR 650

[14]Of course, from one point of view it was a mistake not to have sued Professor Rausing, because if her case is right and in fact he was her employer, and Wadhurst Park Ltd was simply a shell, then it was a bad or mistaken decision. From another point of view, it can be said to have been a mistake because of the outcome being bad, and one can always say "what a mistake I made" when one knows that the outcome has been not one wished.

[15]But it is in neither of those senses that the Tribunal was, rightly, approaching the question of whether the Applicant had made a genuine mistake, so far as the law is concerned. What the Tribunal sought to analyse was whether it could be said that she was, when she made her election, when she took the step to sue Wadhurst Park Ltd and not Professor Rausing, labouring under a mistake of fact; whether there was something she did not know which she has only subsequently discovered, and the Tribunal rightly pointed out, as indeed Mrs Bezant herself has accepted in her submission to me today, at paragraph 30 of the Decision that:

"In analysing the reason put forward by Dr Bezant, it becomes clear that she does not claim that she was mistaken as to who was her employer. She says rather that she was mistaken in her belief that it was not necessary to name her true employer, and that it would meet the requirements of the Originating Application if she named Wadhurst Park Limited."

[16]The Tribunal considered this in the following paragraphs:

"31 In considering the import of this mistake which Dr Bezant says that she made, it is important to bear in mind that she was represented legally at the time that she completed the Originating Application. She must be deemed, in view of the advice which she received from her solicitors, to have been aware of the need to name her true employer as the Respondent to her claim. If she failed to name her true employer as Respondent to the claim, it cannot be said to be a genuine mistake. If, contrary to that, Professor Rausing was not her true employer, her claim fails in any event."

And then at paragraph 32 the Tribunal recites:

"….. We concluded that Dr Bezant decided to join Professor Rausing to proceedings when she discovered that the decision against Wadhurst Park United would not result in any significant compensation"

Indeed, I would reword that as saying "any compensation at all", as I understand it. Then at paragraph 34 the Tribunal recites:

"We concluded. as a result, that what was being considered here was not a "genuine mistake" in the sense in which that phrase is used in Cocking v Sandhurst ."

The Tribunal then said:

"…if the Tribunal had gone on to consider prejudice to one party or the other, it is inevitable that there would be prejudice to one or other of the parties whichever way the discretion was exercised. As far as Professor Rausing was concerned, such prejudice would result (whether Dr Bezant had made a genuine mistake or not) because he had lost any chance to defend the action. The merits cannot now be determined via the route which Dr Bezant has asked the Tribunal to take."

[17]Dr Bezant, understandably, criticises that passage, pointing out that in fact there would not be prejudice to Professor Rausing, because it is not being suggested by her that he would simply be slotted in to the judgment instead of Wadhurst Park Ltd/Tertiary Enterprises Ltd. If he were, then of course there would be prejudice because he would not have had the opportunity of defending himself. She is simply seeking that the matter be re-opened But of course it is the very fact that she is suggesting that the matter be re-opened, so that the issue could be decided as to whether, as she asserts, Professor Rausing was her real employer and not Wadhurst Park Ltd, that the issue becomes so clear that she is estopped from now doing so; because her election to sue Wadhurst Park Ltd as her employer has now gone so far down the line that she would have positively to set aside the judgment against it as her employer, which she obtained at her own initiative, in order to try and recast the case against what she regards as the real employer.

[18]It is far too late, as the Tribunal concluded, to do that now, unless there was a genuine mistake, at the time of the election; and, in my judgment, the Tribunal cannot possibly be found to be perverse, indeed there is no basis on which they could possibly be criticised for the finding they did, that there was no such genuine mistake.

[19]In those circumstances, this appeal and this application must be dismissed. I cannot dismiss it however without once again repeating my very considerable concern, and the concern I am sure of the entire legal system, that a position of this kind should have been achieved. There must be other ways which could still be considered by the Appellant for her to enforce this award. The first, obviously, would be that she would have the power, and no doubt with legal advice, to seek to bring proceedings or take steps within the ambit of the Companies Court, to see whether there are assets of Wadhurst Park Ltd which could be called in, which might meet her judgment.

[20]The second is a matter again upon which I can give her no encouragement, but which at least would have a sensible legal foundation. It appears to me that there is no need for her to have asserted that Professor Rausing was the real employer; it would have been sufficient for her to allege that because he was, if he was the prime personality in and behind Wadhurst Park Ltd, he was, or may have been, a secondary discriminator within section 42 of the Sex Discrimination Act 1975 , albeit not her employer. By section 42(1):

"A person who knowingly aids another person to do an act made unlawful by this Act shall be treated for the purposes of this Act as himself doing an unlawful act of the like description."

And it would have been open for the Appellant to bring a claim under section 42 against Professor Rausing.

[21]An applicant's advisers, and the Tribunals, are always reluctant to see claims made against individuals, when there is a perfectly good claim that can be made against an apparently solvent employer, but section 42 makes it plain that that can be done. There is a time limit under section 76 of the Sex Discrimination Act, being a period of three months, beginning with the act complained of, but there is power under section 76(5) for an Employment Tribunal to consider any such complaint which is out of time "if in all the circumstances of the case it considers that it is just and equitable to do so."

[22]It is now clear that Wadhurst Park Limited will not pay the award. Without giving any encouragement, it appears to me that this is a case in which the Appellant may decide, no doubt with the benefit, which I encourage, of taking legal advice, to bring a claim against Professor Rausing under section 42, to seek to persuade an Employment Tribunal that it would be just and equitable in all the circumstances of this case to extend time to bring such an application.