Schofield v Church Army
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DILLON,LORD JUSTICE CROOM-JOHNSON |
| Judgment Date | 08 July 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J0708-3 |
| Docket Number | 86/0647 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 July 1986 |
[1986] EWCA Civ J0708-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE WOOLWICH COUNTY COURT
(JUDGE C. P. JAMES)
Royal Courts of Justice
Lord Justice Dillon
Lord Justice Croom-Johnson
86/0647
MR. R. D. MELVILLE (instructed by Messrs. Rubinstein Callingham) appeared for the Appellants.
MR. D. R. FOSKETT (instructed by Penelope Grant, 1 Mabledon Place, London, W.1. appeared for the Respondent.
The Church Army appeals, by leave, against a decision of His Honour Judge James given in the Woolwich County Court on 19 September 1985. The appeal raises a novel point.
The respondent, Mr. Schofield, was for a number of years the warden of a hostel run by the Church Army in Westminster to provide beds for homeless men. As warden, the respondent was responsible for the receipts of the hostel for the accommodation provided. Those receipts took the form either of cash paid by the men for their accommodation or of cheques sent by the D.H.S.S. to the hostel in exchange for vouchers previously issued by the D.H.S.S. to the men which were handed over by the men to the hostel for their accommodation. It was the duty of the respondent to keep records of all cheques and cash received, and to bank the cheques and the cash—or at any rate so much of the cash as was not required for petty cash purposes—in the Church Army's bank account.
On 26 and 27 April 1984 a routine audit at the hostel was conducted by two officials from the Church Army's headquarters. They found that a number of cheques issued to the hostel by the D.H.S.S. and payable to the Church Army had not been entered in the appropriate receipts journal of the hostel. They also found, at that stage, that some half a dozen of these unrecorded cheques had been paid into the Church Army's bank account, apparently by the respondent. They concluded from their investigations that the respondent had stolen from the recorded cash receipts of the hostel amounts of cash equivalent to the amounts of the half dozen unrecorded cheques thus paid in. The respondent was therefore summoned on short notice to a meeting with Mr. Winch, the Director of Finance and Administration at the Church Army's headquarters. The respondent was not told the reason for the meeting. It toot place on 2 May 1984 and lasted for about five minutes. At the meeting, the respondent was asked about one alleged shortfall of a sum of £350 and, as, though denying that he had stolen the money, he did not give any explanation which was satisfactory to Mr. Winch, he was summarily dismissed.
The respondent thereupon applied to an Industrial Tribunal to establish that he had been unfairly dismissed. That application was heard on 12 September 1984 by the Industrial Tribunal. By its decision, sent to the parties on 25 October 1984, the Tribunal held that the respondent had been unfairly dismissed. In its detailed findings the Tribunal found that it was not reasonable for Mr. Winch to claim that the respondent had stolen the money in the light of the limited investigation which the Church Army had undertaken at that time; it also found that the procedure of the Church Army in dismissing the respondent was unfair, in that the respondent did not have a proper chance to answer the allegations against him.
Having made its findings, the Tribunal adjourned the question of the respondent's remedy for the parties to discuss. In the light of the findings, the respondent was prima facie entitled to compensation for unfair dismissal. The amount of that compensation was agreed between the parties, and on 4 February 1985 the Tribunal made a consent order ordering the Church Army to pay the respondent £8,370 compensation. That amount fell to be reduced by certain recoupment provisions. The enforcement of an order of an Industrial Tribunal for the payment of money is, under the relevant statute, by getting an order from the county court. Accordingly, on 1 April 1985 the respondent obtained, on an ex parte application to the Woolwich County Court, an order of that court that the Church Army pay to him the sum of £7,391.67 (being the balance of the £8,370) and £58 costs. The order provided that, if the Church Army failed to pay such sums forthwith, then the sums remaining unpaid should be recoverable as if payable under an order of the Woolwich County Court. Like any other judgment of a county court, that order is final and conclusive between the parties—see section 70 of the County Courts Act 1984.
To enforce that judgment, the respondent obtained a garnishee order nisi from the county court to attach the Church Army's bank account with Barclay's Bank. As a result of that, the bank paid the sum of £7,461.67 (representing the judgment and further costs) into court in the county court on 1 July 1985. This was done under Order 30 Rule 4 of the County Court Rules. The respondent then applied under Order 30 Rule 6 for the money to be paid out to himself. This application was opposed by the Church Army, on grounds to which I shall come. The application came first before a Deputy Registrar on 23 July 1985. He upheld the Church Army's opposition, but the respondent appealed to the judge. That appeal came before Judge James on 19 September 1985; he set aside the Registrar's order and ordered that the money in court be paid out to the respondent's solicitors. It is against that order that the Church Army now appeals; pending the hearing of the appeal the order has been stayed.
After the respondent's dismissal, the Church Army continued its investigations into his accounts. It claimed to have established, by the time of the hearing before the Industrial Tribunal in September 1984, that over £8,200 of cash received by the respondent was unaccounted for. It is clear law that, in considering whether an employee has been unfairly dismissed, an Industrial Tribunal cannot have regard to matters of which the employer was unaware at the time of the dismissal, though such matters can be taken into account in assessing the compensation for unfair dismissal even so as to reduce it to nil— W. Devis & Sons Ltd. v. Atkins (1977) A.C. 931. In fact, the agreed figure of £8,370 compensation the subject of the Industrial Tribunal's order of February 1984 did not take into account any of the alleged defalcations claimed by the Church Army (all of which are denied by the respondent). It is not suggested, however, that that order of the Industrial Tribunal or the subsequent order of the county court of 1 April 1985 gives rise to any form of estoppel or plea of res judicata against the Church Army.
When the sum of £8,370 was agreed as the amount of compensation, the solicitors for the Church Army made it plain in correspondence that their clients proposed to bring High Court proceedings against the respondent, and did not intend to make any payment reflecting the Industrial Tribunal award unless and until it was found after the conclusion of the High Court proceedings that the full tribunal award or part thereof was still owing because no moneys were recoverable under the High Court proceedings or because the moneys recoverable were less than the Industrial Tribunal award. Accordingly, on 1 February 1985, the Church Army issued a High Court writ against the respondent, which was served on the respondent on 21 February. By the statement of claim endorsed on the writ the Church Army alleges that, from about 3 June 1981 until about 5 April 1984, the respondent stole cash sums received by him for the Church Army's use. Detailed particulars are given of 32 sums allegedly stolen, which add up to an amount of £8,986.50, and the claim is for that amount with interest.
The nature of the system of theft alleged is that the respondent, over the period referred to, failed to record 32 of the cheques received at the hostel from the D.H.S.S. in the receipts journal of the hostel, but paid those unrecorded cheques into the Church Army's bank account and, each time he did so, abstracted for his own purposes an equivalent sum in cash from his recorded cash receipts for accommodation at the hostel.
The contention of the Church Army before the Deputy Registrar, before His Honour Judge James and in this court has been consistently that the money paid into court by Barclays Bank should not be paid out to the respondent until the High Court action has been disposed of, because of their cross-claims against the respondent raised in the High Court action. Obviously, from the point of view of the Church Army, if they are right in their claim that the respondent has stolen £8,986 from them in the course of his employment, it would be galling in the extreme and would seem unjust that they should have to pay him £7,461 (the sum in court) compensation for unfair dismissal before their action can come on for trial.
At this stage I must deal with a question of evidence.
Judge James ruled against the Church Army on the ground that he did not have before him sufficient evidence to show the strength of the Church Army's case. He said that he thought it very possible that he would not have allowed the money to be paid to the respondent pending the trial of the High Court action if the Church Army had brought forward evidence to show the strength of its case. In this court, therefore, the Church Army has sought leave to adduce further evidence, in the shape of affidavits from a solicitor and exhibits, to show by fairly detailed analysis of the respondent's receipt and cash books and paying in slips that, as Mr. Melville for the Church Army put it, the Church Army has a good case against the respondent on 32 counts. Mr. Melville accepts, however, that...
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