Pregnancy discrimination and zero-hours contracts

The Equality Act 2010 protects women from discrimination “because of the pregnancy”, or because of illness suffered by her as a result of the pregnancy. In employment cases, the relevant section is Section 18. The core protection is against being treated “unfavourably”. It needs to be read in conjunction with Section 39.

Discrimination because of pregnancy is, by all reports, widespread. A recent Equality and Human Rights Commission stated that around one in nine mothers felt that they were either dismissed, made compulsorily redundant (where others in their workplace were not), or treated so poorly that they had to leave their job. Scaled up, that would amount to around 54,000 mothers per year. The link to the reports (both the full report and the summary of key findings) is here.

The Equality Act 2010 refers to “employees”, but “employment” in the Equality Act 2010 has a much wider meaning than “employment” for the purposes of unfair dismissal claims. The key section of the Equality Act 2010 is Section 83. We know from case law (Pimlico Plumbers and anor v Smith [2018] UKSC 29 and Clyde & Co LLP and anor v Bates van Winkelhof [2014] UKSC 32) that “employee” in the Equality Act covers “workers” within the meaning of s 230(3) Employment Rights Act 1996.

That has important consequences for “zero-hours” workers. A “zero-hours” contract is one where the worker does not have an obligation to accept work, and the employer does not have an obligation to provide work. As a result, the worker will generally not be an employee (in the unfair dismissal sense), but is still protected by discrimination law (although Tribunals have sometimes found that the worker is an employee when they are actually at work, although not a worker in between periods of work).

So a worker on a zero-hours contract still has rights, and those rights include the right not to be discriminated against because of pregnancy. That is an important point, because zero-hours contracts may be particularly attractive to expectant mothers who want flexible working arrangements. Employers may be concerned that expectant mothers will require restricted duties, and this will place a financial burden on the business. Can the employer then rely on the fact that the contract is a “zero-hours” contract, and simply choose not to offer work?

The short answer is “no”. Under s 18 of the 2010 Act, the woman is protected against unfavourable treatment. Unfavourable treatment is essentially the same as “detriment”, and the threshold is “relatively low” (Trustees of Swansea University Pension and Assurance Scheme and anor v Williams [2018] UKSC 65, para 27). The test is whether the treatment is “of such a kind that a reasonable worker would or might take the view that in all the circumstances it was to his [or her] detriment” (Shamoon v Chief Constable of the Royal Ulster Constabulary [2003] UKHL 11). If there is a legitimate expectation of work, then it is very likely that a failure to offer work would constitute unfavourable treatment.  That is the first ingredient of a claim under Section 18 of the 2010 Act.

Furthermore, the test for whether the treatment is “because of” pregnancy is relatively easy to meet. It is sufficient that the protected characteristic (here, pregnancy) has a “significant influence” on the reason why: Nagarajan v London Regional Transport [1999] IRLR 572. Moreover, the treatment will still be “because of pregnancy” if the reason is the economic consequences for the employer of employing a pregnant woman (Dekker v VJV Centrum C-177/88) or the health and safety implications of pregnancy, including a prohibition on performing certain work (Bush v Klinikum Neustadt Gmbh and Co Betriebs-KG C-320/01).

Furthermore, unfavourable treatment of a woman because of pregnancy is direct discrimination (in European terms), and so cannot be justified: see Webb v EMO Air Cargo (UK) Ltd C-32/93.

It follows that economic loss or disruption to work caused by pregnancy or absence because of pregnancy-related illness or maternity leave cannot negate pregnancy or maternity discrimination (see, for example, Tele Danmark A/S v Handels- og Kontorfunktionaerernes Forbund i Danmark (C109/00) [2001] E.C.R. I-6993 at para 23; “…the employer has to assume the risk of the economic and organisational consequences of the pregnancy of employees”).

So, if a worker on a zero-hours contract becomes pregnant, and as a result would need to go onto restricted duties (suppose, for instance, that the work has a substantial manual handling component), the employer cannot simply decide not to offer work. To do so would (very likely) constitute unlawful discrimination, and the worker could (in principle) claim for injury to feelings as well as for lost earnings.

If the employer’s concerns are health and safety concerns, then there is a potential statutory defence in Schedule 22 to the 2010 Act. It is not a particularly transparent piece of legislation. But the Explanatory Notes to Schedule 22 make it clear that Schedule 22 permits differential treatment based on sex or pregnancy and maternity at work which is required to comply with laws protecting women who are pregnant, who have recently given birth, or against risks specific to women.

One potentially relevant piece of legislation is the Management of Health and Safety at Work Regulations 1999, which require employers to carry out risk assessments (Regulation 3) and to carry out specific assessments where the workers include women of child-bearing age, if the work might be risky to the health and safety of a new or expectant mother (Regulation 16). If the risk assessment highlights a risk, then the employer is (as always) required to take steps to avoid that risk.

If those steps won’t avoid the risk, then the employer shall (if it is reasonable to do so, and would avoid the risk) alter the woman’s working conditions or hours of work. And it isn’t reasonable to do that, or if altering working conditions or hours won’t remove the risk, then the employer shall suspend the employee from work – subject to Section 67 Employment Rights Act 1996, which gives the employee the right to be offered to be provided with suitable alternative work (if it is available). Refusing suitable alternative work may mean that the employer can refuse to provide paid suspension.

Where employees (in the Employment Rights Act 1996 sense) are involved, it is clear that the suspension must be on full pay if the suspension is on maternity grounds (Section 68 of the 1996 Act). The 1996 Act is also clear that the employee is to be regarded as suspended from work on maternity grounds only if and so long as she continues to be employed, but is not provided with work or does not perform the work she normally performed before the suspension (Section 66 of the 1996 Act). The Explanatory Notes (see above), I think, make the answer clear – giving the example of a care home which cannot lawfully dismiss, but can lawfully suspend, a night-shift worker because she is pregnant.  Regulation 16 MHSWR 1999 implements the Pregnant Workers Directive (Directive 92/85), which addresses “workers”. A failure to carry out a risk assessment will (if the employer is notified of the pregnancy) amount to a detriment: Hardman v Mallon t/a Orchard Lodge Nursing Home [2002] CMLR 59. So the protection offered by Regulation 16 must cover “workers” (in the extended sense) as well as “employees” (in the narrow sense). If suspension is the only option, it is hard to see how a failure to offer paid suspension, following a Regulation 16 risk assessment, could amount to anything other than unfavourable treatment within the meaning of Section 18 Equality Act 2010.

There is also an “occupational requirement” exception in Schedule 9 to the 2010 Act (which is specifically provided for by Article 14(2) of the Recast Equal Treatment Directive). The Explanatory Notes to Schedule 9 give the example of a modelling job which requires someone of a particular race, age or sex. But that “occupational requirement” must be crucial to the post, and not merely an important factor; and the application of that requirement must be proportionate so as to achieve a legitimate aim.

To recap: a pregnant worker on a zero-hours contract is still entitled to ask for work. If there is a legitimate expectation of work – and this does not require a contractual entitlement to work – then it will very likely be unfavourable treatment not to offer the employee work. If a reasonable worker might take the view that it is a detriment, then the threshold for “unfavourable treatment” is met.

If the consequence is that the employer is put to additional cost, then so be it. The law is clear that the employer, not the pregnant worker, is to bear the economic consequences of pregnancy.

 

 

In the Employment Tribunals, if the reasons are sent to the wrong person, does time for lodging an appeal still run?

“Yes”, said the Court of Appeal in Rana v (1) London Borough of Ealing (2) Stephen Antoine [2018] EWCA Civ 2074.

In Rana (which is two joined appeals – “Rana” and “Bonnie”) the appellants appealed against decisions of HHJ Eady QC in the Employment Appeal Tribunal. She had refused permission to extend time for lodging an appeal against a decision of the ET. Under the relevant rules, time runs from when the ET’s judgment and/or the written reasons are “sent to the parties”. But, in the cases in question, the reasons had been sent to the wrong person. The question was whether they were nonetheless “sent to the parties”. The critical issue, thought the EAT, was “sending”; the reasons had been “sent”, and that was enough to fix the date, with the result that the appeals were substantially out of time.

You can see how that is an unhappy result. It gives the result that it simply doesn’t matter whether the reasons are sent out to anything approaching the correct parties. If the reasons are sent out to an address in Lapland, where the Respondent and Appellant both live in South Wales, then that would be enough to start time running on the appeals.

Despite that issue, Underhill LJ in Rana thought that (para 36):

“. . . there is an obvious practical advantage in having a single, contemporaneously recorded, date from which time for appealing runs for both parties, so that everyone knows where they stand from the moment that the judgment is promulgated; and I think it very likely that that is what the rule-maker intended.” 

The obvious risk is that a party would end up being out of time to appeal a decision of which they had not been formally informed. To that, Underhill LJ thought that the problem could be fixed by appropriate use of the EATs discretion to extend time. The relevant principles are set out at para 42-45 of the judgment. In summary:

  • The guiding principle should be that the party affected by the Tribunal’s mistake (as regards a matter of fundamental importance) should not be put in a worse position than if it had done its job properly.
  • But, if a victim receives a copy of the judgment first, or instead, from the other party, rather than from the Tribunal, they will be in substantially the same position as if the judgment had been properly sent by the tribunal – subject to some caveats. If the covering letter is missing, then the victim will not have been given information on how to appeal. 
  • Further, if the victim is somehow on notice of what has happened (for instance, the victim becomes aware that the other side has received a copy of the judgment), it is incumbent on them to take reasonable steps promptly to obtain a copy – and if they fail to do so then it would not be right for an extension to be granted which would put them in a better position than had they acted with reasonable despatch.

So in Bonnie, Underhill LJ thought that time had started to run, but that the EAT should have exercised its discretion to allow the Appellant an extension to the date that the appeal was filed, largely because she had written “promptly and persistently” to the tribunal to ask for the judgment. The appellant in Rana received a similar treatment: Underhill LJ said that the EAT should have extended time.

McCombe LJ agreed with the result but disagreed with the reasoning. He thought that the words requiring the judgment and written reasons to be “sent to the parties” were clear. They were not satisfied by sending the judgment and reasons to only one of the parties. On a plain language view, the appeals should be allowed.

Bean LJ agreed with the result but adopted the reasoning of Underhill LJ. He noted that the literal construction accepted by McCombe LJ had “the attraction of clarity and simplicity, and of conforming to the natural meaning of the words . . . [but was not] the result which the draftsman . . . was seeking to achieve”.

A moral, perhaps, is that if you are awaiting judgment, it is worth keeping in touch with the other side – and perhaps checking with the Tribunal office, if appropriate.

Can the Employment Tribunal limit the number of discrimination claims to be determined at any one hearing?

Can the Employment Tribunal limit the number of discrimination claims to be determined at any one hearing?

“Only with great caution”, said the Employment Appeal Tribunal in Tarn v Hughes (and ors) UKEAT/0064/18/DM – and the EAT then went on to give some helpful guidance on case management of discrimination claims.

In Tarn, a claimant GP had brought a large number of complaints of discrimination against her (former) partner GPs.

At the case management stage, the ET had required the claimant to select:

the most recent and serious 10 (maximum) events relied upon as giving rise to the above complaints and on which the Tribunal is required to make findings of fact and determinations

The order went on to state that the claimant was not precluded from relying on the other allegations as background and/or context, or pursuing them at a later hearing.

The underlying claim contained some 31 factual allegations. That, commented the Tribunal, would require it to make 180 separate findings (i.e. for each act, whether it happened, whether it was less favourable treatment, and whether it was because of the protected characteristic).

Although the appeal was pursued on a number of grounds, the crux of the matter is set out at para 25 of Tarn. In particular, HHJ Eady QC commented that

. . . of its nature, a discrimination claim is likely to require an ET to draw inferences from the evidence and from its primary findings of fact; to adopt a fragmented approach to the issues may “have the effect of diminishing any eloquence that the cumulative effects might have [on the determination of causation” (see per Mummery J (as he then was) in Qureshi at page 875H)

The judgment goes on to discuss guidance as to the possibility of selecting sample allegations in discrimination cases drawn from Hendricks and HSBC Asia Holdings BV and another v Gillespie UKEAT/0417/10, before giving a summary at para 28. I won’t reprise the paragraph in its entirety but the essence is this:

  1. The ET has a broad discretion to manage cases justly.
  2. In discrimination claims, the starting point is to identify precisely what claims are made and on what basis (and a list of issues will help).
  3. There will be some cases which are apt for striking out. However, it is not otherwise open to the ET to limit the claims a complainant can pursue – that would be to restrict her access to justice and to potentially deny an effective remedy in a case of unlawful discrimination.
  4. The ET could, in an appropriate case, separate out a sample of complaints or issues to be heard in advance of the remaining allegations.
  5. But that does not mean that such a course should be adopted, “save in those cases where it is clear this would not endanger the just determination of the case – something that might be difficult for the ET to assess at a preliminary stage”.
  6. It is often necessary, in discrimination claims, to look at the whole picture before looking at whether there has been unlawful discrimination in respect of a particular allegation. Asking a claimant to select his or her ten best points may often be inconsistent with the just determination of the claim(s).
  7. Moreover, separate determination of selected allegations or issues may not be the proportionate course in a particular case.

As to the appeal in Tarn itself, the EAT thought that the ET had failed to have regard to critical factors – for instance, given the list of issues, it was clear that much of the evidence given on one issue would inevitably address other factual issues at the same time. The Claimant had been placed in the (potentially) unfair position of having to choose between either continuing to assert her right to pursue all of her claims, or simply relying on them as context for the others. The appeal was therefore allowed.

I think this case is interesting not because of the particular disposal, but because of the general treatment of case management and discrimination claims. That inevitably has an impact on how practitioners should present discrimination claims. There is, very often, a tension between choosing the strongest allegations, thereby providing focus, and choosing a large number of allegations, thereby providing context – assisting the Tribunal to draw crucial inferences from the evidence. I suspect it is now less likely that breadth will be “managed out” at a preliminary hearing.

Illegality as a defence in the Employment Tribunals: the case of Okedina v Chikale

In the recent decision in Okedina v Chikale UKEAT/0152/17/RN the EAT (HHJ Eady QC) considered the question of when a Claimant’s contract of employment would be said to be illegal by virtue of the operation of immigration law.

The case contains a useful rehearsal of the relevant legal principles (para 35 – 41 of the decision).

At first instance, the ET had found that the Respondent had arranged for the Claimant (a Malawian national) to travel to the UK to work directly for the Respondent as a domestic worker. In November 2013 the Respondent made an application for an EEA family permit for the Claimant, providing false information with the intention of regularizing the Claimant’s position in the UK. The Claimant relied on the Respondent to take care of her visa situation.

The ET found that there was nothing inherently unlawful about the contract of employment, but that the contract had been illegally performed after 29 November 2013. However, the Claimant had not knowingly participated in that illegality.

The Respondent contended (throughout) that the contract of employment was prohibited by immigration legislation and therefore void from the outset.

The EAT in Okedina referred back to the guidance given in Hall v Woolston Hall Leisure Ltd [2001] ICR 99 (CA). It agreed with the decision at first instance, that this was a case which did not fall within the second category in Hall (i.e. where the contract itself is prohibited); and the ET had found that the Claimant had not knowingly engaged in any illegal performance of the contract, and so was not complicit in any subsequent illegality.

Discussion

The Court’s approach to illegality has developed substantially since Tinsley v Milligan [1994] 1 AC 340.

In Hall v Woolston Hall Leisure Ltd [2001] ICR 99 (CA), the Court set out three categories of illegality: one, where the contract is entered into with the intention of committing an illegal act; second, where the contract is expressly or implicitly prohibited by statute; and third, where a contract, lawful when made, is illegally performed and the party knowingly participated in that illegal performance.

Similarly, the decision in Enfield Technical Services v Payne [2008] IRLR 500 (in the Court of Appeal) cited the decision below (in the EAT) with approval, stating:

[25] In his judgment, Elias J analysed [the authorities] in some detail. I agree with his analysis and with the statement, at paragraph 43:

“In our judgment the essential feature of all the cases where there has been found to be illegality is that the parties have knowingly entered into arrangements which have to their knowledge represented the facts of the employment relationship to be other than that they really were.”

I have already cited the general conclusion of the EAT at their paragraph 46. I agree with their further statement, at paragraph 49 that, while the decision in Daymond was correct, the width of Underhill J’s remarks at paragraph 12, cited at paragraph 18 above, was too broad. Elias J stated:

“We do not consider that the authorities, or Salvesen, support the proposition that if the arrangements have the effect of depriving the Revenue of tax to which they were in law entitled then this renders the contract unlawful. For reasons we have given, in our judgment there must be some form of misrepresentation, some attempt to conceal the true facts of the relationship, before the contract is rendered illegal for the purposes of a doctrine rooted in public policy.”

 

In Allen v Hounga [2014] UKSC 47, [2014] 1 WLR 2889 the Supreme Court considered illegality as a defence to a claim in tort – although the approach to this varied between justices. So, for instance:

“[t]he public policy in support of the application of that defence, to the extent that it exists at all, should give way to the public policy to which its application is an affront . . .” (para 52, per Lord Wilson)

and

 “[t]he various analyses offered in past cases are largely . . . different ways of expressing two connected aspects of the basis for the law of illegality. The first is that the law must act consistently; it cannot give with one hand what it takes away with another, nor condone when facing right what it condemns when facing left. The second is that before this principle operates to bar a civil claim, and particularly one in tort, there must be a sufficiently close connection between the illegality and the claim made. Neither proposition is suggested as a comprehensive test. En route to the answer in an individual case, the court is likely to need to consider also the gravity of the illegality of which the claimant is guilty and her knowledge or intention in relation to it. It will no doubt also consider the purpose of the law which has been infringed and the extent to which to allow a civil claim nevertheless to proceed will be inconsistent with that purpose. Other factors may arise . . .” (para 53, per Lord Hughes)

The approach in Hounga was elaborated on in Patel v Mirza [2016] UKSC 42 (para 101 per Lord Toulson)

“ . . . one cannot judge whether allowing a claim which is in some way tainted by illegality would be contrary to public interest, because it would be harmful to the integrity of the legal system, without a) considering the underlying purpose of the prohibition that has been transgressed; b) considering conversely any other relevant public policies which may be rendered ineffective or less effective by denial of the claim, and c) keeping in mind the possibility of overkill unless the law is applied with a due sense of proportionality. We are, after all, in the area of public policy . . .”

Okedina is a useful illustration of how these factors interrelate. Patel represents a softening of the approach, in a way which (I anticipate) assists Claimants, because of the relevance of proportionality.

An argument which is frequently run in the Tribunals is that the employment contract is illegal on the basis that it defrauds the revenue. So, for instance (the following cases are ET decisions and so, of course, only illustrative):

In Haseldine v (1) Winterton (2) Academy 4 Dogs Ltd (3) Happy Hounds Dog Grooming School Ltd (C-2401434/17) the ET considered that wages were being hidden behind the pretense of unpaid work, and that the claimant was an active participant in the scheme; that was sufficient to yield an illegality defence.

A similar argument failed in Wilcox v Diamond Contracts Ltd (C-1800972/2017) in which the Respondent failed to prove that the arrangement was for the purposes of defrauding the Revenue, or that the performance of the contract was done in a way that had that effect (as in Colen v Cebrian (UK) Ltd [2004] ICR 568).

Likewise in Adair v (1) Concept Barbers Ltd (2) Conway Men’s Hairdressing Ltd (S/4100522/2017), where there had been illegal payments made in respect of the claimant’s wages in order to avoid income tax and NI contributions payable on her behalf. Critical in that decision was the fact that the Claimant did not wish for the financial advantage and did not wish to be party to an illegal arrangement; and the sums involved represented a small proportion (some 20 – 11%) of her total pay; she was an unwilling participant; and, although the case prior to Patel v Mirza would have been “on the margin”, the introduction of a further consideration of proportionality led the judge to the conclusion that he had jurisdiction: it would be “disproportionate to bar the Claimant’s access to her statutory and contractual rights entirely . . .”. And the fact that the First Respondent was the beneficiary of the arrangement counted against denying the Claimant a remedy by reason of illegality.

It is interesting to note that, despite the recent developments (at the level of the Supreme Court, to boot) on the subject of illegality, Hall remains a touchstone.

 

 

EZRA MACDONALD

Injunctions and restrictive covenants: enforceable and/or avoidable covenants?

That is a slightly clumsy title, but it is impossible pithily to summarise the wide-ranging discussion in Signature of St Albans (Property) Guernsey Ltd v Wragg & ors [2017] EWHC 2352 (Ch).

In Wragg, the applicants had brought an application under s 84(2) Law of Property Act 1925 (and under CPR Part 8), which allows the Court to make declarations as to the effect and construction of any restrictions affecting freehold land. The land in question had originally formed part of a large estate; around the turn of the 20th Century it had been sold off in five parcels, each subject to a variety of restrictive covenants (“the 1910 covenants”). The claimant in the action was the owner of one of those parcels, together with some parts of other parcels. It had obtained planning permission to construct a residential care home on the intact parcel. This, it was agreed, would be in breach of the 1910 covenants, but the claimant sought to argue that those covenants did not continue to affect the property and were not enforceable against them as owners of the property.

The claimant ran two separate arguments (c.f. para 25 of the judgment). Firstly it argued that there had been breaches of the vendor covenants which deprived the defendants of the right to enforce the purchaser covenants. Secondly it said that those entitled to the benefit of the purchaser covenants had made or permitted such changes in the character of the neighbourhood that those covenants had ceased to have some practical effect, and that it was not necessary to show that the change in character meant that there was no longer any value left in the covenant at all.

The Court in Wragg applied the general principle regarding the grant of an injunction from Australian Hardwoods Pty Ltd v Commissioner for Railways [1961] WLR 425

“. . . where the agreement is one which involves continuing or future acts to be performed by the plaintiff, he must fail unless he can show that he is ready and willing on his part to carry out those obligations, which are, in fact, part of the consideration for the undertaking of the defendant that the plaintiff seeks to have enforced.”

The relevant (alleged) breach on which the claimant sought to rely was the building of houses elsewhere on the estate, which exceeded (it was argued) a density limitation. The Court’s factual observations in Wragg were that there had not been much (if anything) in the way of breach here. But the more interesting point is that the breach (if any) had been performed by the defendants’ predecessor in title. At para 68 the Court noted that:

. . . [t]he covenant in the present case not to build more than a certain number of houses is broken when the supernumerary house is built. It is not broken at every moment thereafter that the owner for the time being fails to remove it . . .

So the historic breach of the vendor covenant did not disentitle the vendor’s successors in title from enforcing the purchaser covenants.

The claimant then argued that, since there are cases where a person can become disentitled to seek an injunction because of the behaviour of a third party through whom he claims, then a breach of a covenant by a successor in title to one of the parcels of land would disentitle all successors in title to the other parcels of land from enforcing the vendor covenant by injunction (and if that isn’t sufficiently clear, the actual judgment text is at paras 69 – 70).

In response, the Court  emphasised the difference between personal and property rights. At para 79:

In English law, the burden of a positive covenant is not transmissible to (is not binding on) a successor in title, either at common law or in equity. On the other hand, in equity, the burden of a negative covenant which regulates the user or enjoyment of land is so transmissible (or binding). The hallmark of a property right, as opposed to a personal right, is that it is a right relating to a thing which is binding not only as between the parties but also against third parties. That is exactly what covenants restrictive of the user of land are.

So, even if an individual successor in title might debar him or herself from seeking an injunction by reason of their own behaviour, that would not prevent other collateral successors in title, not so disabled, from doing so.

The rest of the judgment is, I think, similarly helpful. For instance, the Court emphasises at [79] that, in the context of property law (e.g. a sale of real property), the consideration given and received is the property rights which have been transferred ([78]: “. . . the totality of the stipulations and benefits on the one side (including the covenant and the conveyance of land) against the totality of the stipulations and benefits on the other (including the covenant and the purchase price)” – and not simply one set of covenants against another set of covenants.

The second argument – based on change of character – was dealt with much more shortly, and I cite only the critical paragraph here. The discussion, however, I think worth reading in full: it is interesting.

[96] In my judgment the answer is not that there are two standards, one for judging changes in the character of the neighbourhood when caused by the applicant for an injunction or his predecessors in title, and the other for judging such changes when caused by other people.Instead, there is one standard only, which applies to everyone, except to an applicant who has (or whose predecessors have) in effect represented that the covenants are no longer enforceable, and others have relied on that representation to their detriment. In other words, the only exception is where an estoppel argument can be raised against the applicant for an injunction. That is quite different from saying that in the case of acts or omissions of the applicant or his predecessors it is enough if the covenants have lost some practical effect. In my judgment, that would be an entirely unprincipled distinction to draw, whereas a general rule for everyone subject to an estoppel defence against a particular applicant is consistent with principle.

“It is quite impossible” (the Court concluded, citing Chatsworth Estates Co v Fewell [1930] 2 Ch 224, 230) “here to say that there has been so complete a change in the character of this neighbourhood as to render the covenants valueless to the plaintiffs.” The purpose of the covenants had not, therefore, failed, and so the covenants were still available to be relied upon by the defendants.

I’d reiterate that the judgment is, I think, worth reading in full; although only a decision of the High Court, it is intrinsically interesting and a useful rehearsal of key principles.

When can one person charge another for looking after goods? On bailment and the right to reimbursement (and cows)

In Tongue v (1) RSPCA (2) Heasalgrave (Trustee in bankruptcy of the Applicant) [2017] EWHC 2508 (Ch), the Court considered the question of when a relationship of bailment arises, and whether (and how) it gives rise to a right to reimbursement for looking after the bailed goods – in Tongue’s case, the goods were cattle.

Tongue is a rather sad case, involving Mr Tongue, his father, and brother; wherein the RSPCA had intervened to deal with cattle owned by Mr Tongue; they were first looked after by the RPCA, then moved from his farm to a holding owned by Trading Standards. The cows had been left in poor conditions. Criminal charges followed, and then convictions; and later a sentence of imprisonment for breaches of the disqualification element of the sentences (in the case of Mr Tongue’s father, that sentence was suspended). In 2013, Mr Tongue was adjudged bankrupt. The RSPCA brought proceedings claiming that, as bailee of the animals, it was entitled to recover expenses incurred in looking after the animals.

Newey LJ in the High Court provides a very helpful summary of the law of bailment at para 71 & seq. Mr Tongue had agreed to let the RSPCA “enter land at Emmadale to care for (f[ood]/w[ater]/vet) [the cattle]” – but that did not give rise to a bailment. Primarily – see para 74 of the judgment – the agreement was not apt to confer possession. Secondly – and this is rather fact-specific:

. . . Assuming that [the seizure of the cattle] was valid, the police must at that point have become bailees of the cattle (compare Sutcliffe v Chief Constable of West Yorkshire) and, having had them placed in its care, the RSPCA would in turn seem to have become a bailee for the police and held the cattle to their order. The consent that Mr Tongue gave later that day will have given the RSPCA due authority to go onto Emmadale Farm (though it was in fact already there), but it is hard to see that it can otherwise have changed much. The RSPCA will surely have continued to hold the cattle as a bailee for, and to the order of, the police. Mr Tongue had no power to release the RSPCA from its obligations to the police.

So the short point, in relation to bailment, is this: one does not become a bailee of goods simply by being permitted to enter onto an individual’s land and deal with those goods; similarly, a bailee generally cannot dispute a bailor’s title to goods.

 

What does a claimant need to do to serve a claim form “during its period of validity”?

In Jones v Chichester Harbour Conservancy & Ors [2017] EWHC 2270 (QB) Master McCloud considered the issue of what a claimant needs to do in order to serve a claim form during its period of validity. The Claimant in Jones had brought a claim which, by reasons of limitation, had to be served by 1 November 2016. She applied for an extension of time; this was granted by Master Fontaine, by an order which stated that “[t]he date for service of the Claim Form is extended to 17th January 2017”. The claim form was emailed at 4.27pm on 17 January 2017, and a hard copy placed in the DX; the hard copy was received on 18 January. The Defendant had not accepted a willingness to accept service by email.

The Claimant pointed out that CPR r 7.5 simply requires the Claimant to “complete the step required [in the relevant table] before 12.00 midnight on the calendar day four months after the issue of the claim form.” This “relevant step”, for DX and/or first class post, was “[p]osting, leaving with, delivering to or collection by the relevant service provider”.

The Defendant’s argument was that the Order of Master Fontaine said nothing about CPR r 7.5; the effect of the Order was to require that the claim form be served by 17 January; CPR r 6.14 provides for “deemed service”, which is the second business day after completion of the “relevant step”. So for service on 17 January, the document would need ot be placed in the DX by midnight on 13 January.

The judgment itself contains a helpful review of the authorities in this area; the Court takes a purposive approach, and then finds as follows at [38]:

    1. In my judgment:

(1) the correct approach when determining whether, for the purpose of answering the question “was the claim form served during its period of validity?” is to ascertain whether the Claimant has carried out the step required by rule 7.5 within the time provided for doing so. That would apply equally to cases where time for service has been extended by order (as here) and to cases where the basic 4 or 6 month period of validity applies; and

(2) as to the purpose of the ‘deemed date’ provisions in rule 6.14 those have to be given an interpretation which gives them a meaningful function and in my judgment the deeming provisions operate as a means to ensure that it is clear to the parties what date is to be used for the purpose of calculating such things as the date for service of acknowledgement of service or defence.

. . . . and that, I think, is a helpful clarification. What a Claimant needs to do, within the four-month validity period, is to take the “relevant step”. The issue of “deemed service” is a separate issue, and is relevant to calculating dates which come after service of the claim form.

What is the correct approach to contractual interpretation?

In the recent case of Wood v Capita Insurance Services Ltd [2017] UKSC 24  in a commercial context, the Supreme Court has recently issued some helpful commentary on the relationship between two lead authorities – Arnold v Britton & Ors [2015] UKSC 36 and Rainy Sky SA & Orsd v Kookmin Bank [2011] UKSC 50.

Wood started life as a claim for loss arising from (alleged) mis-selling or suspected mis-selling of insurance products in the period before a sale under a SPA was completed. One of the points at issue in the appeal was whether the Court of Appeal had been unduly influenced by a submission that the Supreme Court in Arnold had “rowed back” from the approach set out in Rainy Sky. But, with unusual concision, the Supreme Court in Wood (per Lord Hodge) stated that:

14.              On the approach to contractual interpretation, Rainy Sky and Arnold were saying the same thing.

More detailed guidance is given at [11] and [12] of the judgement, which I’d recommend as a useful reference point for disputes over contractual interpretation – which remains, as in Rainy Sky, a “unitary exercise”, requiring the Court to balance the text and the context. The “iterative approach” set out in In re Sigma Finance Corpn [2010] 1 All ER 571 (at para 10, per Lord Mance) was endorsed: take each suggested interpretation and then check it against the provisions of the contract and its commercial consequences.

Failure to attend the trial

When a litigant in person fails to attend a trial for medical reasons, will he/she be able to fall back on CPR r 39.3(2)?

The relevant principles are set out in Emojevbe v Secretary of State for Transport[2017] EWCA Civ 934 (link to BAILII here). In Emojevbe (which began in the Central London County Court) the appellant had applied for an adjournment two days before trial, citing an injured knee. That application was refused; the appellant subsequently failed to attend trial and summary judgment was granted. He applied to set this aside under CPR r 39.3(2)

(2) Where the court strikes out proceedings, or any part of them, under this rule, it may subsequently restore the proceedings, or that part.

It is now well-established that CPR r 39.3 and Part 52 (Appeals) overlap: even if an application under r 39.3 fails, that does not prevent an applicant seeking permission to appeal the order,  and indeed there is some judicial guidance suggesting that a person in that position should do both: see Bank of Scotland plc v Pereira and others (“Pereira”) [2011] EWCA Civ 241 per Lord Neuberger at [24].

In Emojevbe, the trial judge focussed on whether the appellant had a good reason for not attending the trial. He took the view that if the evidence showed that he appellant was “simply unable physically to attend court”, then that would amount to good reason. But Dr Emojevbe had only supplied a “fit note” indicating that he was unfit for work. That, he thought, did not amount to “good reason”.

However, the Court of Appeal took the view that the trial judge had fallen into error, because (para 32):

“. . . his focus and analysis rested wholly on whether the appellant was physically capable of attending court on the day of the trial. In doing so the judge, in my judgment, failed to examine all the evidence relevant to the non-attendance of the appellant. In considering the totality of the evidence the following matters were relevant:

i) There was no history of the appellant either failing to attend court or seeking adjournments;

ii) The illness was genuine; the further medical evidence which had become available before the judge, and which had not been before HHJ Carr, showed that later in the year with which we are concerned surgery to the knee became necessary and the appellant was signed off work for a number of months;

iii) The appellant was in pain. Whilst the emphasis was undoubtedly on the issue of mobility in terms of the appellant’s ability physically to attend court, no consideration was given as to whether the appellant would be put to an unfair disadvantage and be less able to put forward his case on his own behalf whilst in pain from his injured knee. The extent to which his medical condition might impede his ability to conduct the litigation in person is a factual matter which should be taken into account;

iv) The appellant was the claimant and the reality was that if the application under CPR 39.3(3) failed then at no stage would the merits of the case have been considered by a court;

v) The judge had found the third limb, ‘reasonable prospect of success at trial’ to have been satisfied.

The appeal was therefore allowed, notwithstanding the usual disclaimers that appellate courts should be slow to interfere with a decision of a lower court on such questions; that evidence offered in support of an application to adjourn should be scrutinised; that a pro-forma fit note, without more, may be insufficient to found either an adjournment application or a r 39.3 application; and that the fact that someone is a litigant in person is not in itself a reason for applying a test other than that which applies to a represented litigant (all from para 31 of the decision in Emovjevbe).

The moral of the tale is that when dealing with adjournment applications on medical grounds (or subsequent applications under r 39.3) it is worth taking a broad view, and not merely focussing on the medical evidence. That having been said, the medical evidence is likely to be fundamental; and a “fit note” by itself, as the Court in Emovjebe noted, may well be insufficient.

No mercy for missed deadlines

In the fairly-recent case of Lakhani and anor v Mahmud [2017] EWHC 1713 (available via BAILII here), the freeholders of land in a London suburb had brought an action seeking an injunction. They wanted the defendants to restore car parking spaces to a condition in which they were available to the claimants.

As part of case management, D J Jackson made an order requiring the parties to file and serve updated costs budgets 21 days before the CCMC. The claimants served their costs budget on time. The defendants served theirs one day later – and, unfortunately, one day too late. Nonetheless, the parties’ solicitors carried on with the process of commenting on one another’s proposals.

At the CCMC, the court heard the defendants’ application for relief from sanctions. It did not succeed, and they appealed this decision.

In the High Court, Daniel Alexander QC noted that

[t]he application for relief from sanctions was not advanced in a manner calculated to optimise the chances of success . . . it was made at the last minute before the hearing . . . the circumstances in which the application was made and the late service of evidence precluded the claimants form serving evidence in response . . . [t]hird, the 45 minute hearing . . . was turned into a 1/2 day hearing, dominated by the issue of relief from sanctions. Fourth, the late service . . . and the consequential dispute . . . had potential to disrupt agreement over costs budgets.

The appellate decision then goes on to deal with the first instance decision in some detail. It is potentially helpful for anyone faced with a relief-from-sanctions application (although there is, of course, higher authority). The High Court in Lahkhani upheld the first instance decision; it was a decision “open to [the judge] in the exercise of his discretion and is of a kind which the Court of Appeal has recommended should normally be upheld”, although it was (para 59)

“perhaps, on the tougher end of the spectrum as to substance and the leaner end of the spectrum as to analysis. But the defendants have not been deprived of a trial altogether. Had that been the consequence, the situation would have merited more detailed scrutiny than the judge gave it . . .”

 

Nothing new here, some might say, but is a salutory reminder of the strict approach which the Court will often take, and of the uphill struggle with which any appeal against a case management decision will be faced.