Appeal No. EAT/0458/02 & PA/0103/03 & EAT/1413/01 SM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 25 February 2003

Before
HIS HONOUR JUDGE J MCMULLEN QC
MR C EDWARDS
MR P GAMMON

MR A KHAN	APPELLANT

(1) TRIDENT SAFEGUARD LTD	RESPONDENTS
(2) NORTH BRITISH HOUSING
(3) MR P NOKE
(4) MS J RODGERS

Transcript of Proceedings

JUDGMENT

Revised

	APPEARANCES

For the Appellant	MR A KHAN
(the Appellant in Person)

	
For the 1st Respondent

For the 2nd, 3rd & 4th Respondents	MR D PRESTON
(of Counsel)
Instructed by:
Messrs Brooke North Solicitors
Crown House
Great George Street
Leeds LS1 3BR

MS C WEIR
(of Counsel)
Instructed by:
Messrs Cobbetts Solicitors
Trafalgar House
29 Park Place
Leeds LS1 2SP	

HIS HONOUR JUDGE J McMULLEN QC

1	This case is about the standing of a bankrupt employee to conduct proceedings for unfair dismissal and race discrimination.  We will continue to refer to the parties as Applicant and Respondents.

Introduction

2	It is an appeal by the Applicant in those proceedings against a decision of an Employment Tribunal sitting in London (South) over five days, Chairman Mr R Peters, registered with Extended Reasons on 13 March 2002.  The Applicant represented himself, as today.  The Respondents were represented by Counsel, again appearing today. The Applicant claimed race discrimination and victimisation and violation of the European Convention on Human Rights.  The Respondents denied all allegations.

3	The essential task as defined by the Employment Tribunal was to determine two issues raised in two Originating Applications.  The Tribunal found against the Applicant on all issues.  It awarded costs of £10,000 in favour of the employer, the first Respondent and ordered a detailed assessment of costs on the indemnity basis in favour of the second, third and fourth Respondents.  

4	The Applicant appealed against those findings on grounds set out in a Notice of Appeal, a Skeleton Argument and further submissions made by him to the EAT at a preliminary hearing presided over by Judge Serota QC.  A further detailed Skeleton Argument has been submitted to us.  We have carefully pre-read this and all the relevant papers.

5	Judge Serota’s Tribunal, on 25 September 2002, dismissed six of the seven grounds of appeal.  That judgment should be read as part of our judgment.  It did however allow the Applicant to maintain one ground.  The Registrar of the EAT had struck out the Applicant’s claims of bias and apparent bias against the Employment Tribunal and the Tribunal Chairman for want of evidence by the Applicant, in accordance with directions she gave for the advancement of this part of the Notice of Appeal.  The sole remaining ground before us is his claim that the Chairman conducted a pre-hearing review and then sat on the substantive hearing, contrary to Rule 7 (9) of the Employment Tribunal Regulations 2001. 

6	Prior to this, in April 2001, Sir Oliver Popplewell, former President of the EAT, sitting as a Judge of the Queens Bench Division, dismissed the Applicant’s application for judicial review of the decision of the Employment Tribunal.  The Applicant claimed the Chairman acted ultra vires in sitting on the substantive hearing.  The judge decided this matter should be decided on appeal to the EAT and not by way of judicial review.

The legislation

7	The legislation contains two provisions relating to Interlocutory Hearings.  Principally they are the Pre-Hearing Review under Rule 7 and strike out measures under rules 13 and 17.  In principle, the Tribunal which hears a substantive hearing should include no member who sat on a pre-hearing review.  Generally, pre-hearing reviews are conducted by a Chairman alone.  The issue in this case was whether on 11 July 2001the Chairman had conducted a pre-hearing review.  If he had, he would be disqualified for sitting at the substantive hearing by Rule 7 (9).  

8	The effect of a pre-hearing review is that a deposit may be called for from an Applicant and if that is not provided the Applicant’s case may go no further.  It is essentially a measure to strike fear in the Applicant and others.  It is the only one in the Employment Tribunal jurisdiction.  It operates as a disincentive to persons bringing weak or misconceived cases.  It requires a deposit to be paid of up to £500 (£150 at the time the original decision in this case would have been made if it were a PHA) as a condition of continuing with the case.  If after the substantive hearing the Tribunal forms the view that its reasons for dismissing the Applicant’s case correspond to the reasons of the Chairman or Tribunal sitting at the pre-hearing review, then it is required to consider an award of costs and may make one.

9	In this case, the introduction of the 2001 Rules affected the substantive hearing and the Tribunal could have awarded costs up to £10,000 or a detailed assessment.  

EAT procedure

10	In the present case it did both, applying in favour of different Respondents. The stage was thus set for an argument about whether the hearing on 11 July 2001 was a pre-hearing review.  We heard no argument on this matter, for at the opening of today’s hearing an application was made on behalf of all four Respondents to amend the Respondent’s Answer to allege that the Applicant had been adjudicated bankrupt on his own petition on 16 December 2002.  In the absence of the substitution of the trustee and bankruptcy as a party to this appeal it was contended that the Applicant has no standing to proceed with and the Employment Appeal Tribunal has no standing to hear the appeal.  The Applicant had no objection to the amendment as sought and it was granted.

11	The substantive basis of the amendment has been made clear, for we have seen a letter of 10 February 2003 from Mr M Lazareth, the assistant official receiver at the insolvency service, who confirmed that the official receiver did not intend to continue with any of the actions brought by Mr Khan prior to his bankruptcy.  

12	That is a reference to the various actions which Mr Khan has on foot.  For example, on 15 January 2003 I presided over a Preliminary Hearing of the EAT when it heard the Applicant’s appeal against a decision of a Tribunal relating to his claim for delayed holiday pay.  We dismissed the appeal.  The Applicant also has another appeal which is the subject of directions to be given in our list today, and one other appeal. Both are dealt with at paragraphs 22-29 below.

13	Thus the official receiver shows no interest in any of those proceedings.  We have not been addressed as to whether the prior bankruptcy should make a nullity of the judgment I gave on 15 January 2003.

14	The real issue for us today is to decide whether the Applicant has standing.  Mr Preston’s late application is prompted by the publication in the Times Law Reports on 25 February 2003 of a judgment which I gave on behalf of the Employment Appeal Tribunal on 5 December 2002 EAT/67/02 Grady v Her Majesty’s Prison Service.  Mr Preston and Ms Weir rely upon this judgment as authority for the proposition that the Applicant has no standing as a bankrupt.

15	The Grady case involved claims by an Applicant of unfair dismissal, breach of contract in the form of wrongful dismissal and disability discrimination.  We applied the law as we saw it in the Insolvency Act 1986, section 306 and section 436, the judgment of the Court of Appeal in Heath v Tang [1993] 1 WLR 1421 at 1423, per Hoffman LJ, and the judgment of the Court of Appeal in Ord v Upton [2000] Ch 252 at 360, per Aldous LJ.  The separation Hoffman LJ made between those cases which are personal to the bankrupt and all other cases was one which we applied.  We held that all three of those claims brought by Ms Grady were not within the personal action category.

16	Although we did not know it at the time we gave our judgment (because it was not drawn to our attention by either Counsel in the Grady case), a similar conclusion had been reached by a different division of the EAT presided over by Judge Reid QC on 29 August 2002: EAT/0795/01 Ellison v Petrie Tucker & Partners Ltd.  That claim was one of unfair dismissal, a request for a review and a costs order.  All of those were affected by the judgment of the EAT that the Applicant had no standing being at the time bankrupt.

The bankruptcy issue

17	The issue in our case is whether the Applicant’s case of discrimination and victimisation on racial grounds falls within the personal action category or not. The Grady case is of assistance.  Disability discrimination was conceded to be a property action. Disability discrimination and victimisation are similar to race discrimination except that race discrimination applies to persons who allege action is taken on racial grounds, that is by reference to a person’s (often but not necessarily their own) “racial group” whereas disability discrimination applies to a person who is disabled without reference to any group or category.

18	It seems to us that if disability discrimination is, as was conceded, on the personal side of Hoffman LJ’s dividing line, so is race discrimination.  The principal argument addressed in Grady related to unfair dismissal and it proceeded on the basis that the remedies in unfair dismissal were entirely personal, since the Tribunal had power to order reinstatement or re-engagement.  Nevertheless, the EAT’s judgment was that that did not sufficiently constitute a personal action on the lines of a personal injury or an assault on reputation so as to take it within that category.

19	It seems to us no difference appears in race discrimination and victimisation cases and we will apply and follow Grady and Ellison.  Even if it were to be said that this case was about Tribunal procedure and the setting aside of a Tribunal decision made in breach of Rule 7 (9), it would have to relate to the Originating Application which would be the thing in action, the subject of which would be required to be advanced by the trustee in bankruptcy or released to the Applicant.

20	In those circumstances we dismiss the appeal on the basis put forward by the Respondents, that the Applicant has no standing and the EAT has no jurisdiction.

21	We indicated at the outset that since Grady case is pending before the Court of Appeal, we will give leave to Mr Khan to appeal to the Court of Appeal and he should take steps, if he wishes to take that route, to link up with those representing Ms Grady.

Mr Khan’s two other appeals

22	Related to the judgment which we have just given is another case against the First Respondent which the Applicant brings before the EAT, known as PA/103/03.  In accordance with the Practice Direction 2002, I conducted a sift with a view to giving directions last week.  I realised that the parties were the same as in the case which I had heard on 15 January 2003 and I decided that the issue could be dealt with after a hearing of the appeal which we have just dealt with.  The President directed that I should preside over the last case and that I should give directions in respect of the current case.

23	Taking a pragmatic view of the expedience of the matters, both Mr Preston and Mr Khan have agreed to the course which we now propose; that is to treat the hearing as a Preliminary Hearing on notice to all parties.  Mr Preston waives his right to produce a Respondent’s Answer at this stage because he takes the same jurisdiction point, that is that the Applicant as a bankrupt has no status and we have no jurisdiction to entertain his Notice of Appeal.

24	It seems to us that responding flexibly to the practical approach of both of the parties, our course would be to consider whether this appeal falls within Hoffman LJ’s category of personal actions or not.

25	Applying that logic, and our judgment in Grady and the Mr Khan’s first case, we hold that the claims for unfair dismissal under Employment Rights Act 1996, and for victimisation under the Race Relations Act 1976 are not within the category of personal actions.  The claim for victimisation would involve an award of damages and might include a recommendation that the Respondent take certain action.  Nevertheless, that latter remedy does not seem to us to make the case one of an entirely personal nature akin to a personal injury or an assault on reputation and thus we hold that a claim for victimisation under section 2 of the Race Relations Act 1976 is not a personal action as hitherto defined.

26	We will dismiss the appeal and give leave to Mr Khan to appeal to the Court of Appeal.  That case should be tied to his first case and should follow the directions given in respect of Ms Grady.

27	A similar submission was made by Mr Preston in respect of one other outstanding action pending at the EAT which is 1413/01.  We know nothing of this case but accept from Mr Preston and Mr Khan that it is a case of direct discrimination and victimisation under the Race Relations Act 1976.

28	Mr Preston’s clients are anxious that they be not vexed further in the EAT by way of Mr Khan’s actions while he is bankrupt.  We see force in that, since two of his cases may now be on their way to the Court of Appeal.  The practical approach which we have adopted in the previous case should be adopted in this case.  

29	This third case will be dismissed on the ground that the Applicant does not have standing and the EAT does not have jurisdiction to consider any further step in this case. We will give leave to Mr Khan to take that matter to the Court of Appeal and it will be for the Registrar at the Court of Appeal to decide the best way of handling those three matters. We stress that we have not dealt with the merits of any of the three of these cases.