Yapp v Foreign and Commonwealth Office
| Jurisdiction | England & Wales |
| Judge | Lord Justice Underhill,Lord Justice Davis,Lord Justice Patten |
| Judgment Date | 21 November 2014 |
| Neutral Citation | [2014] EWCA Civ 1512 |
| Docket Number | Case No: B3/2013/1496 B3/2013/1698 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 November 2014 |
[2014] EWCA Civ 1512
Lord Justice Patten
Lord Justice Davis
and
Lord Justice Underhill
Case No: B3/2013/1496 B3/2013/1698
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM The High Court, Queen's Bench Division
Mr Justice Cranston
[2013] EWHC 2440 (QB)
Royal Courts of Justice
Strand, London, WC2A 2LL
David Platt QC and Alan Payne (instructed by Treasury Solicitor) for the Appellant
Jane McNeill QC and Katherine Howells (instructed by Buss Murton Law LLP) for the Respondent
Hearing dates: 15 th-17 th July 2014
Approved Judgment
INTRODUCTION
In January 2007 the Claimant in these proceedings, the Respondent before us, was appointed British High Commissioner in Belize. He took up his post in August that year. On 13 June 2008 he was withdrawn from that post on "operational" grounds with immediate effect and suspended pending investigation of allegations of misconduct. The Foreign and Commonwealth Office ("FCO")'s disciplinary procedures were implemented; some, though not all, of the allegations against him were found to have been established, and he received a written warning. His suspension was lifted but he had developed a depressive illness, and also had to undergo heart surgery, and he did not in fact receive any other appointment in the FCO until his retirement when he reached the age of 60 in January 2011.
On 16 May 2011 the Claimant commenced proceedings against the FCO complaining both of his withdrawal from the post of High Commissioner and of the way in which the disciplinary process was conducted and its outcome. He said that the resulting stress had caused his depressive illness, which both constituted damage in itself and led, on account of his inability to return to work, to pecuniary loss over and above the loss of his enhanced earnings and allowances as High Commissioner.
The issue of liability was tried by Cranston J over a number of days in February and March 2013. By a judgment handed down on 3 May 2013 he found that the withdrawal of the Claimant from his post was both a breach of contract and a breach of the duty of care which the FCO owed him at common law; but he dismissed the claims relating to the disciplinary process.
In the course of his judgment Cranston J made a number of findings relevant to the assessment of damages, including a finding that the Claimant was entitled in principle to recover for the depressive illness which he had developed and its consequences. On the basis of those findings the parties were able to agree damages in the sum of £320,000. It was also agreed that that sum should be paid to the Claimant's solicitors and held by them pending the outcome of a proposed appeal by the FCO. They were, however, unable to agree about whether the FCO should pay interest on that sum. At a hearing on 4 June 2013 Cranston J resolved that issue in the Claimant's favour, holding that the FCO should pay interest at a rate representing the difference between the judgment rate of 8% and such rate as the Claimant's solicitors were able to obtain on the sums held.
What is before us is as follows:
(A) The FCO's appeal. The FCO appeals against Cranston J's finding that the Claimant's withdrawal from his post in Belize constituted a breach. But it also contends that even if that finding stands the Claimant is not entitled to recover damages for his depression and its consequences, on grounds of remoteness and/or causation.
(B) The Claimant's Respondent's Notice. The Respondent's Notice raises what are said to be additional grounds for upholding the Judge's order. The issues raised by these are broadly distinct from those raised by the FCO's appeal and were treated as such in the oral submissions.
(C) Interest. The FCO appeals against the interest decision.
Reflecting the shape of the submissions before us, I will consider each in turn, though some of the points raised under the Respondent's Notice overlap with those in the main appeal.
The Claimant was represented before us by Ms Jane McNeill QC and Miss Katherine Howells, who both appeared below, and the FCO by Mr David Platt QC and Mr Alan Payne: before the Judge Mr Payne appeared unled. The interest appeal was argued by the juniors.
THE CONTRACTUAL BACKGROUND
The contractual documents relevant to the issue before us consisted of (a) the letter appointing the Claimant as High Commissioner in Belize; and (b) the relevant parts of the FCO's internal HR guidance document HR1 ("the Guidance"), which it was common ground had contractual force. I take them in turn.
THE APPOINTMENT LETTER
The appointment letter is dated 9 January 2007. It says that the posting is for a period of three years with the option of a fourth year. The posting was initially to begin in December 2007, though in the event it was brought forward.
The only passage which I need to set out is para. 6, which deals with withdrawal. It reads as follows:
"You should be aware that your appointment is not on salaried tenure terms and that the FCO retains discretion (through the Selection Boards and usual performance management processes, and where it is deemed necessary for operational reasons) to withdraw any Head of Mission from his/her post if he/she falls short of acceptable levels of performance and delivery. Our selection procedures are robust and we should not expect that this will have to be the case very often. As Head of Mission you are, of course, entitled to fair treatment accompanied by the same principles of effective performance management that we expect to be applied elsewhere in the organisation."
Although the drafting is poor, it was common ground before us that withdrawal "for operational reasons" is not as such a disciplinary matter and may occur for reasons which do not involve poor performance or misconduct on the part of the post-holder. That is confirmed by the terms of the Guidance which I consider below.
THE GUIDANCE
We are concerned with two aspects of the Guidance – the provisions relating to withdrawal of a post-holder before the expiry of the term of his posting and those relating to misconduct.
The provisions relating to withdrawal appear at paragraph 39 of the Guidance under the heading "Early termination of a posting at public expense". The paragraph begins:
"This is exceptional and should only be considered where there is no alternative and the costs are justified. The following are the possible grounds: …"
The grounds that follow include "misconduct" and "operational". "Misconduct" is glossed as follows (so far as material):
An officer will be withdrawn from a posting at public expense where:
• he/she is suspended whilst an allegation of gross misconduct is being investigated …
• he/she has to return to the UK to attend a hearing before a disciplinary panel, and the outcome of that hearing, and any appeal, is dismissal
• Director HR considers that, regardless of the outcome of the investigation into allegations of misconduct, it would be untenable in the circumstances of the case for the officer to remain in post."
As for the "operational" ground, various circumstances are set out in which an operational "short tour" may be considered. These include where:
… the position of one or more officers at post has become untenable such that HR Director considers it necessary for the continued efficient functioning of that post that an officer or officers are withdrawn, e.g. due to a serious breakdown in working relationships within the post or with the host government or local community, or any other circumstance which in the opinion of the HR Director is serious enough to warrant such a withdrawal…
The FCO's misconduct procedures are set out in chapter 22 of the Guidance. The drafting is diffuse, but for present purposes I need only note the following points:
(1) The procedure distinguishes between three kinds of misconduct – level 1, which is "less serious"; level 2, which is "more serious"; and level 3, or "gross" misconduct, which is reserved for cases where the misconduct if proved would "[breach] the bond of trust and confidence between the FCO and the officer" and which is accordingly liable to result in dismissal.
(2) The procedure for dealing with alleged misconduct falls into two stages. The first stage is a fact-finding investigation. If that discloses a case to answer, full details of the misconduct in question must be provided to the employee in writing: I will refer to this as the "charge", though that term is not in fact used. There will then be what is described as a "disciplinary interview" – in effect, a hearing – following which a decision will be made. The procedures are more elaborate in level 3 cases.
(3) The maximum penalty for level 1 misconduct is a written warning; for level 2 it is a final written warning.
(4) There is a right of appeal in all cases.
(5) Para. 23 of ch. 22 gives the FCO the right to suspend an employee on full pay "whilst an allegation of misconduct is being investigated". Read literally, that applies only to the first stage; but I assume that it is intended to cover the second stage also if the employee is charged. Paras. 23–25 read as follows:
"23. Suspension on full pay whilst an allegation of misconduct is being investigated should be a last resort. It should only be considered for cases where gross misconduct may be involved and either:
• there is a breakdown in trust which cannot be resolved until the disciplinary process has run its course or
• the nature of the allegation is such that it would make it difficult for the staff member to continue working or
• there is a risk to other people or
• there is a risk that evidence might be tampered with or
• there is a risk of unauthorised disclosure of official information...
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