Andrew John Halstead v Paymentshield Group Holdings Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE PILL,Lord Justice Sullivan,Sir Mark Waller |
| Judgment Date | 25 April 2012 |
| Neutral Citation | [2012] EWCA Civ 524 |
| Court | Court of Appeal (Civil Division) |
| Date | 25 April 2012 |
| Docket Number | Case No: A2/2011/2526 |
[2012] EWCA Civ 524
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM
THE EMPLOYMENT APPEAL TRIBUNAL
HHJ McMullen QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Pill
Lord Justice Sullivan
and
Sir Mark Waller
Case No: A2/2011/2526
Selwyn Bloch QC and Katherine Apps (instructed by Sheridans, Solicitors) for the Appellant
Michael Duggan (instructed by Reynolds Colman Bradley, Solicitors) for the Respondent
Hearing dates : 6 March 2012
This is an appeal against a decision of the Employment Appeal Tribunal ("EAT") dated 18 October 2011, following a hearing on 9 September 2011, whereby the EAT, His Honour Judge McMullen QC sitting alone, allowed an appeal from a decision of Employment Judge Etherington, sitting alone at an Employment Tribunal held at London Central on 15 July 2011, refusing to stay proceedings brought before that Tribunal by Mr Andrew John Halstead ("the appellant") against Paymentshield Group Holdings Ltd ("the respondents") for unfair dismissal, automatic unfair dismissal on the ground of making protected disclosures, and holiday pay under the Working Time Regulations. The claims were originally listed to be heard on 1 February 2011 and 10 days were allocated.
The stay was granted by the EAT because, on 7 December 2010, the appellant sent a letter before action and draft particulars of claim in relation to a prospective action by the appellant against the respondents in the High Court for breach of contract, rescission, debt and interest. High Court proceedings for breach of contract would not of course be governed by that cap upon Tribunal awards for unfair dismissal (though not automatic unfair dismissal on the whistleblowing ground alleged in the Tribunal) which applies to Tribunal claims.
The respondents applied for a stay on 21 December 2010 on the ground that there were likely to be concurrent proceedings. The appellant did not contest that application and the stay was granted by Employment Judge Lewzey 'pending the outcome of High Court proceedings'.
On 23 March 2011, the appellant applied to lift the stay on the Tribunal proceedings. The reason given was that the earlier consent had been based on the appellant's belief that his finances would permit him to pursue a High Court claim in advance of the Tribunal claim but that his financial circumstances had now changed. On behalf of the appellant, it was also stated that despite the appellant's best efforts, without prejudice negotiations in relation to the proposed High Court claim had proved unsuccessful. An undertaking was given, if the stay was lifted, 'not [to] pursue any High Court claim in tandem with Tribunal proceedings and that he will wait until Tribunal proceedings have concluded prior to issuing any High Court claims.'
On 23 May 2011, Employment Judge Lewzey lifted the stay on the ground that 'no High Court proceedings have been issued and in these circumstances it is not in accordance with the overriding objective for the stay to remain.' A further application for a stay was made to Employment Judge Etherington who dismissed the application for reasons given in a judgment dated 15 July 2011. The EAT allowed an appeal against that decision, ordering that 'the hearing at the Employment Tribunal be stayed pending the outcome of proceedings at the High Court, or further order of the Employment Tribunal or of the EAT.'
The employment arrangements were complex but, for present purposes, need be described only in outline. The appellant signed a contract with Cullum Capital Ventures ("CCV") on 5 July 2007 by which he was entitled to a salary of £175,000 per year with a guaranteed bonus of £350,000 per year. The contract was due to take effect on 8 July 2008 on which date the appellant was told that his "promised bonus of £350,000 required recalibration". The appellant was paid less than his contractual entitlement. There were prolonged attempts to renegotiate the remuneration package. On 2 July 2009 the appellant was presented with a new contract which he signed, he says under duress. Soon afterwards he was told that he was to be dismissed. His case is that he was required to leave the office on 27 October 2009. On 23 December 2009, he was informed by the respondents that he was dismissed. He claims that the repudiatory breach was not accepted until early in 2010. He sought reinstatement and worked for several days in the New Year.
In employment terms, the claims are for large sums of money. In his Tribunal claim, the appellant bases the claim on the new contract and in the schedule of loss a sum of about £400,000 is claimed, based on the whistleblowing claim. In draft particulars of claim in High Court proceedings, which have not been instituted, claims were advanced under both the original contract with CCV and the new contract. In that part of the proposed claim, rescission of the new contract, alternatively damages in lieu of rescission, is claimed. The schedule puts the proposed claim in excess of £1 million.
In refusing to stay the Tribunal claim, Employment Judge Etherington stated:
"Here, there are no contemporary proceedings; there may never be any contemporary proceedings especially given the Claimant's statement that he will commence High Court proceedings, if at all, only after the Tribunal proceedings have concluded; and there may never be such an action then. I do not know of and have not been alerted to the existence of any power residing in any court enabling it to order the Claimant to commence or maintain an action before the High or other court. By staying the action now it would in a rather roundabout way bring pressure on the Claimant to do so but in my view that would be a draconian exercise of power. Though Mr Wynne's arguments are attractive I have decided on balance that the proper decision today is not to order a stay but to allow the proceedings to continue before the Tribunal. Weighing the balance of prejudice as between the parties it is my view that staying the action before the Tribunal would have a greater prejudicial impact on the Claimant's case than allowing it to continue would have upon the Respondent's case. The difficulties perceived as possibly arising from two sets of proceedings (whether contemporaneous, consecutive and acknowledging that in any event there is no certainty that the High Court proceedings would ever be lodged) are a much less likely source of prejudice and injustice than would be the forced abandonment of the Claimant's claim; or its forced presentation; and maintenance with him unrepresented."
In allowing the appeal, Judge McMullen QC stated that the Employment Judge had erred in law in failing to apply the principles stated in Mindimaxnox LLP v Gover ( UKEAT/0225/10/DA7). In that case, Judge McMullen had considered five submissions of a party seeking a stay on Employment Tribunal proceedings when there were concurrent High Court proceedings; complex factual matters more appropriate for High Court, embarrassing the High Court, complex legal matters better decided in the High Court, considerable overlap, and small financial value. He concluded, at paragraph 45:
"In my judgment it is not in accordance with the overriding objective to have concurrent proceedings over exactly the same factual territory except for the unique tort of unfair dismissal in the Employment Tribunal. The factual territory and the legal principles relating to the dismissal, but not the unfairness of it, are the same or at least substantially similar. It cannot be right that there are two sets of proceedings on foot, each requiring teams of lawyers to be respectively in the London (Central) Employment Tribunal and the Queen's Bench Division on different days. Take this very case. In the Employment Tribunal there is to be a Case Management Discussion then a PHR on one of the issues, if not more, and then in the High Court there is a PHR on the confidentiality issue and then a trial. It cannot be in accordance with the overriding objective that duplicate proceedings are on foot."
In his judgment in the present case, the judge stated that there is an overlap of issues and embarrassment for a High Court Judge, if the claim in the Employment Tribunal is permitted to proceed. He added: "Any constraint on a High Court judge is a public issue". There was no difference in the principle to be applied, Judge McMullen held, "when High Court proceedings have been issued, and been the subject of a pre-action conduct letter and a draft particulars of claim." The judge continued:
"This is not a case where there just may be a glint in the Claimant's eye that he may seek in another forum from the Employment Tribunal to recover substantial amounts, say, for a bonus; that issue is not before me. But it seems unlikely that a Respondent would succeed in keeping the Claimant out of the Employment Tribunal just because for six years he might possibly issue proceedings. The principle applies where there has been issue and service of proceedings; see Mindimaxnox. In my judgment it is correct to...
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