Mr Eyad Zaki Nayif v The High Commission of Brunei Darussalam
| Jurisdiction | England & Wales |
| Judge | Lord Justice Elias,Lady Justice Rafferty,Sir Brian Leveson |
| Judgment Date | 27 November 2014 |
| Neutral Citation | [2014] EWCA Civ 1521 |
| Docket Number | Case No: A2/2013/3253/QBENF |
| Court | Court of Appeal (Civil Division) |
| Date | 27 November 2014 |
[2014] EWCA Civ 1521
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
The Honourable Mr Justice Bean
QB20130421
Royal Courts of Justice
Strand, London, WC2A 2LL
THE PRESIDENT OF THE QUEEN'S BENCH DIVISION
( Sir Brian Leveson)
Lord Justice Elias
and
Lady Justice Rafferty
Case No: A2/2013/3253/QBENF
Mr Robert Glancy QC (instructed by Grange & Castle) for the Appellant
Mr Jeremy Johnson QC (instructed by Bircham Dyson Bell LLP) for the Respondent
Hearing date: 18 November 2014
This appeal raises a short point on issue estoppel. The material facts can be summarised briefly. The appellant was employed by The High Commission of Brunei Darussalam as a chauffeur from 2003. He made a catalogue of complaints about his employment between 2003 and 2010 alleging that in various ways he had been treated unfairly and subjected to various acts of bullying, harassment and abuse. He alleges that he sustained psychiatric injury from these acts.
On 26 October 2011 he issued a claim in the Employment Tribunal pursuant to section 54 of the Race Relations Act 1976 seeking compensation for, amongst other matters, the psychiatric injury resulting from the commission of these acts, which he asserted was attributable to race discrimination. His claim was dismissed because it was out of time.
Section 68(1) of the 1976 Act provides:
"An employment tribunal shall not consider a complaint under section 54 unless it is presented to the tribunal before the end of
(a) the period of three months beginning when the act complained of was done …."
By subsection (6) there is an exception. It provides that the tribunal may nevertheless hear the out of time complaint "if it considers that it is just and equitable to do so."
All the claims advanced here were outside the three month limit. So the tribunal considered whether in all the circumstances it was just and equitable to hear the case in any event. For this purpose the Tribunal considered documents adduced by the claimant, heard submissions as to the circumstances of the complaints, and considered the explanation why the application had been lodged so late. It declined to exercise the discretion to extend time. It did not in any way engage with the substantive merits of the case although the judge did observe that it was "still not clear from the claim form why the claimant says that the cause of his bullying was his race".
An application for permission to appeal to the Employment Appeal Tribunal challenging the employment tribunal's rejection of jurisdiction was refused on paper at the sift stage pursuant to rule 3(7) of the Employment Appeal Tribunal Rules. The claimant did not avail himself of the right to seek an oral hearing.
On 20 December 2012 the appellant issued proceedings in the High Court in negligence and breach of contract in respect of the same alleged psychiatric injury. He made the same catalogue of complaints about his treatment between 2003 and 2010 as he had made in the earlier Tribunal proceedings. He did not allege in these proceedings that he had been discriminated against on grounds of race.
The High Commission contended that he was precluded from pursuing these proceedings. Paragraph 1 of its defence was as follows:
"The defendant relies on the dismissal by the Employment Tribunal of the claimant's claim for damages for compensation arising out of the same facts and matters as found the basis for the instant claim."
In technical terms, this is known as the defence of "issue estoppel".
Master Leslie felt that he was bound by authority to uphold that defence and in particular, by the decision of the Court of Appeal in Lennon v Birmingham City Council [2001] IRLR 826. He reached that conclusion with what he described as "considerable reluctance". He was concerned that in barring the claim he might be causing a grave injustice to the applicant. He gave permission to appeal and referred the case to the Court of Appeal but Tomlinson LJ remitted it to the High Court so that it was considered by Mr Justice Bean, as he then was. Bean J concluded that Master Leslie was correct to strike out the appeal and that this was required in accordance with the principles enunciated in Barber v Staffordshire City Council [1995] ICR 379 and the Lennon case.
The question is whether that analysis is correct.
Res judicata and Issue estoppel
As Lord Sumption pointed out in Virgin Atlantic Airways v Zodiac Seats UK Limited [2013] UKSC 46; [2014] AC 160, para.17, in a judgment with which Lords Neuberger, Clarke and Carnwath and Lady Hale agreed:
"Res judicata is a portmanteau term which is used to describe a number of different legal principles with different juridical origins."
Two of these principles, relevant to this case, are cause of action estoppel and issue estoppel, which Lord Sumption defined as follows:
"The first principle is that once a cause of action has been held to exist or not to exist, that outcome may not be challenged by either party in subsequent proceedings. This is "cause of action estoppel". It is properly described as a form of estoppel precluding a party from challenging the same cause of action in subsequent proceedings ….
Fourth, there is the principle that even where the cause of action is not the same in the later action as it was in the earlier one, some issue which is necessarily common to both was decided on the earlier occasion and is binding on the parties: Duchess of Kingston'sCase (1776) 20 St Tr 355. "Issue estoppel" was the expression devised to describe this principle by Higgins J in Hoysted v Federal Commissioner of Taxation (1921) 29 CLR 537, 561 and adopted by Diplock LJ in Thoday v Thoday [1964] P 181, 197–198."
The policy lying behind these principles is the interest of finality in litigation; both the public interest that the courts should not be clogged by re-determinations of the same disputes; and the private interest that, as it is sometimes put, "it is unjust for a man to be vexed twice with litigation on the same subject matter": see Clark v Focus Asset Management and Tax Solutions Ltd. [2014] EWCA Civ 118; [2014] 1 WLR 2502 paras. 11–12 per Arden LJ.
The analysis of Lord Sumption presupposes that there will have been a formal adjudication by a court. That is indeed the typical situation in which the principles arise. But it is well established that this need not be the case. There are circumstances where these principles will operate when the proceedings have been dismissed without any formal adjudication at all. This was the position in the two judgments upon which Bean J relied to uphold the strike out of the appellant's case.
In Staffordshire BC v Barber [1996] ICR 379 the applicant brought a claim for a redundancy payment in an employment tribunal. It was resisted upon the grounds that she had two contracts and under each she was employed for fewer than eight hours a week. Under the law as it was then mistakenly understood to be, she could only satisfy the qualifying period for a redundancy payment if she was employed under a contract for at least eight hours per week.
The day before the full hearing was due to take place her solicitors wrote to the Tribunal and said that on instructions they were withdrawing her case. As a consequence, the Tribunal judge dismissed the proceedings. Subsequently a decision of the House of Lords established that the understanding of domestic law was incorrect in the light of EU law: R v Secretary of State for Employment ex p. Equal Opportunities Commission [1995] A.C. 1. She sought to bring her claim afresh in the Employment Tribunal for both redundancy and unfair dismissal. Each had the same hourly qualification requirement. The respondent argued that she should not be allowed to re-open the case. The employment judge found that she could bring the fresh proceedings but the Employment Appeal Tribunal upheld her appeal and its decision was in turn upheld by the Court of Appeal.
Mummery J, presiding in the Employment Appeal Tribunal, said this (p. 388):
"There is nothing in the principles of cause of action or issue estoppel which stipulate that they can only apply in cases where a tribunal has given a reasoned decision on the issues of fact and law in the first litigation. On the contrary, it appears from cases such as SCF Finance Co Ltd v. Masri (No. 3) [1987] 1 All ER 194 that an estoppel may arise from an order dismissing proceedings without argument or evidence directed to the merits of the case. In the SCF Finance case, which concerned a question of issue estoppel in subsequent garnishee proceedings, Ralph Gibson LJ said at p.208E —
"… an order dismissing proceedings is capable of giving rise to issue estoppel even though the court making such order has not heard argument or evidence directed on the merits … If a party puts forward a positive case, as the basis of asking the court to make the order which that party seeks, and then at trial declines to proceed and accepts that the claim must be dismissed, then that party must, in our view, save in exceptional circumstances, lose the right to use again that case against the other party to those proceedings."
At p.209 E-G Ralph Gibson LJ concluded the judgment by stating the principle in the following terms:
"A litigant who has had an opportunity of proving a fact in support of his claim or defence and has chosen not to rely on it is not permitted afterwards to put it before another...
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