MR S DEMAN v (1) VICTORIA UNIVERSITY OF MANCHESTER (2) PROFESSOR ANDREW STARK (3) PROFESSOR STUART TURLEY [2008] UKEAT 0211_06_2406

EMPLOYMENT APPEAL TRIBUNAL
BAILII case number: [2008] UKEAT 0211_06_2406Case No Appeal No. UKEAT/0211/06Venue 58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS
Between
MR S DEMANAPPELLANT(1) VICTORIA UNIVERSITY OF MANCHESTER (2) PROFESSOR ANDREW STARK (3) PROFESSOR STUART TURLEYRESPONDENTS
Before
Mr Justice Bean Mr J C Shrigley Ms B SwitzerDate 24 June 2008
[1]APPEARANCES For the Appellant MR S DEMAN (The Appellant in Person) For the Respondents MS E SMITH (of Counsel) Instructed by: Messrs Addleshaw Goddard LLP Solicitors 100 Barbirolli Square Manchester M2 3AB SUMMARY PRACTICE AND PROCEDURE: Costs If a Tribunal considers that the conduct of the proceedings by a party or his representative has been vexatious, abusive, disruptive or unreasonable, the Tribunal is under a duty to consider making an award of costs irrespective of the terms of the opposing party's application, if any, provided that it is satisfied that the opposing party has incurred costs of at least the amount which it awards. THE HONOURABLE MR JUSTICE BEAN In 1998 and 2000 the Claimant, Mr Deman, presented two originating applications alleging race discrimination and victimisation against the Respondents, the Victoria University of Manchester and two professors on the staff of the university. The hearing of the two originating applications together took place before an Employment Tribunal in Manchester chaired by Mr D A Leahy and extended over no less than 23 days beginning in March and ending in November 2004.[2]When the hearing had been adjourned for a period after some nine days, an appeal was brought by Mr Deman to this Appeal Tribunal against certain aspects of the Tribunal's decision. A Rule 3(10) hearing took place following a decision on the sift and at that hearing, which Mr Deman drew to our attention this morning, HHJ Ansell upheld the interlocutory decisions of the learned Chairman which were being criticised and observed at paragraph 24 that the conduct of the case thus far had not taken an entirely smooth course. Mr Deman suggested to us that that was a criticism of the learned Chairman but we do not read it that way. Judge Ansell was simply setting out part of the tortuous history of the hearing thus far.[3]Following the conclusion of the hearing, the Tribunal reserved its decision and by a decision promulgated in writing on 14 December 2004 all the claims were dismissed.[4]The Respondents made an application for costs. A hearing on the subject of costs took place before the same Chairman and the same lay members on 23 May 2005. The Claimant on this occasion was represented by counsel; so too were the Respondents, by Ms Smith who had represented them at the substantive hearing and who appears on their behalf before us today. The Tribunal, by a decision sent to the parties on 14 June 2005, ordered Mr Deman to pay to the Respondent, by which we have taken to mean the Respondent university, its costs of these proceedings limited to the sum of £8,000 and also ordered Mr Deman to repay to the Secretary of State the whole of the allowances paid by the Secretary of State to two persons for their attendance before the Tribunal.[5]Mr Deman appealed to this Tribunal against both the substantive decision and the costs decision. On the substantive decision it appears that there was an appeal or attempted appeal on the merits as a whole and also an appeal against a decision by the learned Chairman refusing an application by Mr Deman to recuse himself.[6]On 13 December 2005 Rimer J, as he then was, ordered that the appeal on the merits should proceed no further since it was out of time and he did not consider it a proper case for an extension of time. He directed that the recusal appeal should be set down for a preliminary hearing and that the costs appeal should be the subject of a Rule 3 direction.[7]That was accordingly the end of the merits appeal. On 17 March 2006 Mr Davies QC settled a skeleton argument dealing with the recusal appeal and the costs appeal. Paragraphs 1 - 25 of that document concern the recusal appeal; paragraphs 26 and 27, to which we shall return in due course, deal with the costs appeal.[8]The Claimant exercised his right to an oral hearing under Rule 3(10) in relation to the costs appeal and that came before Mr Justice Wilkie sitting alone in this Tribunal on 3 April 2006 when Mr Davies QC appeared. Mr Justice Wilkie allowed the Rule 3(10) application and recorded:
"This appeal be set down for a full hearing in respect of paragraphs 26 - 27 of the Appellant's skeleton argument dated 17 th March 2006 only."
[9]On 1 September 2006 this Tribunal chaired by Mr Justice Underhill made a Restriction of Proceedings Order against Mr Deman under s33 of the Employment Tribunals Act 1996 . The effect of that order was that Mr Deman could neither institute an appeal to this Tribunal nor continue an appeal already lodged without the leave of a judge of this Tribunal. By s33(4) of that Act Parliament provided that leave could not be given unless there were reasonable grounds for an appeal and it was not an abuse of process.[10]By an order made on 25 July 2007 Mr Justice Elias, President of this Appeal Tribunal, gave leave in respect of the costs appeal in these terms:
"This is a case where a costs order has been challenged by the applicant. It has been allowed to go to a full hearing in respect of paragraphs 26 - 27 of the appellant's skeleton argument dated the 17th day of March 2006 only. It raises a discrete point, and the outcome has an effect on the amount that the applicant will have to pay. I think he should be given permission to pursue this appeal."
And so the appeal comes before us today.[11]The Tribunal, when considering the costs application before them, had written submissions from the Respondents incorporating a schedule of costs. They are to be found at pages 89 onwards of our bundle. Paragraph 4 reads:
"The four areas of conduct upon which the Respondents rely for the purposes of this application are (a) Costs incurred in the Claimant's applications for adjournments ('Part One'); (b) Costs incurred in the Claimant's applications to strike out the Respondent's case ('Part Two'); (c) Costs incurred by the Claimant submitting false witness statements, additional witness statements and making spurious applications or witness orders ('Part Three'); (d) Costs incurred by the Claimant's failure to attend hearings and produce medical evidence in breach of Orders of the Employment Tribunal ('Part Four')."
[12]The schedules of costs suggested that the total amount of costs incurred by the Respondents in relation to the litigation was vastly in excess of £10,000, but the Respondents limited their claim to the sum of £10,000 in accordance with Rule 14(3)(a).[13]The Tribunal judgment relating to costs, after referring to Rules 14(1) and 14(4) and the authorities to which they were referred, said this at paragraph 3:
"The general principles which we draw from these authorities are that we must first be persuaded that, in this case, the claimant has acted in such a way as is encompassed by the words of Rule 14(1) to make an order under 14(1)(a) or (b). In respect of Rule 14(4), the requirement is not that he has acted in a way which is unreasonable, vexatious, abusive or otherwise as described in Rule 14(1) but that, in effect, he has caused or brought about the postponement or adjournment."
That is plainly a correct statement of the law and it is not suggested otherwise.[14]They then made a number of findings critical of Mr Deman's conduct of the case. At paragraphs 4 - 6 they referred to the fact that he had constantly made what they described as interventions and applications, through the hearing, taking up a few minutes short of 20 hours; and they found that, accordingly, on the basis of five hours a day for sitting, four days of Tribunal hearing time had been wasted. After a compliment to the way in which Ms Smith, counsel for the Respondents, had conducted herself in the face of what they describe as loud and aggressive interruptions, they went on to refer to a Mr Graham, who had accompanied the Claimant for the first two weeks of the hearing, who never gave evidence and it seems was never likely to, who made at least two interjections during the hearing which troubled the Tribunal, and conducted a picket outside. They concluded at the end of paragraph 9 as follows:
"As our earlier decisions will show, we became concerned at a very early stage that the claimant's whole approach to the conduct of this case was to be disruptive and, perversely, to avoid the Tribunal being able to conclude the hearing. We are in no doubt that the conduct which we have expressly found the claimant to have been guilty of amounts to vexatious conduct, abusive conduct and disruptive conduct; at times it was scandalous and at all times it was unreasonable. We therefore have no difficulty at all in concluding that the respondent is entitled to make an application for costs and that this Tribunal, given the mandatory words of Rule 14, must consider making an order for costs against him."
[15]Pausing there, we made it clear to Mr Deman, and it is right to say he did accept, after no more than a short debate, that it is not open to him to attack these findings in this Appeal Tribunal. That is because the leave which he has been given, both by Wilkie J in ordering the case to go to a full hearing and by the President in granting permission under s33, was confined to paragraphs 26 and 27 of Mr Davies ' skeleton argument. This began:
"26. Turning to the Costs Appeal as an independent matter (i.e. assuming that the Recusal Appeal is not allowed to proceed to a full hearing) there is one real point."
[16]At paragraph 18 the Employment Tribunal stated that: "… for the purposes of our decision we focus on part four alone." (That was a reference to Part 4 of the Respondents' schedule.) Part 4 is annexed to the skeleton. It only claimed a total of £5,673.50. Mr Davies' submitted in his skeleton argument that it could not therefore properly found the basis of an award of £8,000 by way of costs. In fact from the scheme of the Employment Tribunal's decision, particularly at paragraphs 18 and 19, it is clear that the Tribunal started with a figure of £10,000, being the costs claimed by the Respondents, and deducted 20 per cent in respect of the two matters referred to at paragraph 19, deducting 20 per cent from £5,673.50 produces a figure of £4,538.84. On the Tribunal's approach, wrote Mr Davies, that must be the "top ceiling" on any acceptable order for costs.[17]We now revert to the text of the Tribunal's decision about costs. They record at paragraphs 10 onwards that the Respondents' claim to costs, that is the claim in the written submissions, breaks down into four areas. Part 1 deals with the pre-hearing conduct of the case and the multitude of applications to adjourn or postpone which the Claimant made. Part 2 refers to a specific item of £381 costs incurred on an interlocutory application by Mr Deman for the Respondents' case to be struck out. Part 3 relates to what they describe as the specious witness statements submitted by the Claimant pursuant to the two directions to exchange witness statements, one of which was apparently from HHJ Prophet, lately President of the Employment Tribunals. The Tribunal say under this heading that they were deceived. Part 4 relates to:
"… the conduct of the hearing and, specifically, the claimant's failure to attend hearings and, subsequent thereto, to produce the medical evidence which he was ordered by the Tribunal to produce as a condition of an adjournment which had taken place on 17 May 2004."
That citation in paragraph 13 of the Tribunal's decision is a reference, almost verbatim, to the heading of Part 4 of the Respondents' schedule at pages 113 - 114 of our bundle:
"Part Four - Costs incurred as a result of the Claimant's failure to attend hearings and produce medical evidence in breach of the orders of the Tribunal."
[18]The Tribunal concluded, at paragraph 14 of their decision, that the grounds upon which it granted adjournments on the basis of the Claimant's alleged ill health in April and May were not bona fide . More accurately, they say they are not satisfied that the grounds were bona fide . Although Mr Deman sought before us to draw a distinction between the two, we think there was a clear finding that the grounds were not bona fide .[19]Having set out these four headings of the Respondents' claim, they repeat their view that they were in no doubt that the Claimant's conduct merited an award of costs and compelled them to consider making one pursuant to the Respondents' application.[20]At paragraphs 18 - 20 of their decision, they found as follows:
"18. We deal, in conclusion, with the respondent's application. The respondent limits its claim to the sum of £10,000 which accords with the provisions of Rule 14(3)(a). We have little doubt that its costs comfortably exceed that figure but for the purposes of our decision we focus alone on part four. We assess the respondent's basic costs of attending this hearing, with all its complexities and with all the preparation that was necessary each day, at a minimum of £1,500 per day. In the first ten days of the hearing of this case the claimant wilfully wasted four days. A further three days were wasted in April and May with the claimant not participating because of his alleged ill health – a reason which, we have already said, we do not accept as bona fide . It can therefore be seen that the respondent's costs simply for the claimant's procrastination easily exceed £10,000 and on that basis there is no point in our considering further parts one, two and three of their claim for costs, either in principle or in quantum. 19. Thus, we are satisfied that the respondent has shown that its costs and its basic, legitimate costs exceed £10,000 and so we have considered the exercise of our discretion as to costs and whether or not it is appropriate to make an award of £10,000. We cannot overlook two significant factors which, if they did not add to the time spent, certainly added to the aggravation of the case. Those were: (i) Professor Turley's notes of the short-listing and interviewing process for one of the important posts here had gone astray. They had not been disclosed. That had been the subject of a legitimate attack by the claimant and they were discovered during the Summer. The circumstances of their discovery were as described to us by Professor Turley and we are entirely satisfied that he has acted honestly and honourably. We do not question his account of these matters. Nevertheless, the fact that those notes were not properly kept and secured at the material time left the respondent in part open to the very attack which was mounted by the Originating Applications. (ii) There had, as the claimant rightfully prompts his Counsel today to remind us, been interlocutory hearings over the issue of what information could and should properly be disclosed to the claimant with regard to the curricula vitae and backgrounds of his competitor candidates for the posts for which he had applied. The respondent had throughout strongly resisted disclosing C.V.s or anything other than a summary. The initial summary which they prepared under order from the Tribunal was rejected as being inadequate and a further summary was ordered to be provided. That summary was all that this Tribunal had when it started the hearing of this case. It will be seen that it caused the claimant to make complaint and to make further application to us. We accepted the respondent's arguments for the non-disclosure of the C.V.s. All this is the subject of previous decisions and reasons and we will not rehearse it here. In the Autumn, thanks to the claimant's own research, it transpired that essential C.V.s were already posted on the internet and thus the whole matter could have been resolved many months earlier. That conduct itself, we believe, was not reasonable. 20. By reason of these two matters, justice tells us that it is best served by the exercise of our discretion in making an Order for Costs against the claimant but that Order shall be limited to the sum in £8,000."
[21]It can be seen, therefore, that the point made in Mr Davies' skeleton argument at paragraphs 26 and 27 is narrowly focussed. It can be expressed in two ways. Firstly, were the Tribunal, in the third sentence of paragraph 18, confining themselves to Part 4 of the Respondents' costs schedule, that is the costs incurred at the substantive hearing as a result of the Claimant's failure to attend hearings and produce medical evidence in breach of the orders of the Tribunal? If so, the total of that part of the schedule was £5,673.50 and with a 20 per cent reduction to reflect the two points made against the Respondents in paragraph 19, the result would be £4,538.84. Secondly, and in any event, does a Tribunal have power to make an award which goes outside the terms of a written application by the prospective receiving party? Here, the Respondents were asking for an award of £10,000 but they were doing so on a somewhat different basis from that on which the Tribunal made its award.[22]As to the first question, we do not consider that the Tribunal were confining themselves to Part 4 of the Respondents' costs schedule. It is true to say that in the sentence we have referred to, the third sentence of paragraph 18 of the decision, they say:
"… for the purposes of our decision we focus alone on part four."
But they go on in the very next sentence to say:
"We assess the respondent's basic costs of attending this hearing … at a minimum of £1,500 per day."
It is clear to us, therefore, that by Part 4 they mean Part 4 of the litigation, not Part 4 of the costs schedule. In other words, they were distinguishing between Parts 1, 2 and 3 of the case which dealt with interlocutory matters and the question of witness statements from Part 4, which, as they said at the beginning of paragraph 13, relates to the conduct of the hearing. We consider, therefore, that there is nothing in the point that the Tribunal, by the words they used in paragraph 18, had precluded themselves from considering the costs of the substantive hearing more generally.[23]That brings us to the second question, which is whether they have power to make an award outside the terms of the written application. At paragraph T1069 of Harvey on Industrial Relations and Employment Law , the learned editors expressed the view that:
"A tribunal has a mandatory duty to consider making an order for costs where it is of the opinion that any of the grounds for making of costs or preparation time order has been made out. The effect of this is that if a tribunal considers that there has been unreasonable conduct by a party or his representative or that the bringing or conducting of the proceedings has been misconceived it must actively address the question of a possible award whether or not an application for costs has been made. In doing so it must, of course, give the parties an opportunity to make representations as to why such an order should or should not be made. The fact that a tribunal has a duty to consider making an order does not, however, deprive it of its ultimate discretion of whether or not to award costs in the particular circumstances of the case."
[24]That accords with our view and with the approach taken by the Tribunal. We do not, therefore, consider that the fact the Respondents made an application for £10,000 costs on a somewhat different basis precluded the Tribunal from approaching the matter on the basis on which they did.[25]Mr Deman has, however, in his submissions to us today raised a number of points, which he is entitled to raise before us, as to why the Tribunal's award of £8,000 was wrong. In saying that we should have added the word "perhaps" since the terms of Mr Davies' skeleton argument, on the basis of which leave was granted, were more limited. However, giving Mr Deman the benefit of the doubt, we will deal with his points one by one.[26]He said, firstly, that when considering an order for costs, the Tribunal should have looked globally at both sides' conduct and in some respects the Respondents were at fault.[27]The answer to that is that the Tribunal did indeed criticise the Respondents in two respects, paragraphs 19(i) and 19(ii) of their decision, and in the light of that made a reduction from the award of £10,000 of 20 per cent. The Respondents are, as we see it, bound by those criticisms in this Appeal Tribunal, but Mr Deman is likewise bound by the fact that that was as far as the Tribunal in fact went in criticising the Respondents' conduct, and the reduction that they made was entirely reasonable and within their discretion.[28]Next in logical order, although not the order in which he made the submissions, Mr Deman observes there is no finding in the costs decision that his claims were entirely misconceived. He is right about that but that is not the basis on which the Tribunal made orders for costs. They made orders for costs on the basis of Rules 14(1) and 14(4) and, so far as Rule 14(1) is concerned, it was the conduct of the proceedings, not the bringing of the proceedings, which led to their decision.[29]Next, Mr Deman argues that there is no evidence as to whether the Respondents' solicitors and counsel taken together, did anything, as Mr Deman put it, to earn their £1,500 a day or in particular to justify that figure. As the schedule makes clear, the Respondents' actual costs per day in the Tribunal exceeded that figure. Counsel's daily fee after the brief fee, traditionally though ineptly referred to as the refresher fee, was £850 a day, which in our judgment was entirely reasonable; and the solicitors' costs were a great deal more than £650 per day.[30]Next, Mr Deman says there is no causal link between paragraphs 4 to 6 of the Tribunal's costs decision about the 20 hours of Tribunal time wasted through applications and interventions and their decision as to how much costs should be paid.[31]That is incorrect with respect. At paragraph 18 line 6, the Tribunal say that in the first ten days of the hearing of the case the Claimant wilfully wasted four days. That is a clear reference back to paragraph 6.[32]Next, it is said on the same subject that there was no analysis as to the fault involved in four days being wasted, and at this point Mr Deman referred back to Judge Ansell's decision on the Rule 3(10) appeal which we have already quoted. We do not think there was anything in that learned judge's observations which precluded the Tribunal from making the findings against Mr Deman which they did and the analysis in paragraphs 4 to 6 is, in our judgment, more than adequate.[33]The next point is that Mr Deman seeks to challenge the finding that a further three days of the hearing were wasted in April and May with the Claimant not participating because of his alleged ill health, a reason which the Tribunal did not accept as bona fide . We have already said that there is nothing in the point about the way this was phrased. The Tribunal considered that what they described as the alleged ill health was not a bona fide basis for applying for an adjournment and they gave sound reasons for that at paragraph 14. It is not for us to interfere.[34]The next point is that the Tribunal did not adequately take into account the criticisms that they made of the Respondents in paragraph 19; and, in particular, Mr Deman argues that the issue of Professor Turley's notes added to the length of the hearing and that was something which should have reduced the order for costs made against him.[35]It did reduce the order for costs made against him in the way we have described. Taken together with the criticisms at paragraph 19.2, it led to a 20 per cent reduction. The Tribunal could perfectly well have taken the view that the Respondents even with that criticism made against them had incurred costs by way of unreasonable conduct far in excess of £10,000 and made an award of £10,000 overall. It is not open to the Respondents so to contend on this appeal, neither is it open to Mr Deman to contend that limiting the reduction to £2,000 and the net total to £8,000 was outside the Tribunal's discretion.[36]Mr Deman finally referred us to two well known authorities emphasising that the Tribunal's jurisdiction to award costs is an exceptional one. They are Gee v Shell UK Limited [2002] EWCA Civ 1479 Scott Baker LJ at paragraph 22 and Lodwick v London Borough of Southwark [2004] EWCA Civ 306 at paragraph 26 per Pill LJ. The Tribunal were well aware of the exceptional nature of the jurisdiction and so are we. The history of the litigation as set out by the Tribunal, although not exceptional for a case brought by Mr Deman, is fortunately exceptional if one views Employment Tribunal litigation as a whole. The Tribunal were fully entitled to make the order which they did make and accordingly this appeal is dismissed.