Appeal No. UKEAT/0473/08/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 8 January 2009

Before
HIS HONOUR JUDGE McMULLEN QC
(SITTING ALONE)

ANTHONY CHOWLES t/a GRANARY PINE	APPELLANT

MR A WEST	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MS H M MULHOLLAND
(of Counsel)
Instructed by: 
Messrs Stone King Sewell LLP
13 Queen Square
Bath  BA1 2HJ	
For the Respondent	MR M BRADBURY
(Representative)
Citizens Advice Bureau	

SUMMARY

PRACTICE AND PROCEDURE:  Appearance/response, Service

A claim sent to Mr Anthony Charles with two errors in the address was not pursuant to Rule 2 “sent to the Respondent” Mr Anthony Chowles. It is unlikely that a telephone call from an ACAS officer would constitute the sending of a claim form or notice of proceedings. A default Judgment cannot be reviewed under rule 34 and 35 but only under the less rigorous rule 33. Default and review judgments and award of £18,310 set aside. Response form accepted. Hearing ordered.

HIS HONOUR JUDGE McMULLEN QC
Employment Tribunal procedure
1.	In 2004 the Employment Tribunal Rules were changed and codified to contain highly prescriptive forms and procedures for handling Employment Tribunal claims.  Duties were imposed on four actors in any particular drama.

2.	First, they were imposed upon a claimant seeking justice at an employment tribunal to bring proceedings in a prescribed form, known as the ET1, and for it to contain certain essential materials.  There were also requirements as to timing, and in parallel regulations, the 2004 Dispute Resolution Regulations, there was a requirement that a claimant in most cases has submitted a grievance and for a respondent in dismissal cases to have instituted a disciplinary procedure.  

3.	The second actor is the Secretary of Tribunals who is governed by rule 2 which is headed “What the tribunal does after receiving the claim”. Rule 2 is highly prescriptive for it provides as follows:
“2.  - (1) On receiving the claim the Secretary shall consider whether the claim or part of it should be accepted in accordance with rule 3. If a claim or part of one is not accepted the tribunal shall not proceed to deal with any part which has not been accepted (unless it is accepted at a later date). If no part of a claim is accepted the claim shall not be copied to the respondent.

(2) If the Secretary accepts the claim or part of it, he shall  - 
(a)send a copy of the claim to each respondent and record in writing the date on which it was sent;
(b) inform the parties in writing of the case number of the claim (which must from then on be referred to in all correspondence relating to the claim) and the address to which notices and other communications to the Employment Tribunal Office must be sent;
(c)inform the respondent in writing about how to present a response to the claim, the time limit for doing so, what may happen if a response is not entered within the time limit and that the respondent has a right to receive a copy of any judgment disposing of the claim;
(d) when any enactment relevant to the claim provides for conciliation, notify the parties that the services of a conciliation officer are available to them;
(e) when rule 22 (fixed period for conciliation) applies, notify the parties of the date on which the conciliation officer's duty to conciliate ends and that after that date the services of a conciliation officer shall be available to them only in limited circumstances; and
(f) if only part of the claim has been accepted, inform the claimant and any respondent which parts of the claim have not been accepted and that the tribunal shall not proceed to deal with those parts unless they are accepted at a later date.”

4.	The power is given to the Secretary not to accept the claim but in the ordinary case once the Secretary has accepted the claim a copy must be sent to each respondent and a record kept of the date on which it was sent.  A number of other subsidiary matters must also be complied with.  See rule 2(2) above.

5.	The third actor who comes into this is an employment judge who makes a judicial decision if there is failure to comply with the Secretary’s directions as to the response form. Or the judge may make a decision in default of a response (see rule 8). These include where no response has been presented within the relevant time limit (see rule 8(2)(a)).  That is a judicial act and it carries with it serious consequences because liability is established and a remedy may follow. The respondent is debarred from attending upon the liability hearing and making a contribution but, according to a judgment given by the immediate past President in D&H Travel Ltd & Henderson v Foster UKEAT0226/06, a debarred respondent is allowed back into the case for the purposes of contesting compensation and remedy.

6.	That brings me to the fourth actor who is the respondent.  The respondent is required to make a response on pain of having a default judgment made against him if he fails to do so.  Not only must he respond, he must do so in the prescribed form, within the prescribed timescale and must deal with specific questions relating, for example in a dismissal case, to compliance with the statutory dismissal procedure.  

7.	At first sight, therefore, the claim is a crucial document for it is the vehicle by which the respondent knows the claim he has to meet, has the duty to make statutory responses to certain elementary questions such as does he agree the length of service, dates and wages and so on, and opens up for him the right in a contract case to launch an employer’s cross-application and in discrimination cases to cite additional respondents.  So the claim is critical and, as I am minded to say, it is not sufficient for there to be an oral indication to a respondent that a claim has been lodged.  After all, given that the Secretary has an administrative function to perform in deciding whether the claim should be accepted, the fact that someone says a claim has been lodged does not mean that a claim will be weighed against any particular respondent.

8.	Safety valves were installed into these regulations.  The first is under rule 33 which gives the power to review a default judgment:
“33.  - (1) A party may apply to have a default judgment against or in favour of him reviewed.  An application must be made in writing and presented to the Employment Tribunal Office within 14 days of the date on which the default judgment was sent to the parties.  The 14 day time limit may be extended by a chairman if he considers that it is just and equitable to do so.
(2) 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, an application for an extension of the time limit for presenting the response and an explanation of why rules 4(1) and (4) were not complied with.
(3) A review of a default judgment shall be conducted by a chairman in public.  Notice of the hearing and a copy of the application shall be sent by the Secretary to all other parties.
(4) The chairman may  - 
(a)  refuse the application for a review;
(b)  vary the default judgment;
(c)  revoke all or part of the default judgment;
(d)  confirm the default judgment;
and all parties to the proceedings shall be informed by the Secretary in writing of the chairman's judgment on the application.
(5) A default judgment must be revoked if the whole of the claim was satisfied before the judgment was issued or if rule 8(6) applies.  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
(6) In considering the application for a review of a default judgment the chairman must have regard to whether there was good reason for the response not having been presented within the applicable time limit
(7) If the chairman decides that the default judgment should be varied or revoked and that the respondent should be allowed to respond to the claim the Secretary shall accept the response and proceed in accordance with rule 5(2).”

9.	Quite separately, I hold, since different provisions apply, is a provision for review of other judgments, as set out in rules 34 to 36.  Thus there are two quite separate channels and broadly speaking the second channel is the subject of more rigorous scrutiny for there is a preliminary consideration of an application (see rule 35) and the gateways to this channel are provided by rule 34(3), administrative error, no notice of the proceedings and so on.  Those provisions do not apply to default judgments.

The facts
10.	With those observations in mind I can now turn to the issue in the case.  The Claimant Mr West was engaged as a carpenter and furniture maker by the Respondent to the proceedings, as I will call him.  He is Anthony Chowles and he trades as Granary Pine.  He had been employed by the Claimant for some 16 years until 12 March 2007 when it is said that he was dismissed.  The Claimant received advice from the CAB who advised him to submit a grievance, which it is said he did and received no reply.  So he registered a claim at the Employment Tribunal.

11.	For reasons of which the Claimant is entirely blameless but for which he is responsible, the name given of the Respondent was Mr Anthony Charles and there were two errors in the address given. Of importance is the fact that the postal code omitted three digits.  The record of the Employment Tribunal indicates, as shown to me today, that the claim was sent to Mr Anthony Charles at that address and that notice of a hearing was sent because there was no response.  A default judgment was issued following a hearing before Regional Employment Chairman Mr Tickle, as he then was, on 17 August 2007. It is noted that the Respondent did not file a response or attend the hearing, a finding of unfair dismissal was made, and the Respondent was ordered to pay £18,310 for unfair dismissal and £423 for outstanding holiday pay.

12.	In the meantime, on 25 June 2007, an ACAS officer contacted Mr Chowles and told him that proceedings had been brought but Mr Chowles, to put it neutrally, wished to see the documentation.  So it was that on 1 February 2008 he wrote, when he received the claim, that he regarded this as a ludicrous situation having arisen without his knowledge.  On 13 February 2008 now Regional Employment Judge Tickle accepted the letter as a request to review his judgment out of time. He ordered a hearing at which there would be live evidence and cross‑examination, and that duly took place following a corrected version of the judgment which had already been issued.  On 30 May 2008 this hearing took place and reasons were given on 18 June 2008 when the judge maintained his original decision.

The appeal
13.	The Respondent appealed and has the advantage to be represented by Ms Mulholland of counsel and the appeal is resisted by Mr Bradbury of the CAB whose colleague represented the Claimant below.  With their very helpful approach to this case, in answer to my questions a number of issues have been resolved.  They are as follow.  

14.	First, it is accepted that the original judgment was a default judgment under rule 8.  Secondly, the proceedings which were conducted on 30 May 2008 were a review.  This is clear from my judgment in Secretary of State for Health v Rance [2007] IRLR 665, at paragraphs 25 and 26.  The Employment Judge decided that he would refuse the application for a review but it is common ground that there was a review, that is that the application for a review was granted and a fresh decision was made in the same terms as the default judgment.  Thirdly, the nature of the review, given the premise that this was a default judgment, had to be under rule 33 and not under rule 34.  Fourthly, wrongly delving into rule 34 but not into rule 33, the Employment Judge considered whether notice of proceedings had been received by the Respondent.  It is common ground that notice of the proceedings leading to the decision is apt to include notice of the claim pursuant to rule 2(2) and notice of the hearing.  Fifthly, the Employment Judge eschewed making a decision on the evidence before him as to whether the Respondent received the claim.  He said he had not but the Employment Judge said he did not need to make a decision on this.  As Ms Mulholland engagingly puts it, the Employment Judge’s approach to this issue is opaque.  

15.	The upshot is both parties agree before me that the Employment Judge did not decide, contrary to the Respondent’s case, that he had received the claim.  Thus the evidence is that the first time he received the claim was in January 2008.
 
16.	The next agreed issue is that the review conducted by the judge, which could only be under rule 33, ought to have included a draft proposed response to the claim.  It did not.  Nevertheless, the letter sent on 1 February 2008 clearly passed muster.  No issue was taken as to the absence of a draft response then, nor at the hearing itself, and it was only by order of the EAT that a draft ET3 was produced.  So this is now before me which was not before the Employment Judge.  I am told that there was no cross-examination nor opportunity given to the Respondent to indicate orally what his response would be to this claim. Thus there has been no consideration of the merits of the case, as there ought to be pursuant to rule 33(5) in any review of a default judgment.

17.	The simple outcome of those concessions and agreed positions is this.  The review conducted by the judge could only be under rule 33 and it was defective because there was no review of the merits.  Consideration of the exercise of discretion might well include matters within rule 34 and it would not be wrong to examine certain of the issues found in rule 34(3) but it must be remembered that those gateways are not requirements under rule 33.  As it happened, a good deal of time was taken up in an examination of whether the conversation between the ACAS officer and the Respondent on the telephone constituted the receiving of notice of proceedings, clearly a reference to rule 34(3).  

18.	I have indicated my preliminary view of the importance of a claim.  It is not necessary for me to decide finally on the issue of whether a telephone conversation with an ACAS officer is notice of a claim, since it has not been necessary to argue it in front of me, but suffice it to say my preliminary impression is that it cannot be for the reasons I have given above.  

19.	More fundamental, however, is the requirement that the proceedings be sent to the party pursuant to rule 2(2)(a).  It is accepted by Mr Bradbury, on careful reflection, that it was not sent to the Respondent; it was sent to Mr Charles who is not the Respondent for the record has been corrected to show that.  Thus, no claim was sent to him.  It is therefore not necessary for there to be any further examination of whether the Respondent is telling the truth when he says he got nothing.  The judge made no decision upon it but he would not be required to deal with that matter since the document was not sent to him. Therefore it is not necessary for me to decide the matter (as I was invited to today since Mr Chowles is here) nor to remit it to an employment tribunal.  The proceedings have now been sent and if the ET3 in the form that it is had been sent in timeously there would be no question of an examination at a default judgment stage of the reasonable prospects of success of the defence.  That would be a matter for a PHR to be determined upon proper notice.  It may well be that that would have been sought by the Claimant but in any event I have now seen the ET3; I cannot say that it has no reasonable prospect or is misconceived.

20.	The matter now being in my hands, it being accepted that there was major procedural irregularity in this case, I have decided that the case should be sent to a full hearing on the merits.  I set aside the default judgment and the review judgment and the award or compensation; the response in draft form submitted to the EAT will constitute the response; and directions can now be sought from Bristol Employment Tribunal for the hearing of this case.