The appellant was claiming arrears of salary from 2000. He applied to have the respondent's defence struck out because he was dissatisfied with the Trust's response to the order for specific disclosure. The judge told the appellant that he was not prepared to hear his application to strike out the respondent's defence at that stage because, in his view, the issue of limitation must logically be determined before the application to strike out. The appellant, in person, valiantly strove to persuade the judge that that would be "to put the cart before the horse". The judge was adamant that the limitation issue had to be determined before the application to strike out the defence and he so ruled. The claimant appealed.

The court allowed the appeal. The only issues for the court to decide were whether the claim was statute-barred and whether the Trust had waived its right to rely on the Limitation Act. In short, the limitation point was the defence. If the defence was struck out, the limitation point disappeared. The judge erred probably because he mistakenly thought that limitation was an issue which went to jurisdiction. It is not; it is a defence which must be pleaded and proved by the defendant. It followed that the appellant was right when he submitted to the judge that to determine the limitation issue before the application to strike out the defence was "to put the cart before the horse". The court also agreed that any arrears should be paid gross, not net.

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Case No: B2/2010/2064

Neutral Citation Number: [2015] EWCA Civ 1049

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM The Central London Civil Justice Centre

His Honour Judge Mitchell

6BT08225

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 15/10/2015

Before:

LORD JUSTICE UNDERHILL

LORD JUSTICE CHRISTOPHER CLARKE

and

DAME JANET SMITH

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Between:

Olufunso OyesanyaAppellant- and -Mid-Yorkshire Hospital NHS Trust Respondent

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• - - - - - - - - - - - - - - - - - - - -

Simon Colton (acting pro bono) for the Appellant

Kolarele Sonaike (instructed by Ford & Warren) for the Respondent

Hearing date: 21 July 2015

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Judgment

Dame Janet Smith:

Introduction

1. This is an appeal from the order of HH Judge Mitchell made at the Central London Civil Justice Centre on 30 July 2010. The judge declared that the claimant's claim for remuneration owed by the defendant Trust, in respect of services rendered in 2000 was in large part statute-barred. He declared that the value of the claim was £3,269.22, noting that the claimant might be entitled to some interest on that sum. He directed that any outstanding issues should be transferred to the small claims track. Either party was to be permitted to apply within 28 days to set down the claim. He ordered that the claimant's outstanding application to strike out the defence should be adjourned generally but could be restored on application within 28 days. If no applications were made within that time, the claim would be dismissed without further order. He reserved all further proceedings to himself. Although he had not yet given judgment in any sum, he ordered the claimant to pay the defendant's costs of the action and, within 28 days, to pay £12,500 by way of interim payment of costs subject to deduction of any sum found owing by the defendant to the claimant. Permission to appeal was refused.

1. Neither party applied to restore the claim and the claimant's entitlement to interest was never determined; nor was the claimant's application to strike out the defence. Instead, the claimant sought permission to appeal to this Court. His application was refused on paper but granted by Tomlinson LJ following an oral hearing in June 2013. Throughout the proceedings, the claimant had acted in person but, after the grant of permission to appeal, the appellant was fortunate to obtain the services of counsel, Simon Colton, acting pro bono. This Court had the advantage of clear and succinct submissions from both counsel for which we are most grateful.

1. It will be immediately apparent that the judge's order was somewhat unusual, in that it made a declaration as to the value of the claim and determined the issue of limitation before hearing an outstanding application to strike out the defence. To understand how that unusual order came about, it will be necessary to explain the history of these protracted proceedings.

The history of the claim

1. The appellant is an obstetrician and gynaecologist. In 2000, he worked as a locum consultant for the Dewsbury Health Care NHS Trust at the Dewsbury Hospital in West Yorkshire. Initially, his services were supplied to the hospital through an agency. Then, in August 2000, the appellant was offered and accepted a short term contract of employment directly with the hospital Trust of which the present respondent is the successor in title. The employment was to last from 14 August 2000 until 31 March 2001, subject to review. The appellant continued with his duties, which I think were the same as those he had been carrying out for some time. At the outset, the Trust provided a draft contract for the appellant's signature. There was later to be a dispute about whether or not the appellant signed it. For reasons I will discuss later, the Trust did not pay the appellant's remuneration.

1. The employment did not go smoothly in that it appears that a number of allegations were made about the manner in which the appellant spoke to patients and staff – allegations which the appellant did not accept. Also he considered that there had been a breach of confidentiality in relation to one of his referees. He decided to resign. His resignation was accepted and the employment ended on 30 November 2000. He remained unpaid.

1. On 1 December 2006, a claim form was issued in the Barnet Civil and Family Court Centre in which the appellant sought the sum of £16,929.35 plus interest at 8% per annum and costs. He named as defendant the Chief Executive of Dewsbury Hospital, which was incorrect and later had to be amended to name as defendant the body currently responsible for Dewsbury Hospital, Mid Yorkshire Hospital NHS Trust. The claim alleged that the Trust had promised to pay the claimant the due remuneration on 22 December 2000 but, despite several reminders, had not done so. The total value of the claim as pleaded was £25,373.83. Although the claim form was stamped as having been issued on 1 December, it had in fact been received by the court, in good order, on the previous day, 30 November 2000.

1. The Trust acknowledged service but failed to serve a defence in time. On 9 January 2007, the appellant entered judgment in default. The Trust applied to set the judgment aside claiming that it had a good defence to the claim because the appellant had never been employed; his services had been provided through an agency. At the hearing, on 30 April 2007, the appellant produced a letter of appointment from Dewsbury Health Care NHS Trust dated 17 August 2000 and a draft contract of employment, signed by the Trust but not by him. The district judge adjourned the application to enable the Trust to make further enquiries. In the course of the hearing, the district judge remarked that the claim might be statute-barred. It would depend on when the debt became due. He suggested that if the debt became due on 30 November 2000, the claim would be out of time by one day. The Trust's solicitor responded that he had not thought that it was out of time, in view of the allegation that there had been a promise to pay on 22 December 2000.

1. At the adjourned hearing, on 6 June 2007, the default judgment was set aside. The Trust had accepted that it had employed the appellant but sought permission to file an amended defence, which admitted the employment, neither admitted nor denied that any money was owed, denied that there had been a promise to pay on 22 December 2000, alleged that ordinarily the Trust would pay employees at the end of the month during which they had worked and averred that, if it had not paid the appellant for the work done, his entitlement to payment was now time barred under section 5 of the Limitation Act 1980. Section 5 provides that an action founded on a simple contract shall not be brought after the expiration of six years from the date on which the cause of action accrued. The defence also denied the claim for interest and alleged that the appellant had deliberately delayed bringing his claim.

1. District Judge Marin's order of 6 June 2007 is a document of some importance in the current appeal. In addition to setting aside the judgment, amending the title of the action, allowing the Trust to rely on its amended defence and setting the time for any reply, at paragraph 5, the district judge recorded that "the Defendant accepts that it owes the claimant the monies claimed for his salary". At paragraph 6, it was recorded that the only issues in the case were (1) whether the claim was statute-barred and (2) whether at the hearing on 30 April 2007, the Defendant had waived any limitation defence. The judge then allocated the case to the multi-track and gave directions for the disclosure of documents, service of witness statements, the filing of pre-trial checklists, the transfer to the Central London Civil Justice Centre for a one day hearing and the preparation of documents for use at trial.

1. On 12 June 2007, the Trust asked for further information about the alleged promise that the appellant would be paid on 22 December 2000. The appellant replied on 12 July 2007 saying that the promise had been given by a female senior officer of the Trust in the finance department. The promise was made on 30 November 2000 in the finance department at the hospital. The female officer had said that, as that day was the last day of the month, the payroll for that month had been done and pay day had passed. She said that the appellant would be paid on the next pay day which would be 22 December. The appellant's response was accompanied by a statement of truth.

1. Standard disclosure of documents was due on 11 July 2007 with requests for inspection to follow. The Trust did not provide its list until 27 July 2007. Its representative certified that he or she had searched the Trust's premises and offices. Apart from party and party correspondence and court documents, the only documents listed were the appellant's letter of appointment and unsigned draft statement (both of which had been provided by him at the hearing on 9 April 2007) and a small bundle of typewritten notes of meetings in late 2000 between the appellant and the Trust's then Assistant Director of Human Resources, Sue Tyler.

1. The Trust filed its witness evidence, a statement from Mrs Tyler (by this time the Director of Human Resources for the Barnsley Hospital NHS Foundation Trust) dated 14 August 2007. She produced the bundle of notes just referred to and explained what she knew of the background to the claim. In essence, she said that the appellant had at all times refused to sign the draft contract he had been offered. She explained that because of this refusal, the Trust had been unable to place the appellant on its payroll and was therefore unable to process payment to him. She referred to the contract, which was headed "Contract of Employment for Senior Medical Staff." It covered all the matters one would expect, such as duties, holidays, termination arrangements, none of which is important in this appeal. Mrs Tyler drew attention to the term of the draft contract which provided that the salary (£57,615 per annum) would be payable monthly in arrears by credit transfer. She said that, because the appellant had never returned his "new starter information" which would have included his bank details, the Trust could not pay him.

1. The notes of Mrs Tyler's meetings with the appellant show that on 2 October she became aware, from other staff, that the appellant had not signed his contract. She was also told of concerns expressed about the way in which the appellant spoke to patients and other staff. She spoke to the appellant's referees to see if they were aware of any previous problems with his conduct. They were not. On 3 October Mrs Tyler spoke to the appellant by telephone, expressing concern that he had not signed his contract. He said he was not happy with it and had sent it to the BMA (the British Medical Association) for "checking". They had advised him not to sign it. He promised to come in to see Mrs Tyler by the end of the week. Mrs Tyler then spoke to someone at the BMA who said that the appellant had not sent the contract in and expressed the view that the appellant would be bound by the contract as he had worked for some time without raising any objection.

1. Mrs Tyler's note records that, on 6 October, the appellant came to see her. Before the meeting she had been made aware that the appellant had resigned and that he had learned that she had been in touch with his referee. When she met the appellant, he had shown her a letter of resignation and had told her that that morning he had spoken to Roger French, the Chief Executive, about the fact that she had spoken to his referee without telling him. She admitted that she had. The appellant still did not know why Mrs Tyler had contacted his referee and Mrs Tyler suggested that he should speak to Mrs Hudson, his line manager. She asked him to sign his contract but he refused, saying that the BMA and his solicitor had advised him not to. Mrs Tyler said that he should have told the Trust of his concerns earlier than he had. He reiterated that he was not prepared to sign, especially as he had now resigned.

1. Mrs Tyler's statement then states that, on 13 November, she attended a meeting with the appellant and Mrs Hudson. The notes of this meeting show that Mrs Tyler asked the appellant to explain why he was refusing to sign his contract. He gave three reasons. The first was that he thought the starting date (14 August) was wrong; he had been working through the agency until the end of August. This mattered because he had been earning more with the agency. The appellant's second concern was that he was dissatisfied with the salary provision. He was worse off working as a locum consultant than he had been as a registrar. Mrs Tyler rejected this, saying that the rate of pay was correct for locum consultants and she was not prepared to renegotiate it. The appellant's third concern was that he was required to give three months' notice which he thought was excessive; he would have preferred one month. Mrs Tyler said that three months' notice was standard practice for the Trust and pointed out that the appellant had the benefit of three months' notice if the Trust wished to terminate his contract. This part of the discussion concluded with Mrs Tyler saying that the Trust would not condone the situation (the unsigned contract) for much longer. There then followed a discussion about the complaints relating to the appellant's manner of speaking to patients and other staff. It is recorded that, during this part of the conversation, the appellant said that it would be better for him to resign. This is slightly odd as, according to Mrs Tyler's note of 6 October, he had already done so. He was advised not to resign in haste.

1. Mrs Tyler's next note relates to a meeting on 16 November attended by her, the appellant and Mrs Hudson. The first issue to be discussed and resolved was the start date of the appellant's work as an employee. Mrs Tyler accepted that she had been wrong and that the start date was in fact 18 August 2000. She offered a revised contract. At that stage, it is said that the appellant handed over letters of resignation, saying that he felt his continued employment by the Trust would damage his career prospects. Mrs Tyler then told the appellant that, in order for any payment to be made to him, he would have to sign the contract and payroll documentation, which would have entailed providing his bank details. He indicated that he did not see the point and asked to be paid by some other means, such as by cheque. Mrs Tyler said that that would not be acceptable.

1. Mrs Tyler's final note recorded a conversation with the appellant on 29 November 2000, the day before his last day of work. Some of the discussion related to the complaints which had been made and which the appellant strongly refuted. However, Mrs Tyler again asked him to sign his contract. He replied that he had done the work and was owed the money. She asked whether the Trust had ever said it would not pay him; she said that if he signed the contract and the new starter information he would be paid immediately. The appellant then asked if the Trust would pay him as a self-employed consultant by cheque but Mrs Tyler said that that was not within Trust policy. He had been offered the post of locum consultant in August and "had accepted the contract on that basis". The Trust would not be prepared to renegotiate terms. There was a brief reference to the amended start date before Mrs Tyler indicated that, as the appellant was not there to sign his contract, there was nothing more to discuss.

1. The appellant did not make or serve a witness statement by 15 August 2007 as he should have done. Nor did he file his pre-trial checklist by 29 August as directed. However, the Trust filed its checklist on the appointed day. On 18 September, 2007, an unidentified Recorder directed the appellant to file his checklist. This order was not drawn up until 2 November 2007. So far as I can see, the appellant did not comply.

1. The claim then lay apparently dormant until August 2008 when the Court of its own motion directed the parties to comply with the directions for preparation for trial made by District Judge Marin in June 2007 and fixed the trial for 15 January 2009. That trial date was vacated; I am not sure why although it seems likely that the appellant was not ready. Another trial date was fixed for 7 May 2009. Shortly before that date, on 20 April 2009, the appellant made an application for specific disclosure of documents. His request was very wide. He sought "personal files, personnel files, departmental files, contemporaneous (handwritten) notes of various meetings". He also sought records kept by the Chief Executive (Mr Roger French), Medical Director (Mr J O'Shea) Clinical Director Obstetrics and Gynaecology (Ms Fishwick), Director of Personnel (Ms D. Nichols), Director of Operations (Mr G Naylor), Deputy Director of Personnel (Ms Sue Tyler), General Manager Women's Health (Ms A Hudson), General Manager Women's Health (Mr G Donnelly), Manager Women's Health (Ms K Speight) and "other relevant officers within the Trust". He asserted that he believed these documents existed because he had had various meetings with these people and noted that they had made contemporaneous notes which were kept in files. He asserted that the documents were relevant, inter alia, because they would shed light on when the debt was due and would confirm the Trust's "vehement refusal to pay".

1. On 7 May 2009, the trial was adjourned. The order records that the Court had not yet processed the appellant's application for specific disclosure. It appears that both parties wished to have the case transferred to the Manchester County Court and that was done. The application for specific disclosure was listed by that court for 16 September 2009 but was adjourned. On 20 October 2009, the court in Manchester adjourned the application for specific disclosure generally and directed that there should be a case management conference (CMC) on 7 December 2009. However, when that day came, the appellant did not or could not attend. Apparently he had refused to agree to a CMC by telephone. The case was that day transferred back to Central London, where the court listed a 3 hour CMC to take place on 26 February 2010.

1. On that day, HHJ Hand QC made an order for specific disclosure and gave directions for trial. By paragraph 2 of the order, the judge directed the Trust to give specific disclosure of documents by sending copies to the appellant by 9 April 2010. The order covered any documents relating to the presence of the appellant at the Trust's premises between 1 August 2000 and 31 March 2001 which were in the possession of or in the departmental files of Mr Roger French, Mr J O'Shea, Ms Fishwick, Mr G Naylor, Mr G Donnelly, Ms Hudson and Ms Speight. Further, if no such documents could be found or had been destroyed or were no longer in the possession of the above, each of the above was to swear a witness statement with a statement of truth appended and send it to the appellant by 9 April 2010. This was a very wide and quite onerous order. It gave the appellant practically everything he had requested although it did impose a limiting time period. We do not have a transcript of that hearing and do not know what submissions were made by the Trust. However, we do know that the order was not appealed.

1. The judge also gave fresh directions for trial. Witness statements were to be served by 16 June 2010; the trial was listed for 12 July 2010. There were directions relating to skeleton arguments and the preparation of documents for use at trial.

1. The Trust did not comply with the order for specific disclosure by 9 April and, on that day, the appellant gave notice that, if there had not been compliance within a further 7 days, he would apply to strike out the defence. It is not clear to me exactly when the Trust purported to comply with the order; probably the response was served by fax on 13 April. No documents were produced. The response comprised three witness statements. One was from Mrs Tyler, by now the Director of Human Resources for the Trust; it was dated 12 April 2010. At paragraph 3, she stated that she had spoken to Mr Roger French and he had confirmed that he had no recollection of the appellant and would not have had any documents relating to the presence of the appellant at the Trust's premises during the relevant period. She did not say that any search had been made of his departmental files. At paragraph 5, Mrs Tyler said that she had spoken to Kathryn Fishwick who had confirmed that she had no documents relating to the presence of the appellant on the premises at the relevant time. There was no reference to a search. At paragraph 8, Mrs Tyler said that she had tried to speak to Mr G Naylor but he was on extended holiday in South Africa and she had been unable to contact him. She did not suggest that anyone had attempted to speak to the person left in charge of his office in his absence or that any search had been made of his departmental files. At paragraph 7, Mrs Tyler said that she was not sure of the identity of Mr G Donnelly. The Trust had asked the appellant for further details but he had not responded. One is bound to wonder why the Trust had not realised that they did not know of a Mr G Donnelly before the hearing before Judge Hand; they had had plenty of notice that he was on the appellant's list. Finally at paragraph 9, she stated that Ms K Speight was not an employee of the Trust at the material time and therefore would not have had any records of the appellant's presence on Trust premises. Again, one wonders why the Trust had not realised that before Judge Hand's order was made. The other witness statements were from Ms Anne Kennedy, formerly Hudson. She said that she remembered the appellant's name but did not remember him. She said that she did not recall ever being in possession of any personnel files, departmental files or handwritten notes of meetings. She added that she did not recall ever meeting the appellant. She said that, as General Manager, she would not have kept any personnel records or employment files; they would be kept by the HR Department. Her department may have kept correspondence with consultants but she did not remember any incidents with respect to the appellant and, if there were any documents, "they would be with the Trust". She said that she had retired in 2007 and had not taken any documents with her. She reiterated that she did not remember any meetings with the appellant and did not have any notes or records relating to his employment with the Trust. Perhaps not surprisingly, she did not say whether there had been any search of the files of the department of which she had formerly been the head. The third statement came from Mr J Shea who said that he was the Medical Director at the time of the appellant's employment. He did not recall the appellant and had no knowledge of him whatsoever. He did not recognise his name or remember ever meeting him. He did not recall ever seeing any records in respect of the appellant's employment. He had not worked for the Trust since 2003. He said nothing about a search.

1. The appellant was dissatisfied with the Trust's response to the order for specific disclosure and, on 16 April, applied to have the defence struck out. Just pausing there in this exposition of the facts, it is clear that the response was not compliant with the order. Before us, Mr Colton for the appellant described it as wholly inadequate. Mr Sonaike accepted that it was defective but suggested that it was not as bad as Mr Colton had submitted. In my view, it was wholly inadequate not least because there was no claim or suggestion that any search had been made at all. All that had been done was to ask people whether they remembered the appellant and whether they thought they would have had papers relating to him. Whether or not they remembered him is quite irrelevant. They might have known him and had documents relating to him but have forgotten all about it, as appears to have been the case with Mrs Kennedy (Hudson). There might have been papers created by these managers' staff of which they had not at any time been aware. What was required was an organised search for documents.

1. When one knows that there must have been some documents in, for example, Mrs Hudson's departmental files (because she had received complaints about the appellant's manner of speaking to patients and other staff) and when one knows that the appellant had spoken to the Chief Executive about Mrs Tyler's action in speaking to his referee without telling him that she was going to do so, one can see that there must have been some documents which fell within the classes sought. Further, if it were true that the appellant had telephoned and written to the Trust seeking payment of his past salary, one would have expected some record of the receipt of such communications. Whether those documents still existed is another matter. It appears to me that the application to strike out the defence was not fanciful; it must have had some real prospect of success.

1. On 16 June 2010, the appellant wrote to the Court as he had become concerned that he had not heard about his application. This was followed by a visit to the Court offices on 18 June. Later that day, the appellant wrote to the Court to confirm what had been said during the visit. He had been told that the application to strike out had been overlooked and had not been processed. He also discovered that a notice of the trial date (which was in fact confirmation of the date set by Judge Hand) had been sent out to the parties. The appellant had not received it, probably because the court had sent it to his old address, although he had informed the court of his change of address. He asked for his strike out application to be heard. He does not appear to have received any reply to that letter and went to the Court office again on or about 28 June 2010. It appears that he was told that he had better attend court on the trial date and ask for his application to be heard then.

1. Because he was dissatisfied with the disclosure and because he had an outstanding application to strike out the defence, the appellant did not serve his witness statement either in time or at all. He prepared a provisional statement (he called it a temporary statement) and a small bundle of documents which he sent to the court but did not serve on the Trust. That was the unsatisfactory state of affairs when the trial came on.

The hearings before HH Judge Mitchell

1. The transcript of the hearing on 12 July shows that, at the outset, the judge told the appellant that he was not prepared to hear the application to strike out the defence at that stage because, in his view, the issue of limitation must logically be determined before the application to strike out. The appellant, in person, valiantly strove to persuade the judge that that would be "to put the cart before the horse". The judge would not have it; he said to do it in the way the appellant requested would put the cart before the horse. He was annoyed that the Trust had not made an application long ago to strike out the claim as statute-barred. Mr Sonaike several times pointed out that, as limitation was the only issue to be determined, the Trust's attitude had been to encourage the appellant and the Court to get on with the trial. The judge was adamant that the limitation issue had to be determined before the application to strike out the defence and he so ruled.

1. This decision created two problems for the appellant. He had only prepared for the application to strike out the defence; he had not prepared his arguments on limitation. The judge accepted that that was so although he pointed out that the case had been listed for trial where all issues would be dealt with. He told the appellant that he would hear Mr Sonaike on limitation and the applicant could respond on the following day. The appellant's second problem was that he had not served his witness statement because he had been waiting and hoping for further disclosure of documents.

1. In the course of the argument about which issue should be dealt with first, the appellant mentioned that the action had been 'brought' not on 1 December 2006, when the claim form was issued, but on 30 November, when he had lodged the necessary papers and fee in the court office. This was something of an aside at the time because the issue under discussion was whether the strike out application should be heard first.

1. On beginning his submissions on limitation, Mr Sonaike immediately referred to what the appellant had just said about having brought the claim on 30 November 2006, not 1 December. He candidly admitted that "our entire defence has been based on the fact that this claim had been issued on 1 December". The judge said that he would need to see the court file. It had not been available when he came into court.

1. Mr Sonaike then submitted that the appellant had been employed from 14 August to 30 November 2000. The Trust always paid salaries monthly in arrears which meant that the salary for any month would be paid at the end of that month. So, the appellant's last salary payment would be due on 30 November 2000. The limitation period would begin to run on 1 December 2000 and would expire on 30 November 2006. As the claim was issued on 1 December 2006, it was a day out of time. In the alternative, if it was found that the claim had been brought on 30 November, that would not avail the appellant in respect of his salary for August, September or October because those payments were due at the end of the respective months and were time-barred. Only the November salary would be recoverable. As for the appellant's argument that he had been promised payment on 22 December 2000, Mr Sonaike submitted that that had not been proved (evidence might be required) but even if that promise were proved to have been given, it would make no difference to the limitation position. The claim would still be time-barred, either in whole or in large part. Mr Sonaike also submitted that nothing that the Trust had said or done at the hearing on 9 April 2007 could be construed as a waiver of its right to rely on a limitation defence. As that is now accepted by the appellant, I shall say no more about it.

1. The appellant said he would make his submissions on limitation on the following day as offered by the judge. But before the court rose for the day, there was further discussion about finding the court file and when the claim had been brought. The appellant said that he had obtained a copy of a document which showed that the claim had been received at the court on 30 November 2000. He said that he had told the Trust's solicitor about this. The judge rose, saying that he would have the court file found. As it transpired, the file could not be found, either that day or the next.

1. The following morning, 13 July, in the absence of the file and on the production of a document in the appellant's possession which seems to have been a receipt from Barnet County Court, stamped 30 November 2006, there was a long and inconclusive discussion about when the claim had been 'brought'. Mr Sonaike suggested that it was for the appellant to produce the proof that the claim was brought on 30 November, if that was what he was contending. Neither the judge nor Mr Sonaike was prepared to accept the receipt the appellant had produced as adequate for the purpose. Neither was prepared to accept that the claim had been brought on 30 November. At one stage the judge was minded to adjourn the case until the court file could be found and the point established but eventually invited the appellant to put his arguments on limitation.

1. The appellant dealt first with the issue of waiver about which I need say no more. Second, he challenged Mr Sonaike's submission that it was for him to prove the date when the claim was brought. He said that, as the Trust had the burden of proving that the claim was statute-barred, it had the burden of producing the evidence. He invited the judge to adjourn until the court file could be found. The judge was not keen to do that and was persuaded by Mr Sonaike that he could deal with the issue of limitation on the basis that, even if the appellant was right, the bulk of the claim was barred; only the November salary would be recoverable. Also, the judge could deal with waiver which did not depend on the date when the action was brought. The judge informed the appellant that, if he did succeed on the date issue, the most he could claim was one month's pay. The appellant did not accept that and embarked on a submission to the effect that the contract had been what he called a 'special purpose contract'. This submission was not very clear but the gist of it was that because this was a special purpose contract, his pay did not accrue due until he left. He said that one of the reasons he had been so anxious to find relevant documents was that they would help on this issue. The judge then stated that, as the appellant had not signed the contract, "we are driven back on to ordinary contractual principles". The appellant asserted that he had signed the contract; the unsigned document which was before the court was the counterpart contract which he had kept for his own records. He had signed and returned the Trust's copy but they had not produced it. Asked about the meetings for which Mrs Tyler had produced notes, the appellant said that the meetings had not been about his failure to sign the contract but were about other matters. The judge pointed out that none of that had gone into a witness statement. The appellant pointed to his 'temporary' witness statement where he had said that the meetings were about his objection to Mrs Tyler approaching one of his referees without telling him. However, as the judge insisted, nowhere in writing had the appellant stated that he had signed the contract. The appellant submitted that clearly he must have done because otherwise the Trust would never have allowed him to carry on working. He then explained that what he meant by a special purpose contract was that the contract should be viewed as a whole and not on a month to month basis. The judge was clearly unimpressed by that and said that the evidence showed that the appellant "did not have a contract". The appellant argued that there was mutuality of obligation which showed there was a contract. He had done the work. Even at common law, he said, there was a contract. There followed a long exchange the upshot of which was that the judge said that, on the evidence he had, the most the appellant could claim (if he was right about the date on which the claim was brought) was one month's remuneration. There was some recapitulation before the judge called on Mr Sonaike in reply. He submitted that whether the appellant signed the contract made no difference to when his cause of action accrued; it did so month by month. The remainder of his reply dealt with the issue of waiver.

1. The judge gave an ex tempore judgment. After setting out the non-contentious aspects of the factual background and the course of proceedings up to the date of trial, the judge dealt with the appellant's request that he should deal with the outstanding application to strike out the defence before dealing with the issue of limitation. He expressed the view, as he had done the previous day, that to do that would be to put the cart before the horse. He said that, if the limitation argument succeeded, there would be no question of striking out the defence because the claim would be at an end.

1. The next issue the judge dealt with was the absence of the court file and the uncertainty about whether the claim had been brought on 30 November or 1 December 2006. He recorded Mr Sonaike's acceptance that, if the court file showed that the claim form and fee had been received at the court office on 30 November, that was the date on which the action had been 'brought' for limitation purposes even though the court had not issued the claim form until the following day. However, he said, that if the claim was brought on 1 December 2006, the appellant was "not entitled to sue at all".

1. The judge then turned to discuss the terms of the contract. At this stage he had to decide when the appellant's claim (or claims if there were more than one) had accrued. He found as a fact that the appellant had not signed the contract. Beginning at paragraph 19 he said:

"19. The position therefore is quite simply this. As there was no contract of employment, that is to say on the evidence that I have just recited, then the hospital would have paid the claimant at the end of September for his September earnings, at the end of October for this October earnings, at the end of November for November, at the end of August for August. What Mr Sonaike says is if it is 1st December the claimant is entitled to nothing. But in a sense his fall back position is that if it be the case that the proceedings were brought on 30th November the onus was on the claimant to check with Barnet and to investigate this matter because it was clear from the filing of the amended defence that the Limitation Act point was going to be taken. And, says Mr Sonaike, that has not been done.

1. I agree with the thrust of that submission but am concerned about dealing with a case where the original court file is not before the court. …..

1. Mr Soniake's position is simply: with temporary personnel who were not contracted to the hospital for a specific period of time (the claimant would have been contracted to 1 March 2001, I think) what happens is they are paid really on a quantum meruit one monthly basis. It follows in accordance with the principles and the evidence produced by the defendant, Mr Oyesanya, the claimant would only have been entitled to the payment for the month of November.

1. Mr Oyesanya argues that in fact this is some sort of really ongoing contract, and that really if he is entitled to one payment for November, he is entitled to go back to August as well. In my judgment, that as a legal concept does not operate in this case. If he is correct about the date of the proceedings being brought as 30 November, it seems to me that the most which he can justify claiming is for the month of November 2000."

1. The judge then said that he would allow some time for enquiries to be made at the Court in Barnet so that the date on which the action was brought could be established. He then rejected the appellant's arguments on waiver, about which I need say nothing.

1. After judgment, the case was adjourned until 30 July to allow the appellant to seek information from the Court at Barnet.

The resumed hearing on 30 July 2010

1. As soon as the Court reconvened on 30 July, it was clear that the action had indeed been brought on 30 November 2006 as the appellant had contended. Mr Sonaike accepted or submitted that a claim for one month's wages would be in time. That, he said, was £4,801.25 gross or £3,269. 22 net. He said that he had performed this calculation using an iPhone application. The judge announced his decision that the total value of the claim was £3,269.22. The appellant was plainly puzzled at the reduction from £4,801.25 to £3,269.22. This had clearly taken him by surprise and he asked for an explanation. This was provided by Mr Sonaike who told him that, in a court of law he was only entitled to a net figure just as he was only entitled to receive his salary net. The appellant protested that his tax affairs were a matter for his accountant but the judge confirmed his decision and moved on to costs.

1. I will not deal with the reasons for the judge's costs order in any detail because there is no freestanding appeal against it. Mr Sonaike pointed out that the sum recovered fell within the small claims track jurisdiction and submitted that the claim should have been brought there. The judge accepted that. Mr Sonaike produced a part 36 letter which showed that, in March 2010, the defendant had offered a sum of money (we do not know how much) which the appellant had rejected but had failed to beat. The appellant protested that his application to strike out the defence was still outstanding. So indeed was his application for interest, which the judge was not prepared to deal with that day. The argument continued for some time but the judge ordered that the appellant had lost the case. Because he ought to have started in the small claims court, he should pay the Trust's costs of the action. He directed that the appellant must make an interim payment of £12,500 on account of costs from which there could be deducted whatever sum was found to be owing from the Trust to the appellant once interest had been determined.

1. In fact, interest never was determined. The appellant did not apply to set down the case for a hearing. Because the judge had made some extremely unpromising remarks about the appellant's entitlement to interest, the appellant took the view that it was sensible for him to move straight to an appeal. He did not make an interim payment on costs. He applied for permission to appeal, which, as I have said, was eventually granted in 2013. At that stage a stay was imposed on the judge's order so no money has been paid by either party.

The Appeal to this Court

1. The appellant's original grounds of appeal had been long and somewhat diffuse. Tomlinson LJ did not restrict the scope of the appeal but Mr Colton helpfully reduced the grounds to four.

1. The first ground was that Judge Mitchell was wrong to refuse to hear and determine the application to strike out the defence. Mr Colton submitted that that application had to be determined before the limitation issue because that would decide whether the defendant was to be permitted to run the limitation defence. The judge erred, submitted Mr Colton, because he seemed to regard the issue of limitation as one of jurisdiction. At one stage, the judge had said that if the claim was statute-barred, the appellant was not entitled to bring the claim at all. Mr Colton submitted that that was wrong. A claimant is entitled to bring his claim without regard to limitation, which only becomes an issue if and when pleaded by the defendant. Mr Colton submitted that this decision had put the appellant at a severe disadvantage. His application to strike out the defence was a strong one and might well have succeeded, thereby bringing his claim to a successful end. Even if the application had not succeeded in full, the judge might well have required the Trust to carry out proper searches of its files in accordance with Judge Hand's order and might well have made an unless order to operate in the event of non-compliance. If the Trust had then complied with the disclosure order, who knows what new material might have been available for the appellant to deploy?

1. Mr Soniake submitted (without, I think, much conviction), that the judge's decision to deal with limitation before the application to strike out fell within his wide discretion. He reminded us of the well-known authorities to the effect that an appellant court should not interfere with a discretionary decision of the court below unless it had exceeded the generous ambit within which a reasonable disagreement is possible.

1. In my judgment, this decision was wrong in principle. The position here, as made plain by District Judge Marin's order of June 2007, was that the only issues for the court to decide were whether the claim was statute-barred and whether the Trust had waived its right to rely on the Limitation Act. In short, the limitation point was the defence. If the defence was struck out, the limitation point disappeared. I think it likely that the judge erred because he mistakenly thought that limitation was an issue which went to jurisdiction. It is not; it is a defence which must be pleaded and proved by the defendant. It follows that the appellant was right when he submitted to the judge that to determine the limitation issue before the application to strike out the defence was "to put the cart before the horse".

1. Much more difficult is the question of what would have happened if the judge had heard the strike out application first. Mr Colton submitted that it was very strong and might well have succeeded. Not only was there the manifest inadequacy of the Trust's response to Judge Hand's order which was depriving the appellant of material which might help his case, there had been other failings as well. He mentioned that the Trust had failed to file a defence in time and had then filed a defence which was factually wrong. Mr Sonaike accepted that the Trust's response to Judge Hand's order was not as it should have been but argued that the defence would not have been struck out. It was not at all clear that the disclosure exercise would have produced anything of use to the appellant. When one bore in mind the difficulty caused to the Trust by the appellant's delay in commencing proceedings, the court would be slow to strike out an otherwise apparently well-founded defence for failure to conduct an onerous set of searches. The court considering the strike out would also consider the delay caused by the appellant. While accepting that the appellant had been entitled to wait until 2006 to issue his claim, Mr Sonaike submitted that, if he did not then proceed expeditiously with his claim, he would be open to criticism. He had not done so.

1. This Court cannot decide definitively whether or not the defence would have been struck out if it had been heard. It is not our function. We do have to form a view as to the likely outcome. I do not propose to weigh up all the many factors which a court has to consider when making a decision on a strike-out application. I repeat that, in my view, the Trust's response was quite inadequate but I think it unlikely that the defence would have been struck out. It was by no means clear that any useful documents would be found to be still in existence. Although not beyond criticism, the Trust's conduct of the action had not been seriously deficient. Further, the limitation defence had apparent merit. I think that the most likely outcome would have been that the Trust would have been ordered to revisit its response to Judge Hand's order. Possibly a rather more limited order might have been substituted. There would have had to have been an adjournment. What the outcome would have been we will never know.

1. As his second ground of appeal, Mr Colton submitted that it had been unjust for the judge to proceed immediately to hear the limitation arguments. First, the judge knew that the appellant had prepared for the hearing in the expectation that his application to strike out would be heard first. He allowed only an overnight adjournment for the appellant to prepare to argue limitation. Second, the appellant was deprived of the benefit of any documents which might have come to light following proper searches. Third, the judge refused to allow the appellant to give evidence because, for perfectly sensible reasons, he had not put in his witness statement. The trial of the limitation issue had not been fair. If that were accepted, the only solution would be to remit the case to the County Court for the strike-out issue to be determined. Mr Colton accepted that the result might well be only partial success, with the Trust ordered to carry out proper searches. He accepted that that was not a happy prospect.

1. Mr Sonaike submitted that, although at first sight the judge's course might appear to have been unfair, in the event no injustice had been done. First, it was most unlikely that any relevant documents would have come to light so long after the events they related to. It would not be proportionate to require further searches to be made. Even now, the appellant had not said what documents he believed existed or how they would help his case. I interpose there to say that the appellant had stated in his application for specific disclosure that he believed there would be contemporaneous notes of meetings with the people named and that these would assist with the limitation issue. But it is true that he did not say exactly what had been said at those meetings which would be of assistance to him. Mr Sonaike also submitted that, now that we had heard the whole of Mr Colton's submissions, it was clear that the appellant accepted that he had never signed the draft contract of employment and that Mrs Tyler's notes of the various meetings were essentially correct. So it did not matter that he had not been allowed to give evidence about those matters. Nor did it matter that he had not been able to give evidence about the alleged promise to pay by the female officer in the finance department. Even if that were proved, it could not avail the appellant because the promise to pay on 22 December was not supported by consideration. It did not affect the limitation issue because it did not give rise to a fresh cause of action.

1. I find this a difficult issue in that I see the strength of the arguments on both sides. However, for reasons which will be apparent when I have dealt with Mr Colton's third ground of appeal, this second ground has turned out to be unimportant.

1. Mr Colton's third ground of appeal is that, even if the judge had been entitled to decide the limitation point before considering the strike-out application, he reached the wrong conclusion on limitation. He ought to have found that the whole claim accrued on 30 November 2000 and was not statute-barred when the claim was brought on 30 November 2006. Mr Colton advanced two reasons why this was so.

1. First, he submitted that, on the Trust's own evidence, which the judge had accepted, it appeared that, while the employment continued, there was no contractual obligation to pay the appellant. The reasoning was as follows. Mr Colton accepted that a finding that the appellant had not signed the contract was inevitable. He submitted that, even though the contract was not signed, the parties had conducted themselves on the basis that they had entered into a contract, the precise terms of which had not yet been determined but of which some, though not all, terms were agreed. One of those terms was that payment would be made by credit transfer (BACS). During the employment, the appellant had not provided his bank details and Mrs Tyler had said that without that information, the Trust could not pay him. While the employment continued, the Trust was entitled to insist on payment by BACS and was not therefore in breach of any obligation if it did not pay the appellant. If there was no breach, there was no cause of action. While the employment continued, the appellant could not have sued for his unpaid monthly salary. He would have been met by the answer that there had been no breach. When the employment ended, the entire sum of unpaid remuneration became due and the Trust was no longer entitled to insist on payment by BACS. Accordingly, the whole sum became due on 30 November and failure to pay amounted to a breach of contract which gave rise to a cause of action. Mr Colton had to accept, of course, that this argument had not been run by the appellant before the judge. However, he submitted that, as this is a purely legal argument, he should be allowed to take it before this Court. Mr Sonaike did not dissent from that.

1. Mr Colton also sought to rely on the alleged promise to pay made by the female officer in the finance department. He did not accept that that promise had not been proved. The appellant had given further information about this incident and had appended a statement of truth. The only evidence from the Trust was that Mrs Tyler had said that no one except her would have had the authority to make such a promise. He submitted that, if such a promise had been made, it amounted to a fresh agreement between the parties. Whereas the previous agreement had been to pay by BACS, this agreement would be by some other means, such as by cheque. Also it had been had been supported by consideration, namely there was a forbearance to sue in return for a promise to pay by different means.

1. As to the first argument, Mr Sonaike accepted that, if the appellant had signed the contract but had not provided his bank details, he would not have been able to sue for non-payment and that would mean that the cause of action did not accrue. He did not say what the position would have been after the employment ended but I do not think he was suggesting that the Trust would not have owed the appellant anything simply because he had failed to provide his bank details. However, that was theoretical because it was now accepted that the appellant had not signed the contract. Mr Sonaike submitted that, once that was accepted, it was clear that the contract between the parties had to be implied and that the touchstone of an implied contract was 'necessity'. It could not be said that payment by BACS was a necessary term. Monthly payment would have been an obvious term. Therefore, by not paying the appellant monthly while he was working, the Trust had been in breach of contract and the appellant's causes of action had accrued at the end of each month that he had worked. This argument, that the terms of the contract were to be implied without reference to the draft contract, was somewhat at odds with his skeleton argument, in which he had said that, if the contract had been signed, the appellant would have been entitled to be paid monthly in arrears and, if it had not been signed, the same contractual entitlement would still have arisen, either implied on the same basis or on a day to day accrual basis as the work was done. In other words, in that passage, Mr Sonaike had recognised the possibility that, even though the appellant had not signed the written contract, the parties had conducted themselves in accordance with its terms.

1. As for the alleged promise to pay on 22 December, Mr Sonaike submitted that the allegation had not been adequately proved and that, in any event, such a promise did not amount to a new agreement and was unsupported by consideration. At its best, it could only amount to a promise to remedy an already existing breach of contract.

1. I will say at once that I think Mr Sonaike is right about that and that I would reject Mr Colton's submission that this was a new promise to pay by cheque rather than BACS and was supported by the consideration of forbearance to sue. Even on the appellant's own case, nothing was said by or to the lady in the finance department about payment by cheque instead of by BACS.

1. I do, however, accept Mr Colton's submission as to the terms of the contract and the effect of those terms on the accrual of the cause of action. It appears to me that the judge did not analyse the legal position arising from the evidence before him. Having concluded that the appellant had not signed the contract, the judge jumped straight to an acceptance of the suggestion that personnel in the appellant's position would be paid on a monthly basis. The judge described it as "really on a quantum meruit basis". It is not clear what he meant by that. The judge did not ask himself what were the terms on which the parties were doing business together. Nor did he ask himself why it was (on the evidence of Mrs Tyler) that the Trust had not paid the appellant on a monthly basis as it said it usually would. Had he asked those questions, the answers would have been that the Trust was insisting on making payment by BACS because that was a term of the written contract and the appellant was not suggesting that it was not entitled so to insist; he was requesting payment by cheque but it is apparent that he knew he could not insist on it. The inference which has to be drawn was that the parties were conducting themselves in accordance with the contract even though it had not been signed. The contract which had to be implied was the contract as written even though unsigned. As the appellant had not signed the starter information pack and provided his bank details, the Trust was not in breach of contract in failing to pay him monthly. When the employment came to an end, there was no continuing contract between the parties, simply a debt for unpaid salary. In my judgment, that was the moment at which the appellant's cause of action accrued. The Trust has never suggested that it did not owe the appellant his past salary; indeed before District Judge Marin, it accepted that it owed the sums claimed subject to the limitation argument. Nor has the Trust ever suggested that, after the employment ended, it was entitled to insist on making payment by BACS.

1. I have some sympathy with the judge's position in that the appellant did not advance the case which is now put on his behalf; indeed, he was asserting that he had signed the contract. It appears that because the judge rejected that submission, he moved straight to an acceptance of the Trust's argument. In the event, on Mr Colton's analysis, which I have accepted, it would have made no difference whether the contract was signed or not as the parties had conducted themselves in accordance with it.

1. It follows that I would allow the appeal on the basis that the judge reached the wrong conclusion on limitation. The claim was not partly statute-barred. It was all (just) in time. For that reason, it is not necessary for me to express a concluded view on Mr Colton's second ground of appeal.

1. I turn finally to the fourth ground which relates to the deduction made from the sum which the judge was prepared to award. If the judge was right about awarding a net sum rather than the gross sum as claimed, that ruling would have to be applied to the whole principal sum claimed of £16,929.35. Mr Colton submitted first that it was wrong in principle to deduct tax and national insurance contributions from the sum owed by the Trust. That was because the Trust was bound by the concession it had made before District Judge Marin in June 2007 when it was recorded that the Trust "accepts that it owes the claimant the monies claimed for his salary". Mr Colton submitted that the Trust must be held to this concession because it was one of the conditions on which the default judgment had been set aside. While I accept that judgments are often set aside on conditions, there is nothing in this order which suggests that that concession was a condition of the setting aside of the default judgment.

1. Second, Mr Colton submitted that the words of the concession were plain; the Trust accepted that it owed the monies claimed. That concession did not admit of any deductions.

1. Mr Sonaike did not submit that there was any rule of law that in a case such as this the claimant could only recover the net sum. At least he did not produce any authority to that effect. His submission rather was that that is what happens.

1. There is another difficulty, which is deciding how much to deduct. The judge accepted the figure provided by Mr Sonaike's iPhone application. I have no doubt that that calculation is based on accurate rates of tax and NIC for the relevant period. However, it cannot take into account the personal circumstances of the appellant; in particular, it is not known for how long the appellant was employed in the financial year 2000/2001. Accordingly I am not prepared to adopt the rule of thumb method of deduction adopted by the judge.

1. I have seen a copy of the judgment of Underhill LJ in draft. I agree with the course which he proposes that we should take in respect of tax deduction.

1. The parties requested that we should decide now much interest should be awarded. I think it is common ground that the appellant must be entitled to some interest on that sum. It is also accepted that the rate of interest and the period for which it is to be awarded are for the discretion of this Court. Mr Colton submitted that the appellant's application in his claim form for interest at 8% per annum was optimistic but not unrealistic. As for the period, his case was that the appellant had been entitled to wait 6 years before beginning his claim. It could not be suggested that he had deliberately delayed acting. He had delayed because he would quite unfamiliar with court proceedings and it was a big step for him to take. I think Mr Colton accepted that the appellant had been responsible for some of the delay after commencement although not all of it. Some of it had been caused by the Court. In his skeleton argument, Mr Sonaike drew attention to the judge's observation that: "I am not awarding interest on people who do not get on with their claims." He submitted that the judge was entitled to take account of the long delay both before and after issue of the claim. He blamed the appellant for almost all the post issue delay.

1. I have seen a copy of the judgment of Christopher Clarke LJ in draft. I agree with him that we should award 40% in respect of interest.

1. I would therefore, subject to any submissions that may be made hereafter as to why the figure should be gross, give judgment for the appellant for the appropriate net figure plus 40%.

1. Although there was no free-standing appeal against the judge's costs order, it will plainly have to be revisited in the light of this successful appeal. The Court is aware that there was a part 36 offer although it seems unlikely that we will now be troubled by that.

Lord Justice Christopher Clarke

1. I agree. So far as interest is concerned, there are two issues: (a) over what period should interest run; and (b) at what rate. As to the latter, two indications were given as to why 8% was appropriate.

1. First, CPR 12.6 provides :

"(1) A default judgment on a claim for a specified amount of money obtained on the filing of a request may include the amount of interest claimed to the date of judgment if –

(a) the particulars of claim include the details required by rule 16.4;

(b) where interest is claimed under section 35A of the Supreme Court Act 1981 or section 69 of the County Courts Act 1984, the rate is no higher than the rate of interest payable on judgment debts at the date when the claim form was issued; and

(c) the claimant's request for judgment includes a calculation of the interest claimed for the period from the date up to which interest was stated to be calculated in the claim form to the date of the request for judgment.

(2) In any case where paragraph (1) does not apply, judgment will be for an amount of interest to be decided by the court."

So the rules provide for what is, in effect, an entitlement to interest up to the judgment rate, on a default judgment.

1. Secondly, the notes to CPR 7, at page 372 of the White Book, say this:

"What if the debt is disputed? Generally the judgment rate will still be used where judgment is given following a trial on the small claims track or where judgment is given on a successful application for summary judgment under Pt 24. Thus the judgment rate is frequently applied in cases dealt with by Masters and judges.

However, as a general rule the judgment rate is not the correct rate to be awarded after a trial."

1. Whilst I can see the convenience of using the Judgment Act rate, which is well known and has not changed for many years, it is now so much in excess of the rate generally awarded as to make it, in my view, inappropriate. The default position in commercial cases is to award 1% above Base Rate unless that would be unfair in either direction. The rates for the last 10 years are set out on page 373 of the White Book. Since March 2009 the rate has been 0.50%. So from March 2009 8% has been 5.33 x Base Rate + 1 % i.e. 1.5%.

1. So far as the period is concerned the delay between the accrual of the cause of action and the trial – from 30 November 2000 to July 2010 - was some 9.5 years. The appellant, who allowed 6 years to pass before he began proceedings and appears to have allowed the claim to remain dormant for about a year in 2007/8, should not, in my view, be awarded interest for the whole period but only for about half of it. There was then a 5 year delay between July and the hearing before us. Some of that delay is, also, down to the appellant.

1. In the light of the above I would be minded to award interest on the net amount due to the appellant for 8 years at 5%. I have chosen 5% to reflect the fact that in the early years (from 2001), when the delay was less pronounced, Base Rate was much higher.

1. I cannot leave this case without making three observations. First, I am surprised that the respondent, a Health Trust, thought it appropriate to plead the Limitation Act in order to resist paying the appellant the money which it accepted was owed to him for his work as a locum consultant - a course which, in the event, will have caused it much additional cost and expense. Second, the "progress" of this case through the court system can only be described as lamentable, for which both the parties and the county courts themselves bear some responsibility. Third, it is largely as a result of the pro bono assistance of Mr Colton that the appellant has been able to vindicate his rights. Without it a different result might well have occurred.

Lord Justice Underhill

1. I agree that for the reasons given by Dame Janet Smith the Trust has no limitation defence, and thus no defence at all, to the Appellant's claim for arrears of salary for the period in respect of which he claims. The question then arises whether the judgment should be expressed gross or net of tax and national insurance contributions. The Judge believed that it was self-evident that the amount should be net. However, as Dame Janet has set out, Mr Colton submits that the effect of the order of District Judge Marin dated 6 June 2007, quoted at para. 9 of her judgment, is that the Trust has agreed that it should be gross: that is because the order records the Trust's acceptance that it owes the Appellant "the monies claimed for his salary", and the pleaded claim was to the gross sum.

1. In my view, however, it is necessary to start by establishing what the Trust's obligation would be apart from that order. If, as Mr Sonaike submits, it was obliged as a matter of general law to deduct tax on payment of the arrears the wording of the order could not possibly be read as creating a contractual obligation to pay gross. Neither counsel addressed us on the provisions applicable to payments of arrears of salary by a former employer following a court award. However, the position appears on the face of it to be covered by regulations 37 and 37A of the Income Tax (Pay As You Earn) Regulations 2003, as helpfully expounded at paras. 279-290 of Harvey on Industrial Relations and Employment Law, in which case the Trust will indeed be required to pay net. Following the circulation of our judgment in draft, including the foregoing passage, we were told that the Appellant agreed that this was the case. I would invite the parties – in practice no doubt this will mean their respective accountants – to agree within 21 days the correct net figure to go in the judgment of the Court: if agreement is not possible, written submissions should be lodged with the Court explaining the disagreement and the Court will consider what course is most appropriate. If, however, there remains an issue of law as to whether payment should be net or gross, the Appellant should lodge written submissions within 14 days, to which Mr Sonaike should respond within 14 days thereafter; and the Court will then resolve the issue on the papers. The parties should not need to be reminded that the sums involved are not large, and they or their accountants would be well-advised to adopt any pragmatic solution that may be available rather than incur further costs. HMRC may well be a useful source of advice.

1. I also agree with the award of interest proposed by Christopher Clarke LJ.