Appeal No. UKEAT/0225/11/SM

EMPLOYMENT APPEAL TRIBUNAL
FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON, EC4Y 8JX

	At the Tribunal
	On 25 November 2011

Before
HIS HONOUR JUDGE McMULLEN QC
(SITTING ALONE)

DR C OSONNAYA	APPELLANT

QUEEN MARY UNIVERSITY OF LONDON	RESPONDENT

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant	MR PETER KIRBY
(of Counsel)
(Bar Pro Bono Unit)
	
For the Respondent	MS BETSAN CRIDDLE
(of Counsel)
Instructed by:
Eversheds LLP Solicitors
One Wood Street
London
EC2V 7WS

SUMMARY
PRACTICE AND PROCEDURE – Costs

The Claimant was ordered to pay a contribution of £500 to the Respondent’s costs when she applied on the day of the PHR for a postponement on grounds known to her much earlier.  Her conduct was unreasonable.  Applying Barnsley and Dean & Dean the EAT would not overturn this exercise of discretion.  Even if the Employment Judge were wrong under rule 40(2) she was unarguably right under rule 40(1) (adjournment) which does not require a pejorative finding.  Her application to the EAT to adduce fresh evidence was refused: Ladd v Marshall applied.

HIS HONOUR JUDGE MCMULLEN QC

1.	This case is about costs.  I will refer to the parties as the Claimant and the Respondent.

Introduction
2.	It is an appeal by the Claimant in those proceedings against a Judgment of Employment Judge Jones, sitting alone at the East London hearing centre on 14 January 2010, expressed in Reasons sent to the parties with further orders on 3 February 2010.  The record shows that the Claimant was represented by Dr K Osonnaya, her husband.  

Disputes of fact 
3.	There is an issue about whether he represented her, but today Mr Peter Kirby giving his services under the ELAA Scheme, accepts that that is what the record shows.  It is backed up by 19 pages of notes taken by the solicitor for the Respondent. Dr K Osonnaya did address the Judge, made submissions, and indeed cited legal authorities on at least two occasions, referring to what I interpret is Teinaz v London Borough of Wandsworth [2002] IRLR 721 CA, and his reference to a different case in the same Tribunal.  Although it is plain the Claimant made a lot of the contributions herself, she did have her husband there.  He is a doctor in medical law, holding a PhD.  The Respondent had been represented by counsel, and today Ms Betsan Criddle represents it.

4.	The Judge postponed the hearing of the PHR.  An issue arises as to whether an application had been made by the Claimant.  The Judge cites the application on a number of occasions; the notes of the attending solicitor make that plain.  I hold an application was made. The Claimant asked for a postponement primarily to deal with problems of her witnesses. Medical issues she had raised earlier seem to have fallen into the background.  So two of the issues of fact have been resolved simply by looking at the written material.

5.	The Judge acceded to the application and set it off for two months, to be heard in March 2010, and to an application made by the Respondent for a fraction of its costs.  The Judge was told the costs but the sole application was for a token sum of £500.  She awarded that figure.  The Claimant appeals.  

EAT procedure
6.	The appeal was rejected on the papers by a procedural judge.  The matter came before HHJ Peter Clark in a rule 3(10) application.  This time the Claimant had representation by Mr Kirby. A fresh Notice of Appeal, in substitution for the earlier one, was accepted by Judge Clark.  It had four points in it.  The matter was set down for a full hearing.  I indicated in pre-hearing case management that I was minded to dismiss the appeal in the light of two recent Court of Appeal authorities: Dean v Dean (A Firm) and Ors v Dionissiou-Moussaoui [2011] EWCA Civ 1332 and Barnsley Metropolitan Borough Council v Yerrakalva [2011] EWCA Civ 1255.  For the saving of costs, in accordance with the overriding objectives, I invited the parties to consider the situation.  It fell on stony ground.  Mr Kirby, now appearing for the Bar Pro Bono Unit, in an unpromising start to his submissions, recognises the force of those two authorities and the problems facing any advocate seeking to dislodge a discretionary order of costs in an Employment Tribunal.  See to the same effect Arrowsmith [2011] EWCA Civ 797.

7.	The remaining two issues identified by Judge Clark remain live on appeal.  They are that the Judge made findings of fact without hearing evidence on matters in dispute between the parties which amounted to a serious procedural irregularity. In any event, the Judge failed to take into account the means of the Claimant or state brief reasons for not doing so.  The Judge was invited by Judge Clark to give further reasons to clarify the basis of her findings in the light of the new grounds of appeal and I am grateful to her for providing those reasons by a letter of 24 October 2011.

8.	There is very protracted litigation between the parties.  There is some satellite litigation, arguably connected with this matter between the two parties in the Central London Civil Justice Centre.  A substantial costs order was made against her, from which she seeks permission to appeal to the Court of Appeal.  That application awaits a decision on the papers. 

The facts
9.	The instant proceedings relate to a dispute which is now to be heard over six weeks, beginning in January 2012.  There is, therefore, very substantial material to be gone through.

10.	The Claimant is a prolific writer and correspondent with the Tribunal and the Respondent.  Not a day goes by without her raising some matter at great length in correspondence with the Employment Tribunal.  The PHR which was the subject of the costs order was listed long before and was due to take place between 12 and 15 January 2010.  By December 2010, the Claimant knew certain matters that might affect the PHR, such as the choreography of the witnesses she wished to call, her own medical condition, and the difficulty in attendance of her husband who was to represent her, and assist her as carer.  She is disabled, as I accept for the purposes of today.  So issues were being raised by the Claimant about the way in which the PHR could be organised.

11.	The Judge postponed the PHR which opened by agreement on 14 January 2011.  The effect was the application for costs. The Judge held that the Claimant had acted unreasonably.  That is a within rule 42.  She gave reasons, primarily that the first occasion on which a postponement had been sought was on the morning of the hearing and that was unreasonable. She did not consider ability to pay.

12.	The Claimant swore an affidavit, indicating that she had made an application on 4 January 2011.  She filed the affidavit with the EAT, pursuant to Judge Clark’s order.  It was said to exhibit a letter of 4 January 2011.  This letter is produced in the bundle before me by the Respondent who, Ms Criddle tells me, received it some two months later.  It is on this basis that the Claimant contends that the Judge wrongly made the order.

13.	There is an application under the practice direction for the adduction of new evidence on appeal.  The basis upon which I would allow the matter is set out in Ladd v Marshall [1954] 1 WLR 1489.  The material could not, with reasonable diligence, have been adduced before.  It has to be apparently credible and it should have a significant influence on the costs order.  I refuse the application to adduce this material.  I accept Ms Criddle’s contention that this was plainly available to the Claimant in advance of the PHR.  On the Claimant’s account, she produced it herself and posted it, so she could, with diligence, have given it to the Judge, particularly as the criticism the Judge was making was of the late application to postpone.

14.	Secondly, I accept Ms Criddle’s argument that this is not apparently credible.  I have looked with care at the considerable correspondence emanating from the Claimant page after page, day after day, relating to the upcoming PHR.  It is extraordinary, if the letter of 4 January had been written, that there is no reference to it.  The Claimant uses a style which refers to her previous correspondence and cites the dates. There is not a single reference in the correspondence following 4 January to that letter or even to the gist of it, which is to take out the PHR on 12 to 15 January 2011.

15.	Indeed, there are contrary representations in that the Claimant asserts, after 4 January, that she is eager to have her case heard and seeks simply adjustments for her disability, and adjustments to cater for the calling of witnesses.  The Claimant says she posted this letter together with bundles.  The Judge carefully looked at the matter on remission by Judge Clark.  There is no trace of it.  It does not appear to me to be credible.

16.	It would have a significant effect on the decision, because the Judge’s decision as to unreasonableness is based upon timing.  In my judgement this fails two of the three essential tests in Ladd v Marshall and should not be adduced. 

The legislation and the principles
17.	The Tribunal Rules 2004 include Rule 40::

“40. When a costs or expenses order may be made
(1)	A tribunal or chairman may make a costs order when on the application of a party it has postponed the day or time fixed for or adjourned a Hearing or pre-hearing review. The costs order may be against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment.
(2)	A tribunal or Employment Judge shall consider making a costs order against a paying party where, in the opinion of the tribunal or Employment Judge (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or Employment Judge may make a costs order against the paying party if it or he considers it appropriate to do so. 
(3) The circumstances referred to in paragraph (2) are where the paying party has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived.
41.
[...]
(2)	The tribunal or Employment Judge may have regard to the paying party’s ability to pay when considering whether it or he shall make a costs order or how much that order should be.
(3)	For the avoidance of doubt, the amount of a costs order made under paragraphs (1)(b) or (c) may exceed £10,000.”

18.	The legal principles involved in this case can be summarised as follows.  A costs order is exceptional in an Employment Tribunal.  It is unusual but not exceptional where an adjournment has been sought and granted.  There is no pejorative finding attached to it.  In other words, a successful application for a postponement may cause an order for costs if costs have been incurred by the other side.

19.	The use of the word “unreasonable” requires a high threshold to be passed, when a costs order is made.  The Judge may consider the ability to pay of the paying party, but that is a discretionary matter and she is not obliged to do so.  The Judge is not required to conduct an inquisition in respect of a litigant in person - and I am prepared to accept that for this purpose the Claimant may be a litigant in person - to create a case for her (see the Judgment of Mummery LJ in Lemas & Anor v Williams [2009] EWCA Civ 360, relied upon by Rimer LJ in Muschett v HM Prison Service [2010] IRLR 451 at paragraphs 29-31).

20.	HHJ David Richardson in Jilley v Birmingham & Solihull Mental Health Trust & Others UKEAT/0584/06/DA, UKEAT/0155/07/DA indicated the exceptional nature of costs and what must be considered.  A number of cases have been drawn to my attention in addition to those.  They are Mirikwe v Wilson & Co Solicitors & Ors UKEAT/0025/11/RN and the three recent Judgments of the Court of Appeal (above).  The Employment Tribunal is required, if the matter is raised, to consider ability to pay.  If the matter is not raised, there is no authority imposing a legal duty on the Judge to raise the question, even with a litigant in person. I do not consider that there is. 

Discussion and conclusions
21.	As I have already suggested, the climate now makes it very difficult for the discretion of an Employment Judge on costs to be overturned on appeal, and it is against that high standard that I have to judge the merits of this appeal.  The first ground of appeal live today is whether the Judge made findings without hearing evidence. The simple issue, which the Claimant contends was wrongly decided by the Judge, was this: was the application on 14 January 2010 made for the first time?

22.	In my judgement there was ample material before the Judge for her to come to that conclusion.  This was not to do with credibility because the Claimant did not say to the Judge that she had previously made an application on 4 January and it had been ignored.  There is not a trace of this in the notes of the solicitor who attended. This finding of fact cannot be disturbed.

23.	I have already given my own views in deciding the interim application for the adduction of new evidence that the material does not appear to be credible, by looking at the surrounding statements made by the Claimant in writing.  So it may well be that credibility would have become an issue before the Judge, but as I have indicated there was material upon which she could find that this was the first occasion.

24.	The next issue is whether or not it was reasonable for the Claimant to have left it so long.  That is a matter of evaluation and assessment by the Judge.  The Judge plainly decided this under rule 40(2) - the Claimant had been unreasonable.  In the light of the findings as to what the Claimant knew in the month or so prior to the PHR, the Judge was entitled to form the view that the Claimant had been unreasonable.

25.	The case seemed to have gone on practically the whole day, since there are 19 pages of notes by the solicitor.  The Claimant had ample opportunity to put forward every matter which she wished.  From the notes, she is seen herself to advance many, many points as is her husband, and the Judge was able to form a view about what it was reasonable for her to do in the conduct of these proceedings.  It is for an Employment Judge and not for a judge on appeal to decide in the circumstances of the case, whether the conduct was reasonable or not.  She was entitled to come to the conclusion that it fell below the standard of reasonable conduct.

26.	If I am wrong about that, the Judge was unarguably right (see Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812) if the decision had been made under rule 40(1).  This does not carry the condign criticism of behaving unreasonably.  It is a simple proposition that if the Claimant makes an application and it causes costs to be incurred, and it is successful, then the Judge may order costs to follow.  The Judge was unarguably right, being faced with an indication of costs of thousands of pounds and a token being sought of £500.

27.	I then turn to the second ground of appeal, which is that the Judge failed to take account of the Claimant’s ability to pay.  Notwithstanding her assertions through counsel today, I am satisfied ability to pay did not arise at the hearing.  It is a matter which the Claimant could have raised.  She knew the figure that was being sought by the Respondent.  She could have said “I can’t pay £500”.  She did not, according to the solicitor’s notes which I accept.  She does not mention it in the affidavit, which supports the redrafted Notice of Appeal.  This again is a matter which caused Ms Criddle to be sceptical.  I accept that scepticism and hold that ability to pay was not raised before the Judge.

28.	I bear in mind the Claimant was a litigant in person but she was assisted by Dr K Osonnaya, and she was familiar with adjournments and applications and so on, having already succeeded in making three.  There was no duty on Judge Jones to inquire into the ability to pay.  The cases which have been put before me do not illustrate this particular problem.  They all indicate cases where ability to pay has been a live issue before the Judge.  In this case, it was not a live issue.  I have to say that £500, as a fraction of the costs in this case, does not seem a large amount of money.

29.	The authorities to which I have been referred (above) show, for example, costs of £65,000.  One could well see why ability to pay would arise in respect of that figure.  Even if it had not been specifically relied on by a Claimant, any judge facing an application for £65,000 might well ask, “Can you pay?” but that would not be so apparent in respect of £500.  In any event, following Lemas, the Judge did not err in failing to cause questions as to the Claimant’s ability to pay. This ground of appeal must be dismissed.

Result
30.	I would very much like to thank Mr Kirby for the assistance which he has given me. The Osonnayas can be assured that he has put forward every point which could possibly be argued in this case.  I would also like to thank Ms Criddle. The application to adduce new evidence is refused and the appeal is dismissed.