Appeal No.	 EAT/782/99

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 14 July 1999

Before
HIS HONOUR JUDGE D M LEVY QC
MR R N STRAKER
MR N D WILLIS

H M PRISON SERVICE	APPELLANTS

MR S S HUSSAIN	RESPONDENT

Transcript of Proceedings

JUDGMENT

INTERLOCUTORY

Revised

	APPEARANCES

For the Appellants	MR B CARR
(of Counsel)
The Treasury Solicitor
Queen Anne's Chambers
28 Broadway
London
SW1H 9JS	
For the Respondent	MR A KORN
(of Counsel)
Lees Lloyd Whitley
Solicitors
43 Castle Street
Liverpool
L2 9TJ	

	JUDGE LEVY QC:	This is an interlocutory appeal in unusual circumstances from a decision of an Employment Tribunal Chairman in Reading made on 28th June 1999. Then as the Notice of Appeal says, he/she refused to accept the time period for presentation of a Respondent’s Notice of Appearance (and as a consequence refused to adjourn the hearing) and the complaint of the applicant, the Respondent to this Appeal, is presently listed for hearing on 15th July 1999. We draw attention to the he/she refused because in the short time since these proceedings were started the Respondent or the Appellant have made applications by letter to the Tribunal to which the Tribunal has replied that the letter had been referred a “Chairman who directs me to answer as follows”. Neither the parties nor we know whether the same Chairman has been dealing with this case throughout or the identity of the Chairman in question. We do think it would be helpful for us and the parties if Chairmen who make decisions could be identified, especially when there are a sequence of decisions made, so that the parties can learn whether the matter is in the hands of one Chairman or two or more, or may be the case.

1.	To go to the merits of the appeal. The history starts on 4th May 1999 when the Respondent made an application to an Employment Tribunal. The application was a complicated one. The Appellant, H M Prison Service Agency transferred the Respondent from employment in one prison to another, after he had worked in very difficult circumstances in the first. His complaints are that he was subject to racial discrimination under s. 4(2)(b) and (c) of the Race Discrimination Act 1976. Paragraph 10 of his IT1 requested full details of his complaint and the complaint made runs to some three pages with many paragraphs recounting many incidents.

2.	On 12th May 1999, the Appellant received a copy of the application and an extension for time for the submission of the IT3 was requested. A three-week extension was requested. On 14th May 1999 the tribunal wrote to the Appellant:

“Thank you for your letter dated 12th May 1999.
This was referred to a Chairman of the Employment Tribunals who has granted an extension to 9th of June 1999 to submit a Notice of Appearance in this case.”

It is right to say that the letter of 12th May 1999 stated:

“In view of the lack of particularisation in the Originating Application, I will write to the other side requesting Further & Better Particulars.”

There is no reason given for the cutting down of the time allotted requested by the Appellant for the Extension.

3.	On 25th May 1999 a request was made to the Respondent’s solicitors for Further and Better Particulars. On 9th June 1999 the time expired for the submission in the extended time of the IT3. On 22nd June 1999 a Notice of Hearing was sent to the parties (page 28A of the bundle) which has under paragraph 2:

“
Unless there are wholly exceptional circumstances, no application for postponement due to non-availability of witnesses or for other reasons will be entertained if it is received more than 14 days after the date of this notice. Any such application must be in writing and state the full grounds and any other unavailable dates in the six weeks following the above hearing date.
”

And in paragraph 3 and with less emphasis:

“If you consider that the hearing is likely to last more than one day, you must inform the tribunal office within 14 days after the date of this notice.”

At the top of the document itself it says “Appearance not Entered”, but nonetheless that paragraph 2 is there for attention.

4.	The next day the Appellant submitted a further request for extension of time and requested that:

“This letter be placed before a Chairman  who be asked to extend my client’s time for filing his Notice of Appearance until today. I would further request that the Chairman give the Respondent leave to amend its Notice of Appearance if necessary within 14 days of receipt of the Further & Better Particulars from the Applicant’s Solicitor.”

The solicitor apologised for any inconvenience that these requests might cause.

5.	On the same day the Appellant’s solicitors sent a fax to the Regional Secretary in these terms:

“I faxed my client’s Notice of Appearance to you earlier this afternoon with a covering letter explaining the delay in filing it. I am now in receipt of a Notice of Hearing for this matter, giving notice that the case is due to be heard on 15 July and that my client is not entitled to be represented. I would appreciate it if you would let me know as soon as possible (by phone if possible) whether the Chairman has granted my earlier application. If he has, I would like to apply for the hearing on 15 July to be adjourned. I will need more time to prepare my client’s case, which, as is clear from the lengthy Notice of Appearance, is a detailed and complex one. I expect the Applicant’s solicitor to be in a similar position.
In addition, I would estimate that this case should be listed for 5 days. 
Because of the number of witnesses I would request the Employment Tribunal to send out a listing notice before the matter is relisted.
[Signature]
PS I will send a copy of my earlier letter and the fax to the Applicant’s solicitor.”

 6.	On the same day the Respondent’s solicitors wrote to the Appellant’ solicitors:

“I apologise for the delay in responding to your Request for Further and Better Particulars. I should point out that this was not due to Mr Hussain not providing the necessary information within the time.
In relation to my response, I have not detailed the questions which you have asked, but merely provided the requisite information.
…
I look forward to receipt of the IT3 and response to the Race Relations Act Questionnaire.”

Also on that date the Appellant’s solicitors wrote to the Respondent’s solicitors sending copies of the two letters sent to the Employment Tribunal (without enclosures) asking for consent  for the application to adjourn the hearing fixed by the Tribunal and to send a copy of the fax.

7.	The next day the Respondent’s solicitors wrote to the Employment Tribunal in these terms:

“We acknowledge receipt of your notice of hearing. We have also received copies sent yesterday (23 June) by the Treasury Solicitor, including their Application for the matter to be adjourned from the 15 July hearing date.
We also wish to support the Application and would be grateful if the following additional points could be drawn to the Tribunal Chair’s attention.
At present the respondent has not entered a Notice of Appearance and it maybe that this issue needs to be addressed separately before the matter proceeds further. In any event, this is a case which will certainly require more than one day and whilst the Treasury Solicitor’s estimate of five days may be excessive at this stage, it would be prudent to consider such a period as there is inevitably going to be a number of witnesses called on both sides.
The reply to the Further and Better Particulars is now with the Respondent and we agree that they will need to undertake further investigation. At present we have not been able to finalise our witness list. We expect to call in the region of four or five witnesses, including the Applicant. Dependent on how many witnesses the Respondent call, clearly one day will be insufficient and equally, we do not know witness availability at this stage.
We respectfully request that the Tribunal adjourns this matter.”

Clearly, there is a recognition in this letter that it is not a simple case, although it says “at present the respondent has not entered a Notice of Appearance”, really the position was that the Notice of Appearance which had been sent had not been validated. A copy of that letter was sent to the Appellant’s solicitors. There was really no point taken on that letter, suggesting that there should be opposition to the extension of time being made.

8.	On 28th June the Employment Tribunal at Reading sent a further letter to the Appellant’s solicitor with a copy sent to the Respondent’s solicitors and ACAS:

“Thank you for your letter dated 24th June 1999 which was referred to a Chairman who directs me to answer as follows.
The Chairman declines to validate the Notice of Appearance. The papers were served on the respondent on 4th May 1999 and probably received on the 6th May 1999. A request for an extension of time was made and granted on the 9th June, not 16th June as requested. That represented about an extra two weeks. The respondent’s solicitor did not file its intended Notice of Appearance until 23rd June, a further week beyond the time they had requested.
The Chairman does not regard the failure, as alleged, on the part of the applicant to provide further particulars as excusing the respondent’s failure to file a Notice of Appearance within the extended time allowed by the Tribunal.”

	On the same day the Tribunal wrote a letter to the parties:

“Further to correspondence received, the Chairman instructs me to answer as follows.
The Chairman declines to grant a postponement of the hearing listed for Thursday 15th July 1999, stating that as the Notice of appearance has not been validated he sees no need for one.”[Our underlining]

9.	On 29th June 1999 the Appellant’s solicitors faxed to the Respondent’s solicitors enclosing “1. Grounds of Resistance 2. Letters from the Employment Tribunal” and asked if she could be advised by the next day whether the Respondent would suffer prejudice if the Employment Tribunal agreed to validate the Appellant’s Notice of Appearance.

10.	On 1st July the Appellant’s solicitors wrote a long reasoned letter to the Regional Secretary of the Employment Tribunal asking the Chairman to reconsider his decision not to validate the Notice of Appearance. In numbered paragraphs 3 and 4 the letter said:

“3.	The Employment Tribunal extended my time for filing my client’s Notice of Appearance until 9 June. I received a boxful of papers from my client towards the end of the first week of June. I read these and drafted a Notice of Appearance. I thought that I had sent it to my client for their approval and was and awaiting their response. I had in fact failed to do so.
I was also waiting for the other side to come back to me with a fully pleaded case, so that I could take proper instructions and be in a position to address the Applicant’s complete case when I filed my client’s Notice of Appearance.
4.	In retrospect it is clear that I should have written to the Employment Tribunal on 9 June to ask for a further extension of time. I can only apologise for not doing so, because I overlooked the date. This was partly due to pressure of work and partly because my husband was due to go into hospital for a serious operation the following week and the normal pressure of work was exaggerated as a result.”

	Paragraph 9 reads:

“9	My client would suffer great prejudice if it were not allowed to respond to the serious allegations of racial discrimination made in the Originating Application in this case. I would submit that the Applicant will suffer little or no prejudice if the Tribunal were to accede to my application and validate my client’s Notice of Appearance. As is suggested by the full response to the request for Further & Better Particulars, the Originating Application was not fully pleaded. The Applicant’s solicitor, in his letter to the Employment Tribunal, accepts that I will probably have to make further investigations in the light of it, and that it is likely that, as a result of these, I will apply to amend the Notice of Appearance. The Applicant will not be in a position to deal with my clients fully pleaded case until after these steps are taken. I would submit therefore that the Applicant’s position will not be affected by the late filing of my client’s Notice of Appearance, as my client’s case would not have been clear to him in any event until the Further & Better Particulars were received and commented on by my client.”

	Paragraph 12 reads:

“12.	 I would be grateful if my letter could be placed before a Chairman of the Tribunals to reconsider the decision to refuse to validate my client’s Notice of Appearance for the reasons set out in this letter and extend by my client’s time to file its Notice of Appearance until 23 June.”

	We have not set out all the paragraphs of this important letter but those salient to this appeal.

11.	On 6th July the Respondent’s solicitors wrote to the Employment Tribunal. The second paragraph of the letter:

“In submitting the Notice of Appearance on behalf of the Respondent [the Appellant in this appeal] out of time, the Treasury Solicitor has submitted representations on why the Tribunal should exercise its discretion in her favour. We would respond as follows.
…
In addition, it is contended that the Respondent [Appellant] should have at least been aware of the Applicant’s allegations having received paperwork and meetings being arranged with senior management figures at HMP Bullingdon. We do not believe that the Treasury Solicitor can necessarily argue that her client’s were caught cold by these allegations included in the Originating Application. They had, as far as we are concerned, been brought to management’s attention at HMP Bullingdon during the course of the Applicant’s alleged discriminatory treatment.
…
We do not accept that “pressure at work” can realistically be sustained as a material factor, in view of the overall resources of the Respondent’s [Appellant’s] representatives. We have, however, noted in the Treasury Solicitors letter to you on 1 July reference made to domestic difficulties which the Treasury Solicitor had during the time.
It is therefore, open to the Tribunal to consider whether this is a material factor which would allow it is exercise its discretion accordingly. To that extent we do not make any representations and whilst we accept that this was undoubtedly a difficult time for the Treasury Solicitor concerned it is, of course, the first time that this has been mentioned.
Whilst we do not wish to appear obstructive towards the interests of justice it is our view that the Respondent’s [Appellant’s] Notice of Appearance being out of time is such, that the Tribunal’s decision should stand.”

12.	Faced with that correspondence, the Employment Tribunal sent this letter to the parties on 7th July:

“A Chairman has considered this matter further in the light of the representations made by the parties and the earlier correspondence.
He accepts that if he refuses to validate the respondents [appellants] will be exposed to the risk of a large award of compensation with no right of appeal. If he does validate it the applicant will be faced with a fully contested hearing which as things stand at present, he will not have to face. The Rules clearly envisage that a respondent may not be able to defend himself against a claim if he does not enter a Notice of Appearance.
The respondents [appellants] sought and obtained an extension of time to file the Notice of Appearance, but did not do so within the time granted. The Chairman does not accept that the respondents [appellants] were taken entirely by surprise by the contents of the IT1 – there were internal enquiries and the applicant [respondent] had raised matters of complaint with the Governor etc.
The Chairman has considered all these factors and has decided, balancing the prejudice the parties may suffer depending on his decision, that he should not validate the Notice of Appearance.”

13.	This appeal arises from the correspondence set out.

14.	The relevant rules under the Employment Tribunals Rules of Procedure Rule 3:

“(1)	The respondent shall, within 14 days of receiving the copy of the originating application, enter an appearance to the proceedings by presenting to the Secretary a written notice of appearance-
(a)	setting out his full name and address, and if different, an address within the United Kingdom to which he requires notices and documents relating to the proceedings to be sent;
(b) 	stating whether or not he intends to resist the application; and 
(c)	if he does intend to resist it, setting out sufficient particulars to show on what grounds.
Upon receipt of a notice of appearance the Secretary shall send a copy of it to each other party.
(2)	A respondent who has not entered an appearance shall not be entitled to take any part in the proceedings except-
(a)	to apply under rule 15 for an extension of the time appointed by this rule for entering an appearance;
(b)	to make an application under rule 4(1)(a);
(c)	to make an application under rule 11(4) in respect of rule 11(1)(b);
(d)	to be called as a witness by another person;
(e)	to be sent a copy of a document or corrected entry in pursuance of rule 10(5), 10(10) or 10(11);
and in the rules which follows, the word “party” only includes such a respondent in relation to his entitlement to take such a part in the proceedings, and in relation to any such part which he takes.
(3)	A notice of appearance which 
(a) 	is presented to the Secretary after the time appointed by this rule for entering appearances, and 
(b)	sets out the reasons why the notice has been presented after that time 
shall be deemed to include an appellation under rule 15 for an extension of the time so appointed on the grounds disclosed by those reasons.”

	Under Rule 15:

“(1)	A chairman may on the application of a party or of his own motion extend the time for doing any act appointed by or under these rules (including this rule) and may do so whether or not the time so appointed has expired.
(2)	An application under paragraph (1) shall be made by presenting to the Secretary a notice of application, which shall state the title of the proceedings and shall set out the grounds of the application.
(3)	The Secretary shall give notice to each of the parties of any extension of time granted under this rule.”

15.	Counsel in this case has submitted to us a number of authorities. At this stage we will briefly identify them in date order. First, we have been referred to an unreported decision of the Employment Appeal Tribunal, in a panel headed by the then President, Browne-Wilkinson J as he then was, in Horsfield v Roberts (EAT/240/81). At page 2 of that decision it shows that a submission had been made that the approach of the industrial tribunal was that they were bound to refuse an extension of time unless … reasonable grounds for the delay had been shown. Counsel for the Appellant had submitted that the decision of Phillips J in Ryan Plant International Ltd v Price [1976] ICR 424 established that this was the wrong approach. Phillips J said this:

“I have had cited to me, and reliance is place on Atwood v Chichester [1878] Q.B.D. 722, and I accept that, as a general principle, where a party is in default, as a result of which perhaps a judgment has been given against him, and even more so when the only default is in failing to enter an appearance, he ought to be relieved from his default, if that can be done with justice to everybody concerned. One therefore has to weigh up the whole of the circumstances.”

	Further on in the decision, having looked at the statutory bar which was made for putting complaints, the judgment concluded that the Ryan judgment showed that:

“You have to look at the whole of the circumstances of the case and, so far as possible, you do not debar somebody from taking part in the proceedings if he can be allowed so to do without injustice to the other parties.”

16.	The next case in time to which we were referred is a judgment of this tribunal headed by Mummery J, later a President of the EAT, in Kwik Save Stores Ltd v Swain [1997] ICR 49. In that judgment, having drawn attention to the importance of time limits and having drawn attention to the rule, the judgment says this under the heading “The discretionary factors”:

	“The explanation for the delay which has necessitated the application for an extension is always an important factor in the exercise of the discretion. An applicant for an extension of time should explain why he has not complied with the time limits. The tribunal is entitled to take into account the nature of the explanation and to form a view about it. The tribunal may form the view that it is a case of procedural abuse, questionable tactics, even, in some cases, intentional default. In other cases it may form the view that the delay is the result of a genuine misunderstanding or an accidental or understandable oversight. In each case it is for the tribunal to decide what weight to give to this factor in the exercise of the discretion. In general, the more serious the delay, the more important it is for an applicant for an extension of time to provide a satisfactory explanation which is full, as well as honest.
	In some cases, the explanation, or lack of it, may be a decisive factor in the exercise of the discretion, but it is important to note that it is not the only factor to be considered. The process of exercising a discretion involves taking into account all relevant factors, weighing and balancing them one against the other and reaching a conclusion which is objectively justified on the grounds of reason and justice. An important part of exercising this discretion is to ask these questions: what prejudice will the applicant for an extension of time suffer if the extension is refused? What prejudice will the other party suffer if the extension is granted? If the likely prejudice to the applicant for an extension outweighs the likely prejudice to the other party, then that is a factor in favour in granting the extension of time, but it is not always decisive. There may be countervailing factors. It is this process of judgment that often renders the exercise of a discretion more difficult than the process of finding facts in dispute and applying to them a rule of law not tempered by discretion.
	It is well established that another factor to be taken into account in deciding whether to grant an extension of time is what may be called the merits factor identified by Sir Thomas Bingham MR in Costellow v. Somerset County Council [1993] 1 WLR 265, 263:
“a plaintiff should not in the ordinary way be denied an adjudication of his claim on its merits because of procedural default, unless the default causes prejudice to his opponent for which an award of costs cannot compensate.”
	Thus, if a defence is shown to have some merit in it, justice will often favour the granting of an extension of time, since otherwise there will never be a full hearing of the claim on the merits. If no extension of time is granted for entering a notice of appearance, the industrial tribunal will only hear one side of the case. It will decide it without hearing the other side. The result may be that an applicant wins a case and obtains remedies to which he would not be entitled if the other side had been heard. The respondent may be held liable for a wrong which he had not committed. This does not mean that a party has a right to an extension of time on the basis that, if he is not granted one, he will be unjustly denied a hearing. The applicant for an extension has only a reasonable expectation that the discretion relating to extensions of time will be exercised in a fair, reasonable and principled manner. That will involve some consideration of the merits of his case.”

17.	The third decision to which we were referred is an unreported decision of the present President in City Centre Restaurants (UK) Ltd t/a Garfunkels v Calheiros (EAT/1061/96), where the learned President and the panel considered the decision of Browne-Wilkinson J, to which we have referred, and said page 5H:

“We would respectfully observe that it was a decision dated 1981 at a time when it can legitimately be said, I think, that the unfair dismissal procedures were in their ‘teenage years’ if not in their ‘infancy’, whereas at this date they are of maturity. It seems to us clear that every employer, certainly of the size of Garfunkel’s, is plainly aware and must be aware and must be taken to be aware of the need for prompt responses when they have received an IT1.
	It seems to us that if one was to take prejudice as the guiding principle for the determination of the exercise of the tribunal’s discretion to extend time, it would be most unlikely that there would be any case where time would not be extended. Thus by applying the prejudice rule as the prime rule, the time limits provided by the Rules would become meaningless.
	It seems to us that the position is as follows: that where the tribunal is considering whether an extension of time should be granted or not, they should first of all satisfy themselves that a reasonable explanation has been put forward for the non-compliance with the court’s rules. Only when such explanation satisfactory to the tribunal has been given, will it be necessary to consider the question of prejudice, and in those circumstances, it is likely on the facts of a case similar to this one, that if stage two is reached the discretion will be exercised in the respondent’s favour.”

	It will noticed that the approach taken by the President is in contradiction to that taken by Mummery J in Kwik Save Stores v Swain to which he was not referred.

18.	The final case to which we were referred was Tull and others v Severin and another [1998] ICR 1037. There, a panel headed by Bell J, heard an appeal where a Notice of Appearance had not been entered in time. The headnote reads as follows:

“Held, allowing the appeal, that the very attendance of the respondents at the hearing, clearly wanting to be heard, amounted to an application for an extension of time for entering an appearance, without which they would not be able to participate as respondents in the substantive hearing, whether or not they had drafted a proposed notice of appearance and whether or not  they expressly asked for an extension of time; that, moreover, those circumstances called for the chairman of her own motion to consider extending time for presenting a notice of appearance as allowed by rule 15(1) of the Industrial Tribunals Rules of Procedure 1993; and that, balancing the prejudice which, on the facts, the respondents would suffer if they could not put their case before the industrial tribunal against the prejudice, by way of delay, to the applicants, the interests of justice demanded that the originating applications be heard in the presence of all the parties.”

19.	We have had the benefit of extended argument on behalf of both the Appellant and the Respondent by learned and experienced Counsel. We have considered all the facts and matters placed before us by each of the Counsel. We do not consider that this is a case where the Chairman can be said to have reached a perverse decision. But we do think it is one in which he has not exercised his discretion in accordance with the guidance given in by Mummery J and the panel in Kwik Save v Swain. The Chairman has not looked at the situation in the round and looking at the damage that could be done to the Appellant in a very complicated case if the matter was allowed to go to trial with only the Respondent calling evidence. We do not think that he has given any or any sufficient weight to the reasons for the delays by the Appellant’s solicitors fully and very properly and candidly put forward. We think he has given too much weight to the advantage of the Respondent if the Appellant is not allowed to take part in the action, because of the failure to put in their Notice of Appearance in the restricted extended time allowed. Every case must depend on its own particular facts, but all the facts must be looked at in the round before the discretion is exercised. 

20.	We are satisfied that if “a” Chairman had looked at all the circumstances of this case in the light of the authorities, he would not have come to the decision that the Chairman reached. In the circumstances we are of the view that the Chairman has wrongly exercised his discretion in circumstances where we should on appeal substitute our views on how the discretion should be exercised on the test set above. In our judgment this appeal must be allowed and we must validate the Notice of Appearance which we understand has been sent to the Employment Tribunal.

20.	We should say that just before lunch we announced to the parties that we would give the reasons for our decision later in the day, but that we would be allowing the appeal and asking that the Employment Tribunal at Reading should be informed of it, so that arrangements could be made for the procedural hearing tomorrow to be adjourned. We do order that that hearing should be adjourned in so far as such an order is necessary.