Lord Justice Simon Brown:
There are before us two applications, referred to the full court by
Mummery LJ by orders made respectively on 7 May 2003 and 1 August
2003, for permission to appeal against two decisions of the EAT presided
over by His Honour Judge Ansell ("the Ansell EAT"), respectively a
decision of 17 March 2003 dismissing the appellant's appeal against the
Employment Tribunal's refusal to order a review of an earlier Employment
Tribunal decision, and a decision of 30 May 2003 ordering the appellant to
pay the respondent's costs in the assessed sum of £3,158.50.
It is impossible to understand these applications save in the context of the
long and complex history of this litigation and so I turn at once to that,
albeit shortening and simplifying it wherever possible. For convenience I
shall refer to the appellant as H., to the respondent as Mr T., and to each
of the Employment Tribunals and EATs which at various times were seised
of this litigation by linking it with the name of whoever was chairing or
presiding over it (as above, with regard to the Ansell EAT).
From 27 February 1990 until 26 February 1998 when he resigned, Mr T.
was employed by H. as its in-house group solicitor, initially in London but
from October 1997 in Madrid.
On 2 March 1998 Mr T. filed a complaint in Form IT1 alleging that H. had
unfairly dismissed him, a complaint amended on 14 April 1998 to include
also a claim for wrongful dismissal. His complaint in a nutshell was that H.
had required him to act improperly, indeed unlawfully, thereby repudiating
his contract of employment, his resignation in response amounting in law
to a constructive dismissal giving rise to both claims.
On 20 March 1998 H. gave Notice of Appearance in Form IT3, first,
contending that the Tribunal had no jurisdiction to hear Mr T.'s unfair
dismissal claim since he ordinarily worked for it outside Great Britain (see
s196(2) of the Employment Rights Act 1996), and, secondly, without
prejudice to its jurisdictional objection, disputing his claim to have
been instructed to carry out unlawful acts. On 28 April 1998, following
Mr T.'s amendment to his complaint to add a common law claim for
wrongful dismissal, H. amended its Notice of Appearance to raise a wider
jurisdictional objection (which eventually crystallised as an objection
pursuant to Article 18 of the Brussels Convention).
Meantime, on 27 March 1998, the chairman of the Employment Tribunal
had directed that the issue of jurisdiction should be the subject of a
preliminary hearing. That hearing took place on 26 June 1998 before an
Employment Tribunal chaired by Mr Roose ("the Roose tribunal"). Before
the main hearing began, however, Mr Roose volunteered certain remarks
with regard to H.'s conduct in other unrelated cases and this caused
counsel then appearing for H. to apply on the grounds of apparent bias
for the case to be heard by a differently constituted tribunal in a different
region. Upon the Tribunal's refusal of that application, counsel and H.
withdrew from the hearing which then proceeded in its absence.
On 10 September 1998 the Roose Tribunal promulgated their decision by
which they found for Mr T. on the issue of jurisdiction. H. promptly then
sought to appeal that decision both on the ground of bias and with regard
to its correctness.
In the light of that pending appeal, the Employment Tribunal on 12
October 1998 refused to list Mr T.'s substantive claims for unfair and
wrongful dismissal. Mr T., however, successfully appealed against that
refusal to an EAT presided over by Morison J (then President) which on 23
March 1999 directed that Mr T.'s substantive complaints be heard (albeit,
at H.'s request, at another venue, London Stratford) and, moreover,
encouraged the Employment Tribunal to give them "an early hearing
date".
Amongst H.'s arguments for not proceeding with the substantive claims
had been the submission that H. "will be prejudiced because [it] will then
have submitted to the jurisdiction of the Employment Tribunal. Reference
was made to Article 18 in that connection". The Morison EAT's response to
that submission was:
"In relation to the prejudice which the employers say [it] will suffer if
[it] participate[s], we should just simply say that that does not seem to
us to be a sustainable proposition, having regard to the decision of the
Employment Tribunal on the jurisdiction issue."
The Morison EAT refused leave to appeal and ordered that any application
for leave would not operate to stay the merits hearing without a further
express order of the Court of Appeal.
H. then sought permission to appeal to this court against the Morison
EAT's directions ruling, an application which Mummery LJ on 21 May 1999
rejected on the papers in these terms:
"This appeal has no reasonable prospect of success. The ET Chairman
was plainly wrong in exercising his discretion to postpone the hearing of
Mr T.'s case on its merits until after the determination by the EAT of the
appeals on questions of jurisdiction and bias. As the ET held that it has
jurisdiction it should proceed to determine the case and not await the
outcome of the EAT appeal against the jurisdiction decision."
In the result, just three days later, on 24 May 1999, Mr T.'s substantive
complaint came on for hearing before the Employment Tribunal at
Stratford chaired by Mr Ryan ("the Ryan tribunal"). H. appeared by
counsel but only to apply for the postponement of the hearing. Its
argument for such postponement was essentially the same as that
already advanced to, and rejected by, the Morison EAT. The argument was
recorded by the Ryan tribunal in paragraph 11 of its extended reasons
for refusing the application as being: "[it does] not wish to submit to the
jurisdiction because of the problem of Article 18 which says that if [it
enters] into the arena and deal with the matters substantively [it is] taken
to have submitted to the jurisdiction".
Counsel having failed in that argument and withdrawn, the hearing then
proceeded in H.'s absence. The ET heard Mr T.'s evidence and, having
itself questioned him, upheld his claims of both unfair and wrongful
dismissal. Paragraphs 8 and 9 of the Ryan tribunal's extended reasons
read as follows:
"8. We found that [Mr T.] was entitled to resign from that position
by virtue of the fundamental breach of his contract of employment
committed by [H.], by which [it] repudiated his contract. We found that
the breach was so serious that he was entitled to resign without notice.
9. A number of matters gave rise to that breach. In February 1998, [Mr
T.] was specifically instructed by [H.] to find ways of avoiding payment
over to the Inland Revenue of sums representing PAYE deducted tax
and National Insurance which [H.] had withheld from the wages of
employees in this country. He was instructed to claim a set off and
to counterclaim, as against those sums, from monies allegedly owed
to [H.] by HM Customs & Excise in respect of VAT. He was instructed
to seek injunctions in the High Court enjoining the Commissioners of
Inland Revenue from taking steps to enforce payment of such arrears of
PAYE and contributions to National Insurance. [Mr T.] was given those
instructions notwithstanding that [H.] knew, because he had so advised
them, that there were no legitimate claims that could be made. Even if
some such claim could be mounted, asking [Mr T.] to take such draconian
steps against the Commissioners of Inland Revenue would result in him
taking steps that were bound to fail. They might well also have exposed
him personally to applications for wasted costs, if not to proceedings for
professional misconduct before the Law Society.
The Ryan tribunal awarded Mr T. £24,036 in respect of his wrongful
dismissal claim and a further £12,980 in respect of his unfair dismissal.
His losses were in fact considerably higher, but there was then in force a
statutory cap of £11,300 in respect of the compensatory award.
H. then applied for permission to appeal to the EAT against the Ryan
tribunal's refusal to adjourn the hearing before them, an application which
the EAT presided over by His Honour Judge Levy QC refused on 15 July
1999. The Levy EAT's decision, it is now conceded, was plainly correct: in
the light of the Morison EAT's directions ruling (from which permission to
appeal had been refused) the Ryan tribunal had had no alternative but to
proceed with the merits hearing listed before it.
On 21 June 1999, I may note, H. had withdrawn its renewed application
to this court following Mummery LJ's refusal of permission to appeal
against the Morison EAT's decision.
All this time, of course, the appeal against the Roose tribunal's decision
on jurisdiction had remained outstanding. And that, indeed, continued
to be so up until 6 April 2001 when this Court finally allowed H.'s appeal
against the intermediate decision of the EAT presided over by Lindsay J
(then President) on 2 November 1999 rejecting H.'s appeal against the
Roose tribunal's decision on the grounds of bias.
Upon judgment in its favour being handed down on 6 April 2001, H.
invited the Court of Appeal to order not merely a rehearing of the
jurisdictional issues but also, were those issues once more to be decided
against it, a rehearing of the substantive merits of Mr T.'s complaint. It is
instructive to note the following passages in the argument:
"[Counsel for H.]: [I]f it is held that there is jurisdiction … there will then
need to be a rehearing on the merits because the only hearing on the
merits so far is a hearing in which H. has not taken part.
Lord Justice Pill: That is not as obvious to me as it appears to be to you.
[Counsel for H.]: Absent a proper finding on the issue of jurisdiction, it is
difficult to see how the Tribunal could properly have assumed jurisdiction
and gone on to resolve those claims on the merits.
Lord Justice Pill: I do not have that difficulty."
Lord Justice Pill then asked how the court could direct that what on the
face of it was a properly made award subject to jurisdiction be set aside if
jurisdiction were thereafter decided against H..
"[Counsel for H.]: Because it is an inevitable consequence.
Lord Justice Pill: You will have to argue that elsewhere if and when that
arises …. We are against you on that point."
Following a hearing on 16 August 2001 the Employment Tribunal (chaired
by Mr Pritchard-Witts) decided, for the extended reasons given on 30
October 2001, that it had jurisdiction to hear Mr T.'s claims both for unfair
dismissal and wrongful dismissal, a decision which H. never thereafter
sought to appeal. No more need be said of the Pritchard-Witts tribunal's
decision save only that it mistakenly recorded that: "It is agreed between
the parties that all other matters have been determined and are res
judicata . No further adjudication upon the merits as decided on 25 May
1999 is required".
Following the decision of the Pritchard-Witts' tribunal, H. sought a review
of the Ryan tribunal's substantive ruling on the merits on the ground
that it had "unjustly been shut out from contesting … the merits of the
claim" (see H.'s solicitor's letter of 14 February 2002) by the refusal
to postpone that hearing until the issue of jurisdiction had finally been
resolved.
On 29 April 2002 Mr Lamb, the Regional Chairman of the Employment
Tribunal, rejected that application. The core of his letter reads:
"In my opinion, once it was decided by the [Morison EAT] that the merits
hearing should proceed, and then after the event it was decided [by the
Levy EAT] that that had indeed been the right course, there is no room
left for the argument that it was not a just course.
All that has happened since then is that the decision on jurisdiction has
been reopened and then re-determined, against [H.], and they are now
essentially in the same position in which they found themselves at the
time of the hearing before the Ryan tribunal, save that the criticisms of
the Roose tribunal have been fully explored and ruled upon.
The essence of the position is, in my opinion, that once the [Morison
EAT] had, prior to the Ryan tribunal hearing, determined that it was
fair and just to proceed to a hearing on the merits, notwithstanding
a consideration of the Article 18 argument, the respondents were
entitled to rely upon that determination and contest the merits hearing.
Alternatively, once the Ryan tribunal refused the renewed application for
a postponement, the respondents were not compelled to be absent from
that hearing, having made it perfectly clear what was [its] position.
Therefore, although [H.] were absent, they were deliberately absent, and
I do not see that ground for review could possibly be upheld."
H. then appealed against Mr Lamb's decision and on 8 October 2002
the EAT, presided over by His Honour Judge Burke QC, at an ex parte
preliminary hearing made an order allowing that appeal to proceed to a
full hearing.
Thus it was that H.'s appeal against the refusal to grant a review of the
Ryan tribunal's merits decision came before the Ansell EAT for hearing on
25 February 2003 with the result indicated at the outset of this judgment.
In its decision dated 17 March 2003 the Ansell EAT quoted from Mr
Lamb's letter, as I have done above, and noted: "The question we now
ask ourselves is whether that Decision was wrong in law". The Ansell
EAT then set out the terms of Article 18 of the Brussels Convention and
considered in particular the decision of the ECJ in Elefanten Schuh GmbH
-v- Pierre Jacqmain [1981] ECR 171 before concluding:
"16 For [H.], Mr Pitt-Payne concedes that the Elefanten decision gives no
guidance as to whether a defendant, having properly raised the issue of
jurisdiction at the outset, can, therefore, safely take part in proceedings
not only by filing a merits defence, but proceeding to the stage of actually
taking part in a full hearing, as [it was] required to do in this case. He
refers to the position as "uncharted waters", in that until the time when
the jurisdiction issue had finally been determined, there was always a risk
that even if the jurisdiction issues have to be resolved in [H.'s] favour,
an argument could then be mounted against [it] that they had submitted
to the jurisdiction for the purposes of Article 18. We cannot agree with
that submission. We are of the view that all [H.] were required to do
to protect [itself] following the decision in Elefanten was to raise the
issue of jurisdiction at or before filing a merits defence which is what [it]
did. Had [it] taken further steps to deal with the merits other than with
the guidance or approval of the Court, then conceivably, an issue might
have been raised as to whether [it] had submitted to the jurisdiction.
However, that was not the position in this case. A Tribunal had ruled
that there was jurisdiction, and at the time of the merits hearing, whilst
there was an appeal outstanding against that decision, that was still the
effective Tribunal Decision. Further, [the Morison EAT], having considered
the Article 18 submission, had ruled that the merits hearing should
go ahead. The only possible inference from that decision was that this
Court considered that [H.] could safely attend that hearing without
compromising their position. The view of the EAT was confirmed by the
Court of Appeal, certainly as far as the single Judge was concerned.
Further, even accepting [H.'s] concerns re Article 18, there is no reason
why [it] should not have taken part in a merits hearing relating to unfair
dismissal. The position was again confirmed when Judge Levy refused
leave to appeal. We further note that [H.] did not avail themselves of
the opportunity to challenge the refusal of Lord Justice Mummery to
grant leave by taking the matter to a full Court hearing, nor did [it] seek
to appeal the refusal of Judge Levy. We also remind ourselves that the
Appellant did in fact take a further step in the proceedings before Mr
Justice Morison by seeking a change of venue for the merits hearing,
and finally we remind ourselves of the substantial delay in this case,
and particularly the unexplained delay in seeking a review after the
promulgation of the Decision in October 2001.
…
18 The Regional Chairman in his decision, carefully reviewed matters
relating to the history of this case, and quite properly highlighted the
decision of this Court given by Mr Justice Morison subsequently confirmed
by the Court of Appeal. We can find no error on the part of the Regional
Chairman in his approach and we would accordingly dismiss this appeal."
That is the first decision now sought to be appealed to this court. (I shall
return later to the Ansell EAT's second decision as to costs.) On what
basis does H. seek to challenge it? In what respect does it contend that it
is erroneous in point of law?
In a skilful and resourceful argument Mr de la Mare first attacks a number
of the secondary points made by the Ansell EAT against H. in paragraph
16 of its decision. He says that no-one had ever suggested the possibility
of a merits hearing relating only to the unfair dismissal claim until Judge
Ansell himself did so at the appeal hearing, and in any event he submits
that it would not have been possible to separate out the two claims so as
to avoid the risk of being found to have submitted to jurisdiction. He says
that there was no "opportunity to challenge the refusal of Lord Justice
Mummery to grant leave by taking the matter to a full court hearing" (as
the EAT suggested) because, within three days of that refusal, the Ryan
tribunal had already concluded their hearing by when it was already
too late to appeal against an order refusing to postpone it. By the same
token, he submits, there could have been no successful appeal from the
Levy EAT decision. Counsel further submits that H.'s successful attempt
to persuade the Morison EAT to change the venue of the merits hearing
could not itself conceivably have constituted a submission to jurisdiction
such as in any event to belie or invalidate H.'s concern not to prejudice
its jurisdictional objection. Finally as to these subsidiary matters, counsel
explains the delay in seeking a review of the merits decision following the
Pritchard-Witts tribunal's final ruling on jurisdiction by reference to the
need to correct the misunderstanding as to the merits being res judicata
(see paragraph 18 above).
Even, however, were we to put all these secondary considerations entirely
aside, we are left with the central objection to H.'s review application,
the objection which was clearly at the heart of both Mr Lamb's and the
Ansell EAT's decisions: H.'s difficulty in justifying its decision to absent
itself from the Ryan tribunal's merits hearing. Unless Mr de la Mare
can persuade us that H. could realistically have regarded itself as at
risk of being found to have submitted to the EAT's jurisdiction so as to
compromise its outstanding appeal on that issue, he cannot sustain
the challenge to Mr Lamb's and the EAT's decision in point of law. As
he himself put it at the outset of the hearing before us: the essential
question for this court is whether or not H. had a good reason for not
attending the hearing. Was there, then, any real risk of H. being found to
have submitted to the EAT's jurisdiction if, in the particular circumstances
then obtaining, it had remained at the Ryan tribunal to contest the merits
of Mr T.'s claims? Counsel contends there was and that Mr Pitt-Payne had
been right in submitting to the EAT that these are "uncharted waters".
The starting point for the argument is, of course, Article 18 itself which
provides:
"Apart from jurisdiction derived from other provisions of this Convention,
a court of the Contracting State before whom a defendant enters an
appearance shall have jurisdiction. This rule shall not apply where
appearance was entered solely to contest the jurisdiction …."
The effect of that provision and in particular what is meant by
"appearance [ being] entered solely to contest the jurisdiction" was
considered by the ECJ in the Elefanten case. The headnote to the report of
that decision reads:
"Article 18 … must be interpreted as meaning that the rule on jurisdiction
which that provision lays down does not apply where the defendant not
only contests the court's jurisdiction but also makes submissions on the
substance of the action, provided that if the challenge to jurisdiction is
not preliminary to any defence as to the substance it does not occur after
the making of the submissions which under national procedural law are
considered to be the first defence addressed to the court seised."
I need cite a few lines only from the court's judgment on the point:
"15. However, the challenge to jurisdiction may have the result attributed
to it by Article 18 only if the plaintiff and the court seised of the matter
are able to ascertain from the time of the defendant's first defence that it
is intended to contest the jurisdiction of the court.
16. … However, it follows from the aim of Article 18 that if the challenge
to jurisdiction is not preliminary to any defence as to the substance it may
not in any event occur after the making of the submissions which under
national procedural law are considered to be the first defence addressed
to the court seised."
In other words, the court does not have jurisdiction even if the defendant
makes submissions on the merits provided only that the challenge to
jurisdiction is made either before or at the same time as (and not merely
after) the argument on the merits. There is nothing there to have given H.
cause for concern: it clearly has contested jurisdiction from the outset; it
raised its jurisdictional objection in its very first appearance.
True it is, as Sir Gordon Slynn stated in his opinion as Advocate-General
in Elefanten, that "in principle … the lex fori  must determine the stage
and manner in which any plea is to be raised", but, as the First Chamber
of the ECJ (under the presidency of Sir Gordon Slynn) said in Kongress
Agentur [1990] ECR 1-1845, whilst "the Court has consistently held that,
as regards procedural rules, reference must be made to the national rules
applicable by the national court", "it should be noted, however, that the
application of national procedural rules may not impair the effectiveness
of the Convention".
The two authorities under English law on which Mr de la Mare seeks to
rely in support of his argument that H. were properly to be regarded as
at risk had it participated in the merits hearing are Re Dulles' Settlement
Trusts [1951] 2 All ER 69 and Marc Rich -v- Societa Italian Impianti
[1992] 1 Lloyds' Rep 624. Let me consider each briefly in turn. The facts
of Dulles are for present purposes immaterial, the party in question being
held in the event not to have submitted to the English courts' jurisdiction.
In the course of his judgment, however, Denning LJ said this:
"I quite agree, of course, that if he fights the case, not only on the
jurisdiction, but also on the merits, he must then be taken to have
submitted to the jurisdiction, because he is then inviting the court to
decide in his favour on the merits, and he cannot be allowed, at one and
the same time, to say that he will accept the decision on the merits if it is
favourable to him and will not submit to it if it is unfavourable. But when
he only appears with the sole object of protesting against the jurisdiction,
I do not think he can be said to submit to the jurisdiction …."
The difficulty with H.'s reliance on that dictum, however, is that the
common law position there exemplified has not survived Article 18, the
whole rationale of which is to allow the merits to be contested without
prejudice to the question of jurisdiction provided only and always that the
jurisdictional objection has not been delayed until after, under national
procedural law, there has already been a submission to the jurisdiction.
As for the Marc Rich case, the position there was that in their first defence
(in October 1988) Marc Rich had challenged the jurisdiction of the Italian
court at the same time as advancing a case on the merits but that
subsequently (in May 1991) they lodged a further defence in the Italian
proceedings which in the event was held to have constituted a submission
to jurisdiction. Upholding Hobhouse J's decision at first instance, Neill LJ
in the Court of Appeal said this:
"It may well be that it was not necessary for Marc Rich to lodge an
alternative defence on the merits in October 1988 but they made it
abundantly clear in the proceedings that the primary purpose of the
document was to challenge the jurisdiction of the Genoa court. I am
prepared to assume that the first defence did not amount to a submission.
It seems to me that this conclusion is in line with the decision of the
European Court in Elefanten …
The second defence, however, which was lodged in May 1991, is another
matter. It seems to me that this pleading was a plain and unequivocal
submission to the jurisdiction of the Italian court to deal with the merits of
the claim." (p633)
I fail to see how H. can derive the least comfort from that decision. True
it is, as Mr de la Mare points out, that nothing overtly had been said in
Marc Rich's second defence to constitute a submission to jurisdiction.
But it is equally clear that nothing can have been said to reserve Marc
Rich's position with regard to their jurisdictional objection else the second
pleading could not have been described as "a plain and unequivocal
submission to the jurisdiction". The contrast with the facts of the present
case could hardly be more striking. Here, of course, H. had from first to
last been urging and maintaining its objection to jurisdiction and, indeed,
would only have been engaging in the merits hearing because the courts
had forced it to do so in the teeth of all its objections.
It seems to me nothing short of absurd to suggest that, having failed
(before the Morison EAT and Mummery LJ) to stop the merits hearing
being listed, and then failed again, once it was listed, to have it
adjourned, H. could conceivably have been held to have submitted to the
jurisdiction and thereby abandoned its outstanding appeal against the
earlier jurisdictional ruling had it, under continued protest, participated in
the merits hearing.
Mr de la Mare submits that the Morison EAT's reason for refusing to
delay the merits hearing, namely "having regard to" the Roose tribunal's
decision on jurisdiction, was not a very convincing one and not, therefore,
likely to assuage its concerns about being deemed to have submitted to
liability. One can only assume, however, that any supposed shortcomings
in this reasoning were brought out in the skeleton argument (not before
us) put before Mummery LJ when seeking permission to appeal to this
court. In any event it is the fact that the merits hearing was being forced
upon H. rather than the detailed reasons why that would not compromise
its jurisdictional objection which is of importance here.
That, to my mind is the short and conclusive answer to this application.
There was no good reason for H. not to attend the merits hearing and it
could not realistically have thought there was.
H. submits that there is no clear authority to the effect that a party can
participate in a full trial on the merits and still maintain his objection to
the court's jurisdiction. Following Elefanten I find that unsurprising: it is
surely obvious. If authority be needed, however, let this be it.
Mr de la Mare at one stage of his argument sought to contend that H.
had in any event relied on counsel's advice and so, however incorrect,
indeed incompetent, that advice may have been, it should not now be
deprived of the opportunity to participate in a hearing to defend Mr T.'s
claims on the merits. I am wholly unpersuaded by this argument. In
the first place it is noteworthy that nowhere in Mr Pitt-Payne's 14-page
written argument in support of H.'s application to Mr Lamb for a review
was there any reference to counsel's advice. Secondly, however, it seems
to me inconceivable that any advice from counsel (none of which has
been placed before us) would have been so simplistic as is now being
suggested. Counsel must surely have had regard to a whole host of
considerations, not least the prospects of successfully defending the claim
on the merits were it to be fully contested, the prospects of securing a
fresh hearing were it to withdraw from the Ryan tribunal, and the gravity
of any adverse decision on the merits depending respectively on whether
it had, or had not, contested it. This last consideration is, to my mind, an
answer too to Mr de la Mare's frequent invocation of the point that, as
matters stand, very serious findings of fact have been made against it in
its absence (see particularly paragraph 12 above). So they have, but H.
knew perfectly well what allegations were being made and knew the risks
which it was running were it to withdraw (indeed, whether or not it were
to withdraw) from the hearing.
The theme permeating all of Mr de la Mare's arguments on this application
is that H. has been unfairly "denied" (or "deprived of" or "have lost
the opportunity of" - each of these terms was used frequently and
interchangeably throughout) a hearing on the merits of a serious
allegation of wrongdoing. The argument is to my mind misconceived. H.
had every incentive and opportunity to participate in the hearing. Quite
simply, it chose not to do so.
I turn to the Ansell EAT's decision as to costs. The order was made
pursuant to rule 34 of the Employment Appeal Tribunal Rules 1993 which
provides that the EAT may make an order for costs if it appears to them
that:
"any proceedings were unnecessary, improper or \vexatious, or that
there has been unreasonable delay or otherwise unreasonable conduct in
bringing or conducting the proceedings."
I should read paragraphs 2 and 3 of the decision now sought to be
appealed:
"2. As is apparent from the lengthy history of this case, which we
have reviewed in our Decision, we were unanimously of the view that
the issues sought to be raised before us by [H.] had effectively been
determined by this Court on 23 March 1999, in the Decision given by Mr
Justice Morison, and confirmed by the Court of Appeal in their refusal to
grant leave on 21 May 1999. Those decisions were, in our judgment, clear
guidance to [H.] that having raised the issue of jurisdiction, [it] should
then participate in the merits hearing, which took place on 24 May 1999.
Whilst we have explored the issues relating to Article 18 in rather more
detail than the Decision in March 1999, our conclusions are the same and
thus the Regional Chairman was quite entitled, and indeed compelled, by
the history of this case to come to the decision he did. Prima facie, these
proceedings would therefore fall into the category of being unnecessary
and/or vexatious.
3. [H.] reminds us that permission to proceed to a full hearing was
granted at a preliminary hearing before His Honour Judge Burke QC, and
whilst that is clearly a factor that we should take into consideration, we
do not accept that that factor alone would prevent us making an Order
for costs, having heard the full appeal. Moreover, there are two matters
which we believe were not drawn to Judge Burke's attention which could
well have affected the decision given at the preliminary hearing. First, the
concession made before us that the Article 18 issue only related to the
wrongful dismissal claim and that therefore there was nothing to prevent
[H.] participating in the unfair dismissal proceedings, although they chose
not to do so. Secondly, it was [H.'s] choice not to pursue the issue of
leave before a full Court, once Lord Justice Mummery had refused leave in
May 1999."
Mr de la Mare takes exception in particular to the EAT's suggestion in
paragraph 3 that there were two matters which, had they been drawn
to Judge Burke's attention, could properly have influenced him against
giving permission to appeal. As to the first of these, the concession
eventually made that the Article 18 point only arose with regard to
the wrongful dismissal claim, Mr de la Mare reiterates his points, first,
that this possibility was only raised for the first time by the Ansell EAT
itself, and second, that it would not in any event have been possible to
proceed solely with the unfair dismissal claim. For my part I find neither
point convincing. Had H. really wanted to contest the merits before the
Ryan tribunal its counsel could surely have been expected to recognise
for himself the possibility of proceeding with the unfair dismissal claim
only - a course which to my mind was clearly open to them. In the end,
however, it seems to me immaterial whether Mr de la Mare's criticisms of
the EAT's reliance on that matter - and, indeed, on H.'s failure to pursue
its application to appeal the Morison EAT decision after Mummery LJ's
refusal on the documents (a criticism with which I have rather more
sympathy) - are well founded. Paragraph 3 of the costs judgment appears
to me essentially superfluous to the EAT's decision, the points there
made being optional extras to the critical conclusion already reached in
paragraph 2. Once the Ansell EAT had concluded, as paragraph 2 indicates
they had, that Mr Lamb had been not merely entitled but "compelled" to
come to the decision which he did, so that the further appeal to the EAT
was "unnecessary and/or vexatious", the costs order against H. naturally
followed. True it is that the Burke EAT had granted permission for the
appeal. As the Ansell EAT observed, however, that factor alone, although
relevant, "would [not] prevent [them] making an order for costs, having
heard the full appeal".
In my judgment, after considering the facts of this case in some detail,
it would have been very surprising had the Ansell EAT not made a
costs order against H.: there had never been any realistic prospect of a
successful review application.
It follows from all this that I would reject H.'s case in respect of both
the Ansell EAT's decisions. Whether in the circumstances we dismiss the
applications for permission to appeal, or, having granted them, dismiss
the appeals themselves, really matters nothing. Having regard to the very
clear view I have arrived at, however, I marginally prefer the first course I
would accordingly dismiss both applications.
Lord Justice Mummery:
For the reasons given by my Lords Lord Justice Simon Brown and Lord
Justice Mance, I too would dismiss these applications.
Lord Justice Mance:
I agree in their entirety with the reasoning and conclusions expressed
in the judgment of Simon Brown LJ. I wish only to address some
supplementary observations on the issue arising under Article 18 of the
Brussels Convention.
Simon Brown LJ has referred to the principle stated in Elefanten Schuh
GmbH -v- Pierre Jacqmain (Case 150/80) [1981] ECR 1671. It appears
from page 1674 that it was, as a matter of fact, not until over nine
months after its original defence on the merits that the defendant there
challenged the jurisdiction. The European Court was, however, concerned
solely with the issue of legal principle. In some countries, like England, it
is normally either mandatory or at least possible to raise any challenge
to the jurisdiction in advance of presenting any answer on the merits.
But there are, as the European Court pointed out at paragraph 14 of its
judgment, other European countries in which
"a defendant who raises an issue of jurisdiction and no other might be
barred from making submissions as to the substance if the court rejects
his plea that it has no jurisdiction"
The Court went on:
"An interpretation which enabled such a result to be arrived at would
be contrary to the right of a defendant to defend himself in the original
proceedings which is one of the aims of the Convention."
The European Court's answer to the issue of principle was, accordingly,
that, in countries whose procedure does not require any challenge to the
jurisdiction to be made before any defence on the merits, a defendant's
right to challenge the jurisdiction is preserved, as long as it has raised
its challenge no later than the time of its first defence on the merits. The
rationale being that any other result could be contrary to the defendant's
right to defend itself, it is absurd to suppose that the European or any
other court would hold that a defendant was, after raising its initial
challenge, unable to continue to defend itself to any extent necessary
to avoid judgment being entered against it on the merits, pending final
resolution of its challenge to the jurisdiction.
Here, H. had raised and was at the time of the hearing before the Ryan
tribunal in May 1999 still pursuing its challenge to the jurisdiction, by an
appeal on grounds of bias and incorrectness against the decision of the
Roose tribunal of 10 September 1998. In those circumstances, it could
not possibly have constituted a submission to the jurisdiction for H. to
exercise its right of self-defence and to argue the merits before the Ryan
Tribunal, in order to avoid a decision on the merits being given against it
without hearing its side.
For good measure, it seems to me that this was probably also what
Morison J had in mind when, giving the judgment of the EAT on 23 March
1999, he said that
"it does not seem to be a sustainable proposition [that H. would suffer if
it participates], having regard to the decision of the [Ryan] Employment
Tribunal on the jurisdiction issue".
In other words, once the Ryan Tribunal had decided that it had
jurisdiction, no-one could hold it against H. that it had participated on
the merits, because the Ryan tribunal's decision left H. with no other
alternative if it was to exercise its rights of self-defence and avoid the risk
of a decision being given against it on the merits without its side being
heard.
That is sufficient to decide this case, and it is the basis on which I have
reached my judgment. However, subsequent to reaching it, there has
come to my attention further European authority which follows the
Elefanten Schuh case, and which in the interests of completeness and for
future reference I take this opportunity to record. I have to say that its
effect in my view is to make yet more explicit, if that were possible, the
inevitability of the result already expressed by Simon Brown LJ as well as
by myself in the preceding paragraphs.
The European Court has expressly affirmed the principle of the Elefanten
Schuh case in the following series of decisions: Ets. Rohr SA -v- Dina
Ossberger (Case 27/81) [1981] ECR 2431; C.H.W. -v- G.J.H. (Case
25/81) [1982] ECR 1189; and Gerling Konzern -v- Amministrazione del
Tesoro dello Stato (Case 201/82) [1983] ECR 2503. The first is of most
interest, for its facts. In proceedings brought against it in the Landgericht
Ansbach, Ets. Rohr SA ("Rohr") confined itself to challenging the
jurisdiction, with the result that, after deciding that it had jurisdiction, the
Landgericht went on to give judgment against Rohr on the merits. Rohr
failed in an appeal against the Landgericht's decision on jurisdiction and
in an attempt to take that point (out of time) to the Bundesgerichtshof.
The successful claimant ("Ossberger") sought to enforce its judgment on
the merits in France, where Rohr argued that its recognition would be
contrary to public policy, submitting (page 2433) that:
"since Article 18 of the Convention made it impossible for Rohr to submit
a defence on the substance before the German courts without losing
the right to raise an objection of lack of jurisdiction, the fact that those
courts did not restrict themselves to giving a ruling on jurisdiction but also
give [sic] judgment on the substance of the case constituted a manifest
infringement of the rights of the defence and thereby of public policy in
France".
Ossberger in contrast argued (page 2433) that:
"…. Article 18 …. does not prohibit the submission of a defence as to
the substance in the alternative and subject to the objection of lack
of jurisdiction but that Rohr voluntarily refrained from pursuing the
appropriate procedures".
The situation therefore presents a considerable factual analogy to the
present.
It was in this context that the Cour d'Appel of Versailles (at page 2434):
"…. considered that the outcome of this case depended upon a question of
the interpretation of the Brussels Convention"
and submitted to the European Court a preliminary question raising for
consideration whether Article 18:
"'prohibits the simultaneous submission in the alternative' of defences
going to the merits and to the jurisdiction, or allows the same 'in order
to permit the court before which the action is brought to give a decision
in a single judgment, if that is appropriate, on both the objection and
the substance of the action on the pattern of the express provisions of
Article 76 of the Nouveau Code de Procédure … together with the detailed
procedures for the protection of the rights of the defence?'"
The European Court said in answer in paragraph 7 of its judgment that it
had "had occasion to give a preliminary ruling on a similar question in its
judgment of 29 June 1981" in the Elefanten Schuh case, and went on to
cite the paragraph in that case ending with the passage which I have set
out in paragraph 48 above. It continued in paragraph 8:
"This case has disclosed no factor of such a kind as to affect these
findings. Accordingly, the answer to the question submitted must be that
Article 18 of the Convention of 27 September 1968 must be interpreted as
meaning that it allows the defendant not only to contest the jurisdiction
but to submit at the same time in the alternative a defence on the
substance of the action without, however, losing his right to raise an
objection of lack of jurisdiction."
The European Court would have had to give a different answer, if it had
thought that it was not open to a defendant who had raised a challenge
to jurisdiction with his defence to pursue "all the detailed procedures for
the protection of the rights of the defence" (including the production of
any necessary documents or witnesses) so far as necessary to avoid the
entry of any judgment on the merits whilst a challenge to the jurisdiction
remained outstanding.
Far from H. navigating uncharted waters, the beacon of the Elefanten case
was in my judgment by itself clearly sufficient to guide H. home. But the
other European Court authorities to which I have referred show that H.
would also have enjoyed the benefit of a favourable tide.