McCabe v Cornwall County Council and another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Auld,Lord Justice Brooke,Lord Justice Sedley,LORD JUSTICE AULD,LORD JUSTICE BROOKE,LORD JUSTICE SEDLEY |
| Judgment Date | 19 December 2002 |
| Neutral Citation | [2002] EWCA Civ 1887 |
| Date | 19 December 2002 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2002/1330 |
[2002] EWCA Civ 1887
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
EXETER DISTRICT REGISTRY
His Honour Judge Overend
Lord Justice Auld
Lord Justice Brooke and
Lord Justice Sedley
Case No: A2/2002/1330
Mr Satinder Gill (instructed by Elliotts) for the Appellant
Mr Richard Mawhinney (instructed by Hancock Caffin) for the Respondents
This is an appeal by Mr. Robert Jocelyn McCabe against an order of His Hon. Judge Overend on 31 st May 2002, sitting as a High Court Judge in Exeter, refusing him permission to amend his statement of claim by substitution of a new claim and striking out his claim as disclosing no cause of action. The proceedings arise out of an original claim by Mr. McCabe, a teacher employed by the Respondents, for damages for psychiatric injury in respect of events leading up to and arising out of their dismissal of him. By his proposed amendment, Mr. McCabe sought to substitute and limit his claim to damages for breach of an implied contractual duty of mutual trust and confidence and/or in negligence in respect of their suspension and manner of investigation of his conduct prior to dismissal.
The appeal raises two main issues. The first is the extent to which an employee who has been unfairly dismissed is confined, in respect of injury caused by unlawful conduct of his employer prior to and leading to dismissal, to the statutory remedy for such dismissal of a compensatory award from an employment tribunal. The issue, thus narrowly stated, is an illustration of the broader tension between, on the one hand, a need for certainty and tidiness in the avoidance of an overlap between common law and statutory remedies and, on the other, the interest of justice or fair play in preserving established common law rights where statutory remedies may not provide an adequate substitute for them. The second issue is whether, in the circumstances, the Judge should have refused permission to amend and should have struck out the claim as disclosing no cause of action or, as provided by CPR, Part 3.4, as disclosing no reasonable grounds for bringing it.
The facts
I take the facts, as the Judge did, from the statement of claim and adopt with gratitude much of his helpful summary of them. Mr. McCabe began work as a teacher at the school for which the Respondents were responsible in September 1991. In early May 1993 a number of girl pupils made complaints against him of inappropriate sexual conduct. Five days later the head teacher suspended him, and about a week later, on 26 th May, interviewed him. In the interview the head teacher gave him no details of the allegations, but offered him a formal written warning, which he declined to accept. While remaining under suspension, nearly four months elapsed before he learned of the allegations made against him in a letter of 20 th September 1993 requiring him to attend a disciplinary hearing. It was during that period, according to the proposed amended statement of case, that he began to suffer from the psychiatric illness in respect of which he now seeks to claim damages.
Over the following three years there were three disciplinary hearings, each resulting in a determination adverse to Mr. McCabe. The first was in November 1993 conducted by three members of the Second Respondent, the School's Governing Body, who gave him a final written disciplinary warning. The second, which was by way of an appeal to three other members of the Governing Body, concluded in their decision that he should be dismissed notwithstanding that they characterised his alleged conduct as "a relatively trivial affair". As a result, the First Respondent, Cornwall County Council, dismissed him on 15 th March 1994. His response, given the greater severity of this outcome than that at the first hearing, was to request a further disciplinary hearing. He also sought compensation for unfair dismissal against both Respondents before an industrial tribunal under the statutory predecessors of Parts X and II of the Employment Rights Act 1996. Both those procedures were delayed because Mr. McCabe continued to suffer from the psychiatric illness triggered by his initial suspension. The third disciplinary hearing took place first. It was conducted by three members of the County Council over four days in July and August 1996. Although it purported to be an appeal by way of rehearing, no evidence, other than mostly unsigned written statements drafted by a member of staff, was called from the complainants. This body too dismissed his appeal, confirming his dismissal.
Three months later, in November 1996, an industrial tribunal heard Mr. McCabe's complaint of unfair dismissal, and, in December 1996, upheld it. It did so because the manner of dismissal was in breach of the Respondents' disciplinary procedures in that a senior member of the School's staff had not promptly investigated the matter and that all but one of the written statements attributed to the complainants were unsigned. The tribunal deferred a decision as to contributory fault and as to the amount of compensation to be awarded in order to give the parties an opportunity to settle the matter. At an adjourned hearing in April 1997 the tribunal ordered payment to Mr. McCabe of compensation of £11,000, the then maximum sum awardable under the statutory scheme, but found him to be contributorily at fault to the extent of 20%. On appeal by both parties to the Employment Appeal Tribunal, the Tribunal upheld the finding of unfair dismissal but quashed the finding of contributory negligence.
Meanwhile, in March 1997 Mr. McCabe commenced these proceedings in the High Court seeking damages for psychiatric illness in contract caused by the Respondents' conduct of the disciplinary procedure leading up to his dismissal and in tort caused by such procedure and by the dismissal itself. The progress of the claim was slow. Given Judge Overend's refusal to strike it out for delay and that his decision in that respect is not challenged by the Respondents, I need not rehearse the reasons for the delay and the procedural skirmishing that it engendered. It is sufficient to note that it was not until February 2002 that Mr. McCabe applied to amend his claim by substituting for it claims in contract and in tort for damages for psychiatric injury caused by the Respondents' initial suspension of him and failure, over the four months from May to September 1993, to inform him of the allegations against him, and for their failure during that period to carry out a proper investigation. The claim in contract was for alleged breach of a relationship of trust and confidence, and the claim in tort, based on the same facts, was for breach of duty to provide a safe system of work. Those claims did not include, as the original ones had done, claims for damages caused by the dismissal itself. The new pleading was accompanied by a medical report of 5 th March 1997 stating that Mr. McCabe was suffering from a psychiatric illness attributable to his suspension in May 1993 and the accompanying failure to inform him of the allegations and to make proper investigation.
The Respondents sought strike-out of the new claim on the basis that it was essentially the same as the original, namely a claim for damages caused by the manner of his dismissal. They maintained that the authorities showed that such a claim was no longer possible as a result of the introduction of the statutory remedy of compensatory awards for unfair dismissal. Mr. McCabe maintained that the statutory remedy had not ousted his new claims because he was not seeking damages caused by the manner of his dismissal but by matters preceding it.
The authorities
Before I turn to the Judge's reasons for striking out the claim, I should briefly summarise the effect of the main authorities with which he was confronted. The starting point is the now well established principle, acknowledged by the House of Lords in Mahmud v. BCCI [1998] AC20, that there is a mutual obligation implied in every contract of employment, not, without reasonable and proper cause, to conduct oneself in a manner likely to destroy or seriously damage the relationship of trust and confidence between an employer and employee. The obligation, the employer's alleged breach of which the House ruled disclosed a reasonable cause of action, was not to carry on a dishonest or corrupt business the stigma of which might imperil its employees' chances of future employment. In so ruling, the House heavily qualified its own much older decision in Addis v. Gramophone Company Ltd. [1909] AC 488 that a wrongly dismissed employee could not recover, in addition to damages resulting from his dismissal, damages for the manner of the dismissal in the injury caused to his feelings or to his prospects for obtaining fresh employment. In Mahmud Lord Nicholls, with whom Lords Goff and Mackay agreed, explained, at page 39C-D, the extent of the loosening of the Addis shackle:
"In my view these observations [in Addis] cannot be read as precluding the recovery of damages where the manner of dismissal involved a breach of the trust and confidence term and this caused financial loss. Addis... was decided in the days before this implied term was adumbrated. Now that this term exists and is normally implied in every contract of employment, damages for its breach should be assessed in accordance with ordinary contractual principles. This is as...
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