Appeal No. UKEAT/0262/08/DM

EMPLOYMENT APPEAL TRIBUNAL
58 VICTORIA EMBANKMENT, LONDON EC4Y 0DS

	At the Tribunal
	On 23 June 2008

Before
HIS HONOUR JUDGE PETER CLARK
(SITTING ALONE)

CHELSEA FOOTBALL CLUB PLC	APPELLANT

MR P SMITH	RESPONDENT

Transcript of Proceedings

JUDGMENT

	APPEARANCES

For the Appellant	MR A WHITE
(One of Her Majesty’s Counsel)
and
MR T KIBLING
(of Counsel)

Instructed by:
Messrs Fox Williams Solicitors
10 Dominion Street
London EC2M 2EE	
For the Respondent	MR D READE
(One of Her Majesty’s Counsel)
Instructed by:
Messrs Russell Jones & Walker Solicitors
Swinton House 
324 Gray’s Inn Road
London WC1X 8DH	

SUMMARY

PRACTICE AND PROCEDURE:  Admissibility of evidence / Chairman alone
Employment Judge ruling, in advance of substantive hearing, on admissibility of certain evidence.  Illogical distinction within the evidence – lack of reasoning.  Ruling below varied pursuant to s35(1) ETA 1996.  Power in Employment Judge alone to rule on private hearing under rule 16(1) Employment Tribunal Rules

HIS HONOUR JUDGE PETER CLARK

1.	This case is presently proceeding in the London Central Employment Tribunal.  The parties are Mr Paul Smith, Claimant, and Chelsea Football Club, Respondent.  I shall so describe them.  I have before me for full hearing an appeal by the Respondent and a cross-appeal by the Claimant against certain case management orders made by the Regional Employment Judge, Mr D J Latham, following an oral case management discussion (‘CMD’) held on 13 June 2008.  Those orders with reasons were promulgated in writing on 17 June.  The CMD is there erroneously described as a Telephone Hearing.  The appeal has been listed as a matter of urgency since a substantive hearing has been fixed before an Employment Tribunal to commence tomorrow, 24 June, for 3 days.

Background
2.	The Claimant, who has a background in sports marketing, commenced his association with the Respondent in September 2003.  For present purposes he is to be treated as employed since that time until his summary dismissal on 27 July 2007.  

3.	By his amended grounds of complaint he brought claims of unfair dismissal, unlawful deductions from wages (the wages claim) and a declaration as to the terms and conditions of his employment with the Respondent under s11 of the Employment Rights Act 1996 (the s11 claim).  The last two claims are closely linked.  An issue as to notice entitlement awaits possible separate High Court proceedings.

4.	In the event the Respondent has now admitted unfair dismissal and agreed to pay the Claimant the maximum award available to him for ordinary unfair dismissal.  That agreement has been formalised in a judgment of the Employment Tribunal dated 15 May 2008.  
5.	The issue in the related wages and s11 claims turns on a meeting between the Claimant and Mr Peter Kenyon, the Chief Executive Officer of the Respondent, held on 27 February 2007.  It is the Claimant’s case, set out at paragraphs 89 – 108 of his witness statement in these proceedings dated 6 June 2008, that on that occasion agreement was reached between them as to outstanding payments of salary and bonus owed to him and an increase in salary from £330,000 to £400,000 per annum, backdated to 1 January 2007.

6.	Mr Kenyon accepts that agreement was reached as to salary but not as to any additional arrears of pay or bonus.  The total amount in dispute is £336.000.

7.	Having considered the Claimant’s witness statement and that of his partner, Asha Lakhani, the Respondent’s solicitors applied for a ruling prior to the substantive hearing in relation to the admissibility at trial of parts of the Claimant’s witness statement and the whole of Ms Lakhani’s witness statement.  That issue came before the Regional Employment Judge on 13 June, together with a further application by the Respondent that certain of the Claimant’s evidence be heard in private.  

8.	The Regional Employment Judge considered the parties’ submissions and ruled, as appears from paragraph 18 of his Reasons, on the admissibility of sections of the Claimant’s written statement.  He ruled Ms Lakhani’s evidence wholly inadmissible.  Further, he indicated that certain parts of the Claimant’s evidence should be heard in private under Employment Tribunal Rule 16(1) on the grounds that those passages were covered by confidentiality (see Rule 16(1)(b)).

The Appeals
9.	Both appeals challenge findings as to admissibility made by the Regional Employment Judge, and Mr David Reade QC, on behalf of the Claimant, takes a point on the Regional Employment Judge’s jurisdiction to consider whether part of the substantive hearing should be held in private.  I understand that the substantive hearing listed for tomorrow will take place before a full Employment Tribunal.

10.	I shall deal first with a preliminary application made by Mr Antony White QC for this appeal to be heard in private.  Power to do so is specifically dealt with in Rules 22 and 29 of the Employment Appeal Tribunal Rules.  I am not persuaded that this appeal falls squarely within either rule.  However, Mr White points out that under s35(1) of the Employment Tribunals Act 1996 the Employment Appeal Tribunal may, for the purposes of disposing of an appeal, exercise any of the powers of the Employment Tribunal.  Since this is an appeal against CMD orders, and by Rule 17(1) of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004 a CMD shall be held in private before a Chairman (now Employment Judge), I shall adopt that practice in this appeal and hear it in private. 

11.	The principal issue in both appeals concerns the Regional Employment Judge’s ruling as to the admissibility of certain evidence contained in paragraphs 111 and 124 – 125 (the Appeal) and 112 – 123 and 127 – 130 of the Claimant’s witness statement and the whole of Ms Lakhani’s evidence (the cross-appeal).  The key question for the Judge below was whether or not that evidence was relevant to an issue remaining in the case.  That emerges from the Court of Appeal judgments in ALM Medical Services Ltd v Bladen [2002] IRLR 807 and XXX v YYY [2004] IRLR 471, to which the Judge was referred and which he considered (Reasons para. 10), and from Phipson on Evidence (16th Ed.) chapter 7 - 02, 03 and 08.
12.	The primary issue now before the Employment Tribunal is whether or not the oral agreement contended for by the Claimant and denied by Mr Kenyon was reached between the two men on 27 February 2007.  

13.	The case which the Claimant wishes to advance is that the reason why the Claimant was not only dismissed, the fairness of which is no longer in issue between the parties, and why Mr Kenyon should deny the existence of the alleged agreement on 27 February, is a falling out between their respective partners, Ms Lakhani, and Mr Kenyon’s partner, Louise Quinn.  

14.	The effect of the Regional Employment Judge’s ruling is to permit the Claimant to raise this explanation (witness statement paras. 110 – 111) and to give evidence as to its effect at a meeting between the two men on 18 May 2007 (paras 124 – 125).  

15.	The detail of the fall out between the two women on the Claimant’s case is set out at paras. 112 – 123 and 127 – 130 of his witness statement and in the witness statement of Ms Lakhani.

16.	It is not immediately apparent to me from the Regional Employment Judge’s reasons as to why he has made the distinction between the passages ruled admissible (the subject of the appeal) and those ruled inadmissible (challenged in the cross-appeal).  His reasoning on this aspect is not explained, nor was it elucidated at a telephone CMD before the same Judge which I am told took place on 18 June, save that it was made clear that the distinction was intended.  

17.	It is axiomatic that on appeal I can only interfere with an interim order below, as with a substantive judgment, where an error of law is made out: see for example Adams v West Sussex County Council [1990] ICR 546, 550H – 551A per Wood P.
18.	Two potential errors of law are advanced by Mr White.  First, that the Judge’s reasons on this aspect are not “Meek-compliant”.  Secondly that the distinction drawn is illogical and internally inconsistent and thus irrational, thereby fulfilling one of the perversity epithets collected by Mummery P in Stewart & Cleveland v Guest (Engineering) Ltd [1994] IRLR 440 para. 33.  

19.	I accept those characterisations.  It seems clear to me that the whole of the evidence the subject of these appeals is relevant and admissible or it is not.  Again, exercising my powers under s35(1) ETA, I shall exercise the powers of the Employment Tribunal in determining whether the evidence is relevant.

20.	Mr Reade submits that the evidence is at least indirectly relevant to the primary issue, what, if anything, was agreed on 27 February 27, because it goes to explain why, in May 2007, Mr Kenyon reneged on his earlier agreement.  To prevent the Claimant from leading that evidence would, Mr Reade submits, be to deny him a fair hearing as required by Article 6 of the Convention.

21.	I have considered that submission with care.  Whilst finding it superficially attractive, I prefer the submission of Mr White, which is to focus on the pleaded issue.  Was agreement reached in February 2007?  If so, then there is no dispute but that the sums claimed by the Claimant, in principle, are owing.  How does the evidence now in issue in these appeals which relates to a period after February 2007, have sufficient relevance to the circumstances of the alleged agreement?  See the observation of Hoffmann LJ, as he then was, cited in Phipson chapter 7 – 07, in Vernon v Bosley [1997] P.I.Q.R 337 -340.  In my judgment it does not.  

22.	It is clear to me that the Judge, in the exercise of his judicial discretion, carrying out the necessary balancing exercise, considered that the detail of the alleged falling out between the partners of the Claimant and Mr Kenyon was not of sufficient relevance to the issue in the case.  I agree.  Having done so, there seems to me no logical distinction between that evidence and the evidence the subject of the Respondent’s appeal.  In these circumstances, I shall allow that appeal and dismiss the Respondent’s cross-appeal on admissibility.

23.	Finally, in the cross-appeal Mr Reade submitted that the Judge had no jurisdiction to give a direction as to part of the evidence being heard by the full Tribunal in private under Rule 16(1) of the 2004 Employment Tribunal Rules.  He referred me to the old Employment Appeal Tribunal case of Milne & Lyle v Waldren [1980] ICR 138 (Waterhouse J presiding).  That case was decided on a predecessor to Rule 16(1) of the 2004 Rules, that is Rule 6(1) of the 1974 Rules.  It envisaged a ruling by a full tribunal; whereas the present rule 16 specifically refers to a ruling by a tribunal or chairman (now employment judge).  I am satisfied that on that wording the judge had power to make the ruling which he did as to the hearing in private of certain confidential aspects of the Claimant’s evidence, the substance of which is not challenged in the cross-appeal.

Disposal
24.	It follows that the appeal is allowed and the cross-appeal dismissed.  The effect of my order is that the Regional Employment Judge’s order is varied to the extent only that paragraphs 111 and 124 – 125 of the Claimant’s witness statement are hereby ruled inadmissible at the full hearing before the Tribunal presently due to commence on 24 June.