Appeal No.	 EAT/0795/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 19 July 2002

Before
HIS HONOUR JUDGE J R REID QC
MR P R A JACQUES CBE
MR A E R MANNERS

MR C ELLISON	APPELLANT

PETRIE TUCKER & PARTNERS LTD	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR MARTYN BARKLEM
(of Counsel)
	
For the Respondent	MISS DINAH ROSE
(of Counsel)
Messrs Lewis Silkin Solicitors
12 Gough Square
London
EC4A 3DW	

HIS HONOUR JUDGE J R REID QC

1	We have before us a Notice of Appeal by Mr Clive Ellison.  The appeal is against, nominally, three decisions of an Employment Tribunal sitting at London North.  The first being an administrative decision, apparently dated 1 December 2000, that a complaint of unfair dismissal initially made by Mr Ellison had been dismissed on withdrawal.  The second, a decision made on 17 April following a request for a review made by Mr Ellison, that request being refused and Mr Ellison being ordered to pay £500 towards the costs of the Respondent.  The third, being a further decision on an application for, what might loosely be called, a re-review, which was sent to the parties on 23 May 2001.  That last decision refused to review the decision of 17 April.

2	The history of the matter is this.  The Appellant, Mr Ellison, is a dentist.  He was employed by the Respondent, Petrie Tucker & Partners Ltd.  On 5 April 2000 he lodged a claim against them asserting that he had been unfairly dismissed.  A Preliminary Hearing was held on 16 June 2000 at which the Tribunal ruled that he had been an employee and gave directions for the further conduct of the claim.  The case was fixed for a five day hearing to commence on 
6 November 2000.  Unhappily for Mr Ellison, a bankruptcy order was against him on 
4 October.  The solicitors then acting for him informed the Tribunal of that fact by a letter dated 30 October 2000 and asked that the matter be adjourned.  Despite the objection of the Respondents, the case was adjourned from 6 November to 10 November.  The Tribunal on granting the application for a postponement of the hearing, wrote to the Respondent’s solicitors a letter in these terms:

“A Chairman has granted the Applicant’s request for a postponement of the hearing listed to take place on 6 November 2000 to 10 November 2000.
Applicant is bankrupt.  Trustee in bankruptcy (or failing appointment of trustee official receiver) must indicate whether he intends to continue with claim.  Case is stayed for the time being.”

A Trustee in Bankruptcy, a Mr Boyden, of PriceWaterHouseCoopers, was appointed.  On  
24 November he wrote to the Employment Tribunal in these terms:

“I was appointed as Trustee in the above matter on the 26 October 2000 following the making of the Bankruptcy Order on the 4 October 2000.  Your letter dated 2 November 2000, addressed to Lewis Silkin Solicitors has been forwarded to me.
I can confirm that I do not wish to continue the debtor’s claim for unfair dismissal.”

3	Pursuant to that, an order was made by the Employment Tribunal which was sent to the parties on 7 December, still bearing the title ‘Applicant, Mr C Ellison – Respondent, Petrie Tucker & Partners Limited’ saying:

“The application is dismissed on withdrawal by the Applicant.”

On receipt of that document, Mr Ellison wrote to the Tribunal on, what appears to be 
19 December (though the letter bears both the date 19 December and 20 December, it matters not which) in these terms:

“The solicitors who previously acted for me in the above case have sent to me a copy of a decision which was sent to them by the Employment Tribunal which states that my application has been dismissed on withdrawal by me.
I wish to make it clear that I have not withdrawn my application and I should be grateful if you would please let me know the circumstances in which this decision has been issued.  Will you also please treat this letter as my application for the decision to be reviewed and rescinded.  
My last contact with the Tribunal was on Friday 3rd November when I telephoned the Tribunal to enquire as to the outcome of my application for an adjournment of the proceedings and I was advised that my application for an adjournment had been granted, without a new date having been fixed.
By way of further information, my current position is the same as the position when I made the application for the adjournment in that the bankruptcy order has not yet been discharged, although I am endeavouring to resolve that as soon as possible.  
[I should say that the position remains today, the same as it did then, Mr Ellison has not been discharged].
I should be grateful therefore for our confirmation that the decision which was sent to Messrs Gregory Rowcliffe & Milners rather than to me directly will be removed from the Tribunal register.”

Gregory Rowcliffe were the solicitors who were acting for Mr Ellison before his bankruptcy.  

4	After that, Mr Ellison was sent a letter by Mr Boyden, the Trustee in Bankruptcy, dated 26 January 2001.  It says:

“Thank you for your letter dated 20 January 2001.
You were advised in my letter of 27 November 2000 that I will not be continuing with your unfair dismissal action.  This does not mean that I will stop any action, it means that I am not continuing the action as your Trustee.  If you wish to pursue the action in your own name, I would strongly suggest that you seek your own independent legal advice.”

We have not seen the letter of 27 November but it is clear from the context and from the terms of the letter of 26 January that the letter of 27 November cannot have in any way indicated that Mr Boyden was assigning the claim which Mr Ellison had made, and which had vested in Mr Boyden on Mr Ellison’s bankruptcy, back to Mr Ellison, the bankrupt, to pursue.  Mr Ellison then wrote on 18 February to the Employment Tribunal:

“I write further to my enquiry as to the status of this case.  I consulted with my Trustee and he had written to say that his intention was not to stop proceedings but simply to say he had no wish personally to continue with the proceedings and I am free to do so.  A copy of his letter has been included for your information.  I therefore ask that this case be put back on the role and that a date for hearing be set.”

5	The result of that was that the matter came before the Chairman for review.  On review on 17 April, in the absence of Mr Ellison, but in the presence of counsel on behalf of Petrie Tucker & Partners, the Tribunal comprising a Chairman and two Members, unanimously decided that the request for review of the decision of 1 December 2000 be refused and that the Applicant pay £500 towards the Respondent’s costs.  There is a suggestion by Mr Ellison that he attempted to attend to the hearing on 17 April but for reasons beyond his control he arrived too late and was, for whatever reason, unable to take any part in the proceedings.  

6	The Extended Reasons which were given on that occasion by the Tribunal were in this form, having recited the history to the letter of 26 January from the Trustee, which I have already read, the panel went on:

“The matter before the Tribunal today is whether the application for review by the Applicant should proceed.  The Applicant was not present at the Tribunal at 10.00am.  The Notice of Hearing clearly stated that the matter was listed for 10.00am.
The Respondents submitted that the Application for Review should be refused.  The argument put forward by the Respondents was in relation to rule 11(1)(e) of the 1993 Employment Tribunal Procedure Rules: the Tribunal may review its own decision where the interests of justice require such a review.  There had been no procedural error in this case.  The reason that the Applicant had been deprived of the opportunity to pursue and present his case was because of his bankruptcy.
The main reason that the Applicant would be unable to pursue his claim was because on the bankruptcy the cause of action for unfair dismissal was transferred by statute to the Trustee in Bankruptcy.  In support of this assertion the Respondents relied on the case of Ord v Upton [2000] 2 WLR 755.  At page 759 Addous LJ set out the position on a person being declared bankrupt.  Section 306(1) of the Insolvency Act 1986 vests the bankrupt estate in his trustee.  Section 283 defines a bankrupt’s estate which includes the bankrupt’s property.  Section 436 of the Act includes in the definition [of] property things in action.  The claim that the Applicant in this case pursued was [a] claim of unfair dismissal and therefore falls within the meaning of a thing in action.  The bankrupt ceases to have sufficient interest himself to continue the claim.
In the case of Beckham v Drake [1849] 2 HL CAS 579, the Court of Exchequer Chamber had to decide whether Mr Beckham’s claim formed a part of the present and or future personal estate of the bankrupt.  If it did then due to his bankruptcy if vested in his assignee.  The court concluded that where a claim was for pain suffered in the body, mind or character that right did not pass to the trustee.  However where it was for future loss of earnings and loss of past earnings that did pass to the creditors and therefore was assigned to the trustee.
The conclusion therefore is that on being declared bankrupt that person ceases to have sufficient interest in the claim to be able to pursue a case.
If a Trustee in Bankruptcy decides not to pursue a claim that trustee may assign the cause of action to the bankrupt personally but that must take place prior to the application by the trustee to an Employment Tribunal to withdraw the Applicant’s claim.  Furthermore, there must be a deed of assignment recognisable as an assignment in support of that action by the trustee to the bankrupt.  It is not for the bankrupt to assign although it is for the bankrupt to demonstrate that there has been such an assignment.
The only evidence before this Tribunal of any such assignment was the letter of 26 January 2001 from the Trustee in Bankruptcy to the Applicant which post-dated the letter of the Trustee in Bankruptcy to the Tribunal withdrawing the unfair dismissal claim.
The Tribunal having heard the Respondents’ arguments and considered the case law and statutory references concurred with the view of the Respondent that the application for review should be refused.  There was clearly no power in statute for the Applicant to continue his claim as his right was a thing in action which had transferred to the Trustee in Bankruptcy.  It was not his individual right to continue until such time as there was an assignment and that had not been addressed until after the decision of the Tribunal to dismiss the application.”

The Tribunal then went on to consider the question of costs.

7	Mr Ellison applied to review that decision.  He set out some medical background and said that due to his incapacity he had arrived late.  As a result of that he requested the Tribunal to review the decision.  At paragraphs 6, 7 and 8 he said:

“It is also my submission that there are a number of fundamental flaws in the respondent’s case.
This application is to consider whether I should be allowed to continue my case and not to consider whether the trustee has a right to give me the right to continue.  He is empowered to give me this right and has confirmed same to me by letter.
Paragraph 7 of the decision suggests I have lost the right to continue due to my bankruptcy.  This is not the case as the situation has now been rectified.  Furthermore, the case cited namely, Ord v Upton concerns a bankrupt who had been discharged and who then brought a case for damages and attempted to deny the trustee his share of the damages which would accrue to him during the bankruptcy.  The argument in that case was the trustee’s right to damages.  This is not the situation in my case and therefore the case quoted has no relevance to me.  The suggestion that a deed would be applicable is also irrelevant as there is no contract involved.”

He then goes on to make a reference to the old system of pleading and says that his Trustee has indicated his willingness to continue.  He then says:

“The cause of action is my wrongful dismissal and is solely personal as set out in s.436 and as such could not be described as being the property of the trustee.  Therefore there is in effect no need for the trustee to approve the continuation of my case.
I am also of the opinion that should a decision be made not to continue then this would be a travesty of justice as my bankruptcy arose due to the wrongful dismissal action by the respondent.  In addition, the respondent has attempted to evade sanction by using their far greater financial resources to overcome my attempts to have my case heard.
If the respondent succeeded in this matter then it would place a seal of approval on such future behaviour and place other employees at risk.”

8	The Chairman considered that and produced a decision that the application be refused.  She set out the background of non-appearance and the letter of 10 May seeking a review.  She said she studied the file, noted that one of the grounds on which the Tribunal is empowered to grant a review is that proceedings took place in the absence of a party.  She said it was also necessary to consider whether it would be in the interests of justice to grant such a review and said she was of the view that it would not be in the interests of justice to grant such a review.  She continued:

“I am satisfied that the law as set out within the decision promulgated on 30 April is an accurate reflection of the law and for me to grant a review in these circumstances would result in both the Applicant and Respondent incurring unnecessary costs.
Furthermore, if I am wrong in my view that the decision is an accurate reflection of the legal position, this is a matter that should more properly be considered by the Employment Appeal Tribunal rather than a Tribunal of the same status as this Tribunal.”

9	On receipt of that decision an appeal was launched.  The grounds of appeal so far as material are:

“6.1	The Employment Tribunal’s decision made on 1st December 2000 that the Applicant’s application for unfair dismissal be dismissed on withdrawal by him was perverse in circumstances when there was no evidence that the Appellant did withdraw his complaint.
6.2	In determining the Appellant’s request for a review of the decision of 1st December 2000, the Employment Tribunal misapplied or misconstrued the provisions of the Insolvency Act 1986 in that it wrongly considered that there was no power in statute for the Appellant to continue his claim in circumstances where there was a finding of fact that the Trustee in Bankruptcy stated that he did not wish to continue the Appellant’s claim for unfair dismissal but further in his letter dated 26th January 2001, the Trustee in Bankruptcy explained that his statement accordingly did not mean that he would stop any action by the Appellant.  Accordingly, the evidence was not such as to support the Tribunal’s finding that the notification by the Trustee in Bankruptcy to the Employment Tribunal’s letter dated 24th November 2000 amounted to a withdrawal by the Applicant of his claim.
6.3	In determining the Appellant’s request for a review of the decisions of 1st December 2000 and of 17th April 2001, the Employment Tribunal failed to take sufficient account of the new evidence of the letter of 26th January 2001 which was not available at the time of the decision made on 1st December 2000 in contravention of the Employment Tribunal Rules 1993, Rule 11(1)(d) and Rule 11(1)(e).
6.4	In determining the Appellant’s request for a review of the decision of 17th April 2001 the Employment Tribunal erred in failing to take sufficient account of the reasons for the Appellant’s absence from the hearing of the proceedings in circumstances where he arrived at the Employment Tribunal at 10.20am on 17th April 2001, but was advised by a member of the Tribunal staff that as the hearing had commenced, he could not then participate and that he would be notified of the outcome.”

I should pause at that to say that there is no evidence to support that ground of appeal.  It was not a matter which was raised in those terms in the further application for review.  So far as the Employment Appeal Tribunal is concerned, of course, we are left with that bald assertion without evidence either to support it or to contradict it.  Continuing with the grounds of appeal:

“6.5	The Employment Tribunal’s decision that the Appellant’s claim was frivolous and vexatious and that he had pursued the claim unreasonably such that he was ordered to pay costs in the sum of £500 was perverse, having regard to the issues of law identified in the Employment Tribunal’s extended reasons for its substantive decision in circumstances also where the Appellant was not admitted to the hearing notwithstanding his presence in the Tribunal building while the hearing was continuing.
6.6	Accordingly, the Employment Tribunal erred in dismissing the Appellant’s claim for unfair dismissal and further erred in refusing the Appellant’s request for a review of the decisions of 1st December 2000 and of 17th August 2001.”

10	For the first time, in the course of argument this morning, it was suggested that there had at some point been an oral equitable assignment by the Trustee in Bankruptcy of the right to continue the Employment Tribunal claim to Mr Ellison.  What is absolutely clear is that that is something which is brand new and is a suggestion which is not supported by any evidence, nor is it consistent with the documentation which has been produced.  The Appellant, who has been represented today by Mr Barklem, who has said everything that could possibly be said on his behalf, has started from the proposition that the letter from the Trustee of 26 January sheds doubt on the intention of the Trustee not to pursue the claim.  I have already read the letter.  It is worth just looking back on the letter, which was in fact sent to the Tribunal, which ended with the sentence:

“I can confirm I do not wish to continue the debtor’s claim for unfair dismissal.”

In those circumstances, it seems to us, that that point is a point of no substance.  

11	The argument then continued that the result of there being a possibility of a remedy which included a compensatory award for injury to feelings and the like, (as envisaged by Lord Hoffman  in Johnson v Unisys [2001] All ER 801 at 820:

“The emphasis is upon the Tribunal awarding such compensations as it thinks just and equitable, so I see no reason why an appropriate case should not include compensation for distress, humiliation, damage to reputation in the community or to family life.”)

is that the cause of action did not vest in the Trustee in Bankruptcy and Mr Ellison was therefore in a position to continue his claim, and that the Tribunal was wrong to accept the Trustee in Bankruptcy’s expression of a desire not to continue.  That, in our judgment, is incorrect.  It may be that so far as that apart of any damages recovered as reflected a personal loss in the sense of pain felt in mind body or character such as a claim for libel, the Trustee in Bankruptcy would hold that part of the damages as Trustee for the bankrupt, but that does not mean that the bankrupt has a sufficient interest himself to continue the claim.  That, in our judgment, is clearly established by Ord v Upton and by Phelps v Spon Smith & Co.  

12	The argument advanced continues that the Chairman was in error when she referred to the necessity of a deed of assignment having to be entered into before the withdrawing of the claim for unfair dismissal and suggests that this was an inaccurate statement of the law.  It was certainly an incomplete statement of the law, but it was, as matters were then presented, a perfectly sufficient statement of the law, save, perhaps, it would have been more accurate to refer to a document of assignment, rather than deed of assignment, since a legal assignment can be made under hand rather than by deed.  The position is that at that stage there had been no suggestion of any assignment, legal or equitable.  There is still no suggestion of a legal assignment.  Had there been an equitable assignment, it would have been necessary either for the Trustee of Bankruptcy to continue the proceedings, or more accurately, for the proceedings to be continued by Mr Ellison in the name of the Trustee, if the Trustee consented, or, for the Trustee to be joined as a second Respondent if there had been an equitable assignment but the Trustee was unwilling to allow the proceedings to continue in the Trustee’s name.  The position, therefore, seems to us to be that there is no reason to suggest that the learned Chairman’s partial statement of the law was anything other than sufficient for the purposes of disposing of the matter as it stood at that stage.

13	The next suggestion was that there might have been some equitable assignment but it was not asserted that there had in fact been any such, and indeed it was accepted that the only document which even began to hint at there being the possibility of an equitable assignment or a legal assignment in the future did not itself amount to an assignment.  Reference was made to Snell’s Equity and the requirements for an equitable assignment as set out there.  It does not seem to us that in the circumstances of this case that reference advances matters a jot.  The position, so far as Mr Ellison is concerned, is that on his bankruptcy the right of action became vested in his Trustee in Bankruptcy.  It was vested in the Trustee in Bankruptcy at the time when the action was dismissed as a result of the Trustee not wishing to continue it.  There was no assignment and no evidence of any assignment, either legal or equitable, before either of the applications for review.  It was not therefore a case where the debtor, after the dismissal of the case, could by using the review procedure seek having obtained an assignment to revive the case.  Mr Ellison was in a position that he had no right to carry on with the proceedings at the time of the dismissal of the claim, or of either review, and the refusal to have the matter reviewed further was, in our judgment, inevitable.  

14	That leads us on to the second question, which is whether having dismissed the applications for review, the Tribunal should or could make an order for costs.  It is said in relation to that, that given the issues of law identified and given the circumstances of Mr Ellison’s non-attendance, the Tribunal (although it is suggested he was present in the Tribunal building when the hearing was continuing) it was perverse to make an order for £500 costs.  It was further submitted (I am afraid, at the suggestion of myself) that there was a question as to whether or not the Tribunal had any power to make an order for costs because the then relevant rules, The Employment Tribunals (Constitution and Rules of Procedure) Regulations 1993 Schedule 1 paragraph 12, refer to an order containing an award against that party, ie a party who has, in bringing or conducting the proceedings acted frivolously, vexatiously, abusively, disruptively or otherwise unreasonably.  It was submitted that once the cause of action had vested in Mr Ellison’s Trustee in Bankruptcy it could not be said that he was a party, that therefore there was no power under paragraph 12 to make an order for costs against him.  Counsel referred us to Lowbey v Lindo [1981] ICR 216 in support of that proposition, that being a case dealing with Rule 21 of the 1976 Employment Appeal Tribunal Rules.  What Mr Lindo (the employee in that case) tried to do, after his employer’s, Mr Lowbey’s, solicitors had failed to attend on a hearing of an appeal, was to have those solicitors joined as a party to the proceedings with a view, after an adjournment, to having them made liable for costs.  We were referred, in particular, to a passage on page 217:

“It seem to us, prima facie, that rule 21 covers the situation where a party on the record at the time when the costs were incurred was at fault.  We have not, of course, heard full argument on this from the other side but, on the submissions which have been made by Mr Allfrey, [he was counsel for Mr Lindo, the employee] we do not consider that the intention of the rule was to make it possible for someone who was not a party at the time when the costs were incurred to be joined and for costs to be awarded retroactively against the newly joined party.  It seems to us that, at this stage, without hearing the full argument, this rule is intended to give the appeal tribunal power to order costs against someone who is a party only at the time when those costs were incurred.”

It does not seem to us that that authority is of any assistance.  

15	It seems to us that the submission made on behalf of the Respondent is correct namely, that if someone holds themselves out as being a party and makes an application asserting that they are a party, then so far as the proceedings on any application that they make are concerned, they are a party for the purpose of having orders for costs made against them.  Were it otherwise, the position would be absurd in that person having no interest at all who claim to be parties or claim to be made parties and caused other existing parties to incur substantial costs beating off a frivolous or vexatious claim, could not be themselves subject to any order for costs.  

16	It seems to us, therefore, that there was jurisdiction to make the order and that there is nothing in the making of the order which could properly be said to be an improper use of the Tribunal’s discretion.  The Tribunal was entitled to make the order for costs.  There is no reason in law to say that order was wrong.  We therefore dismiss the appeal both as to the substantive issue, the claim for review, and as to the subsidiary issue, the appeal in relation to the £500 costs.  

17	We take the view that having received a warning in fairly strong terms on the Preliminary Hearing that he was at risk as to costs, Mr Ellison has chosen to take a risk and it would therefore be appropriate in the circumstances of this particular case, and given the obvious deficiencies of the appeal, that an award of costs should be made.  However, we take the view that the figures suggested are very considerably more than are appropriate.  What we are proposing to order is that Mr Ellison pay a contribution of £1500 towards the Respondent’s costs.