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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Terry Ballard & Co (A Firm) v Stonestreet [2007] UKEAT 0568_06_1101 (11 January 2007) URL: https://www.bailii.org/uk/cases/UKEAT/2007/0568_06_1101.html Cite as: [2007] UKEAT 568_6_1101, [2007] UKEAT 0568_06_1101 |
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At the Tribunal | |
Before
HIS HONOUR JUDGE McMULLEN QC
MS K BILGAN
MRS A GALLICO
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | Mr T Ballard (The Appellant in Person) |
For the Respondent | Ms A Stonestreet (The Respondent in Person) |
SUMMARY
Practice and Procedure Review; Insolvency
A Respondent debarred under rule 4(1) and 9 may apply for a review and, if granted, appear as a full party. Otherwise there is no purpose in allowing it to make an application under rule 35. The Employment Tribunal erred in the administrative arrangements it made after he was debarred, causing confusion and unfairness, and wrongly refused to review the substantive judgment. D&H Travel and NSM Music applied. Remitted to the same Employment Tribunal to hold a review limited to compensation, as from the outset liability was not contested.
HIS HONOUR JUDGE McMULLEN QC
Introduction
The judgment
The legislation
"4.(1) If the respondent wishes to respond to the claim made against him he must present his response to the Employment Tribunal Office within 28 days of the date on which he was sent a copy of the claim. The response must include all the relevant required information. The time limit for the respondent to present his response may be extended in accordance with paragraph (4).
(2) Unless it is a response in proceedings described in regulation 14(3), any response presented on or after 6 April 2005 must be on a response form prescribed by the Secretary of State pursuant to regulation 14.
8.(1) in any proceedings if the relevant time limit for presenting a response has passed, a chairman may, in the circumstances listed in paragraph (2), issue a default judgment to determine tie claim without a hearing if he considers it appropriate to do so.
(2) Those circumstances are when either
(a) no response in those proceedings has been presented to the Employment Tribunal Office within the relevant time limit; or
(b) a response has been so presented, but a decision has been made not to accept the response either by the Secretary under rule 6(1) or by a chairman under rule 6(3), and the Employment Tribunal Office has not received an application under rule 34 to have that decision reviewed;
and the claimant has not informed the Employment Tribunal Office in writing either that he does not wish a default judgment to be issued or that the claim has been settled.
(3) A default judgment may determine liability only or it may determine liability and remedy. If a default judgment determines remedy it shall be such remedy as it appears to the chairman that the claimant is entitled to on the basis of the information before him.
9. A respondent who has not presented a response to a claim or whose response has not been accepted shall not be entitled to take any part in the proceedings except to
(a) make an application under rule 33 (review of default judgments);
(b) make an application under rule 35 (preliminary consideration of application for review) in respect of rule 34(3)(a) and (b);
(c) be called as a witness by another person; or
(d) be sent a copy of a document or corrected entry in accordance with rule 8(4), 29(2) or 37: and in these rules the word "party" or "respondent" includes a respondent only in relation to his entitlement to take such a part in the proceedings, and in relation to any such part which he takes.
34.(1) Parties may apply to have certain judgments and decisions made by a tribunal or a chairman reviewed under rules 34 to 36. Those judgments and decisions are
(a) a decision not to accept a claim, response or counterclaim
(b) a judgment (other than a default judgment but including an order for costs, expenses, preparation time or wasted costs); and
(c) a decision made under rule 6(3) of Schedule 4 and references to "decision" in rules 34 to 37 are references to the above judgments and decisions only. Other decisions or orders may not be reviewed under these rules.
(2) In relation to a decision not to accept a claim or response, only the party against whom the decision is made may apply to have the decision reviewed.
35.(1) an application under rule 34 to have a decision reviewed must be made to the Employment Tribunal Office within 14 days of the date on which the decision was sent to the parties. The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.
(2) The application must be in writing and must identify the grounds of the application in accordance with rule 34(3), but if the decision to be reviewed was made at a hearing, an application may he made orally at that hearing.
36. (1) When a party has applied for a review and the application has not been refused after the preliminary consideration above, the decision shall be reviewed by the chairman or tribunal who made the original decision."
We have omitted rule 33, which is a review of default judgments.
The facts
"I intend to make an application to set aside last week's order at the earliest opportunity and look forward to receiving a copy of it as soon as possible."
"Mr DN Cowling ordered that you should play no part in the proceedings under RuIe 9, following your failure to serve a response on time. You did not seek to review or appeal that order. It would appear that the Tribunal thereafter continued to notify you of the hearing dates in error.
The application for review is therefore refused; unless or until you were to have Mr DN Cowling's order overturned, nothing would be gained by a review of the judgment that was made on the 12 July 2006."
This was followed by reasons in writing sent on 26 September 2006, followed by a further application based upon these reasons. It was described as an application for a review and response to written reasons. As an application for a review it was therefore in time.
"You are still prevented from playing any part in the proceedings by virtue of the Order made on 26 January 2006 under Rule 9.
The application appears to be under Rule 34 in respect of the Judgment of 12 July 2006, but you need to apply under Rule 33 in respect of the Rule 9 Order, and you must include an application for an extension of time and provide reasons for the delay. (Rule 33(2))"
It will be noted from the above this is a reference to a review of a default judgment, for rule 33 deals with that. This is the beginning of a seismic error running through the succeeding events, if not some of the earlier ones.
"It is entirely without prejudice and to be considered alongside the following:-
a. application for a review dated 2nd August 2006 (and in particular, paragraph 2 thereof);
b. letter to EAT dated 13th September 2006 with chronology (in particular, in relation to the precise legal status of the order of the 28th February 2006 and whether I had any legitimate expectation arising from it);
c. application for a review dated 5th October 2006 (and in particular, the first paragraph thereof (headed 'procedural position'))."
"No further communication was received from you until 20 July, after you had received the judgment made at the hearing on 12 July."
"Your application of 23 October has been treated as an application for a review of the decision to reject your Response.
The time limit for making an application for a review of that decision is 14 days from the date on which the decision was sent to you. The decision was notified to you by letter of 26 January 2006 and, accordingly, the time within which to apply for a review of the decision to reject your Response expired on 9 February 2006. The application for a review is some 81/2 months out of time. There is nothing in the application for a review to explain why the Response on the appropriate form was not submitted in time. You are a solicitor and should be aware of the consequences litigation time limits. In the meanwhile, the case has been heard and decided.
In all the circumstances, the chairman does not consider that it is just and equitable to extend the 14 day time limit, so as to consider this application for a review.
The chairman wishes me to add that had the application for a review been made promptly with adequate reasons for the delay, the result, in all probability, would have been different."
All that happened thereafter was that additional grounds of appeal were submitted on 3 November 2006, by which time an order had been made by Elias J (President) sending this matter to a full hearing, albeit that it was not sealed and sent to the parties until 8 November 2006. As of today, those additional grounds therefore are in play. As can been seen, the Employment Tribunal Chairmen between them considered the relevant rules.
The Respondent's case
The Claimant's case
The legal principles
6. It is quite plain, then, that if there is a default judgment, there is an express power of review, and considerations can then be given as to the remedies that should be imposed by a Tribunal or, in the case of a hearing of a review, retained in respect of such default as there has been by a respondent. In Bolch v Chipman [2004] IRLR 140, the Employment Appeal Tribunal considered the consequences, not in that case of a default judgment under the then equivalent of Rule 8, of a decision to strike out a Notice of Appearance under what was then Rule 15(2)(d): and we considered in that case the consequences which ought to flow and/or could flow, and we required an employment tribunal, among other things, to consider the proportionality of what it was doing. We pointed out that if a fair trial were not possible on liability, there could still be an order simply debarring the respondent from taking any further part on liability, but permitting that respondent to take part on the question of compensation.
7. Where a default judgment is not entered, there may be no occasion for such considerations of proportionality, because, as Mr Stephen Lennard of Counsel (who has argued the matter most ably on behalf of the Respondent to this appeal, the Claimant below) has pointed out, the terms of Rule 9 are very limited. But that does not mean that a tribunal is not all the more required to take very great care in relation to the consequences of its decision not, in a given case, to enter a default judgment but simply to use the much greater bludgeon of an instrument of a consequential order under Rule 9. If, as here, the effect of not entering a default judgment with its appropriate considerations either on an original decision or on a review, but of taking the course of a Rule 9 decision, is that the respondent is debarred, whatever the nature or quality of its default, from contesting both liability and remedy or quantum of compensation, it is all the more important for an employment tribunal carefully to consider the position in the light of such orders it has made in protecting, so far as is proportionate, the position of a debarred respondent.
22. It is to be hoped that in the future, if this occurs, a Tribunal will consider very carefully whether to go down the route of Rule 9 rather than a Rule 8 default judgment, bearing in mind these possible consequences and, if the Rule 9 route has been adopted, will take extra care to consider the consequences to the Respondent and, for example, to take the course I have suggested in relation to a request for reasons.
"55. Had the Chairman appreciated that Mr Henderson wanted at least to be allowed the more limited right to participate in the remedies hearing, was there a route whereby he might in principle have permitted this? We think that there was, although we readily concede that the route is tortuous and highly artificial, at least in circumstances where the default judgment on liability stands.
56. The route is this. As we have indicated, the only way in which a challenge can be mounted to a refusal not to accept a response where no default judgment is entered is through a review under Rule 34. So far as remedy was involved, there was no default judgment with respect to that, and therefore nothing to set aside pursuant to rule 33. So a rule 34 review was the only route. That presupposes that a response has been refused. It is true that no formal response had even been drafted or submitted, but we think that in rejecting the review of the default judgment, the Chairman must be taken to have also rejected an application to permit the late submission of a response. After all, the essence of a review of a default judgment is that the Tribunal is being asked to accept a response out of time. Had the response been accepted then the default judgment would have been set aside. That refusal to allow a response could then itself be the subject of a review under rule 34. Normally that would require an application in writing but there is an exception where it is made orally at the hearing where the decision which it is sought to review was made: Rule 35(2). That was the position here, at least if the representations by Mr Henderson could realistically be seen as an application for a review.
57. We think that they could. Mr Henderson was plainly hoping to put his case; even if he could not reopen liability, the only fair inference, it seems to us, is that he wanted to play whatever part he could in the proceedings. He was present and anxious to do so. Moreover, it is well established that no great formality will be required from litigants in person in these circumstances. In particular, an application for a review under rule 34 is sufficiently made out if grounds can be discerned from the application: see Sodexho Ltd v Gibbons [2005] ICR 1647 at paras 32-33. There can be no real doubt that this was done here; Mr Henderson was saying that it was not fair that he should be excluded from putting his case. That was in legal terms saying that the interests of justice required a review.
58. The artificiality of this, as we fully appreciate, is that in practice the response will focus on liability which, by definition, will already have been determined in the default judgment rather than on remedy itself. Accordingly, if Mr Henderson were to be allowed to put in a response in this case, it would not have been for its real purpose of setting out the employer's case in response to the claim, but for the sole purpose of circumventing rule 9.
59. Accordingly, whilst we are not remotely critical of the Chairman for adopting the position he did, we think that had he applied his mind to the more limited question whether there was a way of circumventing the effect of rule 9 so as to enable Mr Henderson to participate in the remedies hearing, there was indeed such a path. One possibility now would be to remit the matter for that possibility now to be explored. However, we have the power to dispose of the matter by exercising the powers of the employment tribunal: see section 35(1) of the Employment Tribunals Act 1996 and we think we should exercise it.
60. We are conscious of the decision of the Court of Appeal in Bennett v Southwark LBC [2002] ICR 881 where that section was said to apply only where there was but one conclusion the employment tribunal could reach. However, that was before the overriding objective was incorporated into the Rules. We agree with the approach of HH Judge Peter Clark in the Sodhexo case that where the basic facts are not in issue, it will sometimes be desirable and in the interests of the fair and expeditious disposal of the case for the EAT to determine the matter without further referral. We think this is such a case. There are no more facts to be found, and we have heard full argument on the point. In fact, we are also minded to think that there could only be one sensible outcome on this issue, as we will explain."
Conclusions