Royal Courts of Justice
Strand, London, WC2A 2LL
Before :
MR JUSTICE NICOL
Between :
Kadiyali Madhava Srivatsa | Claimant |
- and - | |
Secretary of State for Health | Defendant 1 |
The Practice Surgeries Ltd | Defendant 2 |
Giles Bedloe (instructed by CJ Jones LLP) for the Claimant
Thomas Cordrey (instructed by DAC Beachcroft LLP) for the 1st Defendant
Mugni Islam-Choudhury (instructed by In-house Legal) for the 2nd Defendant
Hearing dates: 8th & 9th November 2016
Judgment Approved
Mr Justice Nicol :
The Claimant is a General Practitioner. He began working for a practice known as The Surgery in College Road, Woking in 2004. His employer at that time was Surrey Primary Health Care Trust, or the part of the PCT known as Surrey Community Health. On 31st March 2013 Primary Care Trusts were abolished and their liabilities were taken over by the Secretary of State for Health who is now the 1st Defendant (‘D1’) to this claim. There is no need to distinguish between the Secretary of State and his predecessors and so I shall refer to them all as D1. On 1st May 2011, the Practice Surgeries Ltd which is the 2nd Defendant (‘D2’) to the claim was awarded the contract by the Primary Care Trust to run the surgery and the GP service was transferred to it from the Primary Care Trust.
Disputes arose between the Claimant and his employers and, at some stage, his employment came to an end. Quite when that happened is a matter of dispute, but not one which I need to resolve.
On 3rd May 2011 the Claimant issued proceedings in the Employment Tribunal (London South) (‘the ET’). Both Defendants to the present action were named as respondents. To minimise confusion, I will continue to refer to them as the ‘Defendants’. The Claimant alleged unlawful discrimination, breach of contract, detriment for making protected disclosures constructive unfair dismissal and arrears of pay.
D1 filed a response to the claim on the form ET3 on 7th June 2011. Among the points which were raised was an allegation that the claim relating to a protected disclosure was out of time. Such a claim had to be made within 3 months and (at least) most of the acts on which the Claimant relied had occurred before then. D2 filed an ET3 on the same day. It, too, took a limitation point.
The ET claim was listed for hearing (which may have been an interlocutory or preliminary hearing) on 27th October 2011.
On 25th October 2011, solicitors for the Claimant wrote to the ET and the Defendants saying ‘Our client wishes to withdraw his claim’ and asking for the hearing which was due to take place 2 days later to be vacated.
At this time, the prevailing ET Rules of Procedure were those in Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 Schedule 1 (‘the 2004 Rules’). Rule 25 of the 2004 Rules provided,
‘25. – (1) A claimant may withdraw all or part of his claim at any time – this may be done either orally at a hearing or in writing in accordance with paragraph (2).
To withdraw a claim or part of one in writing the claimant must inform the Employment Tribunal Office of the claim or the parts of it which are to be withdrawn. Where there is more than one respondent the notification must specify against which respondents he claim is being withdrawn.
The Secretary shall inform all other parties of the withdrawal. Withdrawal takes effect on the date on which the Employment Tribunal Office (in the case of written notifications) or the tribunal (in the case of oral notification) receives notice of it and where the whole claim is withdrawn, subject to paragraph (4), proceedings are brought to an end against the relevant respondent on that date. Withdrawal does not affect proceedings as to costs, preparation time or wasted costs.
Where a claim has been withdrawn, a respondent may make an application to have the proceedings against him dismissed. Such an application must be made by the respondent in writing to the Employment Tribunal Office within 28 days of the notice of the withdrawal being sent to the respondent. If the respondent’s application is granted and the proceedings are dismissed those proceedings cannot be continued by the claimant (unless the decision to dismiss is successfully reviewed or appealed).’
On 26th October 2011 the ET acknowledged receipt of the Claimant’s solicitors’ email regarding withdrawal. It said that the claim had been withdrawn and the file had been closed. The Claimant’s solicitors were told that the file would be retained for a year and then destroyed.
On 7th November 2011, solicitors for D1 applied for the claim to be dismissed. It also indicated that it might seek a costs order against the Claimant.
On 14th November 2011 the Claimant’s solicitors responded
‘We have received a copy of the [D1]’s application for an order that the claim be dismissed and judgment be entered, which we received on 9th November.
We object to the order sought. Our client withdrew his claim upon the expectation that his employment claims would be concluded. His principle reason for doing so was the cost of pursuing his claim against 2 respondents whose pockets are very much deeper than his own. The risk of a costs order, however slight, coupled with the risk that to reach a full hearing would involve expense he simply cannot manage, caused him to withdraw. Our client was facing a barrage of technical and procedural issues.
Accordingly, our client was obliged to withdraw for economic reasons. It now appears that one of the respondents intends to pursue a costs order. If this is correct (it is not clear from their letter), then the claimant would wish to re-activate his claim rather than face a costs application.’
The 2nd Respondent (the 2nd Defendant in the present claim) objected to any reactivation of the Claimant’s claim and applied for costs.
On 15th December 2011 the ET wrote to the parties and said
‘Employment Judge Hall-Smith has considered the parties’ recent correspondence and instructs me to write as follows:
The Judge points out that the Employment Tribunal has no jurisdiction to ‘re-activate’ a claim which has been withdrawn. There is no such thing as “conditional withdrawal.”’
The present claim in the High Court began with the Claimant issuing his claim form on 18th April 2012. At that stage there was just one defendant, Surrey Community Health. The claim was for breach of contract and damages for tortious conspiracy.
D1 applied for summary judgment on the ground that the claim against it had no realistic prospect of success. It argued that, from 1st May 2011 any liability which it had had to the Claimant was transferred to The Practice Surgeries Ltd as a result of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘the TUPE point’). On 8th February 2013 Master Yoxall acceded to the application and granted summary judgment in the Defendant’s favour. On 11th October 2013 HHJ Higgins, sitting as a Deputy Judge of the High Court, allowed the Claimant’s appeal and set aside Master Yoxall’s summary judgment.
On 24th March 2014 Master Yoxall made a number of orders by consent. The Practice Surgeries Ltd was added as D2. The Secretary of State for Health was substituted as the D1. The Claimant was given permission to amend his Particulars of Claim. A timetable was set for the D1 to amend his defence (which he did on 23rd May 2014) and for D2 to file its defence.
In its defence dated 9th June 2014, D2 pleaded (amongst other things) that the Claimant was estopped from pursuing his claim against it because of the earlier ET proceedings.
On 16th September 2014 D1’s solicitors wrote to the ET drawing attention to the fact there appeared to have been no decision on its application for the Claimant’s claim in the ET to be dismissed.
On 13th October 2014 EJ Martin ordered that the ET proceedings which C had brought against D1 and D2 should be dismissed ‘following a withdrawal of the claim by the claimant’. That decision was sent to the solicitors for D1 on 21st October 2014. The Tribunal did not also send a copy to the Claimant or to D2. D1’s solicitors did send a copy of EJ Martin’s decision to the Claimant on 24th October 2014.
On 21st January 2015 D1 applied for permission to re-amend his defence to the High Court claim. The draft pleading sought to add a defence of estoppel. The application notice also sought the trial of a preliminary issue, of, among other things, whether the Claimant was estopped from bringing his claim.
On 10th February 2015 Master Yoxall granted permission to D1 to re-amend his defence. He also ordered that there should be a trial of the issue of
‘whether, pursuant to the principles of res judicata and abuse of process the Claimant is estopped from bringing his claim.’
It has been that issue which I have been trying.
Master Yoxall made further directions regarding that preliminary issue trial.
On 12th February 2015 the Claimant’s solicitors wrote to the ET asking for the decision of EJ Martin of the previous October to be reconsidered.
On 5th March 2015 EJ Martin extended time for the Claimant to apply for reconsideration of her earlier decision and revoked that earlier decision. She said,
‘The Claimant had objected to the dismissal of proceedings when he withdrew his claim in 2011. This information was not known to the judge when the Judgment was made as the Tribunal file had been closed and destroyed. This information was not made known by the Respondent when requesting a dismissal judgment.’
D1 and D2 then applied to EJ Martin to reconsider that decision of 5th March. On 30th March 2015 the Tribunal notified the parties that EJ Martin refused to reconsider her decision of 5th March.
D1 and D2 then appealed to the EAT against the decisions of EJ Martin of 5th March and 30th March 2015.
In May 2015 Master Yoxall stayed the trial of the preliminary issue until after the EAT had given its decision. The time for service of witness statements was extended until 21 days after the EAT decision was given.
Slade J heard the appeal in the EAT in January 2016 and handed down her decision on 26th February 2016. She allowed the Defendants’ appeal against EJ Martin’s decision of 5th March 2015. Revocation of the decision to dismiss the Claimant’s ET claim was set aside. Consequently, the Claimant’s ET claim remained dismissed. She also found that EJ Martin ought to have considered the Defendants’ application to reconsider the decision of 5th March, but I do not need to deal with that aspect.
Her reasons included the following:
The Employment Tribunals (Constitution and Rules Procedure) Regulations 2013 Schedule 1 (‘the 2013 Rules’) applied to proceedings after 29th July 2013. Rule 71 of the 2013 Rules required a party who made an application for reconsideration to send a copy to all the other parties. The Claimant had not sent either Defendant a copy of his application of 12th February 2015 for reconsideration of the order of 13th October 2014 dismissing the claim.
By rule 72(1) of the 2013 Rules the Tribunal should have set a time limit for the defendants to respond to the Claimant’s application for reconsideration. The ET had done this in relation to D1 but not in relation to D2.
If the Claimant’s application for reconsideration was going to be decided without a hearing, r.72(2) required the parties to be given a reasonable opportunity to make further written representations. Neither D1 nor D2 were given this opportunity.
Slade J rejected the argument by the Claimant that these were technical breaches.
Rule 71 meant that the Claimant had had 14 days to apply for reconsideration. His application had been made 111 days after the order of 13th October 2014. D1 had taken the time point. No application for an extension of time had been made and the EJ had given no reasons for extending time which was a breach of r.62 of the 2013 Rules.
I have quoted the reason given by EJ Martin for her revocation decision. Slade J. said that the Judge had been mistaken. D1’s letter to the Tribunal of 16th September 2014 had included a copy of the Claimant’s solicitors’ email of 14th November 2011 which had made clear the Claimant’s objection to dismissal.
For all of these reasons, Slade J concluded that the revocation order should be set aside and the original order dismissing the claim should stand.
Before the EAT both D1 and D2 argued that the Claimant’s ET claim had been properly dismissed and the decision of EJ Martin on 5th March 2015 to revoke the dismissal order was itself wrong. Both defendants argued that the Claimant had indeed abandoned his claims when he withdrew them and, in those circumstances, dismissal was inevitable. Mr Bedloe, on the Claimant’s behalf, in a supplementary skeleton argument of 13th January 2016 disputed the Defendants’ contentions. He argued that it would be wrong to treat the Claimant as having abandoned his claims by withdrawing the ET claim. There were economic reasons for his decision. He had faced a ‘barrage of technical and procedural issues’. The Claimant had wished to preserve the possibility of reactivating the ET claim if he had faced a costs application.
In her decision, Slade J. went on to consider whether the Claimant’s ET claim had been properly dismissed. She considered the position both on the assumption that the 2004 Rules applied (because those were the Rules in force at the time that the Claimant withdrew his claim and when D1 and D2 asked for the claim to be dismissed) and, in the alternative, on the assumption that the 2013 Rules applied (because those were the Rules at the time of EJ Martin’s decision in October 2014 when she dismissed the claim).
The 2013 Rules also allow a party to withdraw a claim, following which the claim comes to an end (see r.51 of the 2013 Rules). But the procedure thereafter is different. Instead of the initiative resting with the respondent to seek an order for dismissal, r. 52 of the 2013 Rules provides,
‘Where a claim, or part of it, has been withdrawn under rule 51, the Tribunal shall issue a judgment dismissing it (which means that the claimant may not commence a further claim against the respondent raising the same, or substantially the same, complaint) unless-
the claimant has expressed at the time of withdrawal a wish to reserve the right to bring such a further claim and the Tribunal is satisfied that there would be legitimate reason for doing so
the Tribunal believes that to issue such judgment would not be in the interests of justice’.
After quoting from the email from the Claimant’s solicitors of 14th November 2011, she said at [51],
‘In my judgment it is clear from the solicitors’ email of 14th November 2011 that at the time of withdrawal the reason given for doing so was cost. The reason the Claimant objected to dismissal of the ET proceedings and for wanting to ‘reactivate’ the claim was to seek to avoid a costs order being made in favour of [D1].’
Under r.25 of the 2004 Rules, an application for dismissal had to be made, but both D1 and D2 had done that.
Slade J. found that EJ Hall-Smith’s decision had concerned the lack of any power to ‘reactivate’ a claim after withdrawal. It had not dealt with the applications for the claim to be dismissed. Those applications therefore remained outstanding.
Slade J. quoted from the judgment of the EAT in Verdin v Harrods Ltd [2006] IRLR 339 in which HHJ Richardson had said at [39].
‘So a party who receives a notification of withdrawal of the whole proceedings, and wishes to establish once and for all that there is to be no further litigation on the same questions, may apply for dismissal. The subsequent hearing will then concentrate on the question, which Mummery LJ identified in Ako [Ako v Rothschild Asset Management Ltd [2002] EWCA Civ 236]. Is the withdrawing party intending to abandon the claim? If the withdrawing party is intending to resurrect the claim in fresh proceedings, would it be an abuse of process to allow that to occur? If the answer to either of these questions is yes, then it will be just to dismiss the proceedings. If the answer to both of these questions is no, it will be unjust to dismiss the proceedings.’
At [61] of her decision, Slade J. then said,
‘[61] The withdrawal of the claim in 2011 was unequivocal. At the time of withdrawal the Claimant did not express a wish to reserve the right to bring a further claim. Whether under the 2004 ET Rules applying the guidance in Verdin and Ako v Rothschild Asset Management [2002] IRLR 348 or under the 2013 ET Rules applying Rule 52, the only decision open to an ET considering an application for dismissal under the 2004 Rules or acting under the 2013 Rules was that the claim should be dismissed.’
Before the EAT the Claimant submitted that the ET should have given the Claimant an opportunity to make submissions as to why it was not in the interests of justice to dismiss the claim. That was particularly so because of the long interval that had elapsed since the claim had been withdrawn. He argued that it was not the function of the EAT to consider the application to dismiss the Claimant’s claim.
Slade J. rejected these arguments. She noted that there had been no appeal from the decision of EJ Martin on 13th October 2014. She went on at [65],
‘In any event if their decision were made under the 2004 ET Rules it was consistent with the guidance of the EAT in [39] of Verdin: at the time of withdrawal in accordance with the contemporaneous email of his solicitors the Claimant was intending to abandon the claim. If the decision of 13 October 2014 was taken under the 2013 ET Rules the exception to mandatory dismissal in Rule 52(a) did not apply. The Claimant contended in his solicitors’ letter to the ET of 12 February 2015 that the sole purpose of the Respondents’ application for dismissal of the claim was to frustrate his High Court claims brought in 2012. It was said that to do so would not be disposing of the ET claim “justly and fairly”. This consideration could not have been relevant to the applications to dismiss when they were made in 2011. Further the effect of the dismissal of the ET claim on that in the High Court is a matter for that court to determine.’
Since the EAT’s decision was distributed to the parties on 26th February 2016, the time for exchange of witness statements expired on 18th March 2016. The Claimant did not serve his witness statement until 19th October 2016, some 7 months late. In accordance with CPR r.32.10 if a witness statement is not served within the time specified by the court, the witness may not be called without the permission of the court. The Court can, of course, give relief against sanctions pursuant to CPR r. 3.9. There had been no application for relief against sanctions prior to the trial, but Mr Bedloe, on the Claimant’s behalf made such an application at the trial. It was opposed by the Defendants. I agreed to consider the witness statement of the Claimant de bene esse. Dr Srivatsa was called and the Defendants had the opportunity to cross examine him. I said that I would deal with Mr Bedloe’s application in the course of my judgment and I will do so later.
On D1’s behalf, Mr Cordrey’s primary case is that the Claimant is barred by issue estoppel from re-litigating in the High Court claims which rely on essentially the same factual matrix as he had relied upon in the ET proceedings when those proceedings have been dismissed. He submits that the Claimant withdrew the ET claim without any or any sufficient indication that he was doing anything other than abandoning them. Slade J. had heard argument as to whether the claims had been abandoned. Those claims stand dismissed and he is estopped from trying to re-litigate the same issues in the High Court. Since Slade J. also dealt with the discrete issue of whether withdrawal amounted to abandonment in the particular factual context, the Claimant is also debarred by estoppel from re-litigating that issue.
Mr Cordrey’s secondary case is that the Claimant’s High Court claim for breach of contract is identical to the breach of contract claim which he sought to bring in the ET. He is barred from doing so by cause of action estoppel. Mr Cordrey recognised that this way of putting his case would lead to only partial success for the Defendants because it would not reach the claim for tortious conspiracy which had not, and could not have, featured in the ET proceedings.
The third way in which Mr Cordrey puts his case was to submit that if the other two arguments fail, the Claimant should nonetheless not be allowed to proceed with his High Court claim because it would be an abuse of process in accordance with the principles in Henderson v Henderson (1843) 3 Hare 100, 115.
Mr Islam-Choudhury, for D2, adopted and supplemented the submissions of Mr Cordrey.
For the Claimant, Mr Bedloe argued that the present case was different from earlier authorities since his ET proceedings were only dismissed after the High Court claim had been issued. Furthermore, it was not right in the circumstances to regard the Claimant’s withdrawal of the ET claim as an indication that he was intending to abandon pursuit of those allegations for all purposes and in any jurisdiction. It was important that there had never been an adjudication on the merits of his claims against the defendants. He argued as well that the defendants were disputing the jurisdiction of the court, but, instead of following the procedure for raising such a challenge in CPR Part 11, they had filed unqualified acknowledgements of service. It was also significant that D1 had not relied on estoppel in either his original defence or his amended defence, but only in the re-amended defence. Accordingly the estoppel issue had not been taken at the first available opportunity and it would be wrong to allow D1 to rely on it now. D1 had not taken the estoppel point in the application for summary judgment.
I shall begin by considering Mr Cordrey’s primary argument: that the Claimant is debarred by issue estoppel from proceeding with any part of his High Court claim.
The essential principles of issue estoppel were not in dispute. They were summarised by Lord Sumption in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2014] AC 160 at [17]
‘Res judicata is a portmanteau term which is used to describe a number of different legal principles with different juridical origins. As with other such expressions, the label tends to distract attention from the contents of the bottle. The first principle is that once a cause of action has been held to exist or not exist, that outcome may not be challenged by either party in subsequent proceedings. This is “cause of action estoppel”… Fourth, there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties …. “issue estoppel” was the expression devised to describe this principle by Higgins J. in Hoystead v Federal Tax Commissioner of Taxation (1921) 29 CLR 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197-198.’
In [20] – [21] Lord Sumption considered the decision of the House of Lords in Arnold v National Westminster Bank plc [1991] 2 AC 93 and summarised the principles to be derived from it at [22] of his judgment where he said,
‘Arnold is accordingly authority for the following propositions:
Cause of action estoppel is absolute in relation to all points which had to be and were decided in order to establish the existence or non-existence of a cause of action.
Cause of action estoppel also bars the raising in subsequent proceedings of points essential to the existence or non-existence of a cause of action which were not decided because they were not raised in the earlier proceedings, if they could with reasonable diligence and should in all the circumstances have been raised.
Except in special circumstances where this would cause injustice, issue estoppel bars the raising in subsequent proceedings of points which (i) were not raised in the earlier proceedings or (ii) were raised but unsuccessfully. If the relevant point was not raised, the bar will usually be absolute if it could with reasonable diligence and should in all the circumstances have been raised.’
In [25] Lord Sumption commented that Res judicata and the power to deal with an abuse of process in accordance with Henderson v Henderson had distinct juridical bases. However, they both had ‘the common underlying purpose of limiting abusive and duplicative litigation.’ As Lord Bingham had said in Johnson v Gore-Wood and Co [2002] 2 AC 1 at 31,
‘The underlying public interest is the same: that there should be finality in litigation and that a party should not be vexed twice in the same matter.’
Issue estoppel applies whether or not the court in the first proceedings addressed the merits of the issue. In SC Finance Co Ltd v Masri and another (No.3) [1987] QB 1028 the Court said at p.1047,
‘The decision in Khan v Golecha International Ltd [1980] 1 WLR 1482 makes it clear that an order dismissing proceedings is capable of giving rise to issue estoppel even though the court making such an order has not heard argument or evidence directed to the merits.’
In that case, the party whom it was sought to estop had purported to reserve the possibility of continuing the argument on another occasion, but the Court said,
‘If a party puts forward a positive case, as the basis for asking the court to make an order which that party seeks, and then at trial, declines to proceed and accepts that the claim must be dismissed, then that party must, in our view, save in exceptional circumstances, lose the right to raise again that case against the other party in those proceedings.’
Staffordshire County Council v Barber [1996] ICR 379 followed SCF Finance in a case where the claimant had withdrawn one set of proceedings in what was then an Industrial Tribunal and then, when a more favourable interpretation of the law was given by the House of Lords, tried to issue a second set of proceedings. The Court of Appeal held that she could not, even though there had been no determination of the merits of the claim in the first proceedings.
Issue estoppel, of course, depends on there being common issues between the first and second set of proceedings. In this case, the causes of action in the High Court proceedings were not identical to the claims in the ET. Necessarily, the elements which the Claimant would have to prove in his High Court claim were not identical to those which would have been necessary to make good the ET claims. However, Mr Cordrey provided a note which showed how the factual matters on which the Claimant relied to make good his High Court causes of action were the same as those which had been pleaded in the originating process in the ET. Mr Islam-Choudhury compared the language of the two sets of claims to show how, at many points, there had been a cut and paste exercise. Mr Bedloe realistically accepted that the factual foundation of the two claims was the same. This was unsurprising since both arose out of the difficulties he says he encountered in his employment. This was a sensible concession and makes it unnecessary to compare the detail of the ET and High Court claims.
Issue estoppel, however, is dependent on the first set of proceedings having been disposed of by an order of the court (or a tribunal). In appropriate circumstances, court proceedings can be discontinued rather than dismissed. If they are dismissed, then in principle issue estoppel may be invoked if the same party seeks to rely on the same matters in new litigation against the same opponent. If they are discontinued that is not the case – see e.g. Ako v Rothschild Asset Management Ltd [2002] EWCA Civ 236 at [30] (although in the circumstances set out in CPR r.38.7 the claimant would need to obtain the permission of the court to proceed on the second claim).
Until 2004, the position in Employment Tribunals was different. There was no distinction between discontinuance and dismissal. That gave rise to problems. Those are illustrated by Sajid v Sussex Muslim Society [2001] EWCA Civ 1684. The claimant instituted ET proceedings for breach of contract, redundancy payments and unfair dismissal. An employment tribunal could consider a claim for breach of contract, but only subject to a cap of £25,000 in damages. The claimant was aware of this and put the defendant on notice that he would be making a claim in the courts for the balance. Seven months later, the claimant did issue a High Court writ. Subsequently, the claimant’s solicitors wrote to the ET and said that, since the High Court claim had now been lodged, they wished to withdraw the ET proceedings for breach of contract. The ET ordered that the breach of contract claim was ‘dismissed on withdrawal by the applicant’. Thereafter the employer included in its defence of the High Court claim a plea of issue estoppel or abuse of process. The judge struck out this part of the defence and the defendant appealed. The Court of Appeal upheld the judge’s decision. The claimant in that case had always made clear that he was contemplating proceedings in another jurisdiction because of the limited nature of what the ET could do. The order of the ET was not and could not have been intended by the parties or the tribunal to constitute a final and binding determination of Dr Sajid’s claim: its purpose was to enable his claim to be pursued and determined in a court which had the jurisdiction which the ET lacked. As Laws LJ said at [22],
‘[Dr Sajid’s] common law claim in the tribunal (being withdrawn) was, on 6th May 1999, dismissed upon the very premise and for the very reason that it should not be litigated there but in another forum.’
In Lennon v Birmingham City Council [2001] EWCA Civ 435 the claimant had begun proceedings in an Industrial Tribunal for harassment, discrimination, bullying and ‘health and safety – duty of care’. There was an internal investigation, but eventually solicitors on behalf of the claimant wrote to the Tribunal and said she wished to withdraw the application to the IT. The Tribunal then made an order ‘the application is dismissed on withdrawal by the applicant.’ Some months later the Claimant began county court proceedings for negligence and breach of contract. She relied on essentially the same facts as she had put before the IT. The claim was struck out and the claimant appealed on the basis that there had been no decision on the merits by the IT. The Court of Appeal dismissed the appeal by reference to SCF Finance and Barber. At [30] Buxton LJ said,
‘Secondly, it was argued that Barber is distinguishable from the present case because in that case, the court knew the reasons for the withdrawal of the original claim. In this case, we do not know the reasons. That is, in my judgment, an incorrect argument. The doctrine turns not on the reason why the court’s decision to dismiss the claim was consented to by the party making the claim, nor on the reason why a court made the order, but on the simple fact that the order was in fact made. It is for that reason that, in the case of issue estoppel, the court will not re-enter the merits or justice of allowing the proceedings to continue, whereas in the wider jurisdiction under Henderson v Henderson, which turns on abuse of process and not simply on a comparison of one order or another, the court may do that.’
I have already shown that Slade J. in her judgment in the EAT referred to Ako v Rothschild Asset Management Ltd. [2002] EWCA Civ 236. In that case the claimant complained to an ET of race discrimination by Rothschilds which she then alleged were her employers. About 11 days later she wrote to the Tribunal and asked for this application to be withdrawn. On 6th July 1999 the ET dismissed her application on its withdrawal. Less than a week later she issued a second application. This named Rothschilds as the first respondent and another commercial organisation as the second respondent. The claimant had understood that the second respondent was a transferee of the part of Rothschilds for which she had been working. Rothschilds applied to strike out the second claim as barred by estoppel.
Mummery LJ said at [27] that a court could have regard to the factual circumstances surrounding a consensual legal act in order to understand its meaning and effect. He noted the procedural problem under the ET Rules of procedure as they then existed and the lack of any distinction between discontinuance and dismissal. He said at [30],
‘In my judgment the reasoning in Barber and Lennon does not require that cause of action estoppel, as applied in the ordinary courts, should apply to Employment Tribunal cases where it is clear, on an examination of the surrounding circumstances, that the withdrawal of the application is in substance a discontinuance of the proceedings.’
Dyson LJ noted that Rothschilds relied on [30] of Buxton LJ’s judgment in Lennon which I have quoted above, but said it was capable of being misunderstood. Dyson LJ said at [34] and [35],
‘[34] The passage in the judgment of Buxton LJ is capable of being misunderstood. A person may withdraw a claim or (in litigation) consent to judgment for many different reasons. He may do so because he has accepted advice that his claim will fail; or because he cannot afford to continue; or because he wants to defer proceedings until some other avenue of resolving the matter has been explored; or because he has decided that he is not yet in a position to proceed; or that he ought to proceed before a different tribunal (as in Sajid) or add another party (as in the present case). In some cases the reasons will indicate that the party has decided to abandon the claim. In others not so. In relation to the question whether a dismissal following withdrawal (or a consent judgment) gives rise to a cause of action or issue estoppel, I consider that the reasons for the withdrawal are not relevant, unless they shed light on the crucial issue of whether the person withdrawing the application or consenting to judgment intended thereby to abandon his claim or cause of action.
[35] I do not believe that Buxton LJ was saying that the dismissal of an application following withdrawal gives rise to a cause of action or issue estoppel even if it is [not] clear that the applicant did not intend to abandon his claim or cause of action. No authority was cited to us for such a proposition which is both so starkly far-reaching and capable of giving rise to serious injustice.’
I have put the word ‘not’ in square brackets because Mr Bedloe argued that it was necessary to make sense of the paragraph. Mr Cordrey disagreed. I am afraid that I do, too. Without that additional word, the sentence makes sense. What is important is whether there was an intention to abandon the claim (and, if there is no such intention, whether it would be abusive to allow the same issue to be litigated in second proceedings). Dyson LJ repeated the point in his conclusion in [41] and, in his short judgment, Jonathan Parker LJ made the same points.
The 2004 Rules, as I have shown, included r.25 concerning withdrawal. Under that provision a claimant has a right to withdraw and withdrawal will bring the claim to an end. It will not automatically lead to dismissal of the claim, but, as can be seen, a respondent can (within the prescribed time) apply for dismissal. The 2004 Rules were in force when HHJ Richardson had to consider Verdin v Harrods Ltd UKEAT / 0538/05/DA. I have already set out what he said in [39] of his judgment. It is notable that he continued at [40] by saying,
‘I agree with a submission made by Mr Nicholls [counsel for Harrods], that where one party withdraws the other party will generally be entitled to have the proceedings dismissed. This is because the party who withdraws will generally have no intention of resurrecting the claim again, or if he does will generally have no good reason for doing so. There is sometimes a temptation for a litigant, as the day of battle approaches, to withdraw a claim in the hope of being better prepared on another occasion. That will be unacceptable. Tribunals will no doubt be astute to prevent withdrawal being used as an impermissible substitute for an application for an adjournment. Occasionally, however, there will be good reason for withdrawing and bringing a claim in a different way.’
It seems to me, therefore, that the first question I must address is whether the Claimant did abandon his claims when he withdrew his ET complaint. ‘Abandon’ in this context must mean give up for all purposes and in all fora.
The parties were agreed that I had to consider this issue. However, D1 and D2 submitted that, since Slade J. had decided this very question, it was not open to the Claimant to re-litigate the same issue before me. In other words, Mr Cordrey and Mr Islam-Choudhury contended that on this specific matter the Claimant was also precluded by issue estoppel from contending that he had not abandoned his claims for all purposes by withdrawing the ET claim.
Mr Bedloe submitted that the Claimant was not estopped in relation to this issue. He made three arguments:
He argued firstly, that Slade J’s comments were not necessary to the issues which she had to decide. As can be seen from my summary of her judgment, she had resolved that EJ Martin’s revocation decision (on 5th March 2015) was wrong and had to be reversed before she turned to consider whether the Claimant had abandoned his claims for all purposes.
In my judgment, this argument is unsustainable. D2’s grounds of appeal had certainly argued that, quite apart from the procedural flaws in the manner in which the revocation decision had been taken, her previous decision in October 2014 to dismiss the claim was the only one to which she could have come, precisely because the Claimant had abandoned his claims. D1’s skeleton argument for the appeal adopted this submission. D2’s skeleton argument elaborated on it, and cited Verdin and Lennon. Mr Bedloe lodged a supplementary skeleton argument dated 13th January 2016 in which he engaged with these arguments. The issue as to whether the Claimant had abandoned his claims was plainly before Slade J. Her decision that he had done so was not obiter or superfluous to her judgment.
Mr Bedloe secondly argued that all that Slade J had decided was that the Claimant had abandoned any claim in the ET (as opposed to the High Court).
However, this is unrealistic. Slade J. was well aware of the context in which these issues arose, and, in particular, that the Claimant had by then issued High Court proceedings. It is inconceivable that she was drawing the distinction for which Mr Bedloe contends. Furthermore, as I have already shown, she directed herself in accordance with the principles set out in Verdin. In that case, the claimant had also wished to withdraw part of her ET claim so that she could litigate the same matter in the High Court. It is clear that Judge Richardson was speaking of ‘abandonment’ in the wide sense of abandoning the case in whatever jurisdiction. It would make no sense for him to have looked more narrowly at whether the claimant in Verdin wished to abandon her claim only in the Employment Tribunal.
Mr Bedloe’s third argument is that, if the Claimant’s witness statement is admitted, it will mean that I have evidence which was not before Slade J. and I am therefore obliged to reconsider the issue of abandonment in light of all the evidence which is before me.
I will come later to Mr Bedloe’s application for relief against sanctions. For the purpose of considering this part of his argument, I will assume that relief is granted and time for service of the witness statement is extended. That would, indeed, mean that there was evidence before me which was not before Slade J. However, that does not take Mr Bedloe far enough. The Claimant would still be bound by issue estoppel unless there was good reason why that same material could not have been placed before the EAT (or, possibly, EJ Martin) – see Arnold v National Westminster Bank plc (above) at p.109 and Virgin Atlantic Airways Ltd (above) at [21]-[22]. There is no such evidence. Accordingly, this third reason for not treating Slade J’s decision on ‘abandonment’ as estopping the Claimant from re-litigating the same issue must also be rejected.
In summary, therefore, I agree with Mr Cordrey and Mr Islam-Choudhury on this point. I conclude the Claimant is estopped from re-litigating the question of whether his withdrawal of the ET proceedings did not constitute an abandonment of those claims for all purposes. I am bound to proceed on the basis that Slade J. determined, namely that he did so abandon his claims for all purposes.
That is an important conclusion. However, as Slade J. noted at the end of [65],
‘the effect of the dismissal of the ET claim on that in the High Court is a matter for that court to determine.’
I will, in due course, consider Mr Bedloe’s further submissions as to why the Defendants cannot rely on issue estoppel even if the Claimant did abandon the claims for all purposes at the time of withdrawing the ET claim.
I will, though, first go on to consider how I would have resolved the issue of abandonment had the Claimant not been estopped by Slade J.’s decision on this topic. In this context I must decide the question as to whether the Claimant should be allowed to adduce the evidence in his witness statement (and cross examination on it by Mr Islam-Choudhury) despite its late service.
The Court’s power to grant such relief is contained in CPR r.3.9 which says,
‘(1) On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need –
For litigation to be conducted efficiently and at proportionate costs; and
To enforce compliance with rules, practice directions and orders.
An application for relief must be supported by evidence.’
There was no evidence in support of Mr Bedloe’s application for relief and so there was no compliance with r.3.9(2). That is an irregularity which the Court can waive - see r.3.10 and the commentary in the White Book 2016 para 3.9.12. I am prepared to waive it, but the absence of evidence will not assist the Claimant in consideration of the application.
The principles to apply on such an application have been established by the Court of Appeal in the well-known cases of Mitchell v News Group Newspapers Ltd. [2014] 1 WLR 795 and in Denton v TH White Ltd [2014] 1 WLR 3296. In the latter case, the Court explained that an application should be considered in three stages, asking in turn, (i) Is the breach serious or significant? (ii) Why did the breach occur? (iii) In all the circumstances should relief be granted so as to deal justly with the application, including the matters specifically mentioned in r.3.9(1) (a) and (b)?
In this case, Mr Bedloe did not dispute that the breach was serious. The witness statement had been served about 7 ½ months late. It is right, as he also submitted, that it has not prevented the trial of the preliminary issue taking place. The time estimate for the trial was 3 days. Even with the time for argument as to whether relief should be given and the oral evidence of the Claimant (which, as I have said, I heard de bene esse) the hearing was completed in less than 2 days. The litigation was not therefore disrupted by the default. In my view, however, that cannot be determinative. Rule 3.9(1)(b) draws attention to the need to enforce compliance with rules, practice directions and orders as a separate matter to the efficient conduct of litigation. The Claimant’s breach was far from trivial, as Mr Bedloe rightly conceded. This was a serious, even if not significant, breach.
There is no evidence explaining how or why the breach occurred.
At the third stage, I must consider whether relief should be granted so as to deal justly with the application for relief. That, in turn, means I must consider the impact on the trial if relief was to be refused or granted. I have already noted that the trial could, and did, take place despite the breach and could be, and was, completed well within the time estimate. Mr Cordrey and Mr Islam-Choudhury fairly accepted that late service of the witness statement had not prejudiced them.
In his witness statement the Claimant gives what he says were his reasons for not continuing with his claim in the ET. Even if I were to grant relief from sanctions and admit this evidence, the weight to be given to it would be slight. That is because it comes some 5 years after the Claimant withdrew his ET proceedings. The contemporaneous documents are likely to provide more reliable evidence of his intentions and reasons. It also comes several months after the decision of Slade J. in the EAT which, as I have shown, found that the Claimant, by withdrawing, had intended to abandon his claims. I am examining the application for relief against sanctions in the context of the exercise of deciding how I would answer the question as to whether he had abandoned those claims on the assumption that it is open to me to address the matter again despite Slade J’s ruling. Nonetheless, the weight to be given to the Claimant’s statement is diminished because it comes after her decision. Furthermore, the intentions of a party on withdrawing an ET claim, which are not communicated to the other side at the time, deserve less significance than those which are shared. So far as the witness statement chimes with the contemporaneous correspondence, it then adds nothing. So far as it goes beyond that correspondence, it is entitled to be given only that reduced significance. This is not, therefore, a situation where admission of the evidence would be crucial to the Claimant’s prospects.
None of the parties suggested that there were other factors which were relevant to my decision. This is not a case where the Defendants relied upon the defaulting party having a history of other breaches of the rules, court orders or practice directions. Mr Bedloe did not argue that the sanction imposed by r.32.10 in this case was disproportionate.
Taking all of these factors together, and taking into account all the circumstances of the case, I do not consider that dealing with the application (or the Claimant more generally) in a just way leads to the conclusion that relief should be granted. I refuse to grant Mr Bedloe’s application for relief. Accordingly, the Claimant cannot rely on his witness statement or the consequent cross examination by Mr Islam-Choudhury.
The parties’ submissions focussed on the contemporaneous documents and particularly the Claimant’s solicitors email of 14th November 2011 which I have quoted above.
Mr Bedloe argued that the Claimant had made clear that he did object to dismissal of the proceedings. His position was therefore unlike those who had consented to dismissal. Mr Bedloe submitted that it was to be inferred that he was not abandoning his claims for all purposes, as opposed to withdrawing from the ET proceedings. In addition, the solicitors alluded to the ‘barrage of technical and procedural issues’ which the Claimant faced. That must have been a reference to the limitation points which both Defendants had taken. Again, it was to be inferred that the Claimant wished to preserve his position to pursue his claims in a forum where the same limitation obstacles would not arise. It was plain that the Claimant was concerned about the costs of proceedings which might fail for these technical or procedural reasons. When the Claimant said he wanted his ‘employment claims to be concluded’ that should be understood as meaning he wanted his ET claims to be concluded, not any other which he may choose to bring.
I am against Mr Bedloe on this matter. Even if I was free to decide the issue for myself, like Slade J., I would conclude that the Claimant had, by withdrawing from the ET proceedings, chosen to abandon his claims for all purposes.
I respectfully agree with what HHJ Richardson in [40] said in Verdin that where a Claimant withdraws an ET claim he will generally have no intention of resurrecting his claim again. It is clear from the solicitors’ email that the claimant was anxious about costs and the risks of losing the ET claim. However, as HHJ Richardson also said, those are not good reasons for refusing an order of dismissal to the other party.
I agree with Mr Cordrey that, if the Claimant had it in mind to follow withdrawal of the ET proceedings with a High Court claim, this could, and should, have been conveyed more clearly. I would hesitate to say that such a reservation must always be express. It may be possible in some circumstances to find that that intention has been conveyed implicitly. But I reject Mr Bedloe’s argument that such an inference is to be drawn from the facts of the present case.
There were limitation defences (at least to the public interest disclosure claim) which had been advanced by the Defendants in the ET. The Claimant had anticipated these in his ET1 by arguing that his complaints concerned a continuing act, or, in the alternative, asked that the ET should exercise its power to extend time (see paragraphs 15 and 28). He did not press the matter to an adjudication of the limitation issue by the tribunal. Had he done so and lost, it would have meant that the Tribunal never had jurisdiction to consider the claims and there would have been no issue estoppel to bar his proceedings in the High Court – see Nayif v The High Commission of Brunei Darussalam [2014] EWCA Civ 1521. At points in his submissions, Mr Cordrey argued that, in the absence of such a decision, the Claimant would necessarily be estopped. I am not sure the position is as stark as Mr Cordrey submitted. If the Claimant anticipated that the limitation defence to the ET proceedings might succeed, but this difficulty could be short-circuited by withdrawing the ET claim and issuing a High Court claim (where limitation periods would have been longer), his position might have been stronger but only if he made clear at the time of withdrawal that this was his intention. In my judgment, the fact that limitation defences had been raised (which might or might not succeed) is not sufficient for the inference to be drawn that the Claimant did intend to short circuit them by pursuing instead a claim in the High Court. The solicitors’ email of 14th November 2011 referred to the ‘barrage of technical and procedural issues’ which might have been understood to refer to, or include, the limitation matters. However, the solicitors did not say or imply that the Claimant’s response to these issues would be to start proceedings in the High Court instead of the ET. The overall message of the email of 14th November 2011 was that the Claimant could not afford to litigate. It was not that he was intending to litigate in another forum.
The Claimant’s Amended Particulars of Claim dated 7th April 2014 said at paragraph 27,
‘The Claimant was obliged to withdraw his claims against the 1st Defendant because he could not demonstrate that his claims were within the relevant limitation period. The Claimant’s claim against the 2nd Defendant was similarly withdrawn on the basis that the wrongdoing complained of concerned the 1st Defendant only.’
In my view this does not help the Claimant. What matters is the intention of the Claimant at the time he withdrew the ET claim. As to this, I prefer the statement of his solicitors in their email of 14th November 2011 to this statement, made 2 ½ years later. Furthermore, Mr Islam-Choudhury is entitled to say that the reasons given in this document as to why the Claimant withdrew the ET proceedings against his client was not to do with limitation.
It is true that the email of 14th November 2011 said that the Claimant objected to his claim being dismissed. However, that is not determinative. I refer again to [40] of Verdin (above). In any case, I agree with Mr Islam-Choudhury that the solicitors’ email, read as a whole, shows that the reason the Claimant objected to dismissal was because he hoped to be able to re-activate the proceedings if the Defendants persisted in their efforts to seek an order that he pay the costs of the ET proceedings. In other words, I reach the same conclusion as Slade J. at [51] of her judgment and which I have quoted above. As EJ Hall-Smith later explained, that tactic was misconceived because the Tribunal had no power to re-activate withdrawn proceedings, but, mistaken or not, I agree that that appears to be the explanation for their opposition to the claim being dismissed. They did not say that they objected to dismissal because the Claimant wished to pursue a remedy in another forum.
Mr Bedloe argued that one or more of the Defendants were precluded from relying on issue estoppel for a number of reasons:
Neither of them had objected to the Court’s jurisdiction pursuant to CPR Part 11. This was not a good argument. Issue estoppel may provide a defence – see Spencer Bower and Handley Res Judicata (4th ed para 18.07). It does not impeach the jurisdiction of the Court to decide the claim. Mr Bedloe did not pursue the argument.
D1 had not taken the estoppel point in the original defence, filed on 12th July 2012, or in the Amended Defence filed on 23rd May 2014, but only in the Re-Amended Defence of January or February 2015. Mr Bedloe is right that Spencer Bower and Handley say, at para 18.09, the estoppel should be raised in answer to the first pleading which contradicts the res judicata (in this case the Claimant’s Particulars of Claim). However, I do not accept this argument. D1 was not in a position to plead issue estoppel until the Claimant’s ET claim had been dismissed – see Khan v Heywood and Middleton Primary Care Trust [2006] EWCA Civ 1087 at [73]. That did not occur until October 2014. Had D1 tried to plead issue estoppel before then, the Claimant could have successfully applied to have the defence struck out or for summary judgment in relation to that defence. D1 applied to re-amend its defence on 21st January 2015 which was within a reasonable time of the dismissal of the ET claim. As it happens, D2’s defence of 9th June 2014 did rely on issue estoppel, but, that too, would have been vulnerable to be struck out or an adverse summary judgment prior to October 2014.
D1’s application for summary judgment did not refer to the estoppel argument. That is factually correct, but since the application for summary judgment was made in 2013, which was before the ET claim had been dismissed, the application could not have relied on issue estoppel.
A theme of many of Mr Bedloe’s submissions was that this case was unique. In all the earlier authorities where estoppel had succeeded, the earlier proceedings had been dismissed before the second proceedings began. Here the second proceedings began with the issue of the claim form in the High Court in April 2012. The ET proceedings were not dismissed until October 2014 – 2 ½ years later. While Mr Bedloe is right that in this respect the present case has no precedent, I do not see why as a matter of principle it makes a difference. The Defendants had applied promptly for the ET claim to be dismissed following its withdrawal (in accordance with the requirement in r.25 of the 2004 Rules). By the time of this trial of the preliminary issue, there had been a dismissal of the earlier proceedings. There had been a dismissal because the Claimant had abandoned his claims for all purposes at the time of withdrawal and withdrawal had already taken place when these High Court proceedings began. Issue estoppel requires that the earlier proceedings have been disposed of. No authority was cited to me for the proposition that the earlier proceedings had to have been dismissed when the second proceedings were initiated. While that will normally be the case when res judicata is invoked, it is the pursuit of the second proceedings, notwithstanding the disposal of the first which is objectionable.
In the EAT Slade J said at [60],
‘Counsel for the [Defendants] contended that if there had been no decision to dismiss the claim in 2011 such a decision was taken by EJ Martin in 2014. That decision was taken on the applications made in 2011. The applications to dismiss were made in time. There is no time limit for determining the applications. The delay in dealing with it was not the fault of the [Defendants]. The 2011 applications to dismiss were dealt with by EJ Martin in her Order of 13 October 2014 which resulted in the dismissal of the claim.’
Thus the EAT found the dismissal order to be effective notwithstanding the interval between the application and the order. It may be that the Defendants could have chased the ET for a response to their application at an earlier stage. Had they done so (and had the ET then responded by dismissing the claim, as it did relatively swiftly once D1 did chase in September 2014) it may be that some of the costs incurred in the present action could have been avoided. That may be an argument relevant to the appropriate costs orders, but it does not alter the ability of the Defendants to rely on issue estoppel.
Mr Bedloe argued that his client had been denied an adjudication on the merits of his complaints against the Defendants and this was contrary to his rights under Article 6 of the European Convention on Human Rights. Buxton LJ dealt with a similar argument in Lennon at [36]. He said,
‘Secondly, it was faintly suggested that there might be some issue arising under Article 6 of the ECHR with regard to the inability now of Mrs Lennon to pursue her claim. The answer to that is that the Convention gives a right of access to a court. That is what Mrs Lennon indeed has had in her access to the Employment Tribunal. It gives no right to a reiterated access to a series of courts, nor does it undermine the reasonable power of the authorities of states signatory to the Convention to make rules for the conduct of litigation in a fair and economic way. There is therefore no point arising under the Convention at all.’
In Nayif Elias LJ agreed with and adopted Buxton LJ’s comments. Elias did add at [39],
‘What I think the appellant can say, however, is that any application of the res judicata principle which operates so as to work injustice by denying the appellant the right to have the merits of his case determined without good cause (itself a highly fact-sensitive judgment) would be a disproportionate interference with his Article 6 right.’
I have considered in the light of all Mr Bedloe’s submissions whether the Defendants’ reliance in this case on the principle of issue estoppel would be disproportionate and I have concluded that it would not.
Conclusion
For all of these reasons, I conclude that pursuant to the principles of res judicata and specifically those of issue estoppel, the Claimant is estopped from bringing his claim.
In these circumstances it is unnecessary for me to address the other ways in which Mr Cordrey put his case.
It follows that the claim is dismissed and judgment must be entered for the Defendants.
I will invite the parties to make submissions as to the formal order which the Court should make when this judgment is handed down.