The claimant brought claims of unfair dismissal based on making protected disclosures relating to race discrimination and sexual harassment. The claimant admitted that he had lied on oath when he said that he had made protected disclosures whilst still in employment. The Tribunal had little hesitation in finding that the claimant’s conduct in bringing and conducting the proceedings was unreasonable and made a costs order against him. They limited this to £4,000, only a fifth of the actual costs incurred by the respondent, by having regard to the claimant’s income and outgoings. The respondent appealed.

The EAT upheld the appeal. Fresh evidence heard on appeal showed that the claimant had made misrepresentations to the Employment Tribunal regarding the nature and extent of his regular outgoings and regarding disposal of a capital sum shortly prior to hearing.  The EAT was satisfied that, in all the circumstances, no regard could be had to the claimant’s means and remitted the case to the Employment Tribunal with a direction to remit the assessment of the claimant’s liability for expenses to the Auditor of the Sheriff Court. The EAT were also satisfied that the ET had erred in taking account only of the claimant’s income and outgoings and not his capital.

_________________

Appeal No. UKEATS/0024/10/BI

EMPLOYMENT APPEAL TRIBUNAL

52 MELVILLE STREET, EDINBURGH, EH3 7HF

At the Tribunal

On 15 July 2011

Before

THE HONOURABLE LADY SMITH, MR P PAGLIARI, MR R THOMSON

SHIELDS AUTOMOTIVE LTD (APPELLANT)

MR RONALD GREIG (RESPONDENT)

Transcript of Proceedings

JUDGMENT

**APPEARANCES**

For the Appellant
MR A HARDMAN (Advocate)

Instructed by:
Messrs Levy & McRae Solicitors
266 St Vincent Street
Glasgow
G2 5RL

For the Respondent
MR G WOOLFSON (Solicitor)

McGrade & Co Solicitors
Standard Buildings
94 Hope Street
Glasgow
G2 6PH

**SUMMARY**

PRACTICE AND PROCEDURE – Costs

Expenses/costs. Claimant found liable in expenses – on grounds of misconduct- restricted to £4,000 on account of his limited means. Fresh evidence heard on appeal which showed that Claimant had made misrepresentations to the Employment Tribunal regarding the nature and extent of his regular outgoings and regarding disposal of a capital sum shortly prior to hearing. Employment Appeal Tribunal satisfied that, in all the circumstances, no regard could be had to the Claimant's means and remitted the case to the Employment Tribunal with a direction to remit the assessment of the Claimant's liability for expenses to the Auditor of the Sheriff Court. Employment Appeal Tribunal also satisfied that Employment Tribunal had erred in taking account of only the Claimant's income and outgoings when assessing his liability for expenses; they had failed to have regard to his capital but, having decided to have regard to his means, they required to look at his whole means and that included his capital resources.

**THE HONOURABLE LADY SMITH** **Introduction**

1. Mr Greig's claim of unfair dismissal against his former employers, Shields Automotive Ltd, was dismissed and he was found to have acted unreasonably in bringing and conducting the proceedings. By a judgment registered on 10 March 2010, an Employment Tribunal sitting at Glasgow, Employment Judge R Gall, ordered that he pay the Respondent's expenses, restricted to the sum of £4,000.

1. The 'agent- client' legal expenses incurred by Shields Automotive totalled £21,460.20 excluding VAT. They have appealed against the Employment Judge's award, submitting that it is too low.

1. We will, for convenience, continue referring to parties as Claimant and Respondent.

**Background**

1. Shortly stated, the Claimant's claim for unfair dismissal was based on an allegation that the reason for his dismissal was that he had made protected disclosures, one in respect of racial discrimination and another in respect of sexual harassment (as were his associated claims for deductions from wages, bonus and pension contributions). He had less than one year's service when his employment came to an end.

1. The Employment Tribunal was not persuaded that the Claimant's departure from the Respondent's employment had anything to do with protected disclosures. Indeed, they were not satisfied that any such disclosures were ever made. They found that he had resigned from his post as general manager on 24 May 2008, after about six months, in circumstances where the Respondent had reasonable grounds to dismiss him for misconduct. At paragraph 5 of their judgment of 10 March 2010, they explain:

"5. The claimant was not regarded by the Tribunal as being at all credible. The Tribunal did not accept that either of the alleged protected disclosures said to have been made had in fact been made. It had regard in particular to the general credibility of the claimant and to inconsistencies in the claimant's evidence together with the fact that the claimant had referred to an email which he said constituted the protected disclosure in relation to racial harassment when setting out his position in the claim form. No such email existed. The claimant accepted that at the Hearing. The first mention of protected disclosures had been made almost 3 months after termination of the claimant's employment when the deadline for lodging the claim was almost at hand, notwithstanding the fact that the claimant had, prior to that time, instructed solicitors who had interacted with the respondents."

1. They return to the matter of the Claimant's credibility at paragraphs 54, 55 and 60:

"54. The Tribunal did not accept the claimant's evidence that he had reported to the respondents the two matters which he said he had reported to the respondents. This was not however a case where the Tribunal simply preferred one party's evidence to the other and had concluded, on balance, that the claimant had not made the protected disclosures.

55. Rather, the Tribunal concluded that the position in this case went beyond that. The Tribunal was of the view in relation to the report said to have been made by the claimant to the respondents of racial harassment having taken place, that the claimant could not have made this report as alleged by him. Further, the Tribunal concluded that it must have been known to the claimant both in making the claim and in giving his evidence at Tribunal, that the alleged disclosure of racial harassment within the respondents' organisation had not been made by him. The claimant had therefore in the view of the Tribunal lied under oath and must have realised that he was lying under oath.

60. In the circumstances, the Tribunal's clear view was that there had been no such disclosure and further that the claimant was fully aware that no such disclosure had been made given the inconsistencies and contradictions in his evidence and admissions made in cross-examination, together with the weight and clarity of evidence to the contrary from other witnesses."

1. Separately, they observed:

"The Tribunal heard substantial and entirely credible evidence as to outlandish statements which the claimant was said to have made in the workplace as to his own achievements in various fields and as to people he had met and friendships he had. Whilst the claimant denied elements and aspects of these statements which were aired in evidence, the Tribunal accepted that he had made various claims as to his achievements, friendships and encounters with well known individuals and that these were on balance and on the evidence heard, unlikely to be true. The claimant was in general terms therefore not regarded by this Tribunal as credible. That general impression informed the Tribunal's view on the evidence in relation to the making or otherwise of the protected disclosures."

1. The Claimant accepted, at the expenses hearing, that he had made allegations which were unfounded; he apologised for having done so.

1. At the CMD on 31 October 2008, the Respondent's agents had indicated that they would be seeking an award of costs if the Claimant persisted with his claim. Following the hearing, they wrote to the Claimant by letter dated 18 November 2008, warning him that they would be seeking a full award of costs. Their letter included the following terms:

"… our clients … intention is to seek an Order for a full award of costs because the evidence which we have recovered on behalf of our clients indicates that your claim has been raised vexatiously. A Claimant is held to have acted vexatiously if he brings a hopeless claim out of spite to harass his employer or for some other improper motive."

1. They then set out that the Respondent's position was that he had, at no time, made any whistleblowing allegations. Thus, the Claimant had been clearly and expressly warned that if he persisted in his claim and, as the Respondent confidently predicted, it failed, they would have no hesitation in seeking an award of expenses against him.

1. The Tribunal had little hesitation in finding that the Claimant's conduct in bringing and conducting the proceedings was unreasonable.

1. It is notable that the Tribunal concluded that the Claimant had not told the truth in bringing his claim nor when giving evidence; he had lied under oath.

1. Turning to the Claimant's financial circumstances, the Tribunal reached its decision by having regard only to his income and outgoings. He had provided information that his gross earnings for the 12 months beginning in February 2010 would be £60,000–65,000. He also provided a list of his monthly outgoings totalling £4303. At paragraph 17, in the section of their judgment dealing with the Claimant's means, the Tribunal state:

"The claimant has monthly outgoings at present which total approximately £4,300. Those outgoings are higher than was formerly the case as the claimant and his wife are currently separated. The claimant's wife intends raising an action of divorce. Document 9 for the claimant was a letter of 21 January 2010 from the claimant's wife's then solicitors intimating that intention. The claimant's wife has consulted fresh solicitors and instructed them in connection with divorce proceedings. The list of outgoings includes payments of rent for accommodation currently occupied by the claimant together with support in respect of his wife and children. His wife does not work. There are 3 children of the marriage aged 6, 4 and 2. Document 8 for the claimant was a list of those monthly outgoings….".

1. The list of monthly outgoings was a manuscript document written by the Claimant and included the following entries:

"Nursery £ 250

Food and Nappies – Family Allowance £1,000

Clothes for children £ 150

Gymnastics, swimming and golf lessons £ 60

Rent £ 654".

1. It also included entries in respect of his wife's car loan, mortgage on the former matrimonial home, insurances, Council Tax, and various utility bills relating to the former matrimonial home totalling about £1,500.

1. The Claimant also produced bank statement pages at the expenses hearing which showed that he had withdrawn £3,000 (using a cash card) from his bank on 21 January 2010 and withdrawn £1,500 ( again, using a cash card) from his bank on 22 February 2010, three days before the hearing. He was left with a balance in his account of £702.02 and the Tribunal concluded that he had no savings. He advised the Tribunal that the £3,000 withdrawal was money that he had paid to his wife.

1. As the Tribunal records, at paragraph 19, the Claimant had capital in the form of his reversionary interest in the former matrimonial home which amounted to £135,000:

"The former matrimonial home in which the claimant's wife continues to reside at present is as anticipated as realising a sale price of around £330,000. His secured loan of (sic) that property such that having repaid the loan from the sale proceeds it is likely that around £135,000 will be the net proceeds."

**Relevant law**

1. The relevant parts of the Employment Tribunals (Constitution and Rules of Procedure) Regulations Schedule 1 **are:

"When a costs or expenses order may be made

This section has no associated Explanatory Memorandum

40—(1) A tribunal or chairman may make a costs order when on the application of a party it has postponed the day or time fixed for or adjourned a Hearing or pre-hearing review. The costs order may be against or, as the case may require, in favour of that party as respects any costs incurred or any allowances paid as a result of the postponement or adjournment.

(2) A tribunal or chairman shall consider making a costs order against a paying party where, in the opinion of the tribunal or chairman (as the case may be), any of the circumstances in paragraph (3) apply. Having so considered, the tribunal or chairman may make a costs order against the paying party if it or he considers it appropriate to do so.

(3) The circumstances referred to in paragraph (2) are where the 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.

(4) A tribunal or chairman may make a costs order against a party who has not complied with an order or practice direction.

The amount of a costs or expenses order

This section has no associated Explanatory Memorandum

41

—(1) The amount of a costs order against the paying party shall be determined in any of the following ways —

(a) the tribunal may specify the sum which the paying party must pay to the receiving party, provided that sum does not exceed £10,000;

(b) the parties may agree on a sum to be paid by the paying party to the receiving party and if they do so the costs order shall be for the sum so agreed;

(c) the tribunal may order the paying party to pay the receiving party the whole or a specified part of the costs of the receiving party with the amount to be paid being determined by way of detailed assessment in a County Court in accordance with the Civil Procedure Rules 1998(1) or, in Scotland, as taxed according to such part of the table of fees prescribed for proceedings in the sheriff court as shall be directed by the order.

(2) The tribunal or chairman may have regard to the paying party's ability to pay when considering whether it or he shall make a costs order or how much that order should be.

(3) For the avoidance of doubt, the amount of a costs order made under paragraphs (1)(b) or (c) may exceed £10,000."

1. The following are of particular note. First, an Employment Tribunal must consider making an award of expenses if it concludes that a party has acted unreasonably in bringing and/or conducting the proceedings. The Employment Tribunal so concluded in this case. The Tribunal, accordingly, required to consider making an award of expenses. Secondly, if an Employment Tribunal decides that an award of expenses should be made, it may have regard to the paying party's ability to pay but does not require to do so. As observed by HHJ Richardson in Jilley v Birmingham and Solihull Mental Health NHS Trust and Others UKEAT/0584/06/DA, a case where the claimant had conducted herself unreasonably:

"44. Rule 41(2) gives to the Tribunal a discretion whether to take into account the paying party's ability to pay …

53. The first question is whether to take ability to pay into account. The Tribunal has no absolute duty to do so. … In many cases it will be desirable to take means into account before making an order; ability to pay may affect the exercise of the overall discretion, and this course will encourage finality and may avoid lengthy enforcement proceedings. But there may be cases where for good reason ability to pay should not be taken into account: for example, if the paying party has not attended or has given unsatisfactory evidence about means."

1. Thirdly, an Employment Tribunal has the power to fix the amount of the award, up to a limit of £10,000. The Employment Tribunal also has power to remit the matter of the amount to be awarded as expenses for taxation – that is, in Scotland, the matter may be remitted to the Auditor of the Sheriff Court, for determination by him. In that event, there is no upper limit.

**The Tribunal's Reasons**

1. Whilst having no difficulty in reaching the view that an award of expenses should be made, the Employment Tribunal restricted the award.

1. Their reason for restricting the award to £4,000 (less than one fifth of the legal expenses incurred by the Respondent) is explained at paragraph 80:

"80. The claimant has very little, if any, free income on a monthly basis at present. His ability to pay costs is therefore not good."

**The appeal**

Application for fresh evidence

1. Two grounds were set out in the Notice of Appeal. The first was that the Tribunal had acted perversely in that they had failed to have regard to a relevant factor, namely the Claimant's capital, represented by £135,000 in the former matrimonial home. The second ground was that new evidence had become available. The new evidence is summarised at paragraphs xii to xv and, insofar as was relied on before us, was said to be:

* Evidence given to the Tribunal by the Claimant about having paid money to his wife from money withdrawn from the bank was not true; and

* Evidence given to the Tribunal about his making payments to his wife of money for childcare/ nursery fees was not true.

1. The evidence had come to the notice of the Respondent via a private investigator who had contacted them on 15 April 2010.

1. By email dated 20 June 2011, the Respondent's solicitor presented an application to have the oral evidence of the Claimant's wife Mrs Caroline Greig, heard by this Tribunal. An affidavit from her, sworn on 17 June 2011, was attached to the application. The application was objected to for the reasons set out in Mr Woolfson's email dated 1 July 2011 and since the application came so late in the day, it was decided that it should be determined after having heard oral submissions regarding it, at the appeal hearing. Before turning to those submissions, we would, however, observe that, in his email of 1 July 2011, Mr Woolfson stated, amongst other matters, in relation to the allegation that the Claimant had misled the Tribunal regarding his disposal of cash withdrawn from his bank account, that the Claimant "cannot recall what, if anything, was stated during the costs hearing about the withdrawals in question".

1. In support of the application, Mr Hardman explained that it could not have been made earlier as the Claimant's wife's affidavit was not available; it was only on 17 June 2011 that she had provided an affidavit. There had been earlier unsuccessful attempts to contact her. It was only once her affidavit was available that the Respondent could properly represent that the fresh evidence they sought to present was apparently credible (see: Ladd v Marshall. Although they had, previously, lodged a review application, it was withdrawn at a time when the Claimant had stopped making the agreed monthly payments towards payment of the award of £4,000 and could not have properly proceeded in the absence of the Claimant's wife's evidence which they did not, at that time, have albeit that they had had an indication from the private investigator of what it might be.

1. Mr Woolfson opposed the application. He questioned whether the fresh evidence was "apparently credible" as all that there was Mrs Greig's affidavit and there were "problems" with it. He referred to various parts of it and sought to explain how her evidence might be challenged. He said that he did not consider that the allowance of fresh evidence would be an appropriate use of process. He referred to the case of [Adegbuji v Meteor Parking Limited]() UKEATPA/1570/09/LA and submitted that this Tribunal was not the appropriate forum for the hearing of fresh evidence; the appropriate procedure was to apply to the Employment Tribunal for a review. The Respondent's had chosen to withdraw their review application and could not now proceed in this way. Mr Woolfson made a subsidiary motion that if the fresh evidence was to be allowed, the Claimant should also be allowed to give evidence.

Decision on application for fresh evidence

1. Having adjourned to consider the application, we decided that, given the unusual circumstances of this case, it should be allowed. We were mindful of the views expressed by Underhill P in the case of Adegbuji **to the effect that where a party seeks to challenge the decision of an Employment Tribunal on the basis of fresh evidence, the appropriate course of action will normally be for him to apply to the Employment Tribunal for a review under rule 34 of the 2004 Rules. However, the Respondent here had followed that course but, for reasons which are entirely understandable, withdrawn their application. It was only now that the Respondent was in a position to present a case that the fresh evidence was apparently credible, the witness having very recently sworn an affidavit. We would add that we reject Mr Woolfson's suggestion that an affidavit is not sufficient for that purpose. Further, we were satisfied that the Respondent could not, on the information before us, be criticised for the fact that the affidavit was not sworn at an earlier stage.

1. We also granted Mr Woolfson's motion that the Claimant should be permitted to give evidence.

**Fresh evidence**

1. We heard evidence from Mrs Caroline Greig and from the Claimant. We found the following facts to have been admitted or proved.

* The Claimant and Mrs Caroline Greig are spouses and have three young children. On 13 November 2009, they ceased cohabiting as man and wife although the Claimant continued living in the former matrimonial home until 13 February 2010, when he left.

* After leaving the former matrimonial home, the Claimant spent some time living in 'Bed & Breakfast" accommodation and some time living with his mother. At some point he moved into other accommodation.

* Divorce proceedings have now been raised and are pending in Glasgow Sheriff Court but they had not commenced as at the date of the expenses hearing.

* The Claimant did not pay £3,000 to his wife in January or February 2010.

* As at 25 February 2010, the Claimant was not paying any nursery fees for the children, nor was he paying his wife £1,000 per month for nappies, food and other costs relating to them, nor was he paying £150 per month for their clothes, nor was he paying £60 per month for gymnastics, golf and swimming lessons. The nursery fees had always been paid by his wife, the Claimant's approach being that it was her responsibility. She received cash from him of £100 – 150 every couple of weeks or so after their separation on February 13th 2010, depending on what he had in his wallet although, as at 25 February 2010, the date of the Tribunal hearing, all that she had received that month was cash of £40 which the Claimant gave her on 13 February, when he left. She was paying the gymnastics fees.

* The Claimant was not renting any property as at 25 February 2010.

* The Claimant had no rental liability as at 25 February 2010.

* The Claimant had not entered into any lease as at 25 February 2010, nor had he become liable to pay any deposit to any landlord.

* The monthly costs involved in paying the mortgage, Council Tax, insurances, and utility bills in respect of the former matrimonial home, and the car loan and insurance for the car driven by the Claimant's wife were, as at 25 February, of the order of £1,500.

* The Claimant's wife's solicitor emailed the Claimant's solicitor on 26 February 2010 (the day after the expenses hearing) indicating that his understanding of the outcome of discussions that had taken place between solicitors earlier that week was that, in principle, the Claimant's ongoing liabilities would be that (a) he would continue to pay the monthly costs relating to the former matrimonial home and the Claimant's wife car as outlined in the penultimate bullet point above i.e. costs totalling about £1500, (b) he would pay £150 per week as interim aliment for the children (in circumstances where all that had been paid since the Claimant left the former matrimonial home, was £40), and (c) he would make a proposal regarding ongoing maintenance for the Claimant's wife herself. That email stated: "If matters cannot be agreed in principle then my client reserves the right to proceed straight to court in terms of an action of divorce ...". It is not known how the Claimant's solicitor responded to that email.

* The Claimant made a representation to the Tribunal of the nature and extent of his outgoings as at 25 February 2010 by placing before them a handwritten list which he had prepared on or about 24 February 2010.

* That list was a misrepresentation. In particular, it represented that the Claimant's outgoings in respect of support of his wife and children totalled almost £3,000 per month at that time. They did not. They totalled no more than about £1,500. Further, it represented that he was paying rent of £654 per month. He was not. He did not occupy rented property at that time and had not entered into any lease.

* At some point, the exact date of which is unclear but may have been around 25 February 2010, the Claimant indicated his willingness to pay his wife £150 per week in addition to the monthly support totalling about £1,500, referred to above. He did not always make those payments or make them timeously.

1. It was suggested to Caroline Greig in cross examination that the Claimant had "come to the house with £3,000 cash in an envelope on a Sunday towards the end of January 2010." No other details of that alleged event or of any events said to have led up to it were put to her. She was adamant that no such payment had ever been made. It was also put to her that at some point, an agreement was reached between solicitors that the Claimant would pay her £150 per week. She confirmed that there had been such an agreement but reiterated that the money was not regularly paid. The agreement was not said to have been reached by 25 February 2010 or prior thereto.

1. We found Caroline Greig to be a credible witness. She gave her evidence in a straightforward fashion, was not shown to be unreliable and none of the points put to her in cross examination demonstrated that we should have any reason to doubt her credibility. Indeed, Mr Woolfson made no submission that she was not a credible and reliable witness. His approach was confined to submitting that we should accept the Claimant's version of events.

1. The Claimant's evidence regarding his liabilities and what was represented to the Tribunal was vague, contradictory and confusing. He prevaricated at times. We did not find him to be a credible or reliable witness.

1. He could not remember exactly what was said about the £3,000 withdrawal from his bank account, at the Tribunal hearing, although his position ultimately seemed to be that it had been said to them that the money had been paid to his wife. He asserted in examination-in-chief that, at a discussion in "a guest house in Ayr" in January 2010, his wife had said she had new things on order – curtains - and a bill for solicitor's fees and she had no money to pay for items and if he loved his children, he would have to pay for them. She specifically requested £3,000. He said that he attended at the matrimonial home with the cash in an envelope and put it on a table in the lounge, beside a takeaway pizza menu. He was also keen to try to use the opportunity to criticise, in his evidence, the state of the house and describe the standard of his wife's housekeeping in derogatory terms, an unimpressive attempt which served only to demonstrate that he was ill-disposed towards his wife. The money was, he said, in cash, because his wife would not give him her bank details. He could not explain why he did not, in that case, write a cheque. In cross examination, he added that his wife had said she required £3,000 because she had run up debts and the money was also for nursery fees.

1. The Claimant's explanation of his representations on the list of outgoings he had put before the Tribunal was confusing. He referred to it being "on the back of" the solicitors' agreement that he would cover the running costs of the house and pay his wife £150 per week, referring to the email of 26 February 2010 from his wife's solicitor, to which we refer above. That is, he sought to rely on an agreement which post-dated the hearing. He said that the nursery fees were to be paid out of the £3,000 without being specific as to how much of the £3,000 was for nursery fees, although at one point he referred to the whole of it as being advance payment for the nursery fees. Further, he accepted that there had been correspondence between solicitors in which the request was made, on his behalf, for his son not to be sent to nursery, because of his financial position. He accepted that he was not actually paying the nursery fees as at the date of the hearing before the Tribunal. He also said that he thought it was "given as read" that everything on the list of outgoings that he put before the Tribunal was correct. He also, at one point, said that his actual outgoings were higher. At another point, he said that he paid all the bills to about £1500 and he had given his wife £3,000. At some unspecified date, his mother had handed over £300 to her, on his behalf, when his wife collected the children. He could not remember when he had paid his wife the £3,000; he would "go with" 21 January, which was the date that the money was taken out of the bank. At another point, his evidence was to the effect that a number of days had elapsed between the money being withdrawn and it being paid over to his wife.

1. We could not accept the Claimant's evidence that he had given his wife £3,000 in cash or his general assertion that he was incurring all the items of expenditure on the list put before the Tribunal. First, the allegation that his wife had demanded the payment for the purposes spoken to by the Claimant in evidence had not been put to his wife in cross examination nor had the details of the circumstances in which the money was alleged to have been delivered to her nor had the allegation that she had refused to disclose her bank details. Secondly, the Claimant's evidence as to what the payment was actually for was confused and internally contradictory – it could not, for instance, all have been for nursery fees and, at the same time, have been for nursery fees, solicitor's fees and curtains. Thirdly, the items on the list for those expenses covered by his wife's solicitors' email (household etc expenses) totalling about £1,500 was not explanatory of his allegation that he had made a global payment of £3,000 – quite apart from anything else, the email postdates the hearing and shows that the agreement had not been finalised as at 25 February. We would also observe that the items for nursery, food etc, children's clothes and gymnastics etc lessons total a further £1460 and it was clear from the evidence before us that the Claimant was not paying them as at the date of the hearing before the Tribunal. Whatever may have been his ultimate commitment to providing support for his wife and children, it was not shown to have amounted to almost £3,000 (as is represented in the list put before the Tribunal) and was certainly not of that order as at 25 February 2010. We also noted that although, in evidence, the Claimant accepted that he had told the Tribunal, when they asked him what had happened to the £3,000 he had withdrawn from the bank, that he paid it to his wife, in Mr Woolfson's written opposition to the fresh evidence motion, it was stated that the Claimant could not remember what, if anything, was said to the Tribunal about that matter.

1. Regarding the withdrawal of £1500 cash from his bank on 22 February 2010, the Claimant said it was advance rental for a house he was "looking at" at that time. He had, however, not entered into any lease. He said he had entered into a "verbal agreement" in respect of a house in the country in Ayrshire. He did not say where the house was, who the landlord was or give any details of the alleged agreement. He did not go ahead with taking the house as he was persuaded not to do so by his family. He was, he said, paying for Bed & Breakfast accommodation in Ayrshire at the time of the hearing before the Tribunal. He alleged that it cost £20 per day. He also said that he paid "rent" to his mother, of an unspecified sum. He accepted that he was not, however, paying rent of £654 per month. Whilst it was clear that, whatever the Claimant's outgoings in respect of accommodation, he was not paying £654 in monthly rent and had not paid any rental deposit, we could not reach any conclusion as to what truly had been the position regarding his outgoings for accommodation as at the date of the hearing, given the contradictions in the Claimant's evidence, the manner in which it was given, and the fact that none of his case on these matters had been put to his wife when she was cross examined.

**Submissions for the Respondent**

1. The first ground of appeal was that the Tribunal had failed to take account of the Claimant's ability to pay, adequately. They had reached a perverse conclusion: Stewart v Cleveland Guest (Engineering) Ltd [1994] IRLR 440 **applied. The decision was shown to be fundamentally wrong because the Tribunal had plainly ignored the Claimant's capital in the former matrimonial home, which amounted to £135,000. Whilst a Tribunal was not bound to consider means, if it did, it required to take account of the paying party's whole means. The Claimant's capital of £135,000 was plainly a relevant factor.

1. The second ground of appeal related to the fresh evidence and was the basis of Mr Hardman's primary submission, namely that this was a case in which the only proper approach was to take no account of the Claimant's means because his evidence about them required, in all the circumstances, to be viewed with suspicion. He referred in support of his submission, to the case of Jilley v Birmingham and Solihull Social Work Department. The evidence of Mrs Greig should be accepted. She had no "axe to grind", her evidence was consistent and it was clear. The Claimant's evidence, on the other hand, was characterised by prevarication, confusion and vagueness. No account should, in the circumstances, be taken of his ability to pay.

1. Mr Hardman's motion was that we should uphold the appeal and remit the case to the Tribunal with a direction that they remit the assessment of expenses to the Auditor of the Sheriff Court.

**Submissions for the Claimant**

1. Mr Woolfson, under reference to Piggot Bros & Co Limited v Jackson [1991] ITLT 312, Yeboah v Crofton [2002] IRLR 634, McPherson v BNP Paribas [2004] IRLR 558, Retarded Children's Aid Society v Day [1978] IRLR 128, Jilley v Birmingham and Solihull Social Work Department, and Stewart v Cleveland Guest (Engineering) Limited, said that he thought that the judgment of the Tribunal was far from being a perverse one. It was not to be assumed that, just because they had not mentioned taking account of the Claimant's capital in the former matrimonial home, they had not in fact taken it into account. He also, in apparent contradiction of that submission, suggested that it was of little relevance because its value could not be used.

1. The Tribunal had made an assessment of expenses and that was a matter for the Tribunal of first instance. It would inequitable to expose the Claimant to a further amount. It would have an enormous impact on him. This Tribunal should be reluctant to interfere. So far as the fresh evidence was concerned, the Claimant had acknowledged that he was wrong to state that he was paying rent of £654 but he had been paying for Bed & Breakfast accommodation. The Claimant was, he said, very clear that he was making global payments to cover the costs over which questions had been raised. He had paid a lump sum of £3,000 which was meant to be for nursery fees (Mr Woolfson made no reference to the Claimant's claim that the sum was also to cover curtains and debts such as for solicitor's fees) . He was paying £150 per week. £300 was paid via his mother. Mr Woolfson was concerned that "there was a cloud" over the handwritten list of outgoings and said that he did not believe that we had heard evidence that showed that the Claimant's evidence of outgoings should not have been accepted by the Tribunal. The Claimant was, he said, making global payments which, "in effect" covered all the items on the list.

1. Whilst at one point Mr Woolfson suggested that it would equitable to refer the whole matter back to the Tribunal, his instructions ultimately were that the Claimant wished the issue of his liability for expenses to be determined by this Tribunal. It should not be remitted back to the Tribunal or to the Auditor for taxation.

**Discussion and Decision**

1. Having heard the fresh evidence and made the findings in fact to which we refer above, we are readily persuaded that the Tribunal's judgment cannot stand. The nature and extent of the Claimant's outgoings were a highly material factor in the Tribunal's reasoning (see: paragraphs 17 and 80) but, unbeknown to the Tribunal, their considerations were based on a factual hypothesis which was wrong. They were based on a list which contained misrepresentations and was, to the extent of over £2,000 (£1460 re: family outgoings and £654 re: rent), an exaggeration. We would refer, in that regard, to our explanation above.

1. Further, the Tribunal proceeded on the basis of the Claimant's statement that the £3,000 cash he had removed from his bank account had been paid to his wife but, as we explain, that too was a misrepresentation. We would add that, whilst no evidence was given regarding what, if anything, was said about his withdrawal of £1500 three days prior to the hearing before the Tribunal, we could not accept the Claimant's explanation that it was to pay a rental deposit. His evidence about that matter was too vague and uncertain. No satisfactory explanation for withdrawal of that cash sum has been provided.

1. As observed in Jilley, a Tribunal is not obliged to take account of the paying party's means. In all the circumstances, we conclude that this is case in which no tribunal could properly reach a conclusion as to the nature and extent of the Claimant's means, given the inherently unsatisfactory and misleading nature of his whole evidence about that matter. We reject Mr Woolfson's submissions – it is plain that had the Tribunal had the whole picture before them, as completed by the fresh evidence we heard, they could not have reached any firm conclusion about the nature and extent of the Claimant's means. That being so, this is a case where the paying party's ability to pay cannot be taken into account. The only limitation to be applied to the liability for expenses is that it be assessed on a party – party basis; that is the usual basis on which litigation expenses are payable by one party to another and Mr Hardman did not make any submission that some other basis should apply. It follows that the appeal falls to be upheld on the fresh evidence ground alone.

1. Turning to the second ground of appeal, we are also readily persuaded that it is well founded. It is plain from paragraph 80, that the Tribunal only had regard to the Claimant's income and outgoings. They took no account of his capital assets when reaching their decision. The Stewart v Cleveland example of perversity being where the response "that must be wrong" is elicited, comes to mind (see: Stewart at paragraph 33). We also observe that paragraph 26 of McPherson v BNP Paribas, which was specifically relied on by Mr Woolfson, cites circumstances where a discretion has been exercised "in disregard of the principle of relevance" as being an example of perversity. Assessing a person's ability to pay involves considering their whole means. Capital is a highly relevant aspect of anyone's means. To look only at income where a person also has capital is to ignore a relevant factor. We would add that we reject Mr Woolfson's submission to the effect that capital is not relevant if it is not in immediately accessible form; a person's capital will often be represented by property or other investments which are not as accessible as cash but that is not to say that it should be ignored. In any event, no case was made to the Tribunal that the Claimant would have difficulty in realising his interest in the house or using its value in some other way so as to meet his liability for expenses. We, accordingly, uphold the appeal on this ground also.

**Disposal**

1. Whilst we are satisfied that the award made by the Tribunal was inadequate, for the reasons explained above, we do not consider it appropriate that we fix the amount to be paid by the Claimant. Nor, in all the circumstances, do we consider that it would be appropriate for the Tribunal to fix those expenses. It seems to us that this is a case where justice will best be achieved by the expenses due being as taxed, on a party-party basis, by the Auditor of the Sheriff Court. We will, accordingly, pronounce an order upholding the appeal, setting aside paragraphs 2 and 3 of the judgment of the Tribunal, substituting for them an order that the Claimant pay to the Respondent the whole expenses occasioned to the Respondent by the Claimant's bringing of and conducting his claim before the Employment Tribunal, as taxed on a party-party basis by the Auditor of the Sheriff Court, and remitting the case to the Tribunal with a direction to remit the assessment of the expenses due by the Claimant to the Auditor of the Sheriff Court, on the foregoing basis.