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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Harada Ltd. (t/a Chequepoint) v Turner [2003] EWCA Civ 1695 (02 December 2003) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2003/1695.html Cite as: [2003] EWCA Civ 1695 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE MUMMERY
and
LORD JUSTICE MANCE
____________________
| HARADA LIMITED (t/a CHEQUEPOINT) |
Applicant |
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| - and - |
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| TURNER |
Respondent |
____________________
The Respondent was not represented and did not appear
Hearing dates: 10th November 2003
____________________
Crown Copyright ©
Lord Justice Simon Brown:
"In relation to the prejudice which the employers say [it] will suffer if [it] participate[s], we should just simply say that that does not seem to us to be a sustainable proposition, having regard to the decision of the Employment Tribunal on the jurisdiction issue."
The Morison EAT refused leave to appeal and ordered that any application for leave would not operate to stay the merits hearing without a further express order of the Court of Appeal.
"This appeal has no reasonable prospect of success. The ET Chairman was plainly wrong in exercising his discretion to postpone the hearing of Mr Turner's case on its merits until after the determination by the EAT of the appeals on questions of jurisdiction and bias. As the ET held that it has jurisdiction it should proceed to determine the case and not await the outcome of the EAT appeal against the jurisdiction decision."
"8. We found that [Mr Turner] was entitled to resign from that position by virtue of the fundamental breach of his contract of employment committed by [Harada], by which [it] repudiated his contract. We found that the breach was so serious that he was entitled to resign without notice.
9. A number of matters gave rise to that breach. In February 1998, [Mr Turner] was specifically instructed by [Harada] to find ways of avoiding payment over to the Inland Revenue of sums representing PAYE deducted tax and National Insurance which [Harada] had withheld from the wages of employees in this country. He was instructed to claim a set off and to counterclaim, as against those sums, from monies allegedly owed to [Harada] by HM Customs & Excise in respect of VAT. He was instructed to seek injunctions in the High Court enjoining the Commissioners of Inland Revenue from taking steps to enforce payment of such arrears of PAYE and contributions to National Insurance. [Mr Turner] was given those instructions notwithstanding that [Harada] knew, because he had so advised them, that there were no legitimate claims that could be made. Even if some such claim could be mounted, asking [Mr Turner] to take such draconian steps against the Commissioners of Inland Revenue would result in him taking steps that were bound to fail. They might well also have exposed him personally to applications for wasted costs, if not to proceedings for professional misconduct before the Law Society.
"[Counsel for Harada]: [I]f it is held that there is jurisdiction there will then need to be a rehearing on the merits because the only hearing on the merits so far is a hearing in which Harada has not taken part.
Lord Justice Pill: That is not as obvious to me as it appears to be to you.
[Counsel for Harada]: Absent a proper finding on the issue of jurisdiction, it is difficult to see how the Tribunal could properly have assumed jurisdiction and gone on to resolve those claims on the merits.
Lord Justice Pill: I do not have that difficulty."
Lord Justice Pill then asked how the court could direct that what on the face of it was a properly made award subject to jurisdiction be set aside if jurisdiction were thereafter decided against Harada.
"[Counsel for Harada]: Because it is an inevitable consequence.
Lord Justice Pill: You will have to argue that elsewhere if and when that arises . We are against you on that point."
"In my opinion, once it was decided by the [Morison EAT] that the merits hearing should proceed, and then after the event it was decided [by the Levy EAT] that that had indeed been the right course, there is no room left for the argument that it was not a just course.
All that has happened since then is that the decision on jurisdiction has been reopened and then re-determined, against [Harada], and they are now essentially in the same position in which they found themselves at the time of the hearing before the Ryan tribunal, save that the criticisms of the Roose tribunal have been fully explored and ruled upon.
The essence of the position is, in my opinion, that once the [Morison EAT] had, prior to the Ryan tribunal hearing, determined that it was fair and just to proceed to a hearing on the merits, notwithstanding a consideration of the Article 18 argument, the respondents were entitled to rely upon that determination and contest the merits hearing. Alternatively, once the Ryan tribunal refused the renewed application for a postponement, the respondents were not compelled to be absent from that hearing, having made it perfectly clear what was [its] position.
Therefore, although [Harada] were absent, they were deliberately absent, and I do not see that ground for review could possibly be upheld."
"16 For [Harada], Mr Pitt-Payne concedes that the Elefanten decision gives no guidance as to whether a defendant, having properly raised the issue of jurisdiction at the outset, can, therefore, safely take part in proceedings not only by filing a merits defence, but proceeding to the stage of actually taking part in a full hearing, as [it was] required to do in this case. He refers to the position as "uncharted waters", in that until the time when the jurisdiction issue had finally been determined, there was always a risk that even if the jurisdiction issues have to be resolved in [Harada's] favour, an argument could then be mounted against [it] that they had submitted to the jurisdiction for the purposes of Article 18. We cannot agree with that submission. We are of the view that all [Harada] were required to do to protect [itself] following the decision in Elefanten was to raise the issue of jurisdiction at or before filing a merits defence which is what [it] did. Had [it] taken further steps to deal with the merits other than with the guidance or approval of the Court, then conceivably, an issue might have been raised as to whether [it] had submitted to the jurisdiction. However, that was not the position in this case. A Tribunal had ruled that there was jurisdiction, and at the time of the merits hearing, whilst there was an appeal outstanding against that decision, that was still the effective Tribunal Decision. Further, [the Morison EAT], having considered the Article 18 submission, had ruled that the merits hearing should go ahead. The only possible inference from that decision was that this Court considered that [Harada] could safely attend that hearing without compromising their position. The view of the EAT was confirmed by the Court of Appeal, certainly as far as the single Judge was concerned. Further, even accepting [Harada's] concerns re Article 18, there is no reason why [it] should not have taken part in a merits hearing relating to unfair dismissal. The position was again confirmed when Judge Levy refused leave to appeal. We further note that [Harada] did not avail themselves of the opportunity to challenge the refusal of Lord Justice Mummery to grant leave by taking the matter to a full Court hearing, nor did [it] seek to appeal the refusal of Judge Levy. We also remind ourselves that the Appellant did in fact take a further step in the proceedings before Mr Justice Morison by seeking a change of venue for the merits hearing, and finally we remind ourselves of the substantial delay in this case, and particularly the unexplained delay in seeking a review after the promulgation of the Decision in October 2001.
18 The Regional Chairman in his decision, carefully reviewed matters relating to the history of this case, and quite properly highlighted the decision of this Court given by Mr Justice Morison subsequently confirmed by the Court of Appeal. We can find no error on the part of the Regional Chairman in his approach and we would accordingly dismiss this appeal."
"Apart from jurisdiction derived from other provisions of this Convention, a court of the Contracting State before whom a defendant enters an appearance shall have jurisdiction. This rule shall not apply where appearance was entered solely to contest the jurisdiction ."
"Article 18 must be interpreted as meaning that the rule on jurisdiction which that provision lays down does not apply where the defendant not only contests the court's jurisdiction but also makes submissions on the substance of the action, provided that if the challenge to jurisdiction is not preliminary to any defence as to the substance it does not occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised."
"15. However, the challenge to jurisdiction may have the result attributed to it by Article 18 only if the plaintiff and the court seised of the matter are able to ascertain from the time of the defendant's first defence that it is intended to contest the jurisdiction of the court.
16. However, it follows from the aim of Article 18 that if the challenge to jurisdiction is not preliminary to any defence as to the substance it may not in any event occur after the making of the submissions which under national procedural law are considered to be the first defence addressed to the court seised."
"I quite agree, of course, that if he fights the case, not only on the jurisdiction, but also on the merits, he must then be taken to have submitted to the jurisdiction, because he is then inviting the court to decide in his favour on the merits, and he cannot be allowed, at one and the same time, to say that he will accept the decision on the merits if it is favourable to him and will not submit to it if it is unfavourable. But when he only appears with the sole object of protesting against the jurisdiction, I do not think he can be said to submit to the jurisdiction ."
"It may well be that it was not necessary for Marc Rich to lodge an alternative defence on the merits in October 1988 but they made it abundantly clear in the proceedings that the primary purpose of the document was to challenge the jurisdiction of the Genoa court. I am prepared to assume that the first defence did not amount to a submission. It seems to me that this conclusion is in line with the decision of the European Court in Elefanten
The second defence, however, which was lodged in May 1991, is another matter. It seems to me that this pleading was a plain and unequivocal submission to the jurisdiction of the Italian court to deal with the merits of the claim." (p633)
"any proceedings were unnecessary, improper or \vexatious, or that there has been unreasonable delay or otherwise unreasonable conduct in bringing or conducting the proceedings."
"2. As is apparent from the lengthy history of this case, which we have reviewed in our Decision, we were unanimously of the view that the issues sought to be raised before us by [Harada] had effectively been determined by this Court on 23 March 1999, in the Decision given by Mr Justice Morison, and confirmed by the Court of Appeal in their refusal to grant leave on 21 May 1999. Those decisions were, in our judgment, clear guidance to [Harada] that having raised the issue of jurisdiction, [it] should then participate in the merits hearing, which took place on 24 May 1999. Whilst we have explored the issues relating to Article 18 in rather more detail than the Decision in March 1999, our conclusions are the same and thus the Regional Chairman was quite entitled, and indeed compelled, by the history of this case to come to the decision he did. Prima facie, these proceedings would therefore fall into the category of being unnecessary and/or vexatious.
3. [Harada] reminds us that permission to proceed to a full hearing was granted at a preliminary hearing before His Honour Judge Burke QC, and whilst that is clearly a factor that we should take into consideration, we do not accept that that factor alone would prevent us making an Order for costs, having heard the full appeal. Moreover, there are two matters which we believe were not drawn to Judge Burke's attention which could well have affected the decision given at the preliminary hearing. First, the concession made before us that the Article 18 issue only related to the wrongful dismissal claim and that therefore there was nothing to prevent [Harada] participating in the unfair dismissal proceedings, although they chose not to do so. Secondly, it was [Harada's] choice not to pursue the issue of leave before a full Court, once Lord Justice Mummery had refused leave in May 1999."
Lord Justice Mummery:
Lord Justice Mance:
"a defendant who raises an issue of jurisdiction and no other might be barred from making submissions as to the substance if the court rejects his plea that it has no jurisdiction"
"An interpretation which enabled such a result to be arrived at would be contrary to the right of a defendant to defend himself in the original proceedings which is one of the aims of the Convention."
"it does not seem to be a sustainable proposition [that Harada would suffer if it participates], having regard to the decision of the [Ryan] Employment Tribunal on the jurisdiction issue".
In other words, once the Ryan Tribunal had decided that it had jurisdiction, no-one could hold it against Harada that it had participated on the merits, because the Ryan tribunal's decision left Harada with no other alternative if it was to exercise its rights of self-defence and avoid the risk of a decision being given against it on the merits without its side being heard.
"since Article 18 of the Convention made it impossible for Rohr to submit a defence on the substance before the German courts without losing the right to raise an objection of lack of jurisdiction, the fact that those courts did not restrict themselves to giving a ruling on jurisdiction but also give [sic] judgment on the substance of the case constituted a manifest infringement of the rights of the defence and thereby of public policy in France".
Ossberger in contrast argued (page 2433) that:
" . Article 18 . does not prohibit the submission of a defence as to the substance in the alternative and subject to the objection of lack of jurisdiction but that Rohr voluntarily refrained from pursuing the appropriate procedures".
The situation therefore presents a considerable factual analogy to the present.
" . considered that the outcome of this case depended upon a question of the interpretation of the Brussels Convention"
and submitted to the European Court a preliminary question raising for consideration whether Article 18:
"'prohibits the simultaneous submission in the alternative' of defences going to the merits and to the jurisdiction, or allows the same 'in order to permit the court before which the action is brought to give a decision in a single judgment, if that is appropriate, on both the objection and the substance of the action on the pattern of the express provisions of Article 76 of the Nouveau Code de Procιdure together with the detailed procedures for the protection of the rights of the defence?'"
"This case has disclosed no factor of such a kind as to affect these findings. Accordingly, the answer to the question submitted must be that Article 18 of the Convention of 27 September 1968 must be interpreted as meaning that it allows the defendant not only to contest the jurisdiction but to submit at the same time in the alternative a defence on the substance of the action without, however, losing his right to raise an objection of lack of jurisdiction."