Nesbitt v Holt

LORD JUSTICE RIX: This is an application by Mr Nesbitt for permission to appeal from the judgment of Patten J given on 14 July 2006. I am uneasy about this application and uneasy about a decision either way in respect of it but, in the end, I thought it proper to resolve my uneasiness in favour of giving to Mr Nesbitt permission to appeal. I will seek to explain my thought processes in this judgment.

Mr Nesbitt, from whom I have heard this morning over the video system, whose sound I confess has not been working very well, had a claim against his employers, Dunlop, which was before the Employment Tribunal in 2003. Mr Nesbitt unfortunately had suffered from an assault back in 2000, which has caused him a brain injury of some seriousness, as I understand it, with consequential epilepsy. As a result, he went on sick leave from October 2000 at any rate until, he tells me, in February 2002 he was adjudged fit to return to work. I do not think he did return to work at that time and I think that gave rise to the dispute which he brought before the Employment Tribunal, under which he was making a claim in respect of disability discrimination, on the grounds that his employers were not making reasonable adjustments to the work that they were requiring of him to take account of his disability.

For the purposes of his claim before the Employment Tribunal, Mr Nesbitt had the assistance of the Gateshead Citizens Advice Bureau and in particular a Wilfred Holt of that bureau. Mr Holt was authorised by Mr Nesbitt to represent him at the Employment Tribunal proceedings. There came a time in August 2003 when Mr Holt had discussions with Mr Nesbitt about the settlement of his claim. It seems that Mr Holt was not confident of success and was anxious to explore with Dunlop the possibilities of a financial settlement.

Ultimately, Mr Holt made an oral settlement with Dunlop’s representatives on the following basis: that, in return for a payment to Mr Nesbitt of £9,000, Mr Nesbitt would agree to be dismissed from his employment and to settle his disability discrimination claim before the Tribunal. Pursuant to that agreement reached with Dunlop on, I think, 18 August 2003, a COT 3 form was signed, the effect of which was to terminate Mr Nesbitt’s Employment Tribunal proceedings. In due course however, there was a dispute about whether Mr Holt had been authorised by Mr Nesbitt to make that settlement. Mr Nesbitt said that he had not authorised Mr Holt in those terms and that the one thing that he was particularly anxious about was to maintain his employment.

In due course, Mr Nesbitt sought to pursue his disability discrimination claim before the Tribunal, but the Tribunal, having been informed by Dunlop of the COT 3 settlement agreement, listed a preliminary point at a pre-hearing stage to decide whether that agreement bound Mr Nesbitt. The Tribunal found, in the decision of Mr Rennie dated 21 October 2004, that the COT 3 agreement did bind Mr Nesbitt; it put it on two grounds, first of all ostensible authority, and secondly, actual authority. Mr Nesbitt represented himself at that hearing. Dunlop were represented by counsel. Mr Holt, and, I think, possibly some other witnesses appeared before the Tribunal. I think that Mr Holt appeared in answer to a witness summons. I am not sure who issued that witness summons.

It is relevant to point out that, although the Tribunal found in favour of Dunlop on the ground of ostensible authority, which was their primary case, it is also clear from Mr Rennie’s decision that he accepted Mr Holt as genuinely believing that he had been actually authorised by Mr Nesbitt to make the settlement agreement, whereas Mr Nesbitt’s evidence that he had not authorised Mr Holt was not accepted. It is perhaps also relevant to point out that on 21 August 2003, that is to say a few days after the settlement agreement was reached, which was on 18 August, Mr Nesbitt had rung up a lady at the Employment Tribunal to enquire about the forthcoming hearing. Mr Nesbitt relied upon that -- albeit the evidence about that phone call was, I think, disputed before the Tribunal -- as indicating his belief that his claim was going ahead and had not been settled.

There came a time however in early September 2003, when Mr Nesbitt received not only a signed copy of the COT 3 form -- he had previously received an unsigned copy -- but also Dunlop’s cheque for £9,000. He did not return that cheque but spent it and did not revert to the Tribunal to seek to press ahead with his claim until the middle of November 2003. Those matters are mentioned in Mr Rennie’s decision and were part of the factual background which informed it. Mr Nesbitt tells me that one reason, at any rate, why he did not return the cheque was that he was advised by a number of people that the settlement agreement was, in any event, binding on him whether he had authorised it or not. That turned out to be correct in the light of the Tribunal’s decision that there was ostensible, as well as actual, authority for the agreement.

All those proceedings however before the Tribunal were against Mr Nesbitt’s employer, Dunlop. For present purposes the proceedings which are before the court arise out of Mr Nesbitt’s claim against Gateshead Citizens Advice Bureau for negligence in making what Mr Nesbitt continues to allege was an unauthorised settlement agreement. In response to that claim against the bureau, the bureau raised two arguments by way of an attempt to strike out Mr Nesbitt’s claim summarily. One argument was that it was an abuse of process for Mr Nesbitt to seek to litigate against the bureau in the light of the Tribunal’s finding of actual authority, and that therefore his claim should be struck out for abuse. Secondly, the bureau sought to strike out the claim summarily on the basis that Mr Nesbitt had no realistic prospect of success in his claim.

Those applications went before Deputy District Judge Watson, who, on 27 January 2006, dismissed both applications. He found that there was no abuse of process, inasmuch as that the burden of proving an abuse was on the bureau, and that it could not be said that the bureau were being harassed unjustly, and that it was relevant that Mr Nesbitt had both been under a medical disability, with impaired intelligence as a result of his brain injury, and unrepresented before the Tribunal. Deputy District Judge Watson therefore balanced the public and personal interests of the parties concerned by ruling against a finding of abuse. He also dismissed the strike out application based alternatively on the allegation of no realistic prospect of success.

In the appeal by the bureau to Patten J, who dealt only with the question of abuse of process, the judge allowed the appeal and held that it was an abuse of process for Mr Nesbitt to be suing the bureau in the light of the Employment Tribunal’s decision about actual authority. He put the matter essentially this way: that prima facie the claim against the bureau was an abuse because it was a collateral attack upon the Tribunal’s decision on actual authority and that Mr Nesbitt could not justify that abuse.

It is from that judgment that Mr Nesbitt seeks permission to appeal. I should say straightaway that this is an application for a second appeal and that therefore I lack jurisdiction to grant the application unless there is an important point of principle or practice or some other compelling reason to grant permission.

It is in these circumstances that I have found myself in the difficulty which I mentioned at the outset of the judgment. On the one hand I have considerable doubts as to whether, in due course, Mr Nesbitt could sustain a claim against the bureau, on the basis that there was indeed no actual authority given to Mr Holt. I say that in the light of the Tribunal’s findings and the carefully reasoned decision of Mr Rennie, and also influenced, as I find that I am, perhaps to an extent which goes beyond that of those who have previously looked at this matter, by the fact that Mr Nesbitt retained and spent the cheque and did not revert to the Tribunal until mid-November 2003.

Nevertheless, for all those doubts, I think that I need to remind myself that not only did Deputy District Judge Watson refuse the application to strike out Mr Nesbitt’s claim on the alleged ground that it had no reasonable prospect of success but that, on appeal, Patten J did not allow the appeal by reversing the district judge on that ground, but on the ground of abuse of process.

Therefore, I think that I ought to confine myself at this stage to the abuse of process question. On that issue, I am troubled by the following matters: first of all, I am troubled by the fact that Patten J’s approach was to find a prima facie abuse and then to put upon Mr Nesbitt the burden of justifying continuation with proceedings in the light of that prima facie abuse. It seems to me that it may well be difficult to reconcile that approach with the leading judgment of Lord Bingham of Cornhill in Johnson v Gore Wood & Co. [2002] 2 App Cases 1 at paragraph 31, where Lord Bingham emphasises that the onus is on the party alleging abuse and that the crucial broad merits-based assessment which has to take place should focus upon whether, in all the circumstances, a party’s conduct is an abuse, rather than to ask whether the conduct is an abuse and then if it is to ask whether the abuse is excused or justified by special circumstances.

Secondly, I am not conscious of any decision applying Johnson v Gore Wood or the Henderson v Henderson jurisdiction in circumstances quite like these, where the first proceedings are against party A, and party B, who is the defendant in the second proceedings, which are proceedings which are said to be an abuse, was only present if at all as a witness in the first proceedings. It is perfectly true that the issue of actual authority was squarely before the Employment Tribunal in the first proceedings, even if it might be said that the Tribunal’s decision on actual authority was not the main ground of decision. It is also plain of course that the Johnson v Gore Wood abuse of process jurisdiction may arise in the absence of the formal position of res judicata or issue estoppel between the same parties.

Johnson v Gore Wood was itself a case of the same defendant being sued by different (albeit closely connected) claimants, but there was held to be no abuse. Amongst the leading authorities referred to by Lord Bingham in his speech in Johnson v Gore Wood were two relied upon by Patten J, namely Bragg v Oceanus Mutual Underwriting Association (Bermuda) Limited [1982] 2 Lloyd’s Reports 132, at 137, and Ashmore v British Coal Corporation [1990] 2 QB 338: but although both those cases recognised the abuse of process jurisdiction which reached its final current formulation in Johnson v Gore Wood, nevertheless the first was indeed a case where the same defendant was being harassed a second time in a strong context, and the second was also a case of the same defendant being sued a second time, albeit by a different claimant and in a case where the court declined to strike out.

It seems to me therefore that the judge’s decision is fit for further consideration: not only on the burden of proof question but also on the question as to whether there ever has been a case in which the abuse of process jurisdiction has been exercised against a claimant whose defendant is being sued for the first time, where the earlier proceedings relied upon were proceedings at which that defendant only appeared by way of giving evidence, in the form of Mr Holt’s evidence before the Employment Tribunal. It is right that questions of access to the court should be regarded as matters of important principle.

I am also conscious of the fact of Mr Nesbitt’s disability, even though Patten J did not seem to think that that was particularly relevant in a dispute which he considered raised a simple question of fact. However, a letter of 19 May 2006 from Dr Philippa Griffiths, a consultant clinical neuropsychologist with the Gateshead Acquired Brain Injury Team, suggests that Mr Nesbitt may well have been under some considerable difficulties and disadvantage in presenting his case before the Employment Tribunal in 2004. I am not sure whether that letter was before Patten J; it predates the hearing before him, but he does not refer to it. If it was not in front of him, Mr Nesbitt may require to make good an explanation of why it was not and why it should be placed in front of the Court of Appeal.

In all these circumstances, it seems to me that there is a realistic prospect of success on appeal and, moreover, that there is an important question of principle or some other compelling reason why an appeal should be permitted to proceed in this case. Having said that, for the reasons which I have also sought to explain earlier in this judgment, I am concerned about the ultimate merits of Mr Nesbitt’s claim against the bureau. I am also concerned therefore about the possibility that Mr Nesbitt, in pursuing this appeal may be, I do not know, running considerable risks in terms of costs. I have sought to explain this to Mr Nesbitt during our video conversation. I hope that he understands the dangers. I shall permit him to have, at public expense, a copy of the transcript of this judgment. I do not know whether he will be able to obtain legal aid or representation for his appeal but if it assists in any way, I would state that I consider that, for all his apparent abilities to express himself on paper or orally, it seems to me that Mr Nesbitt does deserve representation for his appeal in the light of his medical disability.

In sum, while expressing concern, as I do, about the ultimate merits of Mr Nesbitt’s claim, on the question of strike out for abuse of process it seems to me that Mr Nesbitt is entitled to argue his appeal. I counsel him again about the dangers of a liability in costs if he fails. It also seems to me that if this litigation can, even at this late stage, be settled then it would be worthwhile for attempts being made to see if that could be achieved.