Appeal No.	 EAT/976/00

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 21 November 2000

Before
MR RECORDER BURKE QC
MR D NORMAN
MS H PITCHER 

DR AMS ZALZALA	APPELLANT

SHEFFIELD UNIVERSITY	RESPONDENT

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR M S PANESAR
Of Counsel
Instructed by 
Principal Litigation Officer
Commission for Racial Equality
Maybrook House (5th Floor)
40 Blackfriars Street
Manchester  M3 2EG	
For the Respondent	MS MELANIE TETHER
Of Counsel
Instructed by
Ms A Larter
Messrs Beachcroft Wansbroughs
Solicitors
241 Glossop Road
Sheffield S10 2GZ	

MR RECORDER BURKE QC

1.	This is an Appeal against the Order of the Employment Tribunal at Sheffield chaired by Mr Williams, made on 17 June 1999 and supported by Extended Reasons, that the Appellant Dr Zalzala should pay to the Respondents costs to be assessed if not agreed.  There is a debate as to whether the Order went further and ordered a specific sum to be paid, to which we shall refer later in the course of this judgment.

2.	The essential facts are as follows:  The Appellant has brought proceedings against the University of Sheffield by whom he is or was employed as a senior lecturer on the grounds of persistent race discrimination.  He was for a long time represented by well known solicitors who act for members of the Association of University Teachers, of which Trade Union Dr Zalzala is or was a member.

3.	On 12 March 1999 the Tribunal decided that the issue as to whether Dr Zalzala’s complaints, some of which go back well before 3 months prior to the originating application, were in time should be decided by the Tribunal hearing the application on its merits in full.  On that occasion Dr Zalzala was represented by Thompsons, the solicitors to whom we have referred.  The Tribunal said that 10 days would be necessary for the full hearing and ordered that the hearing should start on 1 June.  Dr Zalzala was not present on that occasion.

4.	Dr Zalzala also did not attend the Tribunal on 1 June 1999.  The Tribunal on that day struck out his claim out but adjourned to 17 June the Respondent’s application for costs, to give Dr Zalzala an opportunity to make representations.  On 17 June the Tribunal set aside the Order striking out the claim so that the claim was restored to life but made the costs, order to which we have referred.  It is that costs order which is now attacked by way of this Appeal.  Other areas of appeal are no longer relevant.

5.	Dr Zalzala, as we have said, was not present at the Tribunal hearing on 12 March.  It is not, however, suggested that he did not know at least by the end of that month that the hearing had been fixed for 1 June.  It is clear that he was, by then, told by his solicitors of the date on which the hearing was to take place.  Dr Zalzala told his solicitors that he would be out of the country at the beginning of the week of 1 June but would be available for 3 June.  That is confirmed by the fact that, on 12 April, Thompsons wrote to the Tribunal giving them that information and proposing that the case should start on 3 June.  

6.	On 5 May the Respondent’s solicitors, there having been some delay on their part in responding to the Tribunal’s question of them as to whether they would agree to the proposed adjournment, informed the Tribunal that they would not do so; and both sets of solicitors were promptly told that the hearing was to start on 1 June, by a letter of 7 May.

7.	Unhappily, on 11 May Thompsons, as appears from the letter we have seen, wrote to Dr Zalzala telling him that the hearing was not to be adjourned but also in the same letter stating, mistakenly, that it would start on 3 June.  That was obviously an error on their part.  The letter on the one hand appeared to say that there has been no change, yet on the other hand it indicated a changed date; but there is no doubt at all that, by 17 May, Dr Zalzala had learnt that the hearing was in fact intended to start on 1 June.  By this time it appears that he had arranged to be out of the country for a period from 22 May to 31 May on professional engagements.

8.	Accordingly, on 18 May he wrote to the Tribunal asking for a postponement of the full hearing, scheduled for 1 June, to another date not earlier than 15 July.  He gave various reasons in that letter.  We will not go through them all.  His absence abroad until 31 May was at the forefront, together with the fact, as he pointed out to the Tribunal, that very recently his union (indeed by a letter from the union to him on 13 May) had withdrawn their support from him and therefore he was acting on his own.

9.	Before 22 May, Dr Zalzala had not received any response from the Tribunal indicating whether his application for an adjournment was or was not going to succeed.  Thus at that stage, so far as he knew, the hearing was still to go ahead on 1 June.  He left on 22 May and went to Jordan returning to his home in Edinburgh on 31 May.

10.	When he arrived home he says that he could find no notification as to what had happened to his application for an adjournment although on 25 May the Tribunal had decided that the request for an adjournment would be refused and had sent a letter to Dr Zalzala’s previous address in Sheffield, had also faxed a copy to his number in Edinburgh and had left a telephone message on his answerphone.  His answerphone was in the office however and therefore would presumably not have been able to give him any information when he returned home on 31 May (we are not sure that we know what time of day it was that he came back).

11.	On the morning of 1 June, rather than going to the hearing in Sheffield, Dr Zalzala sent a fax to the Tribunal asking for a further adjournment.  We have not seen the contents of that fax but they are sufficiently described by what we have said.

12.	This was, in brief terms, the history which led to the orders which the Tribunal made on 11 and 17 June.

13.	We must now turn to the relevant powers of the Tribunal.  Rule 12 of Schedule 1 of the Industrial Tribunals  (Constitution and Rules of Procedure) Regulations 1993 sets out the regime so far as costs are concerned.  It provides first of all by Rule 12(1)

“Where in the opinion of Tribunal a party has in bringing or conducting the proceedings acted frivously, vexatiously, abusively, disruptively or otherwise unreasonably the Tribunal may make 

(a)	an order containing an award against that party in respect of the cost incurred by another party.”  

We need not read subparagraph (b).  If a Tribunal acting under Rule 12(1)(a) decides to make a costs order against a party in respect of the costs incurred by another party then that order must fall within one of the sub paragraphs of rule 12(3).  Rule 12(3) says:

“An order containing an award against the party (“the first party”) in respect of the costs incurred by another (“second party”) shall be – 

(a) 	where the Tribunal thinks fit an order that the first party pays to the second a specified sum not exceeding £500 

(b) 	where those parties agree on the sum to be paid by the first party to the second party in respect of those costs an order that the first party pay to the second party a specified sum being the sum so agreed or 

(c)	in any other case an order that the first party pay to the second party the whole or specified part of the costs incurred by the second party as taxed if not otherwise agreed.

The Tribunal in this case purported to be acting under Rule 12(3)(c) having decided to make a costs order under Rule 12(1)(a).

14.	Mr Panesar, who has put forward concise and well ordered submissions on behalf of the Appellant, submits that the Tribunal erred in law in making a costs order at all in this case.  He puts his argument in 3 different ways.  Firstly, he says that the Tribunal failed, in making its decision that a cost order was appropriate under Rule 12(1) on the basis that the Appellant Dr Zalzala had behaved unreasonably, to take into account the whole history and in particular in failing to take into account that the Tribunal was itself culpable in failing to decide earlier upon Dr Zalzala’s first application for an adjournment which was made in April and decided upon in May and also in failing to decide earlier upon his second application for an adjournment made on 18 May and, further in failing to consider the fact that the Appellant’s absence from the United Kingdom was prearranged and for professional purposes and not for a vacation or for other purposes of less importance and further, in failing to consider that the case papers had not reached Dr Zalzala from Thompsons before he went away.

15.	Mr Panesar further says, secondly, that the Tribunal erred in making the criticism that it did of Dr Zalzala’s conduct having regard to the history as a whole.  If there was no error in law in these respects he says that the decision looked at as a whole was perverse.

16.	Thirdly, Mr Panesar submits that the Tribunal adopted an improper procedure; he submits that the decision of the Tribunal reveals, at paragraphs 22 to 24, that before the Tribunal embarked on their decision as to whether Dr Zalzala had acted unreasonably they considered his means and decided that he had means to pay costs of the size which they contemplated as the costs thrown away by the abortive hearing on 1 June.  Mr Panesar argues that, in so doing, the Tribunal considered Dr Zalzala’s means as part of their consideration as to whether or not he had behaved unreasonably; and, he submits, the Tribunal was wrong to do so either because the means of the party who is alleged to have behaved unreasonably can never be relevant to whether or not he has behaved unreasonably or because in the circumstances of this case Mr Zalzala’s means were irrelevant to a decision as to whether or not he behaved unreasonably.

17.	Ably as these arguments were put we are not persuaded by them.  Mr Panesar accepts that, although Dr Zalzala was by his fax of 1 June asking for an adjournment beyond 3 June, as indeed he had on 18 May, he would in fact have been prepared to go on on 3 June, as he had until 17 May understood would be required.  By 17 May he knew that his union and therefore also his solicitors would not support him and he was on his own unless he found other solicitors; and he knew that he would be required, unless he obtained an adjournment, to be prepared to start the hearing and therefore was required to attend the hearing on 1 June rather than 3 June..

18.	While, in his letter of 18 May, he refers to difficulties of preparation, firstly it seems to us that in terms of preparation, if he could have been ready for 3 June, he could have been ready for 1 June.  If he did not have the necessary papers, he could and should have made arrangements to ensure that he received them wherever he was.  It would not have been impossible for the papers to have been got to him where he was in Jordan, if they were not available to him before he left the country.  We see nothing in the argument about the difficulty in getting hold of the papers.  What was fundamental was the request for an adjournment because of his absence.  As to that, the Tribunal did not provide an answer to his request before he went away.  In the absence of a positive answer, there was to be a hearing on 1 June at which he had to be present. 

19.	The burden of establishing whether or not the adjournment which Mr Zalzala sought had been granted by on him, as the Tribunal clearly thought and it is not for us to substitute our own view for theirs in an area in which they were exercising a discretion; but we would, if asked to express our view, reach the same conclusion.  It was for Dr Zalzala to discover whether or not there was going to be an adjournment; and in the absence of a positive indication that there was going to be an adjournment he had to proceed on the basis that he was going to be required to be present before the Tribunal on 1 June.

20.	The Tribunal were critical of Dr Zalzala for failing to make inquiries in relation to his adjournment request before he went abroad.  That seems to us to be an entirely apt criticism and certainly one which they were entitled to make.  They suggested that perhaps in the circumstances it was wrong for him to go abroad at all; that again is a criticism they were entitled to make, but if he had to go abroad, then it was open to him to make arrangements to ensure his return in time or to make other arrangements so that the position which arose on 1 June did not arise.

21.	There is no doubt that, in deciding as they did on the issue as to whether or not Dr Zalzala had behaved unreasonably, the Tribunal were exercising a discretion.  The authorities tell us (and we will say more about the authorities in a moment) that it was a broad discretion.  We can only interfere here in this Appeal Tribunal with that exercise of discretion, if in some way the Tribunal have reached a decision, which no reasonable Tribunal could reach or if they have taken into account some factor which was irrelevant or failed to take into account some f actor which was relevant.

22.	The first relevant factor which, it is said, the Tribunal failed to take into account is the culpability of the Tribunal, as Mr Panesar has put it, that is to say their failure earlier to resolve the 2 applications for an adjournment.  For our part we do not see that there was any culpability on the part of the Tribunal; but perhaps that does not matter; it is quite clear from the Tribunal’s decision, which deals with the history and the chronology in detail, that the Tribunal were well aware of that history and of the chronology and had taken it all into account; and we do not see any grounds on which it can satisfactorily be said that they had failed to take into account any of the factors relied upon by Mr Panesar.  For the same reasons we are not persuaded that this was a decision which was perverse.  We reject Mr Panesar’s first two argumemts.

23.	We must therefore turn, to the argument that the Tribunal took into account the means of Dr Zalzala in deciding whether or not he had acted reasonably.  We have been taken to a number of authorities which go to the question as to whether or not a Tribunal, in making a decision as to whether to make a costs order against the party, should or should not take means into account.  There is no express requirement in the rules that it should do so.  In Wiggin Halloways Limited v Jenkins [1981] IRLR 275, a decision of this Appeal Tribunal presided over by Mr Justice Browne-Wilkinson as he then was, this Appeal Tribunal said: 

“In our view the inability of the Applicant to meet any order for cost is a matter which is properly to be taken into consideration and therefore we cannot see the Tribunal erred in any way in law in exercising their discretion.  We should emphasise that it is no consequence of our decision that the mere fact that for the time being an applicant is penniless is in every case a sufficient ground for refusing an order for costs.  Each case depends upon its own circumstances and lies within the discretion of the Tribunal.”  

In Omar v Worldwide News [1998] IRLR 291, another decision of this Appeal Tribunal presided over by his Honour Judge Smith QC, the Tribunal said this at paragraph 17: 

“Mr McMillan established on authority that as a matter of practice Industrial Tribunals must look at an Applicant’s personal means to pay before making an order for costs against him as a party.”

24.	In possible contrast to those two cases, in Beynon v Scaddon [1999] IRLR 700 this Appeal Tribunal chaired by Mr Justice Lindsay, the current President, (a decision which we should interpose would not have been available as reported to the Tribunal whose decision on costs is now under appeal) took a slightly different line.  At paragraph 23 of that decision, having referred to Omar v Wiggins, the Appeal Tribunal said that the cases could not be taken as introducing any fetters on the broad jurisdiction which Rule 12 confers on the Tribunal.  It indicated that each case depends upon its own circumstances and lies within the discretion of the Tribunal; and that it was a matter for the Tribunal in each case to decide whether or not to investigate means.

25.	We are grateful that we have been taken to those authorities.  They show that the Tribunal, in its discretion, was entitled to look at Dr Zalzala’s means.  There is nothing in the authorities to support the proposition put forward by Mr Panesar that it is wrong in principle for the Tribunal to consider means before it decides the question of reasonableness.  The question of means is one which, in an ordinary case, is likely to be capable of a simple answer after a simple investigation.  And in many cases, if it is shown by such an investigation that there are no means, the Tribunal may well not go on to consider the more difficult question (as it often will be) as to whether or not the person against whom a cost order is sought but who has no means has acted unreasonably.

26.	There is, therefore, good practical sense in the Tribunal’s looking at the question of means before it looks at the question of reasonableness; but it may equally be sensible, in a different case, for a Tribunal to look at the question of reasonableness before looking at the question of means, especially if the answer to the question of reasonableness is straightforward and does not involve much investigation whereas the question of means might involve more investigation.  It seems to us that within the proper exercise of its discretion, the Tribunal are entitled to look at the one before the other, means before reasonableness or reasonableness before means, without in either case stepping outside the bounds of what they are properly entitled to do.  In this case the Tribunal looked at means before reasonableness; and we do not detect any error of law in its having done so.

27.	Mr Panesar goes on to say that, because the Tribunal in this case looked at means before reasonableness, it is necessary to see whether the Tribunal allowed their decision on reasonableness to be tainted by their view that the Appellant had means to pay the costs in issue.  He says that, if they so proceeded, they would have erred.  We are not convinced that the question of the means of the person against whom a costs order is sought can never be relevant to the question of reasonableness.  It is not difficult to think of examples, which may or may not be thought to be unusual, in which the question could be relevant.  Equally, we can see that there may be cases in which it might not be relevant.  In this case, however, there is nothing at all, in our judgment, in the decision which demonstrates that this Tribunal considered means as a factor in their decision on the reasonableness question.  Indeed, there is nothing even to indicate that they might have done.  They deal with the question of means in paragraph 23 and then proceed separately and discretely to deal with the question of reasonableness in paragraph 24, without referring back in paragraph 24 to anything that they had decided in paragraph 23.  Therefore this part of Mr Panesar’s submissions, too, must fail.
 
28.	Next Mr Panesar, on the hypothesis that the Tribunal’s decision that this was a proper case in which to exercise their discretion to make an award of costs under Rule 12(1) survives, submits that the Tribunal should not have made the order that they did under Rule 12(3)(c) as opposed to an order under Rule 12(3)(a) which Order would necessarily have been limited to a maximum of £500.  Mr Panesar makes 2 points.  Firstly he submits that the Tribunal should only go beyond the £500 limit set out in Rule 12(3)(a) in exceptional or special circumstances; and secondly, allied with that, he submits that the Tribunal gave no reasons for going beyond the £500 limit set out in Rule 12(3)(a) in this case. 

29.	We do not accept the first proposition.  The rules state that the Tribunal shall make an order under Rule 12(3)(a) for paying a specified sum not exceeding £500 where the Tribunal think fit.  If, on the facts, the Tribunal does not think it fit to make an order limited in that way, then the Tribunal has jurisdiction to go on to consider whether to make an Order under Rule 12(3)(b) (which depends upon agreement between the parties and is therefore not relevant to this case) or under 12(3)(c), the terms of which we have already described.  There is no warrant in the rules for the suggestion that the Tribunal can only go beyond Rule 12(3)(a) in a special case or where there are special circumstances, as opposed to in any case in which it does not think fit to limit the order for costs to £500 or less.

30.	As to reasons for the Tribunal’s decision to make an order under Rule 12(3)(c), in our judgment they appear adequately from paragraph 22 of the decision.  There the Tribunal made an estimate of the costs which had been thrown away as a result of the events of 1 June; that is in, our judgment, a sufficient expression of the reasons for their decision to go beyond the £500 limit, that estimate reaching a figure in excess of £2,000. 

31.	The next argument with which we must deal is Mr Panesar’s submission that in ordering as, according to one interpretation of their decision, the Tribunal did payment of costs of £2041.56, they wrongly took into account £1,500 of the Respondents’ Counsel’s brief fee because that sum was not committed or spent costs but was the Respondent’s solicitors estimate of how much extra by way of brief fee would have to be paid to Counsel in the future because of her having, in the future, to get the case up again as a result of the abortive events of the 1 June.  It is quite clear from the term of Rule 12(3)(c) that an Order for costs can only be made in respect of costs incurrred as opposed to costs that may be incurred some time in the future.

32.	However, in our judgment what the Tribunal had in mind was plainly compensation by way of costs to the Respondents for costs thrown away on 1 June; and the sum of £1,500, which was the estimate of Counsel’s costs which fell within the total figure of £2,041.56, was as we see it not a sum to be incurred in the future but a measure of what part of the brief fee which had already been incurred had been wasted by what had happened on 1 June and what part of that fee was not wasted.  The Tribunal was simply identifying what sum would have been payable and was indeed payable in respect of the hearing which had been abortive and was of no use to the parties as a result of the unreasonable behaviour of Dr Zalzala.   Accordingly this submission, too, does not persuade us that the Tribunal erred.

33.	Finally there is a further point which we have encouraged Mr Panesar to take.  It is clear from the words of Rule 12(3), and Ms Tether on behalf of the Respondent accepts, that the Tribunal cannot (in the absence of agreement) order a specific sum to be paid under Rule 12(3) beyond the £500 maximum which it can order under Rule 12(3)(a).  Under Rule 12(3)(c), the Tribunal have power only to order that one party should pay to the other the whole or a specified part of the costs incurred by the other party, to be taxed or agreed.  There is an essential distinction between the words ‘a specified sum’ which appear in Rule 12(3)(a) and the words “the whole or a specified part of the costs … as taxed if not otherwise agreed” in Rule 12(3)(c).

34.	It is agreed between Counsel that, if the Tribunal was seeking to order Dr Zalzala to pay a specified sum of £2,041.56 as the costs thrown away on 1 June, it had no jurisdiction to do so.  On the other hand, of course, the Tribunal, having properly decided that they should consider whether Dr Zalzala had means to pay the costs thrown away, were entitled to consider how much those costs were likely to be.  The issue is whether they went further than making an estimate of those costs for the purpose of considering means and actually ordered payment of a specific quantified sum.  It has to be said that the Tribunal’s language is in this respect not particularly clear.  In the decision itself, at paragraph 2, the Tribunal say:  

“The Applicant is ordered to pay the Respondent’s costs (placed at £2,041.56) to be assessed if not otherwise agreed.”

35.	In paragraph 22 of the reasons when considering how much the costs were or were likely to be, the Tribunal say:

“having added Counsel’s fees to the solicitors fees and VAT “that would give a total costs figure of £2,041.56.”

In paragraph 26, the Tribunal say: 

“We therefore make an order under the terms of Rule 12(3)(c) of the Rules with the changes that are now taking place in the Civil Courts, the order is that Dr Zalzala shall pay the Respodents costs (placed at £2,041.56) being such sum as is assessed if not otherwise agreed.”

36.	If this was an order to pay a specific sum then we must to that extent allow the Appeal and substitute an order for assessment of the costs thrown away, if those costs are not agreed.  If on the other this was simply an order for assessment, coupled with an indication as to what the Tribunal thought the right figure was or as to what it was being “placed at” by the Respondents solicitor then there is no need for us to interfere.  Our conclusion, reached not without some hesitation, is that the Industrial Tribunal, albeit not expressing itself with great clarity, intended to order an assessment and not to order payment of a specific sum.  

37.	If the Tribunal intended to order payment of a specific sum, then it would seem illogical that they should, both in the decision and in the Extended Reasons, have gone on to say that the sum should be assessed if not otherwise agreed.  It seems to us plain that they had assessment in mind and therefore were doing nothing more than ordering an assessment, which Miss Tether agrees, if our interpretation of the decision is right, must now take place (unless, of course, the parties are hereafter able to reach agreement).

38.	We have to say that it was we (or more properly I as the Chairman of this particular Tribunal today) who started this particular hare running.  By what we have just said we believe we have properly brought its run to a stop.

39.	For those reasons, this Appeal is dismissed.