Pybus v Milton-Davies [1998] UKEAT 340_98_1506 (15 June 1998)

JUDGMENT PRELIMINARY HEARING - EX PARTE © Copyright 1998 APPEARANCES For the Appellant THE APPELLANT IN PERSON MR JUSTICE MORISON (PRESIDENT) : The purpose of this hearing is to determine whether there is an arguable point of law raised in an appeal which Mr Roy Pybus' solicitors wish to maintain against an interlocutory decision of an Industrial Tribunal Chairman sitting alone. That decision was reduced to writing and was sent to the parties on 6th January 1998 following a hearing on 5th November 1997. The decision of the Industrial Tribunal Chairman was that the solicitors should not be given an extension of time in which to enter their Notice of Appearance for reasons given in the decision. The principles which must be applied by an Industrial Tribunal are set out, helpfully, by my distinguished predecessor in the case called Kwik Save Stores Ltd v Swaine [1997] ICR 49 , at page 53. There he indicated the sort of factors that an Industrial Tribunal would wish to take into account. In essence, a respondent who is seeking an extension of time must put forward a reasonable explanation or excuse for the delay together with an indication that there are reasonably arguable grounds for resisting the application; and that the tribunal in the exercise of its discretion, will take into account the likely prejudice to the parties if the discretion is exercised either way. The weight to be given to any of these factors is entirely a matter for the tribunal at first instance. One can say further that normally an extension of time will be granted provided that there is a reasonable explanation for the delay, and a good arguable defence, but the tribunal has a wide discretion, the exercise of which will not easily upset on appeal. Ryan & Plant International Ltd v Price [1976] ICR 424 . The principles are not in this case in dispute. The background to this appeal can be shortly stated. By an Originating Application presented to the Industrial Tribunal on 21st July 1997, Mr Milton-Davies lodged an application claiming unfair dismissal, damages for wrongful dismissal, non-payment of wages and holiday pay, and/or any alternative compensation; further or alternatively, damages for breach of contract. The heading on the Notice of Application referred to the Employment Rights Act, the Industrial Tribunals Act and the Extension of Jurisdiction Order in 1994. The significance of that is that the 1994 Order gave the Industrial Tribunal jurisdiction to hear certain contractual disputes as does the Industrial Tribunals Act 1996. The respondent, a firm of solicitors, did not seek to enter a Notice of Appearance until 4th November 1997; that is well beyond the 21 day period which is allowed for the entry of a Notice of Appearance. Time expired on 11th August 1997. On 23rd July 1997 the tribunal office wrote to the applicant with a copy to the respondent solicitors indicating that it proposed to strike out the claim for unfair dismissal because in its view it was frivolous. The applicant having only been employed by the solicitors for a very short period of time had less than the qualifying period required for bringing such a complaint. There was no reference in that letter to striking out the applicant's other claims and the tribunal rejected the solicitors' contention that they were so confused by the terms of the Originating Application that they thought the claim for wrongful dismissal was actually a claim for unfair dismissal and that therefore the claim for wrongful dismissal had itself been struck out. The tribunal Chairman was satisfied having heard the evidence that the solicitor did not realise at that time that the Industrial Tribunal in fact had jurisdiction to hear breach of contract cases. By letter dated 21st July 1997 which was sent by facsimile to the respondent solicitors, the applicant pointed out that he had not intended to claim unfair dismissal but that he had wanted to claim wrongful dismissal and he was asserting that the solicitors had 21 days in which to enter a Notice of Appearance. Paragraph 2.5 of the decision reads: "2.5 I reject Mr Pybus' contention that there was no point in entering a Notice of Appearance, at this time, because he was already out of time. Had he considered Rule 3 of the Industrial Tribunal (Rules of Procedure) 1993 with any care, he would have realised that late presentation of a Notice of Appearance is deemed to include an application for an extension of time." On 3rd September 1997 the applicant sent an amended Originating Application to the tribunal in which a claim for wrongful dismissal was substituted for the claim for unfair dismissal, it also set out, quite clearly, the other claims which were being made. Notwithstanding receipt of this document, the solicitors still did not enter a Notice of Appearance. Before the Industrial Tribunal Chairman, Mr Pybus argued that he believed that this was a fresh claim and that therefore time for entering a Notice of Appearance should run from 3rd September 1997, in other words, until 24th September 1997. However, as the Chairman noted, he failed to take any steps to enter an appearance in that period of time. On 26th September 1997 the decision to dismiss the claim for unfair dismissal on withdrawal was formally issued by the Industrial Tribunal. The tribunal had notified both parties that the applicant's claims for breach of contract and under the Wages Act would proceed and that a Notice of Hearing would be issued shortly. That Notice of Hearing was sent out on 8th October 1997 for a hearing date on 5th November 1997. On 13th October 1997 the solicitors wrote to the tribunal saying that a Notice of Appearance had been prepared which would be filed if necessary. By the letter it implied that the solicitors had not entered a Notice of Appearance because the tribunal was proposing to strike out the application which it would appear was still be treated as an application for unfair dismissal. A letter in reply was sent on 28th October 1997 from the tribunal saying: "We have never advised that it was our intention to dismiss the entire application, our letter of 23 July 1997 clearly referred to "that part" of the claim. Nor has there been any indication that the respondent need not enter a Notice of Appearance. This was clearly a claim which included breach of contract and will now be heard on 5 November 1997. If the respondent wishes to take part in the proceedings he should immediately file Notice of Appearance will full explanation for lateness. Consideration will then be given as to validation." The solicitors at some stage wrote to the tribunal saying that they had assumed, perhaps rashly, that their letter to the Industrial Tribunal of 13th October 1997 had been treated "as what is termed in the civil courts as a conditional entry of appearance. Apparently it has not been "treated" in any way at all and we are anxious to correct that impression." As the tribunal Chairman commented, this letter overlooked the fact that the applicant had made a claim for unauthorised deduction of wages and for breach of contract. It also clear to them that the solicitor's research was insufficient because if he had looked at the top of the Originating Application form he would have discovered why it was that the Industrial Tribunal had jurisdiction to deal with breach of contract cases. By a letter dated 28th October 1997 the solicitors wrote to the tribunal enclosing a letter which had been sent to the applicant in which, inter alia, they referred to matters of misconduct alleged against the applicant during his employment and stressed the solicitors' intention to counter-claim. The letter to the tribunal concludes thus: "We do not know whether the Industrial Tribunal requires us to complete a formal form for entry of appearance because none has been supplied to us, we would be grateful if you could fax us such a form which we believe in so form IT3." The Industrial Tribunal Chairman noted that that statement was in conflict with a previous assertion that a Notice of Appearance had been prepared if it was necessary, and further, it ignores the statement in the tribunal's own letter of 21st October 1997 that no Notice of Appearance had been received. On 3rd November 1997 the solicitors sent a letter to the tribunal with a form of Notice of Appearance. The assertion in the Notice of Appearance was that the applicant was not dismissed and beyond denials, the only material averment which was made was as follows: "The terms of offer were contained in two letters dated 1 and 8 October 1996. The latter of which followed a discussion at the office when the requirement of keeping a week's earnings on deposit was withdrawn upon the applicant offering to enter into a formal contract after a satisfactory probationary period for a fixed period of 3 years." The learned Chairman noted that the solicitors' principal submission was that the application lodged by the applicant was muddled. He accepted that there were claims for unauthorised deduction of wages, for breach of contract, and a claim for unfair dismissal, which he deemed to be frivolous. With the benefit of hindsight the solicitors accepted that they would have been well advised to have submitted a holding defence. However, they argued that the Chairman should not rely upon hindsight, but that should treat the solicitor's application in the light of the circumstances that unfolded day by day, week by week during this "saga". The tribunal Chairman said this: "4 I have come to the conclusion that the respondent failed to study the Originating Application with sufficient care to appreciate the claims that were being made. 4.1 He was ignorant of the Tribunal's contract jurisdiction, until the Tribunal pointed that fact out by letter dated 21 October 1997. 4.2 He had numerous opportunities to enter a Notice of Appearance which he did not take. 4.3 His conduct, had he been acting on behalf of another, might well be regarded as negligent. 4.4. He is a Solicitor to 30 years' experience. In all the circumstances of the case I regard his explanation for the late entry of the Notice of Appearance as wholly unsatisfactory. In these circumstances I reject his application for leave to enter a Notice of Appearance out of time. 5 Having announced my decision orally Mr Pybus asked me to review it because he argued that it was against the audi alterem partem rule of natural justice to debar a party from defending, who had an arguable defence. He could and should have made this submission before I considered my decision, notwithstanding, I agreed to take it into account. I rejected it. 5.1 ... In my judgment Mr Pybus thought that the applicant's claims were spurious, without foundation and impertinent. However he made a fundamental error. He did not realise that the Tribunals had any contract jurisdiction; furthermore some of his correspondence to be Tribunal could be described as high handed and indignant. In these circumstances I do not consider that there is any principal of natural justice which required me to permit the respondent to enter a notice of appearance out of time." Next the solicitors applied for the hearing applicant's complaints to be adjourned pending the presentation of an employer's claim; in other words, a counterclaim. In essence, the solicitors alleged that the applicant was guilty of gross misconduct which would have warranted his summary dismissal had the respondents been aware of it in July 1997. The tribunal Chairman said this: "6.1 An employer's claim must be presented within six weeks of the receipt by the employer of an originating application from the Tribunal; notice of the originating application was sent to the respondent on Wednesday 23 July 1997; time therefore expired on say Friday 5 September 1997. 6.2 It follows therefore that before the [ solicitor's ] claim could be heard on the merits there will need to be a hearing to consider whether the Tribunal had jurisdiction to hear the claim. The [ solicitor ] admittedly failed to present a complaint in respect of the matters of which he was aware, further he could have but did not, bring a complaint to the Tribunal at the hearing. The applicant contended that the respondent was seeking to delay the proceedings. In all the circumstances, and considering the manner in which the respondent has conducted this litigation, as set out, above I refused the application for an adjournment." The Industrial Tribunal then proceeded to hear the case, in the sense that it received the applicant's evidence. It was the applicant's case that he had been employed for a fixed term contract for two years as common law managing clerk with the solicitor's firm. He indicated in the course of his evidence that his employment was summarily terminated. He was given a payment by cheque which was dishonoured. The Industrial Tribunal assessed the damage flowing from the breach at £3,276, including various incidental expenses and travel costs, and the Institute of Legal Executive fees which he had found the solicitors had promised. Mr Pybus appealed to us. He is representing himself. He submitted that the learned Chairman had erred in the way in which he had exercised his discretion. He submitted to us that the decision of the Industrial Tribunal Chairman was perverse. He said that the Originating Application which was amended by the applicant was not a valid document because leave to amend had not been granted. Therefore, there was a technical point to be taken on the amended Originating Applicant and, therefore, if that was the substantive document in question, he was not obliged to plead to it because it was not a proper official document as it does not appear that the tribunal had given leave to amend. That was not a point that had been argued before the Industrial Tribunal Chairman, rather the argument at that time was, as I have already indicated, that it constituted a fresh claim and the time for entering a Notice of Appearance ran only from 3rd September. It seems to us to be a point without any merit. There had been an application for leave to amend. The tribunal has jurisdiction to grant an application for leave to amend under Rule 13(1). In fact the amendment which was being made was made in consequence of the decision of the Industrial Tribunal to strike out the unfair dismissal complaint and to make very explicit what the other claims were. It was therefore an amendment to which no sensible objection could have been taken, and in the circumstances, we are of the view that the tribunal had accepted that application. Whether it was a new application or not, it would appear that the solicitors were well out of time for putting in their Notice of Appearance. Accordingly, whatever status the new application had, whether it be a new one or an amended one, the Notice of Appearance was well out of time. In addition, the appellant would wish to argue that the Industrial Tribunal Chairman overlooked the second part of the exercise of a discretion, namely the merits of his defence. He says that it is obvious that there is a complete answer to the complaint and that he is the victim of a judgment for a substantial money made in the absence of his evidence. It seems to us, with respect, that the Industrial Tribunal has not misdirected itself in law in any way. The Chairman has carefully examined the reasons why there has been a failure to put in a Notice of Appearance within time and to advance a cross-claim within time. The Rules of Procedure provide time limits which are limits to be observed and not targets to be aimed at. It seems to us, accordingly, that the Industrial Tribunal Chairman was entitled to say that until a reasonably satisfactory explanation had been given for the delay in this case, the question as to the merits did not fall to be considered. There was no satisfactory explanation for the delay. Therefore, an essential leg of the requirement for an extension of time had not been satisfied. In these circumstances we were all of the view that Mr Pybus had no merit in the appeal which he wished to advance to us. It was the suspicion of the applicant throughout that the solicitors were simply playing for time, perhaps because of their financial predicament. Accordingly, we are sure that there is no point of law fit for hearing at a further hearing, and we will dismiss the appeal. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII