Sud v London Borough of Ealing [2013] EWCA Civ 949

Appeal against a decision by the EAT ruling that the ET had not erred in failing to take account of the deduced effect of the appellant’s illness and that a costs order made against her should stand. Appeal dismissed.

The appellant brought claims of unfair dismissal, detriment for having made protected disclosures, sex, race and disability discrimination and unpaid holiday pay. All her claims were either withdrawn or rejected at the ET apart from the claim of disability discrimination by reason of the failure to make reasonable adjustment of provision of aids and adaptations to assist the claimant to work at home on the basis of her physical disability which was made out. The ET rejected her claim that she was also disabled because of her mental health condition. The ET also made a costs order against the claimant of 50% of the respondent's substantial costs by reason of her unreasonable conduct. The EAT, although it held that there had been an error of law on the part of the tribunal as regards the deduced effect of the appellant's illness, none of her claims for discrimination arising out of such a disability would have succeeded. Accordingly, they found that the tribunal did not err when it concluded that the appellant's claims for discrimination were unfounded (save to the limited extent the tribunal had found it should succeed) and the exercise by the tribunal of its discretion to award 50% of the respondent's reasonable costs was upheld. The claimant appealed to the Court of Appeal.

The Court of Appeal dismissed both aspects of the appeal. An additional finding that the appellant was disabled by reason of mental impairment would not have affected the outcome of this case on the disability-discrimination claims, and, applying the test set out in Dobie, the conclusion of the tribunal was plainly and unarguably right, irrespective of its failure to address the deduced effect of the appellant's treatment. Therefore, the EAT did not err when it decided that this was an academic issue and the case should not be remitted. On the costs issue, the Court of Appeal said that in all the circumstances, the decision by the tribunal was not reached contrary to, or in disregard of, any relevant principle and it was not plainly wrong. Notwithstanding the exceptional nature of the award of costs and its implications for the appellant, the tribunal's decision came well within the proper exercise of its discretion.

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Case No: A2/2012/1509

Neutral Citation Number: [2013] EWCA Civ 949

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM EMPLOYMENT APPEAL TRIBUNAL

(THE HONOURABLE MR JUSTICE WILKIE)

UKEAT/0482/11/LA & UKEAT/0483/11/LA

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 30/07/2013

Before :

LORD JUSTICE MAURICE KAY,

VICE PRESIDENT OF THE COURT OF APPEAL CIVIL DIVISION

LORD JUSTICE PATTEN

and

**LORD JUSTICE FULFORD**

Between :

Sud (Appellant)

- and -

London Borough of Ealing (Respondent)

Mr D Pievsky (instructed by Bar Pro Bono Unit) for the Appellant

Mr R Downey (instructed by London Borough of Ealing) for the Respondent

Hearing dates : Tuesday 11th June 2013

Judgment

Lord Justice Fulford:

Introduction

  1. On 14 December 2009 the Employment Tribunal sitting at Watford ("the tribunal") dismissed all of the appellant's claims (summarised hereafter) except a claim for disability discrimination based on a failure to make a reasonable adjustment by providing aids and adaptations to assist the appellant to work at home by reason of her physical disability (a frozen shoulder, following a fall).
  1. In a second decision, on 22 February 2010, the tribunal ordered the appellant to pay 50% of the respondent's costs, subject to a detailed assessment unless otherwise agreed.
  1. The appellant sought to appeal these decisions, and permission was granted by the Employment Appeal Tribunal ("EAT") at a preliminary hearing on 1 February 2012 limited to two issues, namely whether:

i) the tribunal erred in failing to take account of the deduced effect of the appellant's illness, as required by schedule 1, paragraph 6 of the Disability Discrimination Act 1995 ("DDA"), and

ii) the costs order should be set aside.

  1. On 29 May 2012, the EAT (Wilkie J, Mr Bleiman and Mr Ezekiel) dismissed the appellant's appeal on both issues. The EAT concluded that although there had been an error of law on the part of the tribunal as regards the deduced effect of the appellant's illness, none of her claims for discrimination arising out of such a disability would have succeeded. Accordingly, they found that the tribunal did not err when it concluded that the appellant's claims for discrimination were unfounded (save to the limited extent the tribunal had found it should succeed) and the exercise by the tribunal of its discretion to award 50% of the respondent's reasonable costs was upheld.
  1. The appellant now appeals to this court, with the leave of Mummery LJ (granted at a renewed oral hearing on 17 January 2013), against the decisions of the EAT not to remit the case to the tribunal and to uphold the order for costs.

The Background

  1. The appellant was first employed by the respondent in July 1986 as a Contracts and Review Manager. The history that is relevant to these claims began on 11 October 2004 when the appellant submitted a formal grievance to the interim Director of Social Services against two senior officials in the Council (the Director of Housing, Environment and Health Services and the Head of Commissioning) concerning their lack of response in relation to two issues she had raised about the programme for which she worked ("Supporting People"). She alleged that false and misleading reports had been submitted about the administration of the programme, and she suggested there had been a failure to carry out risk assessments in advance of a proposed move by members of her team.
  1. Additionally, the appellant alleged she had been victimised and subjected to harsh criticism during the investigation into the complaints, and in due course a Mr Steve Cody produced a report dated 24 January 2005. This led to further complaints by the appellant to the Chief Executive on 9 March 2005, in which she expressed her dissatisfaction with the outcome of the investigation, contending that the issues had not been considered seriously and that there had been a lack of care and insufficient attention to the relevant details.
  1. On 2 May 2005 the appellant asked the Chief Executive to consider certain redundancy proposals under the authority's "whistle-blowing" policy. A senior official investigated this request.
  1. On 28 July 2005 the appellant had a fall at her home, sustaining an injury to her right shoulder. As a result she was away from work for the remainder of 2005. The appellant returned for a brief period in February 2006, when she made a detailed complaint (a "written grievance") to the effect, inter alia, that senior managers were attempting to undermine her role and capabilities by means of tactics that were indicative of bullying and victimisation. After a further period of absence, the appellant again returned to work on 24 July 2006, and thereafter there were periods of absence for work-related stress. From February until September 2007 the appellant worked from home and on 11 September 2007 she had an operation on her shoulder in hospital.
  1. Throughout this period there were a number of letters, reports and meetings concerning the appellant's health, the adjustments that needed to be made to enable her to work and the procedure to be followed in order to investigate her various complaints.
  1. In the autumn of 2007, the respondent commissioned a review of staffing and it was suggested that in the proposed restructure the appellant's position was to be "deleted". The overall reorganisation plans were subject to a consultation process that began on 15 November 2007. The plans were accepted on 4 December 2007. The appellant was issued with the notice of dismissal on 20 December 2007. Her attempts to secure redeployment were unsuccessful and the appellant's last day at work was 30 June 2008.

The decision of the Employment Tribunal on the substantive claims

  1. In advance of the end of her employment, the appellant, on 20 February 2008, presented claims to the tribunal alleging that she had been unfairly dismissed and subjected to detriment by reason of having made a protected disclosure, and she alleged sex discrimination, disability discrimination and race discrimination. By a second claim to the tribunal on 29 September 2008, the appellant made additional claims of unfair dismissal, protected disclosure detriment, disability discrimination and for unpaid holiday pay.
  1. During the hearing before the tribunal (7 – 25 September 2009) the claims of discrimination on the grounds of race and sex were withdrawn and the parties resolved the holiday pay claim. The live issues before the tribunal were the subject of significant refinement between the opening of the hearing and counsel's closing speeches. By way of summary, in their final form they were, first, the appellant's claim for unfair dismissal by reference to Chapter 1 of Part X of the Employment Rights Act 1996 and on the grounds of unlawfulness, viz. because of protected disclosures and/or disability discrimination. Second, it was alleged that the appellant had been discriminated against on the basis of her disability. The disability claims were for disability-related discrimination, direct discrimination on the grounds of disability and discrimination by way of victimisation in relation to protected acts under the DDA. Of particular importance in the context of this judgment, it was claimed that the respondent had failed to make reasonable adjustments contrary to s.3A(2) DDA on the basis of her frozen shoulder and her suggested mental disability. Third, the appellant alleged she had experienced detriment by reason of having made protected disclosures.
  1. As set out in the Introduction above, the tribunal concluded that all of the extant claims were unfounded, save that "the claim of disability discrimination by reason of the failure to make reasonable adjustment of provision of aids and adaptations to assist the Claimant to work at home" on the basis of her physical disability was made out. In the context of this appeal, it is to be stressed that it was admitted by the respondent that the appellant's physical injury had resulted in disability but there was a dispute as to whether, additionally, she had a disability as a consequence of mental impairment. Therefore, the tribunal needed to resolve whether the appellant suffered from a disability within the meaning of the DDA in respect of her mental condition. The tribunal described the question thus:

"The issue we had to decide was defined at the Case Management Discussion in this way: Is the Claimant's mental state (i.e. her "depression" and "anxiety") a disability within the meaning of the DDA?"

  1. The appellant's central contention was that her ability to concentrate was affected by her disability, but the tribunal found against her on the basis that her credibility was undermined by the lack of contemporaneous comment or documentation on this issue for the relevant period, coupled with the detailed and voluminous correspondence that she had generated. In all the circumstances, the tribunal decided that there was no substantial and long-term adverse effect on her ability to concentrate and this aspect of the claim was dismissed.
  1. However, the tribunal itself raised a discrete question as to whether the appellant's mental condition gave rise to a disability under the DDA because there was potentially a substantial effect on her normal day-to-day activities as regards her mobility, arising from "workplace phobia": an inability – given her fears – to travel to her place of work or its vicinity. Although Dr Royston (the appellant's expert) was not asked by her solicitors to address the possibility of a deduced effect under schedule 1, paragraph 6 of the DDA, in his report he had indicated that from February 2006 the appellant had been receiving counselling as well as medication (10mg per night of amitriptyline) to help with sleep and insomnia. At paragraph 4.28, Dr Royston expressed the following opinion:

"I also note she has had treatment without which she would, on the balance of probabilities, have functioned even more poorly. This includes help with sleep, Amitriptyline, and regular supportive counselling."

  1. In his questions of Dr Royston, the Chair of the tribunal focussed solely on the drug amitriptyline and whether the 10g doses amounted to medication. Dr Royston said that they did not. Neither the tribunal nor the representatives of the parties asked any questions about the counselling in this context, notwithstanding that it can – in an appropriate case – amount to medical treatment. As a result, the tribunal observed that Dr Royston's evidence had been to the effect that the appellant was "effectively … unmedicated".
  1. The tribunal's overall finding on this issue was as follows:

"269. […] The Tribunal's conclusion in relation to this allegation was that there was a limited effect on mobility associated with a specific phobia relating to work and the vicinity of the place of work. This was indicative of an effect that fell on the side of the line that was not substantially adverse on day to day activities. We came to that conclusion because we considered there to be a very substantial difference between the inability to go to or within the vicinity of the place of work as compared to someone who, as foreshadowed in the guidance, is for example, unable to go out of their home unaccompanied.

  1. As an indication that this was a fairly finely balanced argument we add this. We have considered whether the effects upon the Claimant's mobility taken cumulatively with effects on concentration would be sufficient to say that there was a substantial and long term adverse effect on her day to day activity. Had we been satisfied on the evidence that the Claimant had some impairment of concentration of the kind she contended for then we would have considered that, taken together with the limited effect on mobility, the Claimant would have been a disabled person having regard to the mental impairment that she alleged.
  1. We therefore concluded that the Claimant was not disabled by reason of a mental impairment although she was disabled person by reason of the physical impairment described above."
  1. Accordingly, although the tribunal concluded that the appellant was a disabled person by reason of her frozen shoulder from May 2006 through to the end of her employment and that certain reasonable adjustments in order to address this problem had not been made, given her claim in this context otherwise depended on the suggestion that she was disabled by reason of mental impairment, the other aspects of her case on disability discrimination failed.

The decision of the EAT on the disability discrimination appeal

  1. In addressing whether the tribunal erred in failing to take account of the deduced effect of the appellant's illness, as required by schedule 1, paragraph 6 of the DDA, the EAT took as a summary of the complaint paragraph 2 of the second tribunal claim:

"The Claimant is disabled under the DDA as she suffers from frozen shoulder, and clinical depression and anxiety disorder. These conditions substantially affect her normal day-to-day activities, without medication and treatment."

  1. The EAT set out the relevant statutory framework within schedule 1, which is as follows:

Paragraph 4

"An impairment is to be taken to affect the ability of the person concerned to carry out normal day-to-day activities only if it affects one of the following –

(a) mobility; […]

(g) memory or ability to concentrate, learn or understand; […]."

Paragraph 6

"An impairment which would be likely to have a substantial adverse effect on the ability of the person concerned to carry out normal day-to-day activities, but for the fact that measures are being taken to treat or correct it, is to be treated as having that effect."

  1. The EAT, correctly in my view, concluded that although the deduced effect point had not been taken by the appellant's representatives but instead was raised by the tribunal, it was nonetheless "in play", given the way it was described by Dr Royston in his report as set out above [16].
  1. The EAT concluded that:

"13. In the context of a decision on whether the Claimant suffered a disability under the meaning of the Act, judged against the criterion of it affecting her mobility on the basis of the workplace phobia […], in our judgment it was an error of law for the Tribunal, having raised the issue, to fail to appreciate that the evidence of Dr Royston in respect of treatment in the form of supportive counselling was as relevant to the (deduced effect) issue as was the question of medication, its nature and quantity."

  1. The EAT, having noted the tribunal's description of this as a finely balanced decision, accepted that it was at least possible that if this issue been considered properly – in light of Dr Royston's evidence – the balance might have been tipped in favour of the applicant, leading to a finding that she satisfied the statutory criteria. In the normal course of events, the EAT indicated it would have considered quashing the relevant part of the tribunal's decision and remitting the case for that limited issue to be reconsidered.
  1. It decided not to adopt that course because the tribunal in its decision had identified a number of suggested reasonable adjustments that the appellant maintained had not been made, three of which were said to have been the result of the appellant's mental impairment. The Tribunal had observed:

"301. […] The Claimant's first claim was that the Respondent failed to make reasonable adjustments.

  1. The first three of those reasonable adjustments claim concerned the assertion of disability by reason of mental impairment. They were that the requirement that the Claimant attend a competitive interview, the requirement that the Claimant apply for vacancies and that the assimilation procedure placed her at a substantial disadvantage. The final allegation was that there was a failure to provide her with aids and adaptations, supervision and a risk assessment at home which placed her at a substantial disadvantage in comparison with persons who were not disabled.
  1. Even had the Claimant satisfied the Tribunal that the conditions amounting to mental impairment did place her at a disability the Tribunal would still not have upheld any of the first three of those reasonable adjustment claims on the ground that the Claimant had not demonstrated that she was placed at a substantial disadvantage by being required to attend a competitive interview or to apply for vacancies or in the assimilation procedure. The competitive interview was arranged at a place where the Claimant said she could attend. The Claimant had never previously asserted that applying for vacancies placed her as a substantial disadvantage and the assimilation procedure was carried out by reference not to anything that the Claimant said about her condition but by comparison with the job descriptions at each stage."
  1. Given the tribunal had rejected the appellant's claim that she had been dismissed as a result of "disability discrimination", finding instead that the (fair) reason was redundancy, the overall conclusion of the EAT was as follows:

"17 […] In our judgment, therefore, the point upon which we have concluded that the Employment Tribunal erred as a matter of law was an academic point because, even if the Employment Tribunal had not erred in law as we have identified, and even if, upon a proper consideration of the paragraph 6 of Schedule 1 point, it had concluded that she was disabled within the meaning of the Act, none of her claims for discrimination arising out of such disability would have succeeded."

The decision of the Employment Tribunal on costs

  1. On 22 February 2010, the tribunal ordered the respondent to pay the appellant compensation of £2000 for disability discrimination with interest, and the appellant was ordered to pay 50% of the respondent's costs, to be determined by way of detailed assessment in the County Court unless agreed.
  1. In making that decision, the tribunal reminded itself of the provisions of Rule 40 of the Employment Rules of Procedure 2004 which requires a tribunal to consider making an order for costs against "a paying party" when in the opinion of the Tribunal he "has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived".
  1. Before the tribunal it was argued by the respondent that the conduct of the proceedings by the appellant had been unreasonable. This was put on 6 bases:

i) The respondent had been faced with an unfocused and extensive claim under legislation designed to protect employees who are "whistleblowers" from detrimental treatment (Public Interest Disclosure Act 1998). The nature of this claim had meant that a "massive" amount of documentation had to be disclosed and the tribunal needed to spend a considerable amount of time investigating the various grievances raised by the appellant that were largely out of time and for which no evidence was produced to justify an extension. The tribunal observed that it was only at the stage of closing submissions that the claim was brought into sufficient focus to enable findings to be made.

ii) The claims for race and sex discrimination were only abandoned at the outset of the hearing.

iii) Dr Royston's report was obtained without the leave of the tribunal and it was presented to the respondent as a fait accompli. As a result, the respondent had no opportunity to comment on the doctor's letter of instruction or to ask questions of this witness in advance of his cross-examination (the latter exercise was rendered necessary by the late service of this material). The appellant accepted that this approach to the conduct of the litigation was met with justified criticism by the tribunal.

iv) The appellant failed to establish that one of her potential witnesses, Mrs Yapp, was unable to attend to give evidence on account of her ill health. Her statement was the subject of a ruling on admissibility by Regional Employment Judge Gay, which was rendered pointless by the unavailability of the witness.

v) Although the appellant did not adduce any evidence in support of her challenge to the reason for her dismissal, the respondent nonetheless had to deal with the wide-ranging allegations relating to her disability and the suggested "engineering" of her dismissal on the basis of protected disclosures. It was only accepted that the disability-related discrimination claims were unsustainable in the final submissions.

vi) Offers of settlement were as follows: £10,000 in December 2008; £15,000 in July 2009; and £40,000 in August 2009, repeated in September 2009. The appellant rejected each of these offers out of hand, indicating that she was instead seeking compensation in the order of £360,000.

  1. The tribunal observed in the 14 December 2009 decision that the appellant had made widespread allegations of discrimination and bullying without "necessarily" making any factual allegations in support of them.
  1. The tribunal had in mind that the costs regime relevant to this particular jurisdiction is different in nature to that set out in the Civil Procedure Rules and that the appellant had considered her case to be well founded. The tribunal took into account the appellant's financial circumstances (the earnings of the appellant and her husband, their mortgage and family obligations and certain discrete debts) and concluded that their situation was not such as to prevent an order from being made, particularly given the appellant has capital available against which an order for costs can be secured.
  1. The tribunal concluded that it was appropriate to make an order for costs, and given the overall costs for the respondent "at full value" were over £100,000:

"37. The proper analysis in our judgment it to consider what proportion of the respondent's costs the claimant should pay given: her means, the very important fact that she has succeeded on part of her claim, the fact that that the unreasonable conduct of the proceedings is not just in relation to the hearing but in relation to the preparation of the hearing and the fact that the claimant has over the years and again in these proceedings, made a large number of unspecified allegations without pleaded in many cases a proper factual basis.

  1. Taking all those matters into account it would be unjust and wrong, in our judgment, to order this claimant to pay the entirety of the respondent's costs. There is no appropriate pound-for-pound mechanistic calculation to be done here. In our judgment the proper and just thing to do is to say that the claimant should pay one half or 50% of the respondent's costs […]"

The decision of the EAT on costs

  1. The EAT focussed in particular on what it suggested was the "nub of the matter", namely:

"23. […] the respondent was faced with an unfocused and extensive Public Interest Disclosure Act claim involving multiple alleged disclosures and multiple alleged detriments. These multiple alleged protected disclosures, gave rise also to discrimination or automatic unfair dismissal claims, which had to be addressed by the Respondent by very substantial disclosure of documents, but was dealt with by the Claimant in a witness statement, which she read, which was in excess of 80 pages long and which formed the bulk of the time devoted to the hearing by the Employment Tribunal over a period of 12 days. The Employment Tribunal in the introduction to its decision, which itself runs to 69 pages and has appended to it a schedule of issues that is 5 pages long, in paragraph 11 records that:

"The Tribunal was presented with 11 lever arch files of documents containing in excess of 3,600 pages. Those documents had been extracted and copied into 2 lever arch files that the Tribunal treated as the core bundle."

  1. This was the scale of the rebuttal exercise in which it was said the Respondent had to engage to meet the "unfocussed and extensive Public Interest Disclosure Act claim", which was not focussed sufficiently, according to the tribunal, until written closing submissions at the conclusion of the case, to enable findings to be made."
  1. The EAT considered the appellant's submissions, which in essence were, first, that she and her solicitors had believed her claim to be well founded and, second, her contention that at least some of her arguments had not been properly evaluated; it analysed the effect of various authorities, to which we will turn in due course; and it bore in mind the cardinal factor that the tribunal was the court that had heard the case, as follows:

"32. […] It has first-hand knowledge, gained over a large number of days, of the nature of the case as pleaded, the nature of the case as presented, the amount of documentation that has been generated, the amount of evidence that has been given, the extent to which that evidence is relevant, or irrelevant, or is in respect of issues that are ultimately withdrawn, or not pursued, or are hopeless. The award of costs is an exercise of the Tribunal's judicial discretion. It is not to be interfered with lightly. Effectively, it has to be on the basis that the Tribunal was so unreasonable that no Tribunal properly directing itself could have made such an order.

  1. In this case, the Tribunal concluded, for the reasons to which we have referred, that the Claimant had conducted the proceedings in a way that was unreasonable. That, in our judgment, included making, and persisting with, claims which generated the extensive response and preparation referred to by the Tribunal when it described the volume of documentation that had been prepared. It also included conduct in not withdrawing claims until the last minute. It included irresponsibly failing, whether herself or her representatives, to keep tabs on witnesses and whether they were going to be available to give evidence, and giving the Tribunal due notice. It included the service, late and without permission, of important expert evidence, and it included failing, sensibly, to consider what, on the face of it, and in light of the Tribunal's conclusions, were generous offers for settlement. In our judgment, the Tribunal in this case, for the reason that it has given, cannot be said to have exercised its discretion to come to such a conclusion in any way unlawfully. The conduct to which they referred, and to which we have referred, was, in our judgment, capable of amounting to the unreasonable conduct of the proceedings.

[…]

  1. The Tribunal had regard to all these matters, and to the fact that she had succeeded on one part of her claim. It also had regard to the fact that the unreasonable conduct was not just in relation to the hearing, but was also in relation to the preparation for the hearing. It also had regard to the fact that the Claimant, again and again, had made a large number of unspecified allegations, in many cases without pleading a proper factual basis. It had regard to all these matters in determining what proportion of the Respondent's costs she should pay."
  1. The EAT noted the careful attention that been given by the tribunal to the appellant's financial circumstances, namely Mr and Mrs Sud's earnings, the value of their house and the extent of any mortgage, the various of family debts, and the extent to which the appellant had capital in the family home against which an order for costs might be secured. In upholding the 50% order of the tribunal, the EAT concluded:

"36. In our judgment, we have been given no material upon which to conclude that such a conclusion was outwith the range of reasonable decisions that were open to this Tribunal. We appreciate that the order for costs is potentially very significant, and we also appreciate that for much of the time covered by this litigation the Claimant had the benefit of legal representation in terms of solicitors and counsel. Obviously, we have no idea as to what instructions were given by her and what advice was being proffered by them. We are aware that the Employment Tribunal made an order for costs in respect of a Claimant who, for long periods of the time governed by the award was the beneficiary of legal representation. In our judgment, however, there is not sensible basis for saying that the decision of the Employment Tribunal in respect of costs was outwith the proper exercise by them of their discretionary powers, having regard to the findings that they made in the original Employment Tribunal decision and in the remedies and costs hearing of 22 February 2010."

The appellant's submissions

The decision by the EAT not to remit

  1. The appellant submits that the general principle is that whenever the EAT identifies an error of law, the general principle is that it will remit the case for rehearing in the tribunal. By reference to the decisions in Dobie v Burns International Security Services (UK) Ltd [1984] ICR 812, Greenwood v Whiteghyll Plastics Ltd UKEAT/0219/07/MAA and [Ministry of Defence v Cartner]() [2011] EWCA Civ 1516; [2012] ICR D17, it is suggested that this will only not happen when, notwithstanding the misdirection, the impugned decision is "plainly and unarguably right" or it would inevitably have been upheld. Therefore if the conclusion of the tribunal at first instance, in light of the misdirection, might have been wrong then the case should be remitted to the fact-finding court.
  1. It is argued that the tribunal focussed excessively on the things the appellant could do as opposed to those that she was unable to do. On this the appellant highlights the tribunal's findings that she was able to complete paperwork with only physical, as opposed to other, assistance and her ability to leave home unaccompanied. In this context, the appellant relies on the decision in [Aderemi v London and South Eastern Railway Limited ]()[2013] ICR 591 (UKEAT/316/12), in that Langstaff J observed, when considering the tribunal's finding that the claimant in that case did not have a disability pursuant to s. 6(1) Equality Act 2010, "[a]s a matter of first principle when considering the statute, this requires the focus of the tribunal to be not upon that which a claimant can do but that upon which he cannot do" [15].
  1. Furthermore, the appellant contends that the tribunal failed to ask the correct questions as to the relevant activities, in that it should have expressly addressed those relevant to participation in professional life. This requirement, as identified by the appellant, is principally drawn from the decisions in Chacon Navas v Eurest Colectividades SA [2007] ICR 1 and Paterson v Commissioner of Police for the Metropolis [2007] ICR 1522. In the latter case, the EAT observed that in determining whether someone is disabled within the meaning of section 1 DDA, this can readily be established in a way that gives effect to European Community Law "simply by giving a meaning to day-to-day activities which encompasses the activities which are relevant to participation in professional life" [67]. The appellant's argument is that the tribunal impermissibly dismissed the significance of the appellant's inability to go to her place of work.
  1. Against that background, it is suggested that the EAT failed to apply the approach established in Dobie, in that it is not a question of "considering" whether or not to remit the case, but instead the EAT is required to remit unless the Tribunal's overall conclusion is plainly and unarguably correct, notwithstanding the misdirection. The appellant argues that the EAT erred in stating that on the tribunal's findings none of the appellant's claims for disability discrimination would have succeeded because the tribunal had not sufficiently investigated the one claim of disability-related discrimination (s. 3A(1)) and the two claims of direct disability discrimination (s.3A(5)). The appellant relies on the following three paragraphs from the first instance judgment:

"312. The Claimant made one freestanding disability related claim concerning the Respondents finding alternative employment.

  1. This claim and argument, rendered difficult by the decision of the House of Lords in any event in the case of Malcolm, was one which depended upon a finding that the Claimant was disabled by reason of mental impairment. Absent such a finding the claim could not begin to be sustained.
  1. The Claimant alleged two complaints of direct discrimination contrary to s. 3A(5) of the DDA; one that she was deskilled and secondly, that she was not adequately supervised by Ms McGlennon. Again, both of those claims depended upon a finding that the Claimant was disabled by reason of mental impairment. They were not advanced on the basis of disability by reason of physical impairment alone."
  1. It is observed that given there was no finding of mental impairment, the tribunal and the EAT did not further analyse these claims and it is emphasised that it was not suggested that the claims were misconceived and there had been no application to strike them out.
  1. Finally, on this issue it is contended that the way in which a claim is assessed will depend to a material extent on the precise nature of the disability. The appellant maintains it is dangerous to apply conclusions reached on the basis that the appellant's disability was solely physical to an additional finding of mental impairment (for instance whether a "reason" for particular treatment "relates to the disabled person's disability" (s.3A(1)(a)), because prejudice is unpredictable. It is submitted that the appellant's case as regards disability should be remitted to the tribunal for a decision as to the extent to which this claim should be reopened.

Costs

  1. The appellant argues that the tribunal should not have taken into account issues that went beyond the way in which she had conducted the proceedings when deciding whether, or to what extent, to make an order for costs. In particular it is submitted the tribunal should not have considered the appellant's conduct prior to bringing these proceedings. As set out above, the tribunal referred to the fact that "[…] the unreasonable conduct of the proceedings is not just in relation to the hearing but in relation to the preparation of the hearing and the fact that the claimant has over the years and again in these proceedings, made a large number of unspecified allegations without pleaded in many cases a proper factual basis". It is suggested that it was an error of law for the tribunal to take into account the appellant's conduct outside the parameters of these proceedings.
  1. It is suggested there was insufficient analysis of what was alleged to have been unreasonable in the conduct of the proceedings or consideration of the effect of the appellant's conduct on the respondent (for instance, resulting in the latter incurring additional costs).
  1. It is submitted that in all likelihood the non-attendance of Mrs Yapp did not lead to additional costs for the respondent, and that there is no explanation as to why the attempt by the appellant to introduce a statement containing inadmissible material is an event that can properly attract an order of costs.
  1. The appellant's rejection of various offers of settlement are said to provide an impermissible basis for making an order for costs, and that in any event the tribunal failed to identify what was unreasonable in the appellant's decision to reject each of them.
  1. The tribunal decided "on balance" that it was satisfied that the respondent had established that the reason for the claimant's dismissal was redundancy, and accordingly it is argued that it was wrong for the tribunal to state "[t]he Claimant produced no evidence to support the challenge to the reason for dismissal […]". In any event it is suggested that the burden is on the employer and "[l]itigants who genuinely believe that they have been dismissed or subjected to detriments for discriminatory reasons should not be punished in costs simply because they have not produced evidence of their cases".
  1. Given the observation of the tribunal that the appellant's alternative case that she was dismissed for reasons relating to disability discrimination or because of victimisation or whistleblowing depended on the suggestion that it was not principally for redundancy, it is contended it was wrong for the tribunal to conclude that the appellant had accepted in closing submissions that her disability-related discrimination claims were "unsustainable".
  1. It is argued that a public interest disclosure claim that has "multiple alleged disclosures and multiple detriments" is not ipso facto unreasonable.
  1. The appellant suggests that the approach of the tribunal was too "broad brush" and it failed to engage in sufficient analysis to justify its decision on costs. It is contended that there was inadequate attention paid to the exceptional nature of an order of this kind, which creates the need to provide clear reasons as to the justification for making the award at all and as regards its extent. In particular, there was no link established between the suggested unreasonable conduct and the respondent's costs.
  1. Finally, the appellant highlights that the respondent did not succeed outright, it had not applied to strike out any of the appellant's claims and it had been the subject of an "unless" order relating to disclosure.

The respondent's submissions

The decision by the EAT not to remit

  1. The respondent relies on the following observation by Slade LJ in Hellyer Brothers Ltd v McLeod [1987] ICR 526, 547:

"The duty of the appeal tribunal, on finding that the industrial tribunal has misdirected itself in law, has been explained thus by Sir John Donaldson M.R. in Dobie v. Burns International Security Services (U.K.) Ltd. [1984] I.C.R. 812, 818:

Once you detect that there has been a misdirection, and particularly that there has been an express misdirection of law, the next question to be asked is not whether the conclusion of the tribunal is plainly wrong, but whether it is plainly and unarguably right notwithstanding that misdirection. It is only if it is plainly and unarguably right notwithstanding the misdirection that the decision can stand. If the conclusion was wrong or might have been wrong, then it is for an appellate tribunal to remit the case to the only tribunal which is charged with making findings of fact.

This statement, however, must, in our judgment, be read subject to an implicit qualification stated by Waite J. in the present case [1986] I.C.R. 122, 130:

If we are satisfied that a conclusion reached as a result of a misdirection is plainly and unarguably wrong upon the facts found by the industrial tribunal and those facts do not require further amplification or reinvestigation, then we are entitled and bound to substitute our own conclusion as to what those findings require in law."

  1. Further, the respondent relies on the observation by Mummery LJ in Bache v Essex County Council [2000] IRLR 251, paragraph 35(5), when he observed in the context of rehearsing the Dobie approach that the response by the EAT to a finding that an tribunal made an error of law should be proportionate.
  1. The respondent submits that leave to appeal was granted to the EAT on a narrow basis, and that the appellant is limited by the facts found by the tribunal. In any event it is submitted that, on analysis, the one claim of disability-related discrimination and the two claims of direct disability discrimination would inevitably have been decided in the same way even if the suggested mental disability is accepted. The burden of proving the acts of discrimination lay with the appellant and it is argued she has failed to establish any or any sufficient facts that would have entitled the tribunal to uphold any of the discrimination claims.

Costs

  1. The respondent disputes that the tribunal was obliged to engage in a "rigid analytical approach to the exercise of discretion" as regards the award of costs. Instead, it is submitted that the critical factual question is simply whether the proceedings have been conducted unreasonably. Further, it is argued that although withdrawing a claim does not necessarily equate to unreasonable conduct, depending on the facts it can lead to that conclusion. Although the Calderbank regime does not apply to Employment Tribunals, it is submitted that in particular circumstances an unreasonable rejection of a Calderbank offer can amount to unreasonable conduct of the proceedings such as to lead the tribunal to exercise its limited costs jurisdiction. Furthermore, the respondent contends that if the tribunal considers that the proceedings have been conducted unreasonably for other reasons, the existence of a Calderbank offer and the amount are relevant to the exercise of the tribunal's discretion.
  1. The respondent highlights that the race and discrimination claims were abandoned on the first day of the tribunal claim, after the respondent had had to make extensive disclosure, as well as preparing its case in this regard. The appellant did not request directions for expert evidence at the pre-trial review or otherwise, but instead served a report shortly before the hearing was due to commence. It is observed that Mrs Yapp's statement contained inadmissible material, which the appellant declined to remove. This necessitated a hearing before the Regional Chairman, notwithstanding the unavailability of Mrs Yapp to be called as a witness. The appellant made no attempt to prove her case, notwithstanding the extent to which the burden rested with her. The disability related discrimination claims were abandoned before the tribunal made any findings as to the principal reasons for the dismissal.

Discussion and conclusions

The decision by the EAT not to remit

  1. The power to remit is set out in section 35 of the Employment Tribunals Act 1996, which provides that the EAT may send the case back to the body from whom the appeal was brought. Given the appellant had claimed discrimination on the basis of mental disability during the substantive hearing before the tribunal, this case, if remitted, would simply require consideration by the same tribunal as to the deduced effect in schedule 1, paragraph 6 of the DDA. If the tribunal resolved the issue of mental disability in her favour, it would then need to review the relevant evidence and its findings of fact on the basis of this additional element. There would be no justification for reopening the evidence in the case.
  1. The appellant submits, in a general sense, that discrimination claims need to be considered against the background of the correct analysis of the relevant disability or disabilities so as to avoid any injustice, and that the reaction to an individual's disability can vary depending on its nature. Furthermore, it is suggested that credibility assessments may be dependent, at least to an extent, on a correct finding as regards the individual's mental condition. However, in my view the impact of those general propositions, along with the contentions that it is important to focus on what the individual is unable to do in the context of participating in professional life, depends substantially on an analysis of the facts of the particular disability-discrimination claims in this case.
  1. The claim for disability-related discrimination contrary to section 3A(1) DDA was advanced on the basis that the reason the respondent failed to secure alternative employment for the appellant was connected to her disability, and that she was treated less favourably than someone to whom that consideration did not apply. It was suggested during the closing submissions that she was isolated and ignored because she had taken time off because she was sick and needed to work from home given her physical or mental illness. The tribunal set out the context of the failure to secure the appellant alternative employment in its finding that the decision taken on 23 June 2008 "to freeze all non-social work recruitment for three months because of the serious problems due to the high volumes of child protection work […]" had been communicated to the appellant when she applied for the post of Carer Recruitment Coordinator. The tribunal analysed the steps taken by the respondent to liaise with the appellant about redeployment and the particular circumstances of her applications for other posts. The tribunal discounted a problem that had arisen because the respondent sent some material to a wrong address on the ground that the appellant only became interested in redeployment late in the process, at which stage she began to cooperate. Although it accepted there had been a breakdown in informing the appellant about vacancies covered by agency staff, the tribunal concluded:

"294. Given the substantial steps and opportunities afforded to the Claimant in the consultation, assimilation, re-employment and appeals process in relation to the declaration by the Respondent that her role was genuinely redundant the tribunal was not satisfied that the Claimant had established that the Respondent failed overall to take reasonable steps to find her suitable alternative employment. […]"

  1. The tribunal expressly discounted the appellant's assertion that the respondent had taken an "out of sight, out of mind" approach to her position on the basis of the evidence of the interactions between Ms McGlennon and the appellant.
  1. I note that the appellant did not attempt to provide any relevant comparators, but in any event in light of the findings I have just summarised, it is entirely clear that even if the tribunal accepted that the appellant was disabled on account of mental impairment, this would not affect the overall conclusion, namely that the respondent had not treated her less favourably than others for a reason that relates to disability. It is inevitable that the tribunal would maintain its finding that the failure to secure alternative employment was the result of a variety of factors that were unrelated to her disability, most significant of which were the freeze on recruitment and the appellant's late engagement with the process.
  1. The appellant's case for direct discrimination contrary to section 3A(5) DDA was founded, first, on the suggestion that she was "deskilled" in that she was not given appropriate training in commissioning and procurement ("CIPS"). In particular, it was argued that unlike other employees she was not informed about a course that took place in March 2007.
  1. The tribunal dealt with this part of the claim as follows:

"87. On 20 March 2007 Ealing wrote to a number of possible attendees at a CIPS training course, that is the course in purchasing and supply, being provided by London Metropolitan University Trainers. The course was to take place at Percival House over eight sessions between March and October 2007. The Claimant was later to complain that she had not been offered the opportunity to attend that course and that not having attended it had an adverse affect on her ability to retain her employment. So far as attending the course is concerned it was being provided by outside trainers. Although there was a the end of the course an option exam to be taken on line at one of a number of test centres in London the course was being provided, as the documents in support of it show, in Percival House. Ms McGlennon accepted that she had not alerted the Claimant to the possibility of coming on that course because she knew it was to be provided in Percival House at that time. In the Tribunal's judgment if Ms McGlennon had asked the Claimant if she were prepared to attend the course the Claimant would have declined for that very reason. Had the Claimant then requested that the course be provided elsewhere she would have been told that it was not being provided by Ealing but by outside trainers and that was not possible."

  1. The inevitable result of this conclusion is that notwithstanding the possibility that the tribunal may find the appellant was disabled on the basis of mental impairment, the overall result in this context would be unaffected. It is unsustainable to suggest that on remittal the tribunal would conclude that there had been discrimination in this context, bearing in mind these findings of fact. The appellant's case, on the evidence, was rejected and that decision would remain determinative even if this particular claim was additionally advanced on the basis of mental disability.
  1. The other claim for direct discrimination was based on the contention that Ms McGlennon failed adequately to supervise the appellant during the period August 2006 – 30 June 2008. The tribunal reached the following conclusions on this suggestion:

"306. So far as the failure to provide supervisions was concerned, it is clear that […] Ms McGlennon only conducted one formal supervision on 23 October 2006. There was an agreement between the two women that when the Claimant was working from home, Ms McGlennon would be in telephone contact and there was a suggestion that they should meet from time to time at a location away from Percival House. There was, however, no cogent evidence to show that the Claimant was at a substantial disadvantage in comparison with persons who were not disabled by reason of that process. Someone who was not disabled and was working from home for some other reasons would have been in exactly the same position."

  1. On the basis of that finding, it is wholly clear that the tribunal would reach the same conclusion even if it accepted the appellant was disabled as a result of mental impairment. The lack of evidence to demonstrate that the appellant was at a substantial disadvantage in comparison with others who are not disabled would remain determinative of this claim.
  1. It follows in my judgment that an additional finding that the appellant was disabled by reason of mental impairment would not affect the outcome of this case on the disability-discrimination claims, and, applying the test set out in Dobie, the conclusion of the tribunal was plainly and unarguably right, irrespective of its failure to address the deduced effect of the appellant's treatment. Therefore, the EAT did not err when it decided that this was an academic issue and the case should not be remitted. As emphasised by the EAT, the tribunal's conclusions on the unfair dismissal and reasonable adjustment claims were not the subject of an appeal, and in all the circumstances the overall conclusion it reached – that the appellant's claims for discrimination arising out of disability on the basis of mental impairment would not have succeeded – was clearly correct.

Costs

  1. It is mandatory for the tribunal to consider making an order for costs when it is of the opinion that a paying party "has in bringing the proceedings, or he or his representative has in conducting the proceedings, acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived" (Employment Tribunals Regulations (Constitution & Rules of Procedure) 2004, Schedule 1, Rule 40 (2) and (3)). The issue in this case was whether the appellant behaved unreasonably in the way she conducted the proceedings.
  1. If the costs do not exceed £10,000 the Tribunal may specify the sum to be paid, but otherwise if the parties fail to agree, the amount will be determined by way of detailed assessment in the County Court.
  1. As described by the Court of Appeal in Lodwick v Southwark London Borough Council [2004] ICR 884, as a general proposition it is undoubtedly the case that orders for costs are only made exceptionally in the Employment Tribunal, and that the reason for, and the basis of, any such order should be clearly specified (per Pill LJ, at paragraph 26).
  1. In [Yerrakalva v Barnsley Metropolitan Borough Council ]()[2012] ICR 420 it was emphasised that the tribunal has a broad discretion, and it should avoid adopting an over-analytical approach, for instance by dissecting the case in detail or attempting to compartmentalise the relevant conduct under separate headings such as "nature", "gravity" and "effect". The words of the rule should be followed and the tribunal needs "to look at the whole picture of what happened in the case and to ask whether there has been unreasonable conduct by the claimant in bringing and conducting the case and, in doing so, to identify the conduct, what was unreasonable about it and what effects it had" [39 – 41].
  1. The Court of Appeal in that case made it clear that although causation was undoubtedly a relevant factor, it was not necessary for the tribunal to determine whether or not there was a precise causal link between the unreasonable conduct in question and the specific costs being claimed. Furthermore, the circumstances do not need to be separated into sections, each of which in turn forms the subject of individual analysis, risking the court losing sight of the totality of the relevant circumstances [41].
  1. In McPherson v BNP Paribas (London Branch) [2004] ICR 1398 it was emphasised that it would be wrong to make a finding of unreasonable conduct leading to an order for costs whenever a claimant withdraws a claim [28]. Similarly, it would be wrong for tribunals to follow a practice on costs which might encourage speculative claims, when the claimant hopes to secure whilst never intending to proceed to trial [29]. Instead, the "crucial question is whether, in all the circumstances of the case, the claimant withdrawing the claim has conducted the proceedings unreasonably" [30].
  1. As to the role of the Court of Appeal or the EAT as regards an order for costs by a tribunal, Mummery LJ in McPherson observed:

"26. When a costs order made by an employment tribunal is appealed to the Employment Appeal Tribunal or to this court the prospects of success are substantially reduced by the restriction of the right of appeal to questions of law and by the respect properly paid by appellate courts to the exercise of discretion by lower courts and tribunals in accordance with legal principle and relevant considerations. Unless the discretion has been exercised contrary to principle, in disregard of the principle of relevance or is just plainly wrong, an appeal against a tribunal's costs order will fail. If, however, the appeal succeeds, the appellate body may substitute a different order or, if it is necessary to find further facts, the matter may be remitted to the tribunal for a fresh hearing of the costs application. "

  1. In Yerrakalva Mummery LJ indicated the same conclusion as to the restricted role of this court in these circumstances, albeit in a slightly different way:

"49. I am conscious that, as orders for costs are based on and reflect broad brush first instance assessments, it is not the function of an appeal court to tinker with them. Legal microscopes and forensic toothpicks are not always the right tools for appellate judging."

  1. On the basis of those authorities, although an award of costs against a paying party in the Employment Tribunal is an exceptional event, the tribunal should focus principally on the criteria established in rule 40. In the context of the present case, the tribunal needed to consider whether the claimant's conduct of the proceedings was unreasonable and, if it so concluded, it was necessary for the court to identify the particular unreasonable conduct, along with its effect. This is not a process that entails a detailed or minute assessment, but instead the court should adopt a broad brush approach, against the background of the totality of the relevant circumstances.
  1. In this case, the tribunal identified the reasons for awarding costs against the claimant, under separate headings.
  1. The tribunal found that the manner in which the public interest disclosure claim was brought was unfocussed and extensive. 26 different protected acts were relied on, along with half a dozen suggested detriments. The latter, as the respondent explained, led to a complicated response. The claim was only properly defined during the closing submissions, and as a result the respondent had researched and disclosed a considerable number of unnecessary documents and it was compelled to investigate many grievances that were out of time. The reference in the decision on costs to the fact that the claimant has over the years made a significant number of unspecified allegations, often without pleading a proper factual basis may well have been – at least in part – a reference back to the earlier grievances (many of which were out of time) that formed part of the of this public interest disclosure claim (see paragraph 42 above). In any event, given the way the appellant conducted her case, it is not open to her sustainably to complain that the tribunal was drawn into addressing matters of history, as set out at paragraph 37 of the decision. I agree with the EAT that the public interest disclosure claim is the pre-eminent example of unreasonable conduct ("the nub of the matter"), given the substantial materials and issues generated and the extensive rebuttal exercise. The allegations in this regard remained obscure until the last moment, and it was inevitable that substantial expenditure was unnecessarily incurred as a result.
  1. The claims for race and sex discrimination were abandoned at the outset of the first day of the trial, and there does not appear to have been any credible foundation for either of them. Although withdrawal of one or more claims is not usually treated as unreasonable behaviour, certainly in the context of an overall finding that the claimant's conduct of the proceedings has been unreasonable, this can potentially constitute a contributory factor.
  1. Dr Royston was called to give evidence because his report was obtained without leave and it was served extremely late (less than two weeks before the trial). This undoubtedly lengthened the hearing and caused unnecessary expenditure because his evidence had to be investigated in unfavourable circumstances. No sufficient justification of this approach by the appellant has been provided.
  1. The history concerning Mrs Yapp led to unnecessary expenditure. A hearing was conducted before a Regional Employment judge because the appellant declined to remove the inadmissible parts of her statement (the appellant was seeking to introduce the contents of "without prejudice" discussions). In the event, a ruling was given on admissibility but the witness was not called. Although there is some uncertainty as to when the appellant realised she would never be in a position to call Mrs Yapp, this seemingly pointless exercise involved expenditure for the respondent in preparing for the witness's evidence and in conducting the admissibility hearing.
  1. The disability-related discrimination claims were abandoned "at the last moment" and prior to the decision of the tribunal as to whether it accepted the respondent's suggested justification for the appellant's dismissal (viz. redundancy). The appellant, in part, pursued a "positive" case as regards her dismissal, namely that it was for an inadmissible reason, along with her claims for discrimination and victimisation that were based on the dismissal. No credible or substantive evidence was produced in support of these claims.
  1. As the tribunal accepted, the consequences of Calderbank offers to settle that can have consequences for costs in civil proceedings do not apply in the Employment Tribunal. However, in certain circumstances, the failure by a party to respond to or consider a reasonable offer of settlement can amount to unreasonable conduct (see G4S Services v Rondeau UKEAT/0207/09/DA, a case in which it took 5 months for an offer of settlement to be accepted). In Kopel v Safeway Stores plc [2003] IRLR 753 Mitting J observed:

"18. […] it does not follow that a failure by an appellant to beat a Calderbank offer should, by itself, lead to an order for costs being made against the appellant. The employment tribunal must first conclude that the conduct of an appellant in rejecting the offer was unreasonable before rejection becomes a relevant factor in the exercise of its discretion (under schedule 1, rule 14(1)(a) Employment Tribunals (Constitution and Rules of Procedure) Regulations 2001) […]."

  1. In this case the offers from the respondent went from £10,000 via £15,000 to £40,000, and on each occasion the appellant rejected them out of hand, indicating she was looking for compensation in the unrealistic sum of £360,000. It is clear that the appellant was not prepared to accept any reasonable and appropriate sum in settlement of her claims. The argument that the appellant was entitled to seek declarations in her favour or that she was seeking reinstatement does not have any substantive credibility given that her response to the offers focussed on an exorbitant sum by way of suggested compensation.
  1. In my judgment, all of these separate heads of unreasonable conduct were precisely identified; the tribunal sufficiently explained why, on each occasion, the behaviour was to be criticised; and it is self-evident that, in each instance, the consequence was either to cause additional discrete costs or simply to extend the proceedings. It follows that the reasons for, and the bases of, the order were clearly specified, without the tribunal attempting to identity a precise causal link between the unreasonable conduct and the specific costs that were awarded. The tribunal was exercising its broad discretion, sufficiently identifying the relevant unreasonable conduct and its effect, without seeking to go beyond an appropriate "broad brush first instance assessment". In the event, it correctly avoided an over-analytical approach and the 50% award cannot properly be criticised as falling outside the parameters of a legitimate decision.
  1. In all the circumstances, this decision as to costs by the tribunal was not reached contrary to, or in disregard of, any relevant principle and it was not plainly wrong. Notwithstanding the exceptional nature of this award of costs and its implications for the appellant, in my view the tribunal's decision came well within the proper exercise of its discretion.

Conclusion

  1. For these reasons, I would dismiss these appeals.

Lord Justice Patten:

  1. I agree.

Lord Justice Maurice Kay:

  1. I also agree.

Published: 02/08/2013 09:54

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