Cheltenham Borough Council v Christine Susan Laird

JurisdictionEngland & Wales
CourtQueen's Bench Division
JudgeMr Justice Hamblen
Judgment Date15 Jun 2009
Neutral Citation[2009] EWHC 1253 (QB)
Docket NumberCase No: TLQ/08/0650 AND CLAIM NO. HQ08X04978

[2009] EWHC 1253 (QB)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(FROM THE BRISTOL DISTRICT REGISTRY)

Royal Courts of Justice

Strand,

London, WC2A 2LL

Before:

MR JUSTICE HAMBLEN

Case No: TLQ/08/0650

CLAIM NO. 7BS90328

AND CLAIM NO. HQ08X04978

Between
Cheltenham Borough Council
Claimant
and
Christine Susan Laird
Defendant

Mr Tim Kerr QC and Mr James Cornwell (instructed by Cheltenham Borough Council) for the Claimant

Mr John Dagnall (instructed by Davies and Partners) for the Defendant

Hearing dates: 27/1/2009 – 8/4/2009

Mr Justice Hamblen

Mr Justice Hamblen :

Introduction

1

This is a novel case.

2

An employer sues a former employee for damages for making fraudulent or negligent misrepresentations in a job application.

3

The particular part of the application involved in the present case was the medical questionnaire, but it could as well have been the application form or a CV. It might also have been the reference provided, and indeed the action originally included Rhondda Cynon Taff County Borough Council (“RCT”) as Second Defendant in respect of the reference they had given. That claim was compromised before trial.

4

In many cases material representations made in a job application form will induce the contract of employment made and yet it appears that there is no precedent for an action for damages such as that brought in these proceedings. The likely reason is that in most such cases there will be no damages. The appropriate remedy will be rescission and termination of the contract of employment.

5

In the present case the contract of employment has already been terminated and the sole remedy claimed is damages. The salary paid to the employee is not claimed, no doubt because even if the contract of employment had not been made with her it would have been made with someone else and the same salary would have been paid. It is nevertheless claimed that in the unusual circumstances of the present case substantial damages of nearly £1 million have been suffered.

6

The basis of that claim is that as a consequence of the employment of the First Defendant, Mrs Laird, the Claimant Council (“CBC”) incurred extraordinary expenses that would not have been incurred had some other managing director been employed.

7

As a consequence of differences which arose between Mrs Laird and the leader of the council, Cllr McKinlay, and other members and officers, much time and expense was spent by CBC in dealing with the resulting disputes which arose rather than the normal running of CBC business. These included Joint Negotiating Committee (“JNC”) disciplinary proceedings brought against Mrs Laird and grievance and court proceedings brought by Mrs Laird, as well as a complaint made by her to the Standards Board of England (“SBE”). Outside support had to be brought in to help CBC staff deal with these disputes and to support them. Mrs Laird was off sick for substantial periods, was then suspended and ultimately retired on an ill health pension. CBC claim as damages the time and costs of dealing with these various disputes and their consequences as well as the ill health element of the pension paid. They are encouraged in bringing these claims by the causation rules in respect of claims in deceit and, on present authority, in respect of claims under section 2(1) of the Misrepresentation Act 1967.

8

Mrs Laird not only denies liability but disputes every element of the damages claimed. In essence she alleges that all the disputes and ensuing problems which arose during her employment were caused by CBC's own breaches of duty or fault. She also seeks to set off against the claim made her own claim for damages for stress and ill health. She also seeks to bring into account benefits which she says accrued to CBC only as a result of CBC employing her when it did.

The outline facts

9

“Cheltenham lies at the edge of the Cotswolds and is renowned for its gracious Regency architecture reflecting the Spa' town's rich heritage, mixing readily with the cosmopolitan atmosphere of a fashionable and thriving centre for commerce, education and the arts”. So read the opening words of the Introduction to Cheltenham in the Recruitment information issued by CBC for the post of managing director in early November 2001.

10

One of the applicants for the post so advertised was Mrs Laird. At the time she was Group Director of Community Services at RCT, having previously worked as Chief Executive at the Chartered Institute of Housing (“CIH”), and as Director of Housing and Environmental Services at Derby City Council, among other posts during a working career of some 28 years.

11

Following receipt and review of her application form and the taking up of references Mrs Laird was invited to interview. From 2 to 4 January 2002 she attended interviews which included a session before the council. She made the final shortlist of three and was eventually chosen as the preferred candidate by a council vote of 18:17. Following the vote she was offered the job.

12

On 7 January 2002 CBC wrote to Mrs Laird “to confirm the Council's offer to you of the appointment …”. The offer was stated to be “conditional upon medical clearance being obtained from our Medical Adviser”.

13

On 8 January 2002 Mrs Laird completed a medical questionnaire, which she sent to Gloucestershire County Occupational Health Services (“GCOHS”). It did not mention any history of depression, stress related illness, or any anti-depressant medication.

14

On 9 January 2002 Mrs Laird replied to CBC's letter saying she was “pleased to accept the post of Managing Director on the terms and conditions outlined in your letter” and that she had “returned the medical questionnaire, as requested, to the Council's Medical Adviser”. On 10 January 2002, GCOHS's representative signed a form, which was sent to the council, stating that “[b]ased on the information given on the health questionnaire, the applicant has been found to be … fit”.

15

On 14 January 2002 CBC wrote to Mrs Laird informing her that the medical clearance certificate had been received and that “we can now proceed with your appointment”, and giving a start date of 4 February 2002. There followed various delays in the production and agreement of the detailed terms of Mr Laird contract and the contract, which was dated 2 August 2002, was not in fact signed until early September 2002.

16

At the time of Mrs Laird's appointment CBC had a Conservative majority and its leader, Cllr Duncan Smith, had played a prominent role in her appointment. There was planned to be a restructuring of the council and the new managing director was meant to play a major role in this. Indeed, Mrs Laird immediately started the process of planning and making organisational changes, a process which involved changing roles and titles, as well as a number of voluntary redundancies. On 2 May 2002 there were local elections which saw the Conservatives ousted as the majority party and replaced by the Liberal Democrats. The new leader of the Cabinet was the Liberal Democrat Cllr McKinlay. The leading Liberal Democrats were less enthusiastic supporters of the restructuring plans, and had reservations as to how it should be carried out.

17

From the outset Mrs Laird and Cllr McKinlay found it difficult to work with each other and an atmosphere of mutual distrust developed. During the following months tensions and disputes arose between them and also between Mrs Laird and certain other members and officers of CBC.

18

On 23 April 2003 Mrs Laird informed CBC's then monitoring officer, Mr Ford that she intended to complain to the SBE about the conduct of the leader, Cllr McKinlay. On 24 April 2003 Cllr McKinlay wrote to Mr Ford setting out concerns about Mrs Laird's conduct which he wanted investigated.

19

Mrs Laird's complaint to the SBE dated 25 April was directed against three Liberal Democrat councillors including Cllr McKinlay. On 30 April 2003 three opposition councillors made further allegations to the SBE concernng members of the cabinet. From 8 May 2003 onwards, solicitors acting for Mrs Laird corresponded with (and subsequently litigated against) CBC in relation to her employment position.

20

On 16 October 2003 Mrs Laird lodged a written grievance with the council comprising a narrative followed by six numbered complaints. On 27 October 2003 the council resolved to set up a panel of seven councillors (“the JNC Panel”) to undertake preliminary consideration of disciplinary allegations made by Cllr McKinlay against Mrs Laird, and report back. On 11 November 2003 two grievances from other staff against Mrs Laird were lodged with the then assistant director of human resources.

21

Mrs Laird's grievance was heard over four days from 13 November to 2 December 2003. Solicitors and a barrister were involved at the hearings. On 18 December 2003 the committee hearing the grievance issued its report. Of the six complaints, three were dismissed; one (concerning annual appraisal) was upheld in part; and two were adjourned on the ground that they overlapped with the complaint to the SBE and/or possible defamation proceedings.

22

On 25 May 2004 the JNC Panel reported back to the full council, recommending that a statutory designated independent person (“DIP”) be appointed to consider five allegations against Mrs Laird. The five allegations, and numbered factual particulars supporting each allegation, were set out in the body of the report. On 3 June 2004 the council resolved to approve the recommendations of the JNC Panel.

23

After an unsuccessful attempt by Mrs Laird to obtain a High Court injunction in Bristol to prevent the appointment of a DIP and to prevent her suspension the council resolved to suspend Mrs Laird on full pay and to appoint a DIP.

24

On 4 November 2004 Steven Kingston, the Ethical Standards Officer (“ESO”) responsible for...

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