Gold Panda Ltd & Anor v O'Keefe (Costs order; unreasonable conduct of the proceedings) [2025] EAT 47 (15 April 2025)

SUMMARY

Costs order; unreasonable conduct of the proceedings

The employment tribunal made an award of costs against the appellants under rule 76(1)(a) of the Employment Tribunal Rules, 2013 on the basis that conduct of the appellants would have had the effect of removing them from the register of companies but for interventions by the claimant. The tribunal inferred that the appellants' intentions had been to prevent the claimant from establishing liability against them for her complaints, and found this to be unreasonable conduct of the proceedings

The appellants accepted that the behaviour in question was unreasonable, but argued that the tribunal had erred in concluding that it formed any part of the conduct of the proceedings.

Held: Conduct by the respondents which was intended to influence the course or outcome of the tribunal claim by making it impossible for the claimant to secure a judgment on the merits of her complaints was capable, as a matter of law, of amounting to unreasonable conduct of the proceedings. Having reached the conclusions it did about the appellants' intentions, the tribunal had not erred in law in concluding that rule 76 was engaged.

The appeal was refused.

THE HON. LORD FAIRLEY, PRESIDENT:

Introduction

1. This is an appeal against an award of costs made against the appellants on 12^th May 2023 by a tribunal at Birmingham. The appellants were two of three respondents to a complaint made by Ms O'Keefe, who is now the respondent to this appeal. For ease of reference, I will continue to refer to her as "the claimant" as she was described before the employment tribunal.

Procedural history

2. In a claim form (ET1) presented on 22 October 2021, the claimant brought complaints of unfair dismissal, breach of contract (consisting of failure to pay notice and pension contributions), failure to pay statutory redundancy pay, unlawful deductions from wages (consisting of outstanding holiday pay), failure to provide written reasons for dismissal, direct age discrimination and failure to inform or consult prior to the transfer of a business contrary to regulation 5 of the Transfer of Undertakings (Protection of Employment) Regulations, 2006 ("TUPE").

3. Following a four-day hearing, the complaints of unfair dismissal, breach of contract and unlawful deductions from wages succeeded against the second appellant. The complaint under regulation 15 of TUPE was successful against both appellants. The complaints of direct age discrimination, failure to pay redundancy pay, and failure to provide written reasons for dismissal did not succeed and were dismissed.

4. At the conclusion of the hearing, the claimant's representative made an application for costs under rule 76(1)(a) of the Employment Tribunals Rules of Procedure, 2013. Parties were given an opportunity to make written submissions on that application within 14 days, the claimant was ordered to provide a breakdown of costs claimed, and the respondent was ordered to provide information on means.

5. Each party made submissions and complied with the orders made. On 11 May 2023, the tribunal met to consider the costs application on the papers. In its judgment dated 12 May 2023, it awarded costs against the appellants on a joint and several basis in the sum of £8370.98.

Rule 76

6. Rule 76(1)(a) states:

"A Tribunal may make a costs order...and shall consider whether to do so where it considers that a party has acted vexatiously, abusively, disruptively or otherwise unreasonably in either the bringing of the proceedings (or part) or in the way that the proceedings (or part) have been conducted"

The tribunal's reasons

7. The tribunal accepted a submission on behalf of the claimant that the first appellant had acted unreasonably in making three attempts to have itself voluntarily removed from the register of companies for the purpose of trying to avoid liability for the complaints that the claimant had made against it. In reaching that conclusion, the tribunal noted that the first application to be removed from the register of companies was published a week after the first appellant had submitted its response form (ET3) and that two further applications made while the tribunal proceedings were ongoing.

8. The tribunal also accepted a submission that the second appellant had acted unreasonably in (a) failing to object to a potential compulsory strike off from the register on or after 27 December 2022 despite knowing that it was a respondent to these proceedings; (b) failing to notify the claimant on or around 27 December 2022 of the imminent strike off; and (c) failing to notify the claimant and the tribunal of its imminent dissolution until the evening of 29 March 2023 after completion of evidence and submissions in the proceedings.

9. Neither appellant was ultimately removed from the register or dissolved. Counsel who appeared for the appellants confirmed that, in each case, this was because of preventative steps taken by the claimant.

10. At ET § 31, the tribunal noted that neither appellant had sought to explain why it acted (or failed to act) in the way it did. The tribunal inferred that the appellants actions and failures to act were attempts to avoid liability for the complaints that had been made by the claimant in the tribunal proceedings.

The ground of appeal and the appellant's submissions

11. No issue is taken in this appeal with the tribunal's conclusion that the conduct in question was unreasonable. The single ground of appeal advanced is that the tribunal erred in in law in concluding that the conduct amounted to the appellants' conduct of the proceedings.

12. Counsel submitted that the tribunal's use of the expressions "in relation to the proceedings" (ET § 30) and "in the context of...proceedings" (ET § 31) raised a question as to whether it had correctly applied the test referred to in rule 76 of "the way that the proceedings...have been conducted".

13. Acting in a way that made a judgment more difficult or even impossible to enforce did not, of itself, amount to the conduct of the proceedings, even if it could be said to be related or connected to the proceedings. Other remedies might be available in company law against directors who acted in that way.

14. Reliance was placed on Harvey on Industrial Relations and Employment Law, Division PI, paragraph 1056.01 which states:

"... conduct which occurs outside the bringing or conducting of proceedings, even if it has some connection with it, will not necessarily give rise to the power to make a costs order... So costs may not be awarded against a party simply because they have posted abusive messages on social media about another party's witness... but if the abusive messages are intended to intimidate the witness from giving evidence in the proceedings, that may well fall within rule 76(1)(a)...see Bolch v. Chipman [2004] IRLR 140, at [55]"

15. Whilst Bolch was authority for the proposition that conduct outside the courtroom (including the cited example of witness intimidation) could still amount to conduct of the proceedings, that was distinguishable from a situation where a party to the proceedings (in this case, a limited company) simply ceased to exist as a result of a voluntary action. Counsel submitted that what an owner of a company chooses to do with the company cannot be described as the conduct of proceedings. As a matter of law, therefore, none of the acts or omissions of applying to strike off a company, failing to object to a proposed strike off or failing to notify the claimant of those things could ever amount to "conducting proceedings" for the purposes of rule 76.

Respondent's submissions

16. Counsel for the respondent submitted that the tribunal had correctly directed itself on the law and had reached a conclusion that was open to it.

17. Conduct of proceedings is a broad concept. In Leeks v. University College London Hospitals NHS Foundation Trust [2025] ICR 87, for example, a refusal to participate in judicial mediation was found to be capable of amounting to the conduct of tribunal proceedings.

18. As was noted in Bolch, conduct outside of the court room and outside the ambit of legal correspondence may still be found to be an unreasonable method of conducting proceedings if its intention is to influence the course or outcome of those proceedings. That was the position here. As the tribunal had found at ET § 31, the purpose of the admittedly unreasonable conduct was to prevent the claimant from establishing liability against the appellants for her complaints.

19. Even if the financial component of a judgment was impossible to enforce, a determination of liability still had a value. It was clear that the tribunal's decision was not based simply upon the issue of enforceability of the judgment but rather upon the attempt to interfere with the outcome of the case by bringing it to a premature end. A company whose registration had been cancelled could not be a party to any litigation, as it would have had no capacity to sue or to defend such proceedings (McPherson & Keay's Law of Company Liquidation (5^th edition), chapter 17, para. 1 and the cases referred to therein).

20. In the absence of an alternative explanation, the tribunal was entitled to infer that the purpose of the conduct was to defeat the claimant's ability to establish liability in the complaints made by her in the ongoing proceedings.

Analysis and decision

21. In examining whether unreasonable conduct amounted to "the way that the proceedings (or part) have been conducted", the tribunal first required to define the unreasonable conduct. It did so, and no criticism is made of its conclusions on that issue.

22. The next step, therefore, was to consider whether the unreasonable conduct was part of the conduct of the proceedings. In considering that issue it was legitimate for the tribunal to examine, as part of the whole circumstances, the likely effect of the conduct and the subjective intention behind it. A tribunal's assessment of intent will invariably depend upon the inferences it is prepared to draw about the state of mind of the party whose conduct is under consideration.

23. Without attempting an exhaustive definition of the circumstances in which acts or omissions by a respondent might amount to the conduct of tribunal proceedings, therefore, conduct by a respondent intended to influence the course or outcome of such proceedings by making continuance of them impossible for a claimant certainly could.

24. I do not accept the submission for the appellant that the tribunal's conclusions were limited to the issue of the enforceability of any financial award. On a fair reading of the tribunal's reasons, in particular at ET § 31, it concluded that the purpose of the conduct was to prevent all of the claimant's complaints against the appellants from proceeding any further. The purpose of the conduct went beyond the issue of enforceability of a financial award. The intention of the appellants was to bring the proceedings to an end by frustrating the claimant's ability to establish liability on the merits of her complaints. The tribunal properly concluded that such conduct was not extraneous to the proceedings. Rather, it was part of the way in which the appellants went about resisting the complaints against then. As a matter of law, it was entitled to reach that conclusion.

25. There being no error of law in the tribunal's conclusion that the appellants' unreasonable conduct engaged rule 76(1)(a), the appeal is refused.

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You are here: BAILII >> Databases >> United Kingdom Employment Appeal Tribunal >> Gold Panda Ltd & Anor v O'Keefe (Costs order; unreasonable conduct of the proceedings) [2025] EAT 47 (15 April 2025) URL: https://www.bailii.org/uk/cases/UKEAT/2025/47.html Cite as: [2025] EAT 47

United Kingdom Employment Appeal Tribunal