Appeal No. UKEAT/0558/06/DA

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 31 January 2007

Before
HIS HONOUR JUDGE BURKE QC 
(SITTING ALONE)

1) MR N BARROSSO	APPELLANTS
2) MR M MAYOU
3) MR A GRAY
4) MR D YOUNG

MISS C FAHY	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised 8 June 2007

	APPEARANCES

For the Appellants	MR M WESTGATE
(of Counsel)
Instructed by:
Russell Jones & Walker Solicitors
Swinton House
324 Gray’s Inn Road
London
WC1X 8DH	
For the Respondent	No appearance or representation by or on behalf of the Respondent	

SUMMARY
Practice and Procedure – Appearance/Response; Review
The Appellants’ solicitors sent their Responses to the Tribunal by post on the last day before time expired; they arrived one day late.  The Tribunal refused a review; the decision focused only on the reason for the delay or absence thereof and made no attempt to consider prejudice, to follow Moroak or to apply the principles in Kwik Save Stores Ltd v Swain.  Appeal allowed; time for responses extended to date after actual presentation.

HIS HONOUR JUDGE BURKE QC

1.	Miss Fahy is employed by the Metropolitan Police as a Police Community Support Officer.  In September 2005, she presented a claim to the Watford Employment Tribunal complaining of sexual discrimination consisting, broadly, of sexual harassment.  She named as Respondents four police officers and four Community Support Officers.  Her complaints relate to a period between October 2004 and April 2005.  Mr Barrosso, one of the four Appellants before me (those four being the four Community Support Officers named as Respondents to Ms Fahy’s claim) and Mr Mayou, the second of those four, were specifically identified in the allegations made by Miss Fahy.  Mr Gray and Mr Young feature much less heavily, indeed scarcely at all.  

2.	One of the incidents relied upon, but only one, is alleged to have occurred on 1 April 2005.  Ms Fahy alleges that she was handcuffed by Mr Barrosso and Mayou, who both took photographs of her, and that other members of what she describes as “the team” also took photographs of her; and she alleges that a sexual remark was made.  

3.	In her claim form, Ms Fahy said that she was requesting a stay of proceedings until internal procedures had been exhausted and that the Metropolitan Police were investigating her complaints.  The proceedings were not issued against the four individual Respondents until 29 September, because the claim form did not contain their addresses.  An extension of time for presentation of a response was given to the four Community Support Officer Respondents (or their Solicitors), to 24 November 2005.  Responses for each of those four Respondents were sent by first class post to the Tribunal by Messrs Russell Jones & Walker, their Solicitors, on 23 November, it having been confidently expected by those Solicitors that they would arrive at the Tribunal the next day.  However, they were not delivered to the Tribunal by the Royal Mail until 30 November.  

4.	In those responses, Mr Barrosso and Mr Mayou admit the handcuffing and one remark, but deny all other allegations and deny that the matters that they admit constituted sexual harassment or discrimination.  

5.	On 16 December, albeit that they knew that substantive responses had been presented by all of those four Respondents, the Tribunal entered a judgment in default against them, no doubt, under rule 8(2)(a) of Schedule 1 to  the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004.  The judgment was a default judgment on liability only.  There was no such judgment in either the case of the Metropolitan Police or the 2nd-5th Respondents (the serving police officers) who, I infer, put in responses which were not late.

6.	Thus there was produced an unusual situation in which it is open to the Metropolitan Police to resist Ms Fahy’s claims, albeit that they are based entirely on a vicarious responsibility for the Respondents; but four of those Respondents, for whom the Metropolitan Police are said to be vicariously responsible, cannot resist those claims.  

7.	Although the judgment in default under rule 8 was a judgment, as I have said, in favour of Ms Fahy on liability only (for the Tribunal at that stage could not possibly have entered on any calculation of remedy), by rule 9 the four Respondents to whom I have been referring, who had not presented a response which had been accepted, were disentitled from taking any part in the proceedings (except for the limited purposes set out in rule 9) and were thus debarred from taking any part in the determination of any issues as to remedies.  

8.	The default judgment did not come to the notice of Russell Jones & Walker, who had no idea that their responses had been rejected as out of time, until 1 February 2006; and they did not receive a copy of that judgment until some days later.   No explanation of this delay on the part of the Tribunal appears; but this delay is immaterial because Russell Jones & Walker immediately applied for a review and for leave to apply for a review out of time; and they were given such leave.  

9.	On 8 February, at a case management conference, the proceedings were adjourned so that internal investigations could proceed; and I am told that they still stand adjourned.  I should record that I have also been told that Mr Barrosso has been disciplined and dismissed by the Metropolitan Police although it is not known whether that was on the basis of any act of sexual harassment, as opposed to his admitted act of handcuffing, or being involved in the handcuffing, of Ms Fahy.  I am told that the other three have been internally disciplined in some way.  

10.	The review hearing took place on 1 June 2006 before Mr Pettigrew, as Chairman sitting alone.  He decided that:

1.	Under rule 4 of the Employment Tribunal Rules it was too late, after 24 November, for the four Respondents (who are the Appellants today) to seek a further extension of time for presenting their responses.

2.	Once the time limit in rule 4(4) had been passed, the Tribunal could only accept a late response on an application for a review of the default judgment under rule 33, or by direction of the Chairman under rule 6(4).

3.	On an application for review under rule 33, the Tribunal was required by rule 33(5) (he meant rule 33(6)) to: “have regard to whether there was good reason for the response not having been presented within the applicable time limit.”

4.	Russell Jones & Walker had finalised their instructions on 22 November and sent the responses to the Tribunal by first class post on 23 November.

5.	But in the absence of any evidence that Russell Jones & Walker’s post, sent first class, was normally delivered to the Employment Tribunal on the following day, and in reliance on guidance given in St Basil Centre Ltd v McCrossen [1991] IRLR 455, the explanation offered by Russell Jones & Walker was not a good reason why the response was not received in time.

6.	At para 15, in his conclusion, the Chairman said: “I have found that this is not a good reason why the response was not received on 24 November deadline.  The application for review was therefore refused.”

11.	In this appeal, Mr Westgate, on behalf of the 6th-9th Respondents, challenges that decision.  Ms Fahy is not represented; she is not present; no submissions have been put before us on her behalf in writing.  On 23 January, her solicitors, Messrs Thompsons, wrote to the Employment Appeal Tribunal saying: 

“…upon further reflection, the Respondent ‘[that means Ms Fahy]’ will not now be represented at the Appeal Hearing.”

12.	The Chairman, as I have said, guided himself by the decision of the Employment Appeal Tribunal in St Basil Centre.  In that case, the employers appealed against the finding of the Employment Tribunal that it was not reasonably practicable for the Claimant’s unfair dismissal claim to be presented before the end of the three-month prima facie time limit in circumstances in which it was presented one day late.  The Employment Appeal Tribunal said that the guiding principle in such as situation was whether the solicitors could reasonably have expected the letter to be delivered in time, and the appeal was dismissed.

13.	Mr Westgate submits that the decision in St Basil Centre went only to the question as to whether there was a good reason for the response not having been presented within the applicable time limit and that the Chairman, by concentrating on that issue, failed to consider wider issues which he was required to consider if he was properly to exercise his discretion to review and set aside as appropriate the default judgment.  Mr Westgate also submits that St Basil Centre is not appropriate guidance on the issue to which it relates in modern times in any event.  

14.	I am not persuaded that St Basil Centre does not provide some guidance in a case such as this, although it related to different statutory provisions; but in my judgment the Chairman plainly erred in reaching the conclusion he did and erred in an important way.  By concentrating on St Basil Centre and the lack of historical evidence as to the efficiency of the Royal Mail in delivering Russell Jones & Walker’s  post, he appears to have focused his attention wholly on whether the delay was adequately explained, as he would have had to have done in a case where the issue was whether it was reasonably practicable to present a claim in time (the subject matter of St Basil Centre), and to have failed to have in mind that the discretion under rule 33 to set aside a default judgment on review is a much wider discretion.   

15.	Paragraph 15 of his decision demonstrates, in my judgment, that the Chairman considered that the review application must fail because, and only because, he found that there was not a good reason why the response was late.  But it is now well-established by a series of decisions of the Employment Appeal Tribunal that, although that is of course one factor which the Tribunal may look at and indeed, by reason of the express words of rule 33(6), the Tribunal must consider that factor, it is far from the only factor which has to be considered.  

16.	The first of the series of decisions of the Employment Appeal Tribunal to which it is necessary to refer is Moroak (t/a Blake Envelopes) v Cromie [2005] IRLR 535.  In that case, the response had been presented 44 minutes late because of a failure of the employer’s solicitor’s computer when he sought, late at night it would seem on the last day, to print out and then fax the response to the Employment Tribunal.  In that case, there had been no default judgment.  The Employment Appeal Tribunal, in the form of the then President, Burton J, held that, although rule 33 did not directly apply, a power to review the rejection of the late response existed under rule 6(6) and rule 34.   He then set out the principles on which a review, in the case of a late response, should be approached.  At paras 25-28 those principles, he indicated, applied to a review through the statutory route applicable in that case, and to a review through the rule 33 route, the statutory route applicable in the present case.  He said, at paragraphs 27 and 28:

“27	The discretion is expressly described as being one to do that which is just and equitable. It is not, therefore, the same discretion or power as is being exercised in respect of the time for lodgement of an originating application for unfair dismissal, where the test is one of reasonable practicability. Nor is it the same test as that which is operated for an appellant to put in a notice of appeal to the Employment Appeal Tribunal, where very restrictive rules apply, as has been so often canvassed, particularly in United Arab Emirates v Abdelghafar [1995] IRLR 243.

28	In my judgment, given that the test is as to that which is just and equitable, the same principles will apply to an application under rule 33 or rule 34 (under rule 33 for an extension of time, and under rule 34 for an order that the response already served be permitted to stand and be accepted, albeit that it was out of time), as were fully analysed by the Employment Appeal Tribunal, per Mummery P, in Kwik Save Stores Ltd v Swain [1997] ICR 49. The passages in that judgment, under the heading ‘The discretionary factors’ at pp.54—56, are clear and persuasive; and indeed they fall to be contrasted, as I have indicated, with the very restrictive circumstances laid down by that same learned judge in Abdelghafar. The headnote helpfully summarises the position as follows, by reference of course to a respondent applying to an extension of time, whereas in the circumstances of this case it will be what applies to a respondent applying to review the non-acceptance of a response which was out of time:
‘it was incumbent on a respondent applying for an extension of time for serving a notice of appearance to put before the industrial tribunal all relevant documents and other factual material in order to explain both the non-compliance and .. the basis on which it was sought to defend the case on its merits; that an industrial tribunal chairman in exercising the discretion to grant an extension of time to enter a notice of appearance had to take account of all relevant factors, including the explanation or lack of explanation for the delay and the merits of the defence, weighing and balancing them one against the other, and to reach a conclusion which was objectively justified on the grounds of reason and justice; that it was it was important when doing so to balance the possible prejudice to each party...’”

17.	These principles have been followed and applied on a number of occasions since by the Employment Appeal Tribunal.  In particular, they were followed and applied in Pendragon plc  (t/a C D Bramall Bradford) v Copus [2005] ICR 1671.  In that case, there had been a default judgment; and rule 33 was the vehicle by which the employers were seeking to recover from the consequences of failing to enter a response or failing to enter a response in time.  Burton J drew attention at paragraph 14 to the fact that, in Moroak, he had founded his decision on the basis that the just and equitable principle, which, as he had explained in that judgment, applied to rule 33 expressly, and pointed out that that was not strictly the case.  However, he went on to hold that the principles he had set out in Moroak  did apply to the exercise of the rule 33 discretion.  At para 20 he said this:

“20.	In those circumstances, I remain of the opinion which I expressed in Moroak [2005] ICR 1226 that in applying the discretion, either under rule 33 itself, with regard to setting aside a default judgment, or under rule 34 and the Moroak jurisdiction, of considering an application to review a decision to debar a respondent who has failed to put in a response in time, the principles established by Mummery J in Kwik Save [1997] ICR 49 remain.   Those principles were applied by the chairman in the alternative in this case.  There is no basis upon which I seek to differ from them, and indeed there is no cross-appeal put forward by Mr Copus in that regard.”

18.	Those principles were followed by the EAT in Bone v Fabcon Projects [2006] IRLR 908 and, among other cases, by HHJ Clark in The Pestle & Mortar v Turner (UKEAT/0652/05).  In The Pestle & Mortar HHJ Clark summarised the position which had been reached on the authorities in this way at para 6:

“6.	Since the judgment below in this case, the President Burton J heard and determined an employer’s appeal in Pendragon v Copus (EAT/0317/05 – 11 July 2005).  The principal issue in that appeal was whether the Tribunal had jurisdiction to review a default judgment.  It did.  However, the President also indicated that, in deciding whether to exercise discretion in reviewing a default judgment where the Respondent has failed to put in a response in time, the principles laid down by Mummery P in Kwik Save Stores Ltd v Swain [1997] ICR 49 dealing with the failure to enter a Notice of Appearance in time under the old rules apply.  The President referred to his statement of the principles in Moroak v Cromie [2005] IRLR 535, paragraphs 26-28.  In short, in exercising the discretion, a Chairman should take account of all relevant factors including the explanation or lack of explanation for the delay and merits of the defence, weighing and balancing them one against the other and reach a conclusion which was objectively justified on the grounds of reason and justice and, in doing so, to balance the possible prejudice to each party.”  

19.	At para 9 HHJ Clark said that because rule 33(5) said: “A Chairman 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.” it was necessary, as a gateway to the exercise of the rule 33 discretion, for a respondent to make out such a reasonable prospect.  It is not necessary in the circumstances of this appeal for me to say anything more about that.  There may be arguments to the contrary; but I am quite satisfied that in this case the four Respondent Appellants do have prospects, and reasonable prospects, of successfully responding to at least part of the claims made against them.  Although it would appear, from what I am told, that the handcuff incident took place in some form or another, the precise circumstances of that are not set out in the claim form; and there is an issue as to whether it involved any sexual connotation.  That depends in part upon what was said; and what was said is in issue.  

20.	The precise merits of the response may vary from Respondent to Respondent; for it is not suggested that two of the four Respondent Appellants actually took part in the handcuffing at all.  Only that incident and one other comment are the subject of any admissions.  Everything else is in issue; and as I have pointed out, because of the effect of rule 9, unless the judgment in default is set aside by way of review, none of the present Respondents can play any part in any issue as to remedies and compensation, which is of course part of the claim.  Accordingly, if it is a mandatory requirement, as was suggested in The Pestle & Mortar, that it should be shown that the Respondent who seeks a review under rule 33 has a reasonable prospect of successfully responding to at least part of the claim, that hurdle, I have no doubt, is passed in this case.  

21.	It is entirely clear to me that the Chairman in this case made the error of law (in circumstances in which the authorities cited to him may well have been less full than those available to me; indeed that would necessarily have been so, because some of them had not yet been decided or reported) of looking only at good reason for the lateness of the responses and not approaching the exercise of his discretion,  by taking into account all relevant factors, including as one of them whether there was a good reason for the lateness of the responses, weighing and balancing the merits of the defence, prejudice to each party and what was objectively in the best interests of justice.  Because the Chairman erred in that way, his decision cannot stand.  

22.	In Moroak, the Employment Appeal Tribunal made it clear that, in this situation, it is open to it to substitute its own decision upon a review application such as that which is made in this case, if it is clear that that discretion could, on the facts, only be exercised one way, but that if the EAT was in doubt as to how the discretion should be exercised, the issue should be remitted to the Tribunal; see para 25 of the judgment in Moroak.  

23.	In Bone, having reached this point, I remitted the issue to the Tribunal, in particular because there was an outstanding issue of fact which I could not decide and also because there had not been full argument as to how the discretion should or could be exercised.  In the present case, however, all the facts are before me.  While I have not had any argument from Miss Fahy’s side, that is because a deliberate decision has been made by her advisers not to present any.  I have no doubt that, in the circumstances of this case, the discretion on review to set aside the default judgment should be exercised in favour of the four Respondent Appellants.  It is clear that, in this case, no prejudice to Miss Fahy can have resulted from the minor delay in presentation of the responses.  None is suggested; and the only step taken in the proceedings between 24 November and the application for a review was the case management discussion on 8 February at which Miss Fahy’s request for a further stay was granted.  She has suffered no prejudice at all.   

24.	In contrast, the prejudice to the four Respondents, if they were unable to defend these proceedings, is potentially very substantial.  I have already indicated my views about the merits of their responses.  I do not propose to repeat what I have said; but there is a further important factor.  The claims against the serving police officers, the 2nd-5th Respondents, have been withdrawn because the Metropolitan Police have accepted that they are vicariously responsible for any discrimination on their part.  It appears that the Metropolitan Police are willing and, indeed, may be likely to do the same in the case of the 6th-9th Respondents;  but because of the default judgment, the 6th-9th Respondents are, unless it is set aside, in a position in which they cannot defend themselves and indeed could, in theory, be left by the Metropolitan Police to try to defend themselves while the other individual Respondents have had the case against them withdrawn.  It seems to me that this is a further important factor which I must consider in the exercise of my discretion, although I have to say that I would have reached the same decision without that factor.

25.	Having regard to the interests of justice - balancing prejudice in the case of each party and considering the amount of the delay, which was very small, and the reasons for the delay, which the Chairman regarded as inadequate - I have no doubt that the judgment in default should be set aside.  The explanation for the delay is only a partial explanation because, as the Appellant’s solicitors will have realised, there is always a risk of postal delay; it would have been wiser and better to have faxed copies to the Tribunal on 24 November or to have sent copies by hand; and such a realisation ought not to have come to them only after the event.  However, in my judgment, taking all factors into account, the circumstances are such that it could only be just and equitable to set aside the default judgment, notwithstanding the shortcomings in the explanation of the delay, and to allow the proceedings against all the remaining Respondents to proceed on their merits.  I think it is probably necessary, not only for the judgment to be set aside, but for me formally to allow an extension of time for putting in the responses, in each case, to 30 November, to be granted.  Perhaps that is not necessary; but out of an abundance of caution I will so order unless Mr Westgate tells me that I can not or should not do so.

26.	For those reasons this appeal is allowed.