Godfrey Morgan Solicitors Ltd v Marzon & Anor (Practice and Procedure : Costs) (Rev 1) [2012] UKEAT 0466_11_1502

EAT
Godfrey Morgan Solicitors Ltd v Marzon & Anor (Practice and Procedure : Costs) (Rev 1)
[2012] UKEAT 0466_11_1502 · 2012-02-15
[1]The five appeals before me raise issues that are deeply troubling, both in respect of the way in which the solicitor Appellant behaved and appeared to think he was entitled to behave in respect of Employment Tribunals and, secondly, the way in which the Employment Judges appear to have responded. I have not been assisted in the resolution of these appeals particularly, I regret to say, by the way in which the appeal bundle and documentation has been prepared. Particularly in any case in which there are five appeals, and correspondence that is of importance, it is essential to have a carefully prepared chronology and a bundle that is chronologically ordered; I have been supplied with neither. This is despite the fact that the Appellant is a solicitor and there is an order from this Tribunal that requires there to be a chronology. Background[2]The background is this. The basic underlying story is simple. The Claimant before the Employment Tribunal, whom I shall call Miss Marzan, was a paralegal. She was employed by a solicitors’ practice in Norwich for just over a year. She gave notice, it seems, because she was shortly to be married and was leaving the area. The notice period was one month long, but holiday entitlement was due to her that had not been taken, so her case was that she would have to work for less than a week of the period that remained. She said that she was told that she need not come in to work to serve those particular days, though she remained at the disposal of her employer and did some legal‑associated work in the period of notice. If the employer had been permitted to raise its side of the story before the Tribunal, it would have led evidence that rather than she being told that she need not come in to work she asked if she might leave there and then to accommodate her personal circumstances, and on being told that would mean that she would have no pay for the rest of the month, agreed to that.[3]That simple dispute was raised before the Tribunal in an ET1. The ET1 described the Respondent employer as “Godfrey Morgan Solicitors t/a GMS Law” and gave an address. To the purist that was a slight misdescription. I have been told by Mr Clegg, whom I understand to be the senior employment solicitor at the solicitors, that it should have been “Godfrey Morgan Solicitors Limited t/a GMS Law”. Godfrey Morgan Solicitors had traded as a firm and indeed still have residual bills that are submitted in the firm name. The firm is in law a distinct entity from the company. It is as a company that Godfrey Morgan Solicitors now trade. The claim was resisted in an ET3 in these terms: that there was no jurisdiction in the Tribunal to hear the claim, because it was denied that the Claimant was employed by the Respondent at any time. Further, the Respondent said, “The Claimant is put to strict proof that she was ever employed by Godfrey Morgan Solicitors”.[4]In a witness statement of 8 February 2011 Godfrey Harry Rutter Morgan, who described himself as a partner in the firm of Godfrey Morgan Solicitors, the Respondent in the action, made a witness statement in four short paragraphs. He confirmed that at no point in time had the Respondent employed the Claimant and went on to say that he had made that very point in the ET3, the fourth paragraph being a statement of truth. But for the absence of the word “Limited” in the title of the Respondent the description of the Respondent in the ET1 was entirely correct. Mr Morgan had, it would appear, chosen to read the title even though it included the words “t/a GMS Law” (which, I was informed by Mr Clegg before me today on behalf of the Appellant, is a tag used only by the company at any material time) as referring to the firm and not the company, which would be known simply as “Godfrey Morgan Solicitors Ltd”. The level of misdescription might therefore be thought to be vanishingly small, if indeed it was classed as misdescription at all, though technically as a company Godfrey Morgan Solicitors should have had the word “Limited” after their name.[5]The Tribunal had ordered a hearing for 15 February 2011. It recited the picture largely but not entirely as I have described it; it appears that the Tribunal may not have been told that the limited company traded as GMS Law. Before it, although Mr Morgan had prepared the witness statement, the solicitors’ firm (because it was the firm that considered itself to have been made Respondent) sent a trainee solicitor, a Mr Whitehouse. He apparently explained, once Miss Marzan had produced a contract of employment signed by Mr Morgan, which stated the employer as “Godfrey Morgan Solicitors Ltd”, that there was a distinction between the firm and the company. The Tribunal took the view therefore that the limited company should be added as a second Respondent. That inevitably meant a delay in the resolution of the Tribunal proceedings. It ordered that the parties were to disclose to each other by way of providing photocopies all documents that were in their possession that might be relevant to the issues, whether helpful to their case or not, by no later than 5.00pm on 21 March 2011, and the parties were to prepare witness statements, after which the hearing would be re‑listed for 27 April 2011. It then went on to consider whether to make a time preparation order and order for costs. It is this order that forms the basis of the first, in time, of the appeals before me.[6]The Tribunal took the view that a professionally competent and reasonable representative would, when filing the employer’s response, have stated, as is the usual practice, that the Claimant had named the wrong Respondent, or had incorrectly named the Respondent, then would give the correct name for the Respondent and set out the defence of the correctly identified Respondent, and would have written to the Claimant to point out that she had implicated the wrong party; that her contract was with the limited company and not with the firm. It would also, thought the Tribunal, have disclosed any copy of a contract of employment in its possession, since that would be a highly relevant document in a dispute between employee and employer.

The Judge then added these words:

“9. In this case, what the First Respondent chose to do was simply deny that the Claimant was an employee and put the Claimant to proof. The Respondent, somewhat breathtakingly, has argued today that it could not produce the contract of employment because it belonged to the Limited Company. Mr Godfrey Morgan is the partner and proprietor of the Firm, Godfrey Morgan Solicitors, and he is also a director in the company known as Godfrey Morgan Solicitors Limited. It beggars belief that it would be suggested that a contract in the name of the limited company is not available to the firm to be disclosed. Whilst they may be separate legal entities, they are controlled by the same person. 10. In my view, the conduct of the First Respondent in these proceedings thus far has been appalling. It seemed to me that the First Respondent was simply trying to be clever by filing a response that said the Claimant is not an employee and hoped that Miss Marzan would not bother turning up today.”
[7]Those words led Employment

Judge Warren to his conclusions in paragraphs 11 and 12, which I quote:

“11. The approach of the First Respondent was not to further the Overriding Objective, but to defy it; its approach was not proportionate, was not with a view to ensuring the case was dealt with expeditiously or at minimal costs. Its approach has led to the Tribunal not being able to deal with matters today, but to an adjournment and an Order for a Further Response to be filed. 12. In these circumstances, I am satisfied that the conduct of the First Respondent in these proceedings has been unreasonable and I make a time preparation Order in favour of Miss Marzan. […]”
[8]He then went on to do that and to make an order for costs under rule 46(1) that the first Respondent should pay the Secretary of State such sum as the Secretary of State was in due course to pay to the Claimant in terms of her costs of attending the hearing.[9]I shall turn to the grounds of appeal in respect of that hearing when I have recounted the history that followed. I have a sense, though I can put it no higher than that, that I may not have had the entirety of the relevant correspondence put before me, but it is for the Appellant to make out its appeals, and I assume therefore that all documents that the Appellant considers to be relevant in support of its appeal have been placed in the bundle. I am cautious therefore about assuming too much about the course of events that followed, some of which is slightly murky.[10]A letter, which was inspired by some comment that I do not know of, was written by an entity describing itself as “GMS Law”, which I take to be the company, setting out “confirmation and evidence” that Godfrey Morgan was not in the country on the date of the previous hearing. The Tribunal had at the hearing been critical of the firm’s sending a trainee solicitor to the Employment Tribunal rather than an employment law specialist or partner, or Mr Morgan. It had been told that Mr Morgan could not attend because he was out of the country. The letter, of 16 March, was referred to Employment Judge Postle. He directed, leading to a letter of 29 March 2011, that:
“The Respondent, particularly Godfrey Morgan needs to provide documentary evidence in support of his assertion he was out of the UK on 15 February 2011. Such as evidence of plane ticket travel which can be obtained either from the Airline or Travel agent.”
[11]On 1 April GMS Law again wrote to confirm the absence from the United Kingdom of Godfrey Morgan on 15 February and suggested that it was entirely wrong for an Employment Judge effectively to suggest that he was in the UK and had lied about that to the Employment Tribunal, though of course the lie would have been conveyed by another on his behalf if a lie had been the case. Godfrey Morgan made a second witness statement on 6 April. In that he confirmed that he was abroad on 15 February and did not return until the week beginning 21 February. He said he no longer had a copy of his airline ticket, so the witness statement confirmed his inability to attend the hearing.[12]By now, it seems, the Tribunal had the bit between its teeth. On 5 April it wrote to the first Respondent, saying in the material part:
“You have been directed by Judge Postle to produce a copy of the relevant airline ticket. […] If you fail to comply with the Order an Unless Order will follow.”
[13]On the same date

Judge Pritchard‑Witts ordered:

“On or before the 19 April 2011, you send to the other party a list of such documents specified below as are or have been in your possession or power. A copy of the relevant air line ticket is to be sent to the Tribunal and copied to the Claimant.”
[14]It is to be noted that, from the initial assumption that there might be an airline ticket but might not be, the order was requiring the production of a copy of “the relevant air line ticket”. Nothing more is said that would easily enable another court to police the proper observance of that order. Its terms were somewhat unspecific. In the context of what had happened “the relevant air line ticket” must have meant the airline ticket that on the following day Mr Morgan confessed he had had but had lost and that he could therefore not provide a copy of. Undeterred, an order was made on 14 April 2011 by Employment Judge Pritchard‑Witts. This reads as follows:
“On application by the claimant and in exercise of powers conferred under Rules 10 and 13(2) of the Employment Tribunals Rules of Procedure 2004, Employment Judge Pritchard‑Witts has made the following orders. Unless Order On or before 28 April 2011 you send to the Tribunal a copy of the relevant air line ticket and copy it also to the Claimant.”
There then follows date and signature.[15]Serious consequences follow from unless orders. This order assumes that the person to whom it is addressed will know precisely what those consequences are to be in respect of this particular order; it does not specify them. It is hopelessly unspecific. Any other Judge without detailed knowledge of the background who might have to consider whether there had been a strike‑out or not, let alone the parties, who need to be clear if an order is being made on unless terms as to precisely what it requires, should have had identified what “the relevant air line ticket” was, to which date or flight it related, and the consequence of not providing a copy. If this is the form of unless order that is regularly used in Norwich or Bury St Edmunds, then I suggest that those who regularly use it need to think again about whether there is sufficient clarity and care taken in making such an order.[16]That order is appealed. It is a matter of curiosity that the Appellant solicitors have chosen to appeal this order, which follows naturally from the earlier order requiring a copy of the relevant airline ticket to be produced, but they did not appeal that initial order until, in the course of submissions, becoming aware of the omission, Mr Clegg applied for permission to appeal out of time to me. In the event I have concluded it is unnecessary for me to resolve that application, though I mention it for completeness.[17]The order was not complied with because there was no copy in the possession of Mr Morgan, as he had already said. GMS Law wrote on 27 April to say as much to the Tribunal. The response was made by Judge Pritchard‑Witts in an order dated 5 May 2011, in which he recorded the fact that the response stood struck out for non‑compliance with the unless order. He stated in respect of the letter of 27 April:
“Your submission is rejected; by obtaining a copy from the relevant airline or travel agent you would have been able to comply. The order was issued after reading your statement of 6 April 2011 which was considered as unsatisfactory in all the circumstances of the case. Accordingly, your response is now struck out pursuant to Rule 13(2) […].”
[18]When the claim came before the Employment Tribunal for determination on 16 May 2011 before Employment Judge Moore therefore, the response had been struck out, and the solicitors were unable to lead any evidence in defence of their position. The Claimant was presented, as it were, with an open goal, duly scored, and although the claim against the first Respondent, so named, was dismissed, the claim against the company, the second Respondent, succeeded. The total sum at stake was £935 before tax and National Insurance, and was ordered to be paid to Miss Marzan.[19]In his Judgment Employment Judge Moore gave notice that the second Respondent should show cause why a time preparation order of £433.30 (that is, 14.7 hours at a rate of £29 per hour) should not be made against it. In the course of the findings of fact the Judge recited that not only had the solicitors defended the claim but they had also made a counter‑claim in the sum of £1,000 in respect of 20 hours’ in‑house training which, it was alleged, the Claimant had received prior to the termination of her contract. The suggestion was that if she gave notice, she would be required to repay training at that rate. The Judge recorded the solicitors’ failure to comply with the unless order and said:
“The plain nastiness of the arrogant and bullying attitude shown by Mr Morgan towards the Claimant can only be fully appreciated by reading in full the correspondence on the file and the documents that the Claimant has submitted in evidence. It is made all the more deplorable by the fact that Mr Morgan is a solicitor.”
[20]That question, whether a preparation time order should be made, came before a final determination before Judge Moore on 26 September 2011. He regarded the way in which the second Respondent had conducted the proceedings as having been unreasonable, and that it had produced a counter‑claim which the Claimant had been required to devote time and trouble to answering. It concluded that the counter‑claim was likely for objective reasons to be made for the purpose of intimidating the Claimant into discontinuing her claim for unpaid wages, regarding as evidence for that the attitude consistently shown by the second Respondent toward the Claimant and the way in which the solicitors had treated her as distinct from the way they had treated another paralegal who had left, and regarded it as an unreasonable failure of the solicitors to provide objective evidence of whether Mr Morgan had or had not been in the country on 15 February. For those and other reasons, which it is unnecessary for present purposes to recount, the Judge felt confirmed in his initial instinct to order a time preparation order in the total sum of £433.30, and made it. There is an appeal against both of Judge Moore’s decisions; the last of those is the fifth in time, and although raised as a separate appeal and not earlier consolidated by order of this Tribunal, all five appeals have conveniently been heard together. Discussion[21]The appeals before me fall under two separate headings. First, there is the appeal in respect of the time preparation order and order for costs made at the first hearing in February 2011. That stands distinct from the other four hearings, all of which follow almost inexorably from the un‑appealed decision to order the Respondent or Respondents to produce documentary evidence that Mr Morgan was out of the country on 15 February 2011, leading, as I have shown, to the unless order, to the strike‑out, to the inability to respond to the claim, and to being part of the basis for the order made by Judge Moore as to costs.[22]As to the first hearing, Mr Clegg argues that the Tribunal was simply not entitled to come to the conclusion that the conduct by the firm had been unreasonable. The order was made against the firm, not against the company. He relies upon Ridehalgh v Horsefield and Anor [1994] EWCA Civ 40 for the proposition that that which is unreasonable cannot be shown where it is reasonable to take the particular step in the action that is complained of. That case, of course, related to wasted costs; wasted costs are not in issue here. This is not a case of a representative being required to pay costs because of his negligent or otherwise improper conduct. Where a reasonable explanation can be given, he submits, a Tribunal simply cannot find that conduct is unreasonable.[23]He submits that the distinction between a limited company and a firm is important, and that the Claimant has to frame her claim as she suits or as she sees fit. She would have been well aware during her year in employment with the solicitors of the distinction between firm and company, and issued her ET1 in the wrong name. The response that was taken by the solicitors was entirely correct factually: the firm did not employ her; the company did. The fact that the company did and that the company had a copy of the contract of employment that was material was not referred to by Mr Morgan, but he had no obligation to assist the Claimant in her case. Proceedings are adversarial; it is not for one party to point out where another has got it wrong so that they may better plead their case against the party giving the information. It would be entirely absurd, he submitted, for the Claimant to have understood that Mr Morgan in his response was saying that Godfrey Morgan Solicitors Ltd, trading as GMS Law, had never employed her. That is not what he said; he did not use the word “Limited”. She would have been bound to have understood it as referring to the firm.[24]This is my first area of deep concern. The comment made by Employment Judge Warren seemed to me entirely appropriate, for reasons that I will develop. It appears that the solicitors, by whatever description they are referred to, have not taken on board and appreciated the force of that criticism. It is time they were disabused of it. A solicitor is an officer of the court. As such he has a general obligation to facilitate the court in its pursuit of justice as between parties. It is no part of a solicitor’s practice to frustrate that process. The Judge here regarded the usual position where a Claimant misidentifies a Respondent by some technical error in their naming as being that the party who ought to be sued gives the Claimant an early notice of the error and an opportunity to correct it, since it is plain in most cases that it is an inadvertent error of no materiality to the real issues which it is the function of the Tribunals to resolve. This is all the more the case where the Tribunals rather than courts are involved. The Tribunal system is intended to provide a short, efficient and relatively cost‑free forum within which employment grievances can be resolved. It is inimical to this obvious policy for points that have no merit other than extreme technicality not only to be taken but to be persisted in.[25]Mr Clegg acknowledged that for a solicitor such as Mr Morgan to produce a witness statement for the purposes of court proceedings would require him to be full and frank in such a statement. I have not heard Mr Morgan; however, as presently informed, a witness statement in a situation such as this would not seem to be full if it did not at least confess that Miss Marzan had been an employee of the company and did not draw attention to the fact that Godfrey Morgan Solicitors Limited traded as GMS Law, so that the only misdescription was the absence of the word “Limited”.[26]The Employment Judge was fully entitled therefore to come to the conclusion as to the way in which a professionally competent and reasonable representative would have acted. He viewed the conduct of the first Respondent as appalling. That was linked to his view that the first Respondent was simply trying to be clever by filing a response that said the Claimant was not an employee, hoping she would not bother turning up. When this court first read those words, it thought that they might have been more extreme than the circumstances properly demanded. On reflection, however, it would be inevitable that if the Claimant went to the Tribunal, the first Respondent would have to be represented if an order were not to be made against it. If so, it would be inevitable that the Tribunal would be told that the Claimant had got it wrong in suing the firm and not the company (if indeed that is what she had done, bearing in mind that she did use the words “t/a GMS Law”, which were not appropriate at this time for the firm but only to the company). If that had been made clear to the Tribunal, inevitably it would have given permission for the claim to proceed against the company. Almost inevitably, any Respondent with litigation experience would wish to avoid that situation, since it would appear, rightly or wrongly, that the Respondent was merely trying to avoid a Judgment that would otherwise follow by reliance upon a mere technicality of no merit to the real issues. It is therefore difficult to give any rational explanation for the conduct of the solicitors if it is not that which Judge Warren identified. Accordingly I am not prepared to hold that in coming to that conclusion the Judge misdirected himself.[27]It was accepted by Mr Clegg in argument that if the conduct of the Respondent was capable of being viewed by the Judge as appalling, it could not at one and the same time be said to be reasonable, even though, on his submissions, there was a “reasonable” explanation for it. It follows that the conclusion that the Judge reached that the conduct had been unreasonable was one that he was entitled to reach and, I would add, appeared wholly justified. The order that followed was in respect of the time wasted, in effect, by Miss Marzan in preparation for a hearing that was abortive. The whole point about expecting litigants in this day and age to co‑operate in bringing the real issues before a Tribunal is to avoid the costs that otherwise would blight proceedings. This is particularly so in the Employment Tribunal sphere, where one party will not normally expect to claim costs against the other. Tribunals must be and are alert to ensure that the party with the big bucks does not put the other party to such expense or trouble as to make it difficult for them to continue to litigate the real issues.[28]Therefore, with that general proposition in mind, it seems to me entirely appropriate that the order should have been made as it was. I would be very concerned if the view of these employers as expressed to me in terms of their relationship with the Tribunal and the scope of witness evidence was to be regarded more generally as acceptable. It may of course happen that there is reliance upon a legal technicality, but relying upon a legal technicality that has no effect other than to increase the costs of the proceedings, incur time and trouble, and occupy the resources of the Tribunal, is an approach that is properly regulated by an award of costs as between the parties and is capable, depending on the circumstances of course, of coming within the power of a Tribunal under rule 38 of the Tribunal Rules to make costs. By virtue of rule 40(3) it is required only that the Tribunal find that the party or his representative has:
“[…] acted vexatiously, abusively, disruptively or otherwise unreasonably, or that the bringing or conducting of the proceedings has been misconceived.”
[29]I turn now to the second batch of appeals. At the heart here is the question whether the unless order should ever have been made. I have already made some observations about the form of the order. The order purported to be made under rules 10 and 13 of the Tribunal Rules. Rule 10 contains the following relevant passages, headed “General power to manage proceedings”:
“(1) Subject to the following rules, the [Employment Judge] may at any time either on the application of a party or on his own initiative make an order in relation to any matter which appears to him to be appropriate. […]”
[30]Two examples of orders that may be made under paragraph (1) are orders:
“(d) requiring any person in Great Britain to disclose documents or information to a party or to allow a party to inspect such material as might be ordered by a County Court (or in Scotland, by a sheriff); […]. (5). An order described in [sub‑]paragraph (2)(d) which requires a person other than a party to grant disclosure or inspection of material may be made only when the disclosure sought is necessary in order to dispose fairly of the claim or to save expense.”
[31]Rule 10 thus gives the Employment Judge, in its opening words, the power to make an order in relation to any matter that appears appropriate. That is rightly described as a broad discretion, but as with any broad discretion that is provided for by rules of court or procedure, it is not open to be used in any way a Judge sees fit. It must be exercised having regard to logic, relevance, reason and justice. It must not be exercised arbitrarily or capriciously, nor must it be used as a disciplinary tool in respect of one party unless that is expressly permitted or required by rule. The exercise of any discretion must have regard at the outset to the overriding objective.[32]Was this exercise in discretion in making the unless order an exercise that met those tests? I cannot conclude that it was. First, the issue in the case was whether or not the Claimant was entitled to be paid for October 2010. The question whether Mr Morgan was or was not in the United Kingdom on 15 February 2011 is irrelevant to that decision. It might be relevant, it may be said, to a question of credibility, but such an issue would be entirely tangential to the claim, and Mr Kamara, who appears instructed by the Free Representation Unit and for whose appearance this Tribunal is grateful, frankly accepts that disclosure in respect of a document that goes purely as to credibility is not appropriate. It certainly was not appropriate here. There is no reasoning at any stage that I can see to say why it is that the Tribunal thought it necessary in the first place to resolve the issues in the case that this document should be provided. The Tribunal might have taken its line from rule 10(5), because the person required to make disclosure was plainly Mr Morgan. He was neither the firm, although part of it as a partner, nor the company, though a director of it. But such an order may be made only when the order is necessary in order to dispose fairly of the claim or to save expense.[33]Mr Kamara could not assist me in showing any way in which the disclosure would assist the Tribunal to dispose fairly of the claim. He argued that the Tribunal might wish to know that it had been right to be as critical as it was of Mr Morgan in making the first decision, but the self‑satisfaction of a Tribunal is no justification for making such an order. The Tribunal might have had the sense that it was being misled by Mr Morgan. If so, Mr Kamara conceded, a Tribunal has no right to act as though it were the Office for Supervision of Solicitors; it is not a disciplinary body. The Tribunal may have been irritated by the way in which the solicitors had handled themselves in the claim; I have said enough about that already. But the proper response to that in the terms of this litigation was where appropriate, and within the rules, to make such costs orders as stood to be made. It was not to seek out and lay the ground for further costs orders, the basis of which would not, I have to say, be at all obvious. The expense incurred in the abortive first hearing had been met by the time preparation order made and the order in respect of the Secretary of State’s expenses to which the Tribunal came on 15 February.[34]Mr Clegg added that the Tribunal here, moreover, were asking somebody who was not a party himself, though closely associated, to produce a copy of a document he did not have. This was disclosure not even in the sense of disclosing that there had once been a document in his possession, or a disclosure by list, as it used to be called; it was an order for the production of something that he had said he did not have in his possession. To oblige a party to obtain a copy of a document on pain of some sanction unspecified but, as it was to turn out, intended to be striking‑out, was in my view a wrong use of the power in rule 10. It is a matter of concern to me that an order requiring that in these terms in this case should have been made as it was, leading to the consequences by the end of the matter to which the fifth appeal relates.[35]For those reasons therefore (the wrong approach to the making of the order for disclosure, the fact that making such an order was wholly perverse and had no rational basis, nor did it assist the cause of justice on the issues between the parties, because as expressed the order was hopelessly unspecific), the appeal against that order must succeed. It follows, as Mr Kamara quite rightly concedes, that so also must the appeals against each of the other orders. Conclusion[36]A matter that relates to a sum of £935 has caused the activity and expense to which I have referred; that is regrettable. However, if there remains a real issue between the parties, it will have to be resolved. The issue needs to be remitted to a Tribunal for hearing. I shall listen to the parties as to whether they consider that the matter should be remitted to the same Tribunals (that is, Norwich and Bury St Edmunds) or to some other Tribunal centre; I use “Tribunals” in the plural because of the number of different Judges through whose hands this case has passed.[37]The parties are agreed that a freshly constituted Tribunal would be appropriate. There is no objection to the Tribunal being held in Bury St Edmunds or Norwich. Those Judges who have been associated with the case and have expressed themselves in the strong terms they have should not sit on that case; that excludes, therefore, Judge Warren, Judge Pritchard‑Witts and Judge Moore.