Employment Cases Update

Esparon v Frederick & Anor UKEAT/0156/12/RN

Date published: 24/03/2013

Appeal against a refusal to review a default judgment made in favour of the claimant and involving a substantial award of compensation. Appeal allowed and the review application remitted back to a different EJ.

The claimant brought claims against the respondent in 2010. The respondents failed to lodge an ET3 and the hearing took place without them. A default judgment in favour of the claimant was entered and the claimant was awarded over £220,000 in compensation. The first the respondents said they heard of the claim was when they were contacted by the claimant's solicitors giving notice of enforcement proceedings. The Tribunal paperwork had apparently been sent to the wrong address and the respondents sought a review of the default judgment which was refused on the basis that it had been lodged out of time and it was not just and equitable to extend time. The respondents appealed.

The EAT allowed the appeal. On the material before the EAT, including the respondents' affidavit evidence, it was at the very least arguable that, (a) the respondents had a good explanation for failure to enter a response in time. The claim was served on the respondents at the wrong address; (b) they had a complete answer to the claim; they never employed the claimant; she was simply a guest in their house and (c) the balance of the prejudice lay in favour of the respondents. They had had no opportunity to contest a claim which resulted in a very large award of compensation to the claimant. The EJ had misdirected herself in law by considering only the explanation for delay. The review application could not properly be summarily rejected on paper; a review hearing was necessary.
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Appeal No. UKEAT/0156/12/RN

EMPLOYMENT APPEAL TRIBUNAL

FLEETBANK HOUSE, 2-6 SALISBURY SQUARE, LONDON EC4Y 8JX

At the Tribunal

On 15 February 2013

Before

HIS HONOUR JUDGE PETER CLARK (SITTING ALONE)

(1) ESPARON (APPELLANT)

(1) FREDERICK (2) ROUCOU (RESPONDENT)

Transcript of Proceedings

JUDGMENT

APPEARANCES

For the Appellant
MR DANIEL BARNETT (of Counsel) & MS KEIRA GORE (of Counsel)

Instructed by:
Messrs Clarkson Wright & Jakes LLP Solicitors
Valiant House
12 Knoll Rise
Orpington
Kent
BR6 0PG

For the Respondent
DEBARRED

SUMMARY

PRACTICE AND PROCEDURE – Review

Default Judgment. Review application. Employment Judge failed to take into account all material considerations; see Pendragon v Copus. Appeal allowed; case remitted for fresh review hearing.

HIS HONOUR JUDGE PETER CLARK

1. The parties in this matter before the Ashford Employment Tribunal are Ms Roucou, the Claimant and (1) Ms Esparon and (2) Mr Stephenson, Respondents. On 16 February 2010 the Claimant lodged her form ET1 raising a number of complaints against the Respondent by whom she alleged she was employed as a Nanny at their home between 24 April 2004 and 26 November 2009. No form ET3 was lodged by the Respondents within the required 28 days and following a hearing before Employment Judge Sage sitting alone on 4 August 2010 at which the Claimant appeared, represented by her solicitor, and the Respondents did not attend, that Judge entered a default judgment in favour of the Claimant upholding her claims and awarding her compensation in the total sum of £223,616.58. That Judgment is dated 28 August 2010. Time for applying for a review of the Judgment expired 14 days later.

2. On 18 February 2011, the Claimant's solicitor wrote to the Respondents giving notice of enforcement proceedings. On 21 February Ms Esparon replied to the Claimant's solicitor contending that this was the first she had heard of the claim. She wrote in similar terms to the Employment Tribunal on the same day asking for the relevant paperwork. The Tribunal responded on 7 March and on 8 March Ms Esparon applied to have the Judgment set aside. She pointed out that the Tribunal paperwork had been sent to 14 Middleton Avenue, Sidcup whereas the Respondents had lived at number 40 Middleton Avenue.

3. There then followed various telephone calls to the ET from the Respondent chasing up a response to the application of 8 March. A further review application was lodged by the Respondents on 16 August; a form ET3 in draft was lodged on 27 September. The review application was considered on paper by Employment Judge Sage, it was opposed by the Claimant. By a Judgment with Reasons dated 12 December 2011 the Judge refused the review application. The Respondents appealed that decision. At a preliminary hearing held before Langstaff P on 30 May 2012 the appeal was permitted to proceed to this full hearing. The Respondents have lodged affidavit evidence pursuant to paragraph 5 of the President's Order dated 12 June 2012.

4. The Claimant has been debarred from taking part in the appeal by order of the Deputy Registrar dated 16 August 2012. Mr Barnett points out the reason for that was that the Claimant's solicitors simply relied on the decision and Reasons of the Employment Judge; they had nothing to add.

5. It is apparent on the face of the Judge's Reasons that the sole basis for her decision on paper to reject the review application was that it was lodged out of time and that it was not just and equitable to extend time; see rule 33 of the Employment Tribunal Rules. In Pendragon v Copus [2005] ICR 1671, Burton P held that on an application for a review of a default Judgment failure by a Respondent to provide a good reason for a response not being entered in time is not determinative of the application. Applying the principals in Kwik Save and Swain [1997] ICR 49, Mummery P, it was also necessary to take into account the prospective merits of the defence to the claim and the balance of prejudice between the parties.

6. On the material now before me, including the Respondents' affidavit evidence, it is at the very least arguable that, (a) the Respondents have a good explanation for failure to enter a response in time. The claim was served on the Respondents at the wrong address; (b) they have a complete answer to the claim; they never employed the Claimant; she was simply a guest in their house and (c) the balance of the prejudice lies in favour of the Respondents. They have had no opportunity to contest a claim which resulted in a very large award of compensation to the Claimant. She loses a substantial windfall if the case is properly heard and the defence succeeds.

7. In these circumstances I am entirely satisfied that the Judge misdirected herself in law by considering only the explanation for delay. The review application could not properly be summarily rejected on paper; a review hearing was necessary.

8. Mr Barnett asked me to set aside the default Judgment. I am not prepared to go that far. It seems to me that the proper course is to allow the appeal and remit the review application back to a different Employment Judge for determination on evidence and in accordance with the principles set out in Pendragon v Copus.