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IN THE SUPREME COURT OF JUDICATURE FC2 98/7268/2

IN THE COURT OF APPEAL (CIVIL DIVISION) CCRTF 97/0764/2

(HIS HONOUR JUDGE COX )

Royal Courts of Justice

Strand

London WC2

Friday, 23 October 1998

B e f o r e:

LADY JUSTICE BUTLER-SLOSS

LORD JUSTICE ROBERT WALKER

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DENNIS BARTHOLOMEW

Plaintiff/Appellant

- v -

(1) THE LONDON BOROUGH OF HACKNEY

(2) SAMUEL KENNEDY YEBOAH

Defendants/Respondents

- - - - - -

(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 831 3183

Official Shorthand Writers to the Court)

- - - - - -

MR TIMOTHY SISLEY (Instructed by MU Samuel Egole & Co., London, SW9 8DJ) appeared on behalf of the Appellant

MR CLIVE LEWIS (Instructed by Eversheds, London, EC4V 4JL) appeared on behalf of the Respondent (First Defendant)

The Second Defendant did not appear and was not represented

- - - - - -

J U D G M E N T

(As approved by the Court )

- - - - - -

©Crown Copyright

LADY JUSTICE BUTLER-SLOSS: I will ask Robert Walker LJ to give the first judgment.

LORD JUSTICE ROBERT WALKER: This is an appeal from an order of Judge Cox made from 5 March 1997 in proceedings in the Shoreditch County Court. Judge Cox dismissed a claim by Mr Dennis Bartholomew (the plaintiff below and the appellant in this court) against the London Borough Council of Hackney (the first defendant below and the respondent in this court). There was also a claim against Mr Sam Yeboah (the second defendant) but he is no longer involved in this appeal.

Mr Bartholomew, who appeared in person below but appears by Mr Sisley in this court, seeks by his amended notice of appeal to have a new trial rather than to have judgment for damages entered in his favour. That is because, as Mr Sisley has candidly admitted, the evidence below was insufficient to cover questions of damage, even if Mr Bartholomew succeeds on the point of principle.

Mr Bartholomew was employed by Hackney as head of its race equality unit until his employment was terminated on 28 February 1994. Mr Yeboah was, and it may be still is, head of personnel at Hackney.

The case is concerned with a written reference dated 9 June 1995 (that is some fifteen months after the end of Mr Bartholomew's employment) which was sent by Hackney's chief executive's office to Miss Jinks of Richmond upon Thames Social Services. Richmond wrote to Hackney asking for a reference in respect of Mr Bartholomew because Richmond was minded to offer Mr Bartholomew employment as a residential social worker. The letter from Miss Jinks asked for a response on three points in particular: first, for confirmation that Mr Bartholomew had in fact been employed at the dates and in the posts which he had mentioned; second, Hackney's assessment of Mr Bartholomew's suitability for the post which Richmond was offering him; and, third, the number of days of absence because of ill health which Mr Bartholomew had had while in employment in Hackney.

The letter, dated 9 June, responding to the request, was signed by Miss Angela O'Connor, a directorate personnel officer at Hackney. The letter responded by giving confirmation to the first point but did not in fact provide any direct answer to the second or third questions on which information was sought. I will read the question in its entirety:

"I am writing in response to your letter to Mr Sam Yeboah dated 6.6.95. Your letter requested a reference for Mr Dennis Bartholomew who has applied to you for the post of Residential Social Worker (Care Bank).

Mr Bartholomew commenced employment with this authority in 1984 as a Project Officer. In January 1992 he was appointed as Head of the Race Equality Unit.

In February 1994 Mr Bartholomew took voluntary severance from the Authority's service following the deletion of his post.

At the time of his departure Mr Bartholomew was suspended from work due to a charge of gross misconduct, and disciplinary action had commenced. This disciplinary action lapsed automatically on his departure from the authority."

Soon after that reference was sent, and no doubt in consequence of it, Richmond withdrew the offer of employment which it had made to Mr Bartholomew. It is not really in dispute that each statement in that letter was factually correct. Indeed, it appears that Mr Bartholomew agreed as much when that question was put to him by the County Court Judge. However, Mr Bartholomew says, through Mr Sisley, that the letter as a whole was unfair and that it was a breach of a duty of care owed to Mr Bartholomew by Hackney.

That was the basis of his claim for damages in a summons and statement of claim issued on 3 July 1995. Mr Bartholomew pleaded in paragraphs 8 and 9 of his statement of claim that Hackney had been actuated by a deliberate and unlawful intention to injure him, but that claim is rightly not pursued on the appeal. The claim is really based on the principle established by the House of Lords in the case of Spring v Guardian Assurance [1995] 2 AC 296. In that case the House of Lords held by a majority, with Lord Keith dissenting, that on giving a reference to an ex-employee, in response to a request by an identified prospective new employer, the ex-employer owes a duty of care to the ex-employee, that the breach can give rise to a claim for pure economic loss and that the possibility of such a claim is not excluded by considerations of public policy which favour candour in references. I note in passing, as Mr Sisley noted, that the giving of a reference is a paradigm occasion of qualified privilege for the purposes of the law of libel.

In the Spring case the reference (for a man who was employed in the financial services industry) was about as bad as it possibly could have been. After describing his alleged selfishness towards colleagues, the reference continued:

"... his former superior has further stated he is a man of little or no integrity and could not be regarded as honest... Since 1 January 1989, Messrs. Spring and Parker shared all their commission earnings on a 50:50 basis and left owing the company some £12,000 in funding which to date has not been repaid. This matter is now in the hands of solicitors. The current lapse ratio is running at 18 per cent and this is only for policies written since March of this year. Since their departure, we have found a serious case of mis-selling where the concept of ´best advice' was ignored and the policies sold yielded the highest commissions."

I mention that in order to make clear that in the speeches in the House of Lords in that case there was understandably hardly any discussion of any question of nuances or, as it might be put in terms of defamation law, innuendo which might stop a reference, while factually correct so far as it went, from being unfair. Lord Goff did indeed say at page 320:

"... in considering the duty of care owed by the employer to the employee, although it can and should be expressed in broad terms, nevertheless the central requirement is that reasonable care and skill should be exercised by the employer in ensuring the accuracy of any facts which either (1) are communicated to the recipient of the reference from which he may form an adverse opinion of the employee, or (2) are the basis of an adverse opinion expressed by the employer himself about the employee."

Similarly, at page 340 Lord Woolf referred to:

"a lack of care in ascertaining the facts on which the reference is based."

Lord Woolf stressed the importance of references because they may have a very material effect on an ex-employee's prospects of future employment.

Those citations and also the judgment of Tudor Evans J in Lawton v BOC Transhield Ltd [1987] IRLR 405, 409 reflect the fact that almost any reference to an ex-employee is ultimately going to consist of an opinion based on facts, some of which are capable of more or less precise and objective measurement and others of which depend on much more subjective perceptions. Nothing in those authorities seems to me to give much help in the rather different situation that has arisen in this case.

It is a feature of this case that the basic facts essential to its decision and to the determination of this appeal are relatively simple and are barely in dispute. But plainly there were other issues, in particular whether Mr Bartholomew was actually guilty of gross misconduct, which were highly controversial but which the County Court Judge could not resolve and rightly made no attempt to resolve. The reference stated correctly that Mr Bartholomew started employment with Hackney in 1984 and that in January 1992 he was appointed as head of the race equality unit. The reference then stated with factual accuracy that Mr Bartholomew took voluntary severance in February 1994, that at that time he was suspended from work because of a charge of gross misconduct and that the disciplinary action lapsed automatically with the end of his employment.

The chronology, helpfully supplied by Mr Sisley, fills out to some extent the bare skeleton of facts provided by the reference. Hackney suspended Mr Bartholomew by a written notice on 16 September 1993 pending investigations. Mr Bartholomew responded by issuing an application to the Industrial Tribunal for London North on 23 October 1993. His application alleged racial discrimination.

On 24 November 1993 Hackney gave notice to Mr Bartholomew of complaints against him which were to be investigated in disciplinary proceedings. They were described by the Industrial Tribunal at a later hearing as a number of allegations alleging gross misconduct but giving no further details.

The hearing before the Industrial Tribunal began but was by no means concluded on 21 January 1994. Then it seems negotiations for a settlement began. There was later a question as to whether Mr Beavis, the union representative of Unison, had authority to sign terms of compromise embodied in form COT 3. The Industrial Tribunal subsequently held that he did indeed have authority to sign those terms of compromise. The terms of compromise were as follows:

"1. In full and final settlement of all claims which the applicant has or could have against the respondent, ... Hackney ... arising from his employment with the Council, the Council agrees:-

(i) to permit the applicant to take voluntary severance from the Council's service with effect from 28 February 1994; and

(ii) to pay to the applicant nine weeks' salary in lieu of notice.

2. The applicant agrees to withdraw the above-mentioned originating application as a precondition of any payment to him under (1) above."

Then paragraph 3 related to other cases pending in the Industrial Tribunal which had been brought both against Mr Bartholomew and against the Council by members of his staff. I need not read that. Paragraph 4:

"For the avoidance of doubt, the Council confirms that upon the termination of his employment, the disciplinary action which has been instituted against the applicant will automatically come to an end."

It has not been argued for Mr Bartholomew that those terms, either expressly or impliedly, restricted Hackney's liberty or its duty to give a true, fair and accurate reference. Mr Sisley's submission on the contrary is that Hackney's duty was to give a comprehensive reference in just the same way as it would have done had there been no exchange of correspondence between the parties.

I should perhaps mention at this point that a respondent's notice on behalf of Hackney suggests in paragraph 4 that Mr Bartholomew's ability to object to a reference, even if it were untrue, unfair or inaccurate, was restricted by an estoppel arising out of the exchange of correspondence which I have just mentioned - that is, to be precise, a letter dated 3 February 1994 from Unison to Hackney and an indirect response sent by Hackney to ACAS on 16 February 1994. We have not heard argument on the respondent's notice but it seems to me that that is a point which would be very unlikely to succeed since the exchange of correspondence, although addressing the question of references, does not appear to have produced any concluded agreement.

Similarly, although we have not heard any argument on the rest of the respondent's notice, I would also regard as very unlikely to succeed the contention in paragraph 1 of the respondent's notice that Mr Bartholomew is halted on the threshold of his claim because he agreed with the County Court Judge, possibly in answer to some moderately robust questioning, that the contents of the reference were factually accurate. I would be inclined to reject the last argument because a number of discrete statements may be factually accurate, but nevertheless may in the round give an unfair or potentially unfair impression to the reader. That is very well understood in the law of defamation, in which one special principle, the so-called repetition rule, has emerged, that is to say that it is no defence to a libel action for the defendant to prove that he has accurately repeated another's libel. Whether it is libellous to state accurately that a person is under investigation by the police may depend on the precise words used, and their context: see the decision of the House of Lords in Lewis v Daily Telegraph [1964] AC 234 and the explanation of that decision by this court in Stern v Piper [1997] QB 123 at 130-132. Neither of those authorities on the law of libel was referred to in court but both are very well known.

Mr Bartholomew's claim against Hackney was of course a claim in negligence, not libel. Nevertheless the libel cases seem to me to serve as a salutary reminder that the fairness or unfairness, the accuracy or inaccuracy, and, indeed, truth or falsity of a statement have to be taken in the round and in context and cannot be in every case dissected into a number of discrete parts.

The County Court Judge did not, I think, recognise that sufficiently in deciding the first point in the case against Mr Bartholomew. The matter was not, in my judgment, as simple as the County Court Judge seems to have thought. Equally, on the second point the County Court Judge seems to me to have gone too far in finding that the exchange of correspondence, to which I have referred, concluded the matter against Mr Bartholomew. It is therefore necessary to see whether or not the reference provided by Hackney was in substance true, accurate and fair.

Mr Sisley, who has put the case for Mr Bartholomew with admirable clarity and brevity, was asked what in these peculiar circumstances he submitted the reference should have said. He made three points. First, he said the reference should have specified that the gross misconduct alleged was of a financial nature. I find it hard to see that there is anything in that point. It seems to me that to have referred to gross misconduct of a financial nature could hardly have made the impact of the reference on Richmond upon Thames Social Services more favourable, whatever the category of post for which Mr Bartholomew was applying. The second point that Mr Sisley made was the reference should have said that Mr Bartholomew strongly denied the charge. However that, it seems to me, was really implicit in the fact that disciplinary procedure was, as the reference stated, on foot. Had Mr Bartholomew admitted the gross misconduct, it is most unlikely that he would have remained in Hackney's employment at all. Third, Mr Sisley said that the reference should have stated that Mr Bartholomew was paid six weeks' pay in lieu of salary. That, it seems to me, is a point which calls for serious consideration. Nevertheless it seems to me to have been largely implicit in the fact that the reference did refer to "voluntary severance" that Mr Bartholomew was likely to have received some payment under the severance scheme. That would have been particularly well understood in a reference provided by one local authority to another.

It does seem to me necessary to look at the realities of the situation. What in this situation was Hackney to do in order to fulfil its duty to provide a reference, and a fair reference, to Mr Bartholomew without being unfair or misleading to the recipient of the reference? The terms of the letter from Richmond upon Thames Social Services suggest that the letter was in standard form and that in turn suggests that Mr Bartholomew had told them little or nothing about the background to the matter; otherwise it seems to me much more likely that a specific enquiry would have been made by Richmond. However that may be, if he considered the realities of the matter, Mr Bartholomew must have been advised or must have realised on his own account, when he agreed to compromise his application to the Industrial Tribunal on the terms on which he did compromise it, that the likely result would be that the serious charges against him, whatever they were, would not in the end be adjudicated on one way or the other by any fact-finding court or tribunal. He must, it seems to me, have expected that Hackney would, or at least might, maintain its position, at least to the extent that there were matters requiring investigation and disciplinary proceedings (just as Mr Bartholomew himself, as appears from other papers in the appeal bundle, has maintained his position of innocence and victimisation and has done so in a very vigorous manner). Mr Bartholomew could have attempted to negotiate further with Hackney over the terms in which any reference might refer to the circumstances of his departure, but either he did not try to do so or if he did he was not successful. Had it omitted all reference to the suspension and the disciplinary enquiry Hackney might well, it seems to me, have considered itself as failing in its civil duty to other local authorities, their ratepayers and clients. That must be true even though the charges against Mr Bartholomew were unproven and now, as I have said, are unlikely ever to be adjudicated on.

I would therefore accept Mr Sisley's submission that a reference must not give an unfair or misleading impression overall, even if its discrete components are factually correct. I would not go as far as to accept his further submission that a reference must in every case, and particularly in the unusual circumstances of this case, be full and comprehensive.

In all the circumstances of this case I am not at all persuaded that the reference as a whole was unfair, inaccurate and false. Its form might have been improved on in some respects to which Mr Sisley has drawn attention, but I do not consider, judging the matter in the round, that it constituted a breach of Hackney's duty of care to Mr Bartholomew.

I would therefore dismiss this appeal.

LADY JUSTICE BUTLER-SLOSS: I agree with the judgment that my Lord has given and that the appeal should be dismissed.

Order: Second Defendant's appeal dismissed with no order as to costs; Plaintiff's application for leave to amend the notice of appeal granted; appeal against the first defendant dismissed with costs; leave to appeal to the House of Lords refused. (This order does not form part of the approved judgment)