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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Bournemouth Borough Council v Leadbeater [2011] UKEAT 0010_11_1103 (11 March 2011) URL: https://www.bailii.org/uk/cases/UKEAT/2011/0010_11_1103.html Cite as: [2011] UKEAT 0010_11_1103, [2011] ICR D15, [2011] UKEAT 10_11_1103 |
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At the Tribunal | |
On 4 March 2011 | |
Before
THE HONOURABLE MR JUSTICE SILBER
(SITTING ALONE)
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
For the Appellant | MR MARTIN FODDER (of Counsel) Instructed by: Messrs Wansbroughs Solicitors Northgate House Devizes Wiltshire SN10 1JX |
For the Respondent | MR RAD KOHANZAD (of Counsel) Instructed by: Messrs Thompsons Solicitors 18 Lawford Street Bristol BS2 0DZ |
SUMMARY
PRACTICE AND PROCEDURE Striking-out/dismissal
The Respondent brought unfair dismissal proceedings. The Appellant failed to serve a Response. A default judgement was entered and the Appellant applied to set it aside by a letter of 18 January 2010 in which it was said that "it would be justifiable on the grounds of reason and justice to accept the [Appellant's] response".
The Employment Judge found (a) that the letter did not contain a request for an extension as required by rule 33(2) of the Employment Tribunal Rules Procedure 2004; and (b) the application to set aside the default judgment should be refused.
Held (Allowing the appeal):
1. The letter of 18 January 2011 contained an implied request for an extension of time for serving the Response;
2. An implied request would suffice and would comply with rule 33(2) of the Employment Tribunal Rules Procedure 2004;
3. The appropriate principles for considering whether the default judgment should be set aside are not merely those set out in rule 33(5) and (6) of the Employment Tribunal Rules Procedure 2004 but also those set out in Kwik Save Stores Ltd v Swain [1997] ICR 49, 54-55; and
4. The application of those principles meant that the default judgment should be set aside.
THE HONOURABLE MR JUSTICE SILBER
Introduction
"The application must state the reasons why the default judgment should be varied or revoked. When it is the respondent applying to have the default judgment reviewed, the application must include with it the respondent's proposed response to the claim (where it has not been received by the Employment Tribunal Office), an application for an extension of the time limit for presenting the response and an explanation why rules 4(1) and (4) were not complied with".
The Decision of the Employment Tribunal
"In considering the application for review of a default judgment the Employment Judge must have regard to whether there was good reason for the response not having been presented within the applicable time limit".
"10. My first concern is that the application has not been made in accordance with the Rules and it does say must include an application for an extension of time. It did not. There has been no application to vary. I accept without question [the representative of the appellant's] evidence that the claim was not received in the HR Department but I am not satisfied on the evidence before me that it was not received in the Environmental Department of the [appellant], so I conclude that it was received at the appropriate time, and if not, I believe that the [appellant] delayed when it did receive a copy, it, having been faxed by the Tribunal in mid-December. It delayed a whole month before submitting the Response.
11. Taking all of those matters into account, I do not consider that it is appropriate to review or revoke the Default Judgment, which stands".
Did the Letter from the Appellant's solicitors of 18 January 2010 contain an Application for an Extension of the Time Limit for Presenting the Response?
"We believe that the [appellant] has a good reason for the Response not being presented within the time limit, specifically, that the [appellant] had no knowledge of the claim being submitted. We therefore believe it would be justifiable on the grounds of reason and justice to set aside the default Judgment and accept the [appellant]'s response. We also believe that the claimant will suffer no detriment as a result of the late submissions of this Response".
"We sincerely regret our error in misinterpreting the information we received and request you consider our application. We believe that if the Tribunal allows us to present our side to them the default judgment would not stand."
How Should the Application to Revoke the Default Judgment be dealt with?
"(5) An Employment Judge may revoke or vary all or part of a default judgment if the respondent has a reasonable prospect of successfully responding to the claim or part of it.
(6) In considering the application for a review of a default judgment the Employment Judge must have regard to whether there was a good reason for the response not having been presented within the applicable time limit".
"The process of exercising a discretion involves taking into account all relevant factors, weighing and balancing them one against the other and reaching a conclusion which is objectively justified on the grounds of reason and justice. An important part of exercising this discretion is to ask these questions: what prejudice will the applicant for an extension of time suffer if the extension is refused? What prejudice will the other party suffer if the extension is granted? If the likely prejudice to the applicant for an extension outweighs the likely prejudice to the other party, then that is a factor in favour in granting the extension of time, but it is not always decisive. There may be countervailing factors. It is this process of judgment that often renders the exercise of a discretion more difficult than the process of finding facts in dispute and applying to them a rule of law not tempered by discretion.
It is well established that another factor to be taken into account in deciding whether to grant an extension of time is what may be called the merits factor identified by Sir Thomas Bingham M.R. in Costellow v. Somerset County Council [1993] 1 W.L.R. 256, 263:
a plaintiff should not in the ordinary way be denied an adjudication of his claim on its merits because of procedural default, unless the default causes prejudice to his opponent for which an award of costs cannot compensate.
Thus, if a defence is shown to have some merit in it, justice will often favour the granting of an extension of time, since otherwise there will never be a full hearing of the claim on the merits. If no extension of time is granted for entering a notice of appearance, the industrial tribunal will only hear one side of the case. It will decide it without hearing the other side. The result may be that an applicant wins a case and obtains remedies to which he would not be entitled if the other side had been heard. The respondent may be held liable for a wrong which he has not committed. This does not mean that a party has a right to an extension of time on the basis that, if he is not granted one, he will be unjustly denied a hearing. The applicant for an extension has only a reasonable expectation that the discretion relating to extensions of time will be exercised in a fair, reasonable and principled manner. That will involve some consideration of the merits of his case."
"By SI 2008/3240, Rule 8(1) was amended to make it mandatory rather than discretionary for an EJ to issue a default judgment. Therefore now the lottery of whether a respondent has to make an application under Rule 33 or 34 no longer exists and, it is contended, that the need to ignore the actual wording of the Rules has been vitiated. The requirement to take all of the factors into account, as suggested in Kwik Save, is not found in the wording of the Rules. Rule 33(6) simply requires the tribunal to have regard to whether there was a good reason for the response not being entered in time. And, Rule 33(5) provides that the tribunal may have regard to the respondent's chances of successfully defending the claim. Here the EJ clearly had regard to the former."
"Parliament is normally presumed to legislate in the knowledge of, and having regard to, relevant judicial decisions. If therefore Parliament has a subsequent opportunity to alter the effect of the decision on the legal meaning of an enactment but refrains from doing so, the implication may be that Parliament approves of that decision and adopts it that is an aspect of what maybe called tacit legislation".
a. The delay in putting in the response to set aside the default judgment was a genuine misunderstanding caused by an accidental oversight;
b. The prejudice that would be caused to the Appellant by a failure to revoke the default judgment would be considerable as they would lose the prospect of putting forward what might well be a reasonable defence to the claim; and
c. The prejudice caused to the Respondent by revoking the default judgment would be that she is deprived of a judgment to which she may not be entitled.