Appeal No.	EAT/1411/01

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 14 January 2002
Judgment delivered on 19 April 2002

Before
MR COMMISSIONER HOWELL QC
MR J R CROSBY
MR S M SPRINGER MBE

MR K RATCLIFFE	APPELLANT

(1)	MR J HUSSANEY
(2)	CHESTER CITY FOOTBALL CLUB	RESPONDENTS
      (IN ADMINISTRATION)

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR J ALGAZY
(of Counsel)
Instructed By:
Mr G Tobin
Messrs George Davies
Solicitors
Fountain Court
68 Fountain Street
Manchester
M2 2FB

MR COMMISSIONER HOWELL QC:

1	This appeal is by Mr Kevin Ratcliffe, at all material times the employed Manager of the Chester City Football Club, against the decision of the Liverpool Employment Tribunal sitting on 25 July 2001, set out in Extended Reasons sent to the parties on 22 August 2001 at pages 5 to 7 of the appeal file before us.  In that decision it was held that proceedings against Mr Ratcliffe for alleged unlawful discrimination by way of victimisation of a former trainee player of the Club for which it is claimed he is liable by virtue of section 33 Race Relations Act 1976, should continue.  On his behalf it is contended that in so holding the Tribunal erred in law, since the pursuit of such proceedings against him would, in the circumstances explained below, be impossible or improper.

2	All this arises out of some not particularly edifying conduct on the part of Mr Ratcliffe on a match day in January 1997 when he racially abused the Applicant, Mr Hussaney, at that time a young trainee player. Mr Ratcliffe never denied having done so and this episode was subsequently held by the Liverpool Employment Tribunal in November 1997 to have amounted to detrimental treatment and racial discrimination against Mr Hussaney, who is of mixed race. The Club was liable for it, as Mr Ratcliffe had been in the course of his employment at the time, and he was also personally liable for unlawful conduct as the employee of the Club whose act had constituted the discrimination:  sections 32, 33 Race Relations Act 1976.  An award of £2,500 compensation was made and that part of the Tribunal’s 1997 Decision (embodied in Extended Reasons sent to the parties on 21 November 1997 at pages 25 to 29 of our present appeal file) has never been disputed.

3	What was disputed was the latter part of that decision rejecting the second aspect of Mr Hussaney’s complaints, that a decision taken and communicated to him in March, following a complaint by him and his parents in February about the racial abuse incident, to “release” him and not offer him a professional contract with the Club, amounted to victimisation contrary to section 2 of the 1976 Act.  That claim was made against both the Club and Mr Ratcliffe, who (as recorded in paragraph 10 of the judgment of Charles J referred to below on the appeal against that part of the decision) accepted in cross-examination that the decision on whether Mr Hussaney would be offered a professional contract was his at the end of the day.  The reason given by the 1997 Tribunal for dismissing that claim against both respondents was that while the decision not to offer the Applicant a contract was made in the knowledge of the complaint which had been a protected act, it had been taken “on footballing grounds” and was “untainted by racial grounds” so that the necessary causal link to constitute victimisation contrary to section 2 of the 1976 Act had been absent.

4	The 1997 Tribunal’s decision to dismiss the victimisation claim was appealed by Mr Hussaney, naming both the Club and Mr Ratcliffe as Respondents to his appeal.  The principal ground put forward for the appeal was that the Employment Tribunal had failed to set out sufficient reasons to explain their conclusion on the victimisation issues.  When the appeal eventually came before the Appeal Tribunal for a full hearing on 19 October 2000 that contention was accepted. The Appeal Tribunal’s judgment delivered by Charles J on 15 January 2001 also commented that the Employment Tribunal had in fact been addressing the issue of causation on a mistaken basis because of the state of the law at the time of the hearing: it had then been assumed that there was a need to show conscious motivation before such a claim could succeed, whereas it had subsequently been shown by the decision of the House of Lords in Nagarajan v London Regional Transport [1999] ICR 877 that this was too narrow an approach and that the relevant causal link for the purposes of section 2 of the 1976 Act may be established whether or not those responsible are guilty of conscious racial motivation or an intention to victimise.  As regards the substance of the Tribunal’s decision on victimisation, there can thus be no doubt that the Appeal Tribunal has held it erroneous in law, and so far as any proceedings between Mr Hussaney and Mr Ratcliffe are concerned, has set it aside.  The clear judgment of the Appeal Tribunal, long since conclusive between them since it has not been taken to appeal, was expressed in its concluding paragraphs as follows:

“35	 For the reasons given in our judgment in respect of the dismissal of the Appellant’s claim for discrimination by way of victimisation the Employment Tribunal have erred in law by failing to provide proper and adequate reasons for their decision.
36	Accordingly we allow the appeal and remit the Appellant’s claim for discrimination by way of victimisation against the second Respondent based on the failure of the first Respondent to offer the Appellant a professional contract to a differently constituted Employment Tribunal.  
37	As we see it the only live issue on that claim relates to causation but in our judgment the appropriate course for us to adopt is to remit the whole claim and thus every aspect of it to a differently constituted Employment Tribunal.”

5	In our judgment that makes it explicit, but even if not it is necessarily implicit, that so far as the remitted proceedings between Mr Hussaney and Mr Ratcliffe are concerned the findings and conclusions of the 1997 Employment Tribunal on unlawful victimisation (including those relating to the alleged unlawfulness of the failure of the Club to offer Mr Hussaney a professional contract, by virtue of the acts of Mr Ratcliffe) have been set aside. and cannot be relied on, since they relate to the very issues the Appeal Tribunal has directed to be remitted to the fresh Tribunal for rehearing and redetermination.  

6	Nevertheless, Mr Ratcliffe and his advisers seek by these proceedings effectively to prevent any such redetermination, in what they acknowledge to be the exceptional circumstances of this case.  They do so by pointing to the fact that as recorded in the judgment of Charles J of 15 January 2001 and the Employment Tribunal’s Extended Reasons of 22 August 2001, the appeal proceedings relating to the earlier Tribunal’s decision on victimisation were, so far as the Club was concerned, stayed because it had in the meantime been put into administration on 27 October 1998.  In the event they were never pursued against it, because of the provisions of the Insolvency Act 1986 inhibiting the continuation of proceedings against companies in administration, and no doubt because the view was taken that there would have been little practical point in doing so.  Reliance is then placed on the terms of section 33 Race Relations Act 1976 which must be the basis for establishing any liability on the part of Mr Ratcliffe for the victimisation alleged, providing so far as material as follows:

“33 Aiding unlawful acts
(1)	A person who knowingly aids another person to do an act made unlawful by this Act shall be treated for the purposes of this Act as himself doing an unlawful act of the like description.
(2)	For the purposes of subsection (1) an employee … for whose act the employer … is liable under section 32 … shall be deemed to aid the doing of the act by the employer … .”

Consequently, it is suggested, the Appeal Tribunal has unwittingly directed an impossibility.  The only possible basis of liability on the part of Mr Ratcliffe depends on there having been an unlawful act by his employer, and how can that be so when so far as the Club is concerned the 1997 Tribunal’s finding of no unlawful victimisation still stands, the appeal proceedings against that finding never having been pursued to a conclusion against it?  Therefore it was submitted to the Employment Tribunal by way of preliminary issue on 25 July 2001 that the only course for it was to discontinue all proceedings on the rehearing as regards Mr Ratcliffe, except for the formal purpose of declaring that he could not be made liable personally for victimisation in the circumstances.  The Tribunal rejected that argument and it is contended on the present appeal before us that they were wrong in law to do so.  

7	Mr Algazy who appeared for Mr Ratcliffe on the appeal, sought to develop that line of reasoning in two ways.  First he said that Mr Hussaney would at any rehearing of the victimisation and causation issues in accordance with the Appeal Tribunal’s directions be precluded by the doctrine of estoppel per rem judicatam from disputing the Tribunal’s earlier findings of fact and conclusions in favour of the Club, and thus Mr Ratcliffe, on these issues since those findings so far as the Club was concerned had been reached in proceedings to which Mr Hussaney was a party and had not been set aside, so that he remained bound by them.  Secondly Mr Algazy submitted that even if that were not so, it would amount to an abuse of process to seek to persuade the Tribunal to reach findings inconsistent with those of the 1997 Tribunal or for it to do so, since this would infringe a general principle of public policy against what was referred to by Lord Diplock in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 541 as abuse of process by means of:

“... the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.”

8	In our judgment those arguments are not well-founded, and the Tribunal were right to reject the attempt to forestall the rehearing expressly directed by the Appeal Tribunal.  In the first place the Tribunal were in our judgment plainly right to reject the argument based on the doctrine of estoppel per rem judicatam.  We agree with them that it can have no application in this context to prevent the rehearing and redetermination of all material issues between Mr Hussaney and Mr Ratcliffe relevant to whether there was unlawful discrimination by way of victimisation of Mr Hussaney or not.  If anything, the doctrine of estoppel per rem judicatam appears to us to work in the opposite way to that argued on behalf of Mr Ratcliffe.  As regards any proceedings between Mr Hussaney and him, there is a binding judgment of the Appeal Tribunal that the decision and findings of 21 November 1997 on the issues relevant to victimisation were erroneous in law and have been set aside.  It is thus Mr Ratcliffe who is precluded by the binding effect of that judgment from asserting the contrary, or from relying on the earlier Tribunal’s findings in support of his own case.  Secondly it cannot in our judgment possibly be an abuse of process for the parties and the Employment Tribunal to comply with the express directions of the Appeal Tribunal that there is to be a rehearing and redetermination of all relevant issues in the case of victimisation between the two remaining effective parties to the proceedings.  Lord Diplock’s reference to it being an abuse of process for a party to initiate a fresh set of proceedings for the purpose of mounting a “collateral attack” on a subsisting final decision on the same issues is plainly inapplicable to such circumstances as these.

9	Our conclusion is that the continuing stay of the earlier appeal as against the Club in administration, for reasons which are entirely procedural and have nothing to do with the substance or merits of the legal issues determined by the Appeal Tribunal on 15 January 2001, does not in any way preclude the fresh Tribunal rehearing and reconsidering all material questions to the issues of unlawful victimisation remitted to them for that express purpose.  These must include whether by Mr Ratcliffe’s actions in the course of his employment the Club was made to commit an unlawful act of victimisation by section 32(1) Race Relations Act 1976.  If established that is sufficient to give rise to him being treated as having done an unlawful act by virtue of section 33(1) even though the result of the further proceedings to decide that issue may not be to create any enforceable liability against the Club itself or its assets as it is not an effective party to them.  The case of SFM v Perera (unreported, EAT/0542/00 3 May 2001) on which reliance was placed does not in our judgment assist the Appellant since as was pointed out in that case (unlike the present) an essential element in the agency needed to establish liability via section 32 at all was lacking.

10	For those reasons, this appeal is dismissed.