Liability in Negligence I
Cases
Kirby v. Burke and Holloway.
Gavan Duffy J.
[1944] IR 207
GAVAN DUFFY J.
19. April
This appeal from the Circuit Court turns on a point of law of exceptional public importance, unquestionably fit for the decision of the final tribunal, but neither party has asked me to state a case for the Supreme Court and there is no other right of appeal.
In the Circuit Court the plaintiffs, a father and three little children, recovered damages in tort against the defendant for his negligence in manufacturing and issuing for sale a pot of jam unfit for human food, bought by the housewife for the family, and eaten by the plaintiffs to the sad mischief of their internal economy.
On 6th May, 1942, Mrs. Josephine Kirby, finding butter to be unobtainable, bought for her family from a grocer a pot of rhubarb and ginger jam; the pot was wrapped in cellophane of amber hue, and the jam had a cardboard cover and under the cover, immediately over the jam, a piece of waxed paper. This was the sort of jam known to the trade as “slip” jam, from a slip of paper affixed to the pot, designating the fruit; the main attraction of slip jam seems to have been that it passed with an innocent public as home-made; and it bore no tell-tale label with the maker’s name.
Mrs. Kirby brought the pot home, opened it forthwith and spread the jam on slices of bread for her husband’s lunch; shortly afterwards she gave a similar luncheon to three of her young children, who had the like meal again for their supper. Mr. Gerald Kirby, the husband, suffered that afternoon and subsequently from an attack of gastro-enteritis, and that night the children had very severe attacks of the same malady with its unpleasant symptoms, which persisted; the eldest boy, Gabriel, aged 9 years, recovered very slowly. Mrs. Kirby herself had a toothache and took no jam, and she gave none to her baby daughter; neither she nor the baby fell ill.
I am satisfied that the members of the family who suffered did so as the direct result of eating that jam, and that “war bread,” though laxative, would not have induced the same symptoms. I am satisfied that the jam was unwholesome, when seen by Dr. Masterson next day. I am satisfied that the evidence points strongly to the conclusion that the jam was in the same condition when Mrs. Kirby bought it from the grocer. But she had no reason whatever to treat the product as suspect.
I find that the pot of jam came from the defendant, Holloway, through two intermediate grocers, one of whom had kept it for some six months; and, though neither of these reluctant gentlemen was an impressive witness, I do not on the evidence see any reason to believe that there had been any tampering with the jam pot after it left the defendant’s factory.
Professor Bayley Butler, with whose views generally Dr. John Magrath, the pathologist, agreed,kirbygave learned evidence for the plaintiffs. He knew Mrs. Kirby’s story and he examined the jam; while he could not, as a scientist, be certain of the genesis of the contamination whereof he saw symptoms in the jam, he reached the conclusion that some species of fly, carrying bacteria, must have made its way into the jam pot at the factory, probably while the jam was cooling or before its cardboard cap was affixed; that seemed to me a probable theory, unless it should be rebutted or countered by evidence for the defendant. The plaintiffs could not be expected in the circumstances to do more than put forward a probable case through witnesses of authority, and it was not to be expected that any expert witness would find himself in a position to trace the infection to its origin beyond doubt. (Cp. the judgment of Lord Greene M.R. in Dawson v. Murex, Ltd. ) (1). In my opinion, the initial burden of proof was discharged by the plaintiffs, and it remained for the defendant, with his own special knowledge of the conditions under which his jam was made, to displace thatprimá facie case, and to call any expert evidence which might undo it.
The two distinguished men of science called for the defendant gave their opinions in detail on the probabilities against the plaintiffs, but they were not able to exclude the possibility that the theory for the plaintiffs corresponded with the actual facts; the suggestion that the jam may have become infected after Mrs. Kirby opened the pot is practically excluded by the size of the larvae found in the jam by the plaintiffs’ doctor on the 7th of May. On the scientific aspect of the case, I think that the honours are clearly with the plaintiffs’ witnesses; no adequate counter-theory was opposed to them.
It still remained to be seen whether the defendant could prove that his jam-making process was unexceptionable and thus put the plaintiffs’ theory out of Court; and, as in Daniels v. White & Sons, Ltd. (1) a fool-proof process, established by the defendant lemonade-makers, carried the day, the defendant here could reasonably expect to win this action on establishing a fly-proof procedure after his jam is made; but the actual evidence fell decidedly short of proving any effort to attain so high a standard.
Two, and only two, witnesses were called from the factory, the sole owner, Mr. James J. Holloway, and a Miss Brady. The evidence was that Mr. Holloway himself supervised the whole process of jam-making, while Miss Brady was in immediate control of the more important operations; these consisted, where rhubarb was concerned, of slicing, sieving and steaming first, and then of boiling and cooling, and of affixing the waxed paper to the jam; there followed the stacking of the pots; the subsequent packing was under its own charge-hand. There is no State control of jam-making as such, but a factory inspector calls once or twice a year. Mr. Holloway has had thirty years’ experience as a jam-maker in Dublin; I do not know if he has other qualifications. Miss Brady seems to be a very busy lady and she holds a highly responsible post; but she is called a charge-hand; she has had fourteen years’ experience and her pay, apart from overtime, amounts to £2 17s. 6d. a week.
Mr. Holloway says that three boiling pans are kept going together in one room, a room with good light from a glass roof and an electric fan to clear away steam. In October, 1941, when the jam in question was made, Mr. Holloway was, he states, making 7,000 lbs. of jam per diem and the factory was working overtime. After the jam is boiled, it is emptied with buckets into a copper cooling pan and then, almost immediately, while still quite hot, filled into jam pots. The boiling and cooling is done in one room, and next to that room is the stacking room, where the pots are stacked in layers, with ply-wood between them, for two or three days, (three or four days, he said later), with the wax paper on top; there is no special supervisor here. Then the jam pots go to the packing room, where the cardboard top is affixed and the cellophane placed round the pots. The packing girl has to see that the caps are properly adjusted and that the pots going out are clean. The rooms and utensils are washed and kept clean. Mr. Holloway says that he had some thirty-five employees at the material time.
I have omitted from this summary account of the process the evidence as to the covering of the jam with waxed paper, because that evidence calls for separate examination. Here Mr. Holloway and Miss Brady differed in material particulars. Mr. Holloway, the general supervisor, says that, when the jam pots have been filled, they are then run to the stacking room and the wax caps are put on immediately and the pots are then stacked. He states that two girls are employed on the wax paper and one on stacking. There are in the stacking room two windows, kept open in summer and closed in winter; they would be closed in October.
Miss Brady says that experienced hands are necessary and that all her girls have been employed for many years; she has thirteen girls under her. Two girls are employed all day on the capping and stacking; here possibly she was speaking of some different period from her employer.”The wax capping,” she goes on, “is generally done as soon as the jam is filled; it’s part of my work.” Then, in cross-examination, she says that she was told of Mrs. Kirby’s complaint, the first of its kind; she does not think she would be responsible, if there were such a complaint; Mr. Holloway always supervises after her, to see that everything is right; he himself boils when she is on holiday. “The pots are nearly always capped when filled out; sometimes they are not, a matter of a few minutes; sometimes they would be moved into the stacking room; it’s nearly always done in the room where the cooling is done; the cooling is a matter of a minute or two; very rarely the exposed trays are taken into the stacking room; the girl nearly always does it at the cooling table; the jam is capped immediately; a tray might be missed and taken into the stacking room uncapped, but it does not often happen, a few times during the day; it very seldom happens.” And then:”I’ve no need to go into the capping room.” It was, of course, not suggested that the proprietor himself checks the wax capping of every tray-load of pots done in the stacking room; the universal supervisor could not, if he would.
Thus there is no supervision at all, on any occasion when the wax cap is put on in the stacking room. A tired girl in a rush period may put on the cap badly; then a fly will have plenty of time to get in, after the jam has cooled. I do not know what precautions the packing girl takes afterwards, if any, on finding a wax cap loose. Though complaints be very rare, this was no fly-proof process, and I find that reasonable diligence was not used to ensure the continued purity of the jam, a most important matter, after the boiling was complete. Too much was taken on trust. Mr. Holloway received the impugned jam pot from one of the intermediary grocers on 8th May, 1942, and was told by telephone of the complaint; he admits that the jam had not the normal glitter and appeared to have fermented; Mrs. Kirby and her doctor said that they saw maggots in it, but he could discern none. He says he just put the jam on a shelf; he did not show the pot to Miss Brady; he did not probe it; he did not cause any portion of the jam to be analysed. A day or two later Mrs. Kirby called to recover her pot; he offered her another, which she refused; she says that he then kept her waiting for some time and that, when eventually he returned her pot, some of the jam seemed to have been replaced with fresh jam and that she told him so, but he said the jam was exactly the same. He denies this account of her protest and his reply, and says that he gave her back the pot as he received it and without any delay. Professor Bayley Butler, to whom the jam was then submitted for analysis, found the top layer brighter in colour than the rest, which had numerous bubbles, suggesting fermentation; the top layer was free from bubbles. I accept Mrs. Kirby’s evidence on this matter. I pass over other discrepancies between her evidence and Mr. Holloway’s. His failure to have a serious analysis made was a bad error of judgment.
I have now to consider whether the law sustains the claim of the plaintiffs to make the manufacturer liable for the unpleasant consequences to them of eating his jam. The defendant manufactures a common article of food, jam, made from fruit of the particular season; he then distributes it for sale by retail grocers to members of the public; he intends it to be sold as food for human consumption and bought as food for human consumption. Before sending it out he pots the jam and places waxed paper over it, closes the pot with a cover and packs it in a coloured cellophane wrapper, with the result that the jam, when sold over the counter, will be taken to be (as it is meant to be) in the condition in which it left the factory, and that the purchaser will have no reasonable opportunity to examine the contents for any visible defects; and a manufacturer must know, as a matter of ordinary experience, that a housewife, the probable purchaser, does not usually, on opening the pot at home, begin by scrutinising the contents for signs of corruption; why should she?
A particular pot of jam turns out to be unwholesome, when bought, and injurious to the consumers, and the question at once arises on what principle is the alleged liability of the maker, who intended no injury and made no contract with the consumers, to be determined? The inquiry involves the ascertainment of the foundation, upon the authorities, of liability for tort at common law.
In 1869, an Irish Court, following English decisions, held on demurrer that, in the absence of fraudulent misrepresentation, the law could give no redress against the manufacturers to a man (the purchaser’s servant) injured by the explosion of a boiler in a steam engine, upon an allegation that the boiler was unsafe by reason of negligence in its construction: Corry v. Lucas (1). The confusion and conflict in later cases in England left the basis of liability in tort at common law so uncertain that at the time of the Treaty nobody could find in case law any sure guide to the actual legal position, and I have no Irish decision to guide me.
I am thus thrown back upon first principles in the endeavour to ascertain where the line is drawn at common law between conduct resulting in unintended hurt which entails liability for damage, and conduct resulting in unintended hurt which entails no liability.
In the quandary produced by the baffling inconsistencies among the pre-Treaty judicial pronouncements, I turn from the Courts to one of the outstanding juristic studies of the nineteenth century, “The Common Law” by Oliver Wendell Holmes, afterwards Mr. Justice Holmes of the Supreme Court of the United States. The work was published in London in 1887. The law which I apply to this case is taken from his penetrating Lectures III and IV on torts and the theory of torts.
That master of the common law shows that the foundation of liability at common law for tort is blameworthiness as determined by the existing average standards of the community; a man fails at his peril to conform to those standards. Therefore, while loss from accident generally lies where it falls, a defendant cannot plead accident if, treated as a man of ordinary intelligence and foresight, he ought to have foreseen the danger which caused injury to his plaintiff.
Applying that norm to the facts, I have to inquire whether a man in the position of the defendant, making jam for the public to eat, is bound, according to the standards of conduct prevailing among us, to take specific precautions against the danger, to the hurt of consumers, of infection to his jam from
external causes before it finally leaves his factory; or, more exactly, though he may not have anticipated the precise injury that ensued to the plaintiffs from infection, was he bound, in conformity with those standards, to safeguard his jam from access by flies, as notoriously ubiquitous as they are notoriously dirty, during the interval between the moment when the jam is poured into a jam pot after boiling and the moment, three or four days later, when the jam pot is finally enveloped for sale and sent out? I answer this question, as I believe a jury of practical citizens would answer it, in the affirmative, because our public opinion undoubtedly requires of a jam manufacturer that he shall take care to keep flies out of his jam. Any novice would foresee that a fly might get in, given the chance, and I have already found as facts that the defendant failed to take adequate precautions and that the buyer was in no way at fault.
On the facts of the case now before me, there is no question of remoteness of damage. The test, as Holmes J. puts it is whether the result actually contemplated was near enough to the remoter result complained of to throw the peril of that result upon the actor. The plaintiffs are therefore entitled to succeed.
The much controverted “Case of the Snail in the Bottle,”while leaving subsidiary questions open, has settled the principle of liability on a similar issue finally against the manufacturer in Great Britain. But the House of Lords established that memorable conclusion only twelve years ago in Donoghue v. Stevenson (1), by a majority of three Law Lords to two, “a Celtic majority,” as an unconvinced critic ruefully observed, against an English minority. Where lawyers so learned disagreed, an Irish Judge could not assume, as I was invited to assume, as a matter of course, that the view which prevailed must of necessity be the true view of the common law in Ireland. One voice in the House of Lords would have turned the scale; and it is not arguable that blameworthiness according to the actual standards of our people depends upon the casting vote in a tribunal exercising no jurisdiction over them. Hence my recourse to the late Mr. Justice Holmes. His classic analysis supports the principle of Lord Atkin and the majority. And to that principle I humbly subscribe.
As to damages, this appeal is a re-hearing, so that I must exercise my own judgment on the quantum to award. I shall affirm the decree of the Circuit Court with variations. I award to Mr. Gerald Kirby, the father of the family, the
sum of £27 7s. 0d., to include the fees of £7 7s. 0d. payable to the doctor; Mr. Kirby was the breadwinner for the family. I award to Gabriel Kirby, an infant, the sum of £20; I award to Winifred Kirby, an infant, the sum of £12; I award to Noel Kirby, an infant, the sum of £12. I shall follow the order of the learned Circuit Court Judge in every respect as to the payment into Court and investment of the moneys payable to the three infants.
The order for costs made in the Circuit Court will stand, with the substitution of £71 7s. 0d. for damages instead of £87 7s. 0d. The plaintiffs will have their costs of the appeal, to be taxed and ascertained as one set of costs on the basis of a judgment for £71 7s. 0d., and the same witnesses’ expenses as in the Circuit Court, with an additional sum of £3 3s. 0d. for Professor Bayley Butler and an allowance of £3 3s. 0d. for Dr. Magrath. I reserve for further argument the question of the jurisdiction to allow refresher fees.
McMahon v Ireland, The Attorney General and the Registrar of Friendly Societies
[1988] ILRM 610 (HC, 1987)
Blayney J: The facts of this appeal by way of case stated are as follows.
The plaintiff, who is a member of a religious order, on 19th October 1983, deposited with the Private Motorists Protection Society (hereinafter referred to as PMPS) the sum of
.£400, the proceeds of a bring-and-buy sale organised to raise money for the charitable work of her order.
On the same day, 19 October 1983, the Insurance (No 2) Act 1983 was passed, under which an administrator was appointed to manage the Private Motorists Protection Association Insurance Company Ltd. The plaintiff sought to withdraw the £400 from the PMPS on the following day but her request was refused. Part of the £400 lodged had been in the form ofa cheque for £100; the plaintiff was able to have this cheque stopped, thus reducing the amount deposited to £300. The PMPS was put into liquidation on 19th December 1983 and the plaintiff received a dividend of £92.88 in the winding up, so the actual amount she lost as a result of making the deposit was £207.12. On 27 January 1986 she instituted these proceedings against the defendants claiming damages for negligence, breach of duty and breach of statutory duty.
The action was four days at hearing and judgment was reserved. In a very careful and thorough judgment delivered on 8th October 1986 the learned District Justice dismissed the claim but on the application of the plaintiff stated a case for the opinion of this court.
Four separate questions are set out at the end of the case:
(a) Was I correct in dismissing the action on the grounds set out the said judgment?
(b) Was I correct in holding that there was no mandatory duty imposed on the Minister for Industry and Commerce to appoint a full-time Registrar of Friendly Societies following the passing of the Industrial and Provident Societies (Amendment) Act 1978?
(c) Was I correct in holding that there was insufficient proximity of relationship between the plaintiff and the Minister for Industry and Commerce for a duty of care and negligence to arise?
(d) Was I correct in dismissing the said proceedings notwithstanding the circumstances of the plaintiff as a member of the general public who would not have the commercial awareness of banking institutions in relation to making deposits?
The last three questions raise issues which are subsidiary to the main issue which was contained in the first question, and I propose initially to confine my attention to that.
Two separate causes of action were relied upon before the learned District Justice – negligence and breach of statutory duty – but the latter was abandoned in the argument before me. Mr O’Reilly BL, appearing for the plaintiff, conceded that he would not rely on it in view of the decision of the Supreme Court in Pine Valley Developments Ltdv The Minister for the Environment [1987] ILRM 747. The only case I have to consider accordingly is whether the learned District Justice was correct in dismissing the plaintiff’s claim insofar as it was based on negligence.
The first and second defendants, Ireland and the Attorney General, are sued as being the parties responsible for the acts of the Minister for Industry and Trade, Commerce and Tourism and the Minister for Finance, who are the real defendants. I shall refer to the former as ‘The Minister’, and the latter by his full title ‘The Minister for Finance.’
Mr O’Reilly’s submissions on his case against the two Ministers might be summarized as follows. Section 7(4) of the Central Bank Act 1971 exempted industrial and provident societies from the prohibition in subsection (1) of the same section against carrying on banking business without holding a banking licence. This exemption enabled industrial and provident societies to take deposits and so in effect to carry ona banking business without being under the control of the Central Bank. The PMPS took advantage of this exemption and became one of the largest of the industrial provident societies carrying on this type of business, holding approximately fifty per cent of all moneys then on deposit with such societies. Reports prepared by the Central Bank at the request of the Department oflndustry and Commerce, in August 1976 and April and May 1978, showed that these societies were not carrying on their business in accordance with good banking practice. They were undercapitalized, had very low liquidity levels and their profitability was poor. There was also a doubt about the solvency of the PMPS as, while it appeared from its balance sheet to be solvent, little or no allowance was made by want of provision for bad debts. The Minister for Finance had a duty to remedy this situation. It was his delay in taking any action which was the cause of the plaintiff’s loss. And it was the delay of the Minister in appointing a full-time Registrar of Friendly Societies after the Industrial and Provident Societies (Amendment) Act 1978 (the 1978 Act) had been passed that also contributed to it. While the Act was passed on 15
November 1978 a full-time Registrar was not appointed until 1980. Action should have been taken earlier by the Minister.
In my opinion when this submission is examined it does not disclose any case against either Minister. Neither was responsible for the initial exemption of which the plaintiff complains. It was contained in a statute enacted by the Oireachtas. And it could not be contended that either Minister owed the plaintiff a duty of care to have the Central Bank Act amended so as to prevent industrial provident societies from taking deposits. Even it if could be, the situation was remedied by the 1978 Act which provided by s 5(2) thata society should not accept or hold deposits after a period of five years commencing at the passing of the Act and which gave immediate wide powers to the Registrar of Friendly Societies to investigate and control industrial and provident societies, including the power to direct a society to suspend the taking of deposits for a period not exceeding two months. Once a full-time registrar had been appointed by the Minister in 1980,I consider that it could not be argued that the Minister had any duty of care towards persons depositing moneys with industrial and provident societies. The legislature had entrusted the supervision of such societies to the Registrar of Friendly Societies, so that when the Minister had appointed a full time registrar he ceased to have any function in the matter. So, irrespective of whether either Minister ever owed any duty of care to the
plaintiff,I am satisfied that her loss could not be attributed to any act or omission on their part.
I now consider the claim against the registrar. The case made by the plaintiff is thata duty of care was owed by the registrar to her as a prospective depositor with PMPS, andthat he failed in his duty by not taking action sooner against the Society. If he had taken action, as he might have done by exercising his power under s 16 of the 1978 Act to give a direction to suspend the acceptance of deposits, the plaintiff’s loss would have been avoided.
It seems to me that the first issue that has to be considered is whether the registrar owed any duty of care to the plaintiff as, in the absence of such a duty, he could not have any liability in negligence. And this involves considering whether there was a sufficient relationship of proximity or neighbourhood between the registrar and prospective depositors as to place the registrar under a duty of care towards persons who came within that class, as did the plaintiff. It is clear that there was nothing the registrar could have done to save the plaintiff from loss after she had deposited the money. So the inquiry is limited to the question of whether the registrar owed her a duty when she was still a prospective or would-be depositor.
An issue very similar to this arose in a recent case decided by the Privy Council: Yuen Kun Yeu and Others v Attorney General of Hong Kong [1987] 3 WLR 776. The plaintiffs were four residents of Hong Kong who between August and December 1982 made substantial deposits with a registered deposit-taking company called America and Panama Finance Company Ltd. The company went into liquidation on 25 February 1983 and as a result the plaintiffs sued the Attorney General as representing the commissioner of deposit-taking companies. The claim was for damages for negligence in the discharge of the commissioner’s functions under a deposit-taking Companies Ordinance enacted in 1976. Under s 10 of that ordinance, the commissioner, who had the duty ofregistering companies as register deposit-taking companies on receipt of an application in accordance withs 9, was obliged to refuse to register a company if it appeared to him ‘that by reason of any circumstances whatsoever the company is not a fit and proper body to be registered’. And under s 14 the commissioner had power to revoke the registration of any company if it appeared to him ‘that the company is not fit and proper body to be registered’.
The allegations against the commissioner were that he knew or ought to have known that the affairs of the company were being conducted fraudulently; speculatively and to the detriment of its depositors; that he failed to exercise his powers under the Ordinance so as to secure that the company complied with the obligations and restrictions thereby imposed upon it; and that he should either never have registered the company as a deposit-taking company or should have revoked its registration before the plaintiffs made their respective deposits with it.
On the application of the Attorney General, the High Court in Hong Kong made an order striking out the statement of claim as disclosing no reasonable cause of action. Its decision was affirmed by the Court of Appeal in Hong Kong, and on appeal from that court, by the Privy Council. The judgment of the Privy Council was delivered by Lord Keith of Kinkel. Having summarized the powers and functions of the Commissioners, which are very similar to those of the registrar under Part II of the 1978 Act he defined at page 781G the question which arose for consideration in the case:
“The foremost question of principle is whether in the present case the commissioner owed to members of the public who might be minded to deposit their money with deposit-taking companies in Hong Kong a duty, in the discharge of his supervisory powers under the Ordinance, to exercise reasonable care to see that such members of the public did not suffer loss through the affairs of such companies being carried on by their managers in fraudulent or improvident fashion. That question is one of law, which is capable of being answered upon the averments assumed to be true, contained in the plaintiffs’ pleadings. If it is answered in the negative, the plaintiffs have no reasonable cause of action, and their statement of claim was rightly struck out.”
He then went on to consider the authorities, starting with Donoghue v Stevenson [ 1932]
AC 562 and in the light of them he came to the following conclusion as to the relevant issue in the case:
“The primary and all-important matter for consideration, then, is whether in all the circumstances of this case there existed between the commissioner and would-be depositors with the company such close and direct relations as to place the
commissioner, in the exercise of his function under the Ordinance, under a duty of care towards would-be depositors.” (at p 785)
In my opinion precisely the same question is the primary matter for consideration her-e whether in all the circumstances of this case there existed between the registrar and would-be depositors with the PMPS, such close and direct relations as to place the
registrar, in the exercise of his functions under Part II of the 1978 Act undera duty of care towards such depositors.
Lord Keith then referred to what the court considered to be the relevant circumstances of the case. These were:
( 1) One of the purposes of the ordinance was to make provision for the protection of persons who deposit money; such protection was in part afforded by the restrictions and obligations placed on registered companies for the breach of which there were criminal sanctions, but the discretion given to the
commissioner to register or deregister a company was also an important part of the protection.
(2) Would-be depositors were not the only persons the commissioner should properly have in contemplation; in considering the question of removal from the Register, the immediate and probably disastrous effect on existing depositors would be a very relevant factor.
(3) The power to refuse or revoke registration was semi-judicial in character, there being an appeal from the commissioner’s decision to the Governor in Council.
(4) The commissioner did not have power to control the day-to-day management of
the company; his power was limited to putting it out of business or allowing it to continue.
Lord Keith then went on:
“In these circumstances their Lordships are unable to discern any intention on the part of the legislature that in considering whether to register or deregister a company the commissioner should owe any statutory duty to potential depositors. It would be strange
thata common law duty of care should be superimposed upon such a statutory framework.” (at p 786E)
What the court was considering there was the commissioner’s possible statutory duty or common law duty of care to potential depositors in the light of all the circumstances but in particular in the light of the commissioner’s discretionary power to register or deregistera company, and it held that he had no such duty. It seems to me that it must follow that in the present case the registrar had no such duty either because while his position was little different from that of the commissioner in respect of the other circumstances, namely, having to have other persons in his contemplation when considering the exercise of his powers and in not being able to control the day-to-day management of the societies, since basically all he could do was give directions in writing for the regulation of their business (section 10 of the 1978 Act) his powers ultimately were less than those of the commissioner since he could not remove a society from the Register. Mr O’Reilly BL submitted that Yuen Kun Yeu and Others v Attorne,General of Hong Kong was distinguishable on the grounds that the powers given to the registrar would appear to go further than the powers of the commissioner. It seems to me I hat the opposite is the case: that the commissioner ultimately had greater power in that he was entitled to remove a company from the Register, a power that the registrar does not possess. In my opinion the case is not distinguishable in any respect which would rnnvince me that it should not be followed. If the commissioner, who had greater powers over the registered companies than the registrar has, had no duty of care to would-be depositors, I consider that the registrar could not have had any such duty either·.
Lord Keith then went on to consider whether the commissioner could have had any duty of care towards would-be depositors on foot of the principle in Dorset Yacht Co Ltd 1• Home Office [1970] AC 1004, ie, on the basis that the commissioner had control of the registered companies and so could be made liable for losses caused by them. It was held lhat the principle did not apply. Lord Keith said:
“In contradistinction to the position in the Dorset Yacht case, the commissioner had no power to control the day-to-day activities of those who caused the loss and damage. As has been mentioned, the commissioner had power only to stop the company carrying on business, and the decision whether or not to do so was clearly well within the discretionary sphere of his functions. In their Lordships’ opinion the circumstances that the commissioner had, on the plaintiffs’ averments, cogent reason to suspect that the company’s business was being carried on fraudulently and improvidently did not create a special relationship between the commissioner and the company of the nature described in the authorities. They are also of opinion that no special relationship existed between the commissioner and those unascertained members of the public who might in future become exposed to the risk of financial loss through depositing money with the company. Accordingly their Lordships do not consider that the commissioner owed to the plaintiffs any duty of care on the principle which formed the ratio of the Dorset Yacht case. To hark back to Lord Atkin’s words in Donoghue v Stevenson [1932] AC 562, 581, there were not such close and direct relations between the commissioner and the plaintiffs as to give rise to the duty of care desiderated.” (at p 787B)
Being satisfied that the Privy Council case is not distinguishable in any significant respect from the present case, I propose to follow the decision reached there and accordingly I hold that in the circumstances of this case there was not such close and direct relations between the registrar and the plaintiff as to give rise to any duty of care on the part of the registrar towards the plaintiffs.
I consider that there is a further ground also upon which the decision of the learned District Justice to dismiss the action may be supported but as the conclusion I have reached on the negligent issue disposes of the case I do not propose to consider it at length. In my opinion the following passage from the judgment of Moulton LJ in Everett v Griffiths [1921] 1 AC 631, which was cited with approval by Finlay CJ in Pine Valley Developments Ltd v The Minister for the Environment [1987] ILRM 747 is applicable to the position of the registrar:
“If a man is required in the discharge of a public duty to make a decision which effects, by its legal consequences, the liberty of property of others, and he performs that duty and makes that decision honestly and in good faith, it is, in my opinion, a fundamental principle of our law that he is protected. It is not consonant with the principles of our law to require a man to make such a decision in the discharge of his duty to the public, and then to leave him in peril by reason of the consequences to others of that decision, provided that he has acted honestly in making that decision.”
The registrar’s honesty and good faith have not been and could not be, questioned and accordingly in exercising his functions under Part II of the 1978 Act he was entitled to the protection of the principle referred to in this passage. It follows that he is entitled to immunity from the type of claim being made by the plaintiff.
I would therefore answer the first question by saying that the learned District Justice was correct in dismissing the plaintiff’s claim on the grounds set out in his judgment.
this disposes of the case, it is not necessary to answer the other subsidiary questions and I do not propose to do so.
Fletcher v The Commissioners of Public Works in Ireland
[2003] 2 ILRM 92 Supreme Court
Keane C.J. and Geoghegan J.; Denham J., Murray J., and Hardiman J. agreed with both judgments.]
JUDGMENT delivered the 21st day of February, 2003, by Keane C.J.
Introduction.
1. This is an appeal by the defendants from a judgment and order of the High Court (O’Neill J) of the 15th June 2001, awarding the plaintiff, who was at all material times an employee of the defendants, damages in the sum of £48,000 for the negligence and breach of duty (including breach of statutory duty) of the defendants.
2. The appeal was heard at the same time as four other appeals, in which the plaintiffs were Raymond Brophy, Dermot Swaine, Patrick Sammon and David Shorthall and the present defendants were also the defendants. The plaintiffs in those cases had also been at all material times in the employment of the defendants.
3. All five cases arose out of what was admitted to be the failure of the defendants as employers to take proper precautions for the safety, health and welfare of the plaintiffs as their employees. As a result of that failure, as is also conceded on behalf of the defendants, the plaintiffs were exposed to significant quantities of asbestos dust in the course of their employment and, as a further consequence, were exposed to the risk of contracting in later life a disease called mesothelioma which, when contracted, is significantly painful and potentially lethal. There was evidence in each case from psychiatrists that the plaintiffs, as a result of their having been informed of that risk, suffered from a recognisable psychiatric disorder. In each case, the learned trial judge, (Johnson J in the cases of Brophy, Sammon and Shorthall and O’Neill J in the remaining cases) found that the defendants were liable to pay damages in respect of the psychiatric injury in question and the issue as to whether they were so liable was the subject of extensive written and oral submissions in this court. Since, however, the course which the proceedings took in each case in the High Court was not identical, so far as the admissions made on behalf of the defendants and the issues which fell to be determined were concerned, it seems more convenient that the court should give judgment on the issues which were the subject of argument in this court in the present case only, leaving for further consideration the effect of its judgment on the remaining four appeals.
4. The plaintiff in this case, Stephen Fletcher, was born on the 28thDecember 1947 and was first employed by the defendants in 1977. He is married with one child. From 1985 onwards, he was engaged in Leinster House as a general operative, helping plumbers, electricians, and fitters in the maintenance of what was described by the trial judge as an “enormous and labyrinthine central heating system.” The trial judge found that the piping in that system was covered with a lagging containing asbestos of various types and that much of it was in an extremely poor condition, i.e., it was friable, dusty and falling off in many places. As part of his work, the plaintiff was regularly obliged to hack off the lagging in order to enable the tradesmen he was assisting get access to the pipe work. The work had to be done in difficult conditions in very confined areas.
5. The trial judge further found as a fact, again not contested, that as a result significant quantities of asbestos polluted the air which the plaintiff breathed and that of necessity he inhaled very large quantities of asbestos dust over a number of years. That situation lasted until at least 1989.
6. It appears that in July 1984, an inspection was carried out of the working conditions on behalf of the Minister for Labour. The inspector concluded that the asbestos lagging had deteriorated to such an extent that it should be removed section by section until complete removal had been achieved. In a letter dated 3rd July 1984 from the Department of Labour to the defendants, it was pointed out that the inspector strongly recommended that immediate steps should be taken to have all the asbestos removed under the conditions which would be required under the relevant statutes, as if the building were a factory for the purposes of those statutes.
7. There was also evidence, not disputed on behalf of the defendants, that in February 1985, an engineer acting on behalf of the defendants had written to submit a tender for the work involved in removing insulation from a certain area. That letter stated:
“Workers must be supplied with appropriate protective clothing and protective masks. All removal of contaminated clothes and washing facilities must be within the confined area. Workers, when washed, should then move directly to their clean change area.”
8. Not surprisingly, the trial judge reached the following conclusion based on that evidence:
“It is absolutely clear to me that a dangerous situation pertained [and] that the state of the lagging in the basement area and other pipe work was in a dreadful condition and was a danger to anyone who was obliged to work with it as the plaintiff was. It is equally clear that the defendants knew all of this and knew it from, at the very latest, mid 1984. It is also quite clear from their correspondence that they were well aware of the dangers of asbestos because in their tender document which I have just quoted from, they make the most stringent requirement of a contractor coming in, in relation to their work. Nevertheless at the very same time, they obliged the plaintiff as part of his contract of employment to carry out work in this area without informing him at all of the existence of asbestos or of the risks attached to asbestos dust or without providing him with protective clothing or without taking any steps whatsoever to protect him from the effects of asbestos dust”.
9. The trial judge went on to find that from 1985 until probably well into 1989 the plaintiff was regularly exposed in the course of his employment to asbestos dust and, during that time, inhaled very significant quantities of the dust. The trial judge said that, in those circumstances, he was satisfied that the defendants were guilty of “gross negligence” and that no question of contributory negligence arose. Again, there has been no appeal from that finding.
10. Having noted that the plaintiff finished his tour of duty in Leinster house in 1991 and that thereafter his exposure to asbestos dust ceased, the trial judge went on to consider the evidence in the case of Professor Luke Clancy, a consultant respiratory physician at St. James’s Hospital, Dublin, who is an acknowledged authority on respiratory diseases generally and diseases resulting from exposure to asbestos in particular. He referred to Professor Clancy’s evidence that the plaintiff had been exposed to the risk of developing asbestosis and that he was also at an increased risk of lung cancer; but that the plaintiff had not contracted either disease and that it was very unlikely that he ever would.
11. Professor Clancy’s evidence was, however, also to the effect that, as a result of his exposure to asbestos the plaintiff was at risk of contracting in later life the disease called mesothelioma. This would not happen until at least 20 years after the first exposure to asbestos and might not occur until 40 years thereafter. If it occurred, the prognosis would be very poor, since the disease would be painful and likely to prove terminal within two or three years of its having developed. Professor Clancy emphasised, however, that the risk of contracting the disease was “very remote”. He pointed out that, although exposure to asbestos is widespread throughout the whole community, he saw no more on average than three or four cases of mesothelioma a year in the course of his practice, while he might see as many as four hundred cases of lung cancer in the same period.
12. Professor Clancy also said that while the likelihood was that the plaintiff had inhaled asbestos fibres, and that some of them would have remained in his body and caused microscopic scarring, there were in fact no physical manifestations of the scarring visible on x-ray. On examination his heart sounds were normal, his blood pressure was normal and he had full pulmonary function. While the lining in the lung was a bit thicker than another person’s might be, Professor Clancy did not attach any significance to this. There were no signs of what were called “pleural plaques”, which, if present, would have been significant.
13. The trial judge found that the plaintiff had been angered and shocked, and understandably so, on being informed that he had been unnecessarily and without his knowledge exposed to these risks. Initially, he consulted a solicitor who in turn referred him to Professor Clancy. He was not, however, reassured by what he was told and continued to worry about the possible danger to his health and also the effect all of this might have on his wife’s health, she already having suffered an illness, although the plaintiff was assured that this had no relationship whatever to his exposure to asbestos dust. Ultimately, he went to a consultant psychiatrist, Dr. John Griffin, who concluded that he was suffering from a “reactive anxiety neurosis”, which, as the trial judge found, could not be assuaged by counselling or the best advice which was available.
14. The trial judge summed up his conclusions on this aspect of the case as follows:
“Dr. Griffin, whose evidence I accept, described [him] as having a bug in his brain. It just will not go away. It seems to me to be a very apt way to describe it, and it seems to me that what has happened to the plaintiff is that he has this thing in his head. Everybody can tell him that there is no reasonable basis for it. There is a rational basis for it. [sic] There may not be a reasonable basis for it, but it just will not go away. That is not to say that the plaintiff is to be in some way criticised for that or that this is being said as some form of contrivance on his part. I am absolutely satisfied it is not. His fear, his anxiety is a genuine one.”
15. The defendants submitted that the plaintiff’s anxiety reaction was not caused by the exposure to the asbestos dust itself but by his having become aware of the risk arising from such exposure. They accordingly submitted that, in accordance with the decision of this court in Kelly –v- Hennessy(1995) 2 IR 253, the plaintiff could only recover for such psychiatric illness, unaccompanied by physical injury, if he had suffered a nervous shock and as a result thereof, had suffered a recognisable psychiatric illness. The trial judge said, however, that he was satisfied that the plaintiff’s psychiatric illness was the result of his exposure to the asbestos dust and not his exposure to the knowledge of it. He was also satisfied that it was reasonably foreseeable that such a psychiatric illness would be the result where a person of normal fortitude became aware that he had been exposed to the risk. In those circumstances, he was satisfied that the plaintiff was entitled to recover damage for the psychiatric illness which he had suffered as a result of the defendants’ negligence and, as already noted, he went on to assess the damages in the sum of £48,000.
16. From that judgment and order, the defendants have now appealed to this court. They do not dispute any of the findings of the trial judge as to their failure to take proper precautions for the health and safety of the plaintiff, or his finding that, as a result, the plaintiff was unnecessarily and without his knowledge exposed to significant quantities of asbestos dust or his finding that, in the result, he was subject to a risk, albeit a very remote one, of contracting mesothelioma. Nor have they sought to set aside the trial judge’s finding that, subsequent to his having been informed of that state of affairs, the plaintiff as a result suffered a psychiatric illness. They submit, however, that the trial judge’s determination that the plaintiff was entitled to recover damages in respect of that psychiatric illness, when unaccompanied by any physical injury, was wrong in law.
The nature of the “personal injury” suffered by the plaintiff.
17. It is clear that, if the risk of contracting mesothelioma to which the plaintiff was subjected was associated with some existing physical injury which the plaintiff had suffered as a result of the defendant’s negligence, he would be entitled to damages in respect of that risk, just as a plaintiff who suffers a fracture of a limb giving rise to the risk of arthritis in the future is entitled to be compensated for that risk.
18. Section 2 of the Civil Liability Act 1961 provides that
” ‘Personal Injury’ includes any disease and any impairment of a person’s physical or mental condition and ‘injured’ shall be construed accordingly.”
19. In this case, as Professor Clancy’s evidence made clear, the plaintiff’s physical condition was not impaired by his exposure to the asbestos dust. It is true that, having regard to the use of the word “includes”, the statutory definition may not have been intended to be exhaustive and that, at common law, the plaintiff might have been regarded as having suffered a “personal injury”, in the sense that, as a result of his employer’s acts and omissions, he had inhaled asbestos fibres, some of which at least had probably remained within his system.
20. It is, however, the fact that not only did Professor Clancy say that the plaintiff was not manifesting any physical symptoms of ill health resulting from his exposure to the asbestos dust: he considered the risk of his contracting mesothelioma as “very remote”. He was not invited to quantify the extent of the risk in any way and it is difficult to see how, in those circumstances, the trial judge could have embarked on an assessment of damages in respect of that risk. It is, of course, quite common in personal injuries cases where, for example, a claim is made that the plaintiff has been exposed to a risk of suffering epilepsy in later life as a result of his physical injuries for evidence to be led as to the quantification of the risk, i.e., 5%, 10% or as the case may be.
21. In the present case, there was no such evidence and the trial judge confined his assessment of damages to those which, in his view, sufficiently compensated the plaintiff for the psychiatric injury from which he suffered, consequent upon his being informed that he was exposed to the risk of contracting mesothelioma. I am, accordingly, satisfied that the case should also be approached on that basis in this court.
22. The issue, accordingly, which this court has to resolve is whether the plaintiff was entitled to recover damages for the impairment of his “mental condition” which, according to the evidence of the psychiatrist, has resulted from his exposure to the risk of contracting mesothelioma, a risk which, it is beyond argument, was created by the failure of the defendants to take the precautions which a reasonable employer would have taken to ensure that he was not exposed to any such risk.
23. That in turn depends, initially at least, on whether the consequences which have ensued for the plaintiff ought reasonably to have been foreseen by the defendants. (It is unnecessary , in my view, to arrive at any conclusion as to whether this is so because, if the personal injury was not foreseeable, liability in negligence cannot arise or because, if it was not foreseeable, the damage was too remote. In either case, reasonable foreseeability is a precondition to liability. )The question as to whether those consequences were reasonably foreseeable cannot, of course, be answered by assessing the state of knowledge of the defendants at the material time. The test is an objective one, i.e., as to whether a reasonable person would have foreseen that the consequences suffered by the plaintiff might be the result of the defendant’s want of care. Moreover, as Lord Bridge of Harwich pointed out in McLoughlin –v- O’Brian (1983) AC 410 at p433, the court must assume in applying this test that the hypothetical reasonable person would be properly informed as to the real, painful and disabling nature of psychiatric illness and would not dismiss the possibility of the plaintiff becoming subject to a similar illness simply because it is less susceptible to precise medical diagnosis and treatment than at least some purely physical disorders.
Recovery of damages for psychiatric illness.
24. However, the fact that it is reasonably foreseeable that particular acts or omissions will cause loss or injury to another person does not, of itself, give rise to liability in negligence. There must also be what judges have called, as the law has evolved, a relationship of “proximity” between the plaintiff and the defendant which gave rise to the legal duty to take care that the foreseeable consequence was avoided. That, of itself, does not present any difficulty for the plaintiff: if this were a case in which the injuries sustained by him were purely physical, then, given that they were the foreseeable consequence of the actions or omissions of the defendants as his employer there would, of course, be not the slightest difficulty in concluding that the latter were liable in negligence.
25. Nor is the fact that the injury of which the plaintiff complains, is purely psychiatric sufficient of itself to relieve the defendants from the consequences of their actions and omissions in the present case: since Bell & Another –v- The Great Northern Railway Company of Ireland(1890) 26 LR (Ir) 428 (following the earlier unreported decision of Byrne –v- Great Southern and Western Railway Company), it has been the law in Ireland that a plaintiff who sustains what has usually been described as “nervous shock”, even where unaccompanied by physical injury can recover damages, where the other ingredients of negligence are established. It was undoubtedly the law that damages were not recoverable for grief or sorrow alone: no degree of mental anguish arising from the wrongful acts or omissions of another was compensatable at common law. But nervous shock, even where there was no physical injury or even fear of such injury, was compensatable when caused by the negligence of the defendant.
26. The circumstances in which damages for nervous shock are recoverable were set out as follows by Hamilton CJ in Kelly –v- Hennessy:
“1.The plaintiff must establish that he/she actually suffered ‘nervous shock’. This term has been used to describe ‘any recognisable psychiatric illness’ and a plaintiff must prove that he/she suffered a recognisable psychiatric illness if he/she is to recover damages for ‘nervous shock’.
2. A plaintiff must establish that his/her reasonable psychiatric illness was ‘shock induced’…
3. A plaintiff must prove that the nervous shock was caused by a defendant’s act or omission…
4. The nervous shock sustained by a plaintiff must be by reason of actual or apprehended physical injury to the plaintiff or a person other than the plaintiff…
5. If a plaintiff wishes to recover damages for negligently inflicted nervous shock he must show that the defendant owed him/her a duty of care not to cause him a reasonably foreseeable injury in the form of nervous shock”.
27. In the present case we are not concerned with the difficulties that have arisen in the United Kingdom in determining, subsequent to the decision of the House of Lords in McLoughlin –v- O’Brian, the boundary, if any, that should be drawn in allowing plaintiffs to recover damages for nervous shock where the plaintiff himself is not affected by such nervous shock because of his direct involvement in the accident or event brought about by the defendant’s negligence, as was the case in Byrne –v Great Southern and Western Railway Company of Ireland and Bell & Another –v- The Great Northern Railway Company of Ireland. In particular, we are not, in my view, concerned with the distinction drawn in such cases between what have been described as “primary victims” and “secondary victims”.
28. The plaintiff in Kelly –v- Hennessy had not been present at the car accident which gave rise to the proceedings and which had been caused by the negligence of the defendant. Her husband and two daughters were, however, victims of the accident and the plaintiff, having been informed of this by telephone, went to the hospital and saw them suffering from grievous injuries which had resulted in each case in permanent brain damage. As a result of that experience, she suffered from a recognizable psychiatric disorder. The plaintiff thus belonged to what in the subsequent English decisions was described as a category of “secondary victims” and this court, unanimously upholding the decision of the High Court, concluded that the fact that she was not a “primary victim” as were the members of her family, did not preclude her from recovering damages, provided the conditions which I have cited from the judgment of Hamilton CJ were met. (The distinction indeed is not referred to in the judgment of the learned Chief Justice, although it is mentioned in the judgment of Denham J.)
29. It had been made clear by Lord Wilberforce in his speech in McLoughlin -v- O’Brian that, in such cases, the law would have to place some limitations on the extent of admissible claims and the subsequent decisions of the same tribunal in Alcock & Others -v- Chief Constable of South Yorkshire Police (1992) I AC 310 and White -v- Chief Constable of South Yorkshire Police (1999) 2 AC 455 reflect a cautious and pragmatic approach in the case of such so called “secondary victims”, whose relationship to the primary victims might, on one view, be regarded as not so close or intimate as to justify compensation or whose “nervous shock” was not the result of a sufficiently direct or immediate perception of the events in question, as where they were seen on television in the case of a football stadium disaster.
30. In the present case, the plaintiff was not in any sense a “secondary victim” in my view: the psychiatric condition was the consequence of his exposure to the risk of mesothelioma and he was thus the only victim of the defendants’ want of care. Accordingly, while there are observations in some of the speeches in Alcock and White which are of assistance in this case, the general issue as to where, if at all, the boundary is to be drawn in affording compensation to “secondary victims” suffering from nervous shock does not, in my view, arise for consideration in the present case. That “nervous shock” suffered by an employee who does not have to be characterised as a “primary” or “secondary” victim of negligence in the workplace is properly compensatable where it is the result of such negligence is admirably demonstrated by the Circuit Court decision of Judge Bryan McMahon in Curran -v- Cadbury (Ireland) Limited [2000] 2 ILRM 343, where the legal issues are analyzed with his customary erudition.
Forseeability of psychiatric injury.
31. That it was reasonably foreseeable that the plaintiff would be exposed to the risk of contracting mesothelioma as a result of the defendant’s negligence is not in dispute. But it does not necessarily follow that it was reasonably foreseeable that the plaintiff would suffer a recognisable psychiatric disorder, on being informed that there was a risk, albeit a very remote one, that he would contract the disease.
32. It appears to have been generally accepted at one time by the English courts that for liability for psychiatric illness to arise, it must have been reasonably foreseeable. Foreseeability of physical injury was not enough. But that has no longer been the law in that jurisdiction since the decision of the House of Lords in Page –v- Smith 1996 AC 155. The law prior to that case was stated as follows by Viscount Simonds when giving the advice of the privy council in Overseas Tankship (UK) Limited –v- Morts Dock and Engineering Company Limited (The Wagon Mound (1) (1961) AC 388, 426.
“We have come back to the plain common sense stated by Lord Russell of Killowen in Bourhill –v- Young (1942) AC 92, 101. As Denning LJ in King –v- Phillips (1953) 1 QB 429, 441 said:
“There can be no doubt… that the test of liability for shock is foreseeablity of injury by shock.”
33. However, in Page –v- Smith, a majority of the law lords took a different view. That case arose out of a collision between the plaintiff’s and the defendant’s cars. The plaintiff suffered no physical injury, but three hours after the accident he felt exhausted and the exhaustion had continued. For twenty years prior to the accident, he had suffered from a condition, one description of which was “chronic fatigue syndrome”. He instituted proceedings claiming that this condition had now become chronic and permanent and was the result of the defendant’s negligence. He succeeded at first instance, but the Court of Appeal allowed an appeal on the ground that the plaintiff’s injury was not reasonably foreseeable. In the House of Lords, the majority (Lord Ackner, Lord Browne-Wilkinson, and Lord Lloyd of Berwick) allowed the plaintiff’s appeal, Lord Keith of Kinkel and Lord Jauncey of Tullichettle dissenting. The impact in that case was described by the trial judge as one of “moderate severity”, but no one involved sustained any bodily injuries. The majority were of the view, however, that once it was reasonably foreseeable that personal injury would occur as a result of the defendant’s negligence, it was immaterial whether the injury actually sustained was psychiatric as distinct from physical.
34. In arriving at that conclusion the majority emphasised that the plaintiff was properly regarded as a “primary victim” of the defendants’ negligence, adopting the classification first adopted by Lord Oliver in his speech in Alcock. The plaintiff in Page –v- Smith, having been directly involved in the accident, was a “primary victim”, in contrast to the relatives of those injured or killed as a result of the defendants’ negligence in McLoughlin –v O’Brian, Kelly –v- Hennessy and Alcock, who were categorised as “secondary victims”. In his speech in Page –v- Smith, Lord Lloyd said:
“Foreseeability of psychiatric injury remains a crucial ingredient when the plaintiff is the secondary victim, for the very reason that the secondary victim is almost always outside the area of physical impact, and therefore outside the range of foreseeable physical injury. But where the plaintiff is the primary victim of the defendant’s negligence, the nervous shock cases, by which I mean the cases following on from Bourhill –v- Young, are not in point. Since the defendant was admittedly under a duty of care not to cause the plaintiff foreseeable physical injury, it was unnecessary to ask whether he was under a separate duty of care not to cause foreseeable psychiatric injury.”
35. That approach was severely criticised by Lord Goff of Chieveley in his dissenting opinion in White. That case, which like Alcock, arose out of the Hillsborough Football Stadium disaster, was also largely concerned, like Alcock, with “secondary victims”, although since they were police officers, their claims were also advanced on the basis that they were owed a duty as employees and that, to the extent that they were involved in rescuing the primary victims of the disaster, they were also not in the same category as conventional “secondary victims”.
36. Lord Goff’s initial criticism of Page –v- White was that it was inconsistent with the earlier authorities culminating in the Wagon Mound in England and with a number of Australian decisions. He was also critical of the view of Lord Lloyd that hindsight was not a relevant factor where the plaintiff was a primary victim. Lord Lloyd, while accepting that in the case of a secondary victim it was necessary to look at the circumstances as they actually occurred and consider whether the hypothetical reasonable man would have foreseen that the plaintiff might have suffered an identifiable psychiatric illness, was of the view that this did not apply in the ordinary running down case, where it was sufficient that the defendant ought reasonably to have foreseen that an impact would result in some form of personal injury, even if in the event no direct physical injury was sustained. Finally, Lord Goff questioned whether Lord Lloyd was justified in omitting from the test in the case of a primary victim what might be described as the “reasonable fortitude” factor, i.e., whether the defendant, in a case such as Page –v- Smith, ought reasonably to have foreseen that the plaintiff would have suffered a particular psychiatric reaction which would not have followed in the case of a person endowed with “normal fortitude” or “ordinary phlegm”. In the case of a primary victim, Lord Lloyd thought, the defendant must take the victim as he finds him. In this context, Lord Lloyd cited with approval the dictum of Geoffrey Lane J, as he then was, in Malcolm –v- Broadhurst (1970) 2 All ER 508 that there was no distinction between an “eggshell” skull and an “eggshell” personality. Lord Goff, however, considered that, in so concluding, Lord Lloyd had erroneously taken an exceptional rule – the eggshell principle – relating to compensation, and treated it as being of general application, thereby, as he put it, “creating a wider principle of liability”.
37. However, Lord Goff’s concerns as to the innovative features of Page –v- Smith were not shared to any notable degree by the other law lords in White. It is relevant to note that Lord Goff expressed particular disquiet at an inference which the defendants had sought to draw from Lord Lloyd’s speech i.e., that in the case of both primary and secondary victims the defendant would be liable only where the victim who suffered psychiatric injury was within the range of foreseeable injury, a test that was met, of course, in Page –v- Smith, but not by the plaintiffs in White.
38. It is also true that the majority decision in Page –v- Smyth has been severely criticised by academic commentators as being in conflict with a significant body of existing case law in the United Kingdom and Australia and as also drawing distinctions between primary and secondary victims, in terms of the foreseeability of psychiatric damage, the implications of which for a wide range of cases had not been sufficiently considered.( Mullany, ,’Psychiatric damage in the House of Lords – Fourth time unlucky – Page v Smith ‘, 3 Journal of Law and Medicine (Aus) 112; Handford, ‘ A new chapter in the foresight saga : psychiatric damage in the House of Lords’ , 1964 Tort Law Review (Aus ) 6 ; Trinidade’ Nervous shock and negligent conduct ‘, 112 LQR, 22. )
39. No doubt it can be said that there was no reason in principle why a driver who ought to have foreseen that his negligent driving would cause the plaintiff to sustain personal injury should be relieved from liability simply because, in what was obviously an unusual case, the victim suffered psychiatric consequences, unaccompanied by any physical trauma. But it seems to me that, in the present case, it is unnecessary to consider the wider implications of the majority decision in Page –v- Smyth, because we are here solely concerned with the foreseeability of psychiatric injury flowing from the negligence of a defendant in a specific context, i.e., the failure of an employer to take reasonable precautions for the health and safety of his employees.
40. I see little difficulty in arriving at a conclusion that, in a case such as the present, it was reasonably foreseeable that the plaintiff would suffer a recognisable psychiatric disorder as a result of his taking medical advice and being informed that he was at risk of contracting the disease of mesothelioma, even though at the time of the proceedings he had not actually contracted that disease. Moreover, that result should also follow, irrespective of the extent of the risk. If, for example, the advice of Professor Clancy had been that as a matter of probability he would contract the disease and the plaintiff had, in the result, suffered the psychiatric disorder of which he now complains, it would seem to me unjust and anomalous that the defendants should escape liability. The fact that the advice he received was that he was at no more than a very remote risk of contracting the disease would not be a reason, in principle, for relieving the defendants of liability in limine. If they ought to have foreseen that the plaintiff would be at risk of contracting mesothelioma and, as a result, might also suffer psychiatric injury, the fact that the psychiatric injury would not have been suffered by a person of ‘ordinary fortitude’ is not material: the general principle that the wrongdoer must take his victim as he finds him should, in the absence of other considerations, apply.
41. I do not agree in this context with the view of the learned trial judge that the plaintiff’s reaction should be regarded as that of a person of ordinary fortitude. I think that such a person, on being informed that there was no more than a minimal risk of his contracting the disease, would not have permitted so remote a contingency to disrupt his family, working and social life, any more than he would have allowed all the risks to which we are subject at every turn of our lives, including the tobacco smoke pollution in much of our environment, have a similar effect. Such a person is not properly described, in my view, as a person of abnormal fortitude.
42. I recognise that it may be, on one view, questionable whether the law should apply the ‘eggshell skull ‘test in cases of psychiatric illness. Lord Goff may be right in saying that, in cases where there is no physical injury, this is to translate a rule relating to compensation into a general principle of liability. The fact remains that the test is applied routinely in personal injury cases in our courts: one is well familiar with minor soft tissue injuries which have, according to medical evidence, caused the plaintiff acute psychiatric injury which, one is assured, is of real significance to the plaintiff, however surprising his or her reaction is to the objective finder of fact. It seems to me that logically the same considerations should apply where there is no physical injury. In a case such as the present the question of liability must be resolved, not by the exclusion of the eggshell skull principle, but by determining whether the absence of physical injury is fatal to the plaintiff’s claim. That in turn depends on whether it falls within the category of ‘ nervous shock ‘ cases and, if not, whether liability can still arise in what may be generically called ‘ fear of disease ‘ cases.
Is this a “nervous shock” case?
43. The central issue in this case, accordingly, is not whether the defendants ought to have foreseen that the plaintiff would suffer psychiatric injury. It is whether the claim by the plaintiff comes within the category of “nervous shock” cases in which the courts have awarded damages for such psychiatric injury, even in the absence of any physical injury, and, if not, whether the plaintiff was nonetheless entitled to recover damages in respect of the reasonably foreseeable psychiatric illness which was the consequence of his having been negligently exposed to the risk of contracting mesothelioma. That further inquiry is necessary because of the care with which the courts have approached claims for psychiatric illness, unaccompanied by physical injury, arising out of alleged negligence: the reasons for that cautious approach are considered at a later point in this judgment.
44. “Nervous shock” would probably be regarded by medical experts today as an inexact expression, to put it no more strongly. The authorities, however, use it to define a set of circumstances which, when they give rise to a specific psychiatric disorder unaccompanied by physical injury that was the reasonably foreseeable consequence of a breach of duty on the part of the defendant, may lead to a finding of liability, provided the conditions laid down by Hamilton CJ in Kelly –v- Hennessy are met.
45. In considering what circumstances will amount to nervous shock in that context, one can begin by recalling that Brennan J, as he then was, in Jaensch –v- Coffey 155 CLR 549 said that psychiatric illness which was not induced by shock but by the experience of having to cope with bereavement did not entitle the injured person to damages. He gave the examples of the spouse worn down by caring for an injured wife or husband or the parent rendered distraught by the wayward conduct of a brain damaged child and who suffered psychiatric illness as a result. Even though the injury to spouse or child may have been the result of a tort, the affected spouse or parent will have no action in damages against the wrongdoer.
46. In Alcock, Lord Ackner said:
“Even though the risk of psychiatric illness is reasonably foreseeable, the law gives no damages if the psychiatric injury was not induced by shock. Psychiatric illnesses caused in other ways such as the experience of having to cope with the deprivation consequent upon the death of a loved one attracts no damages…
“Shock, in the context of this cause of action, involves the sudden appreciation by sight or sound of a horrifying event, which violently agitates the mind. It has yet to include psychiatric illness caused by the accumulation over a period of time of more gradual assaults on the nervous system”
47. The plaintiffs in Kelly –v- Hennessy, and McLoughlin –v- O’Brian each sustained “nervous shock” in the sense indicated by Lord Ackner and were held entitled to recover because the resultant psychiatric illness was the foreseeable consequence of the wrongdoing which brought about the shock. In the present case, there was no shock of that nature: no sudden perception of a frightening event or its immediate aftermath, disturbing the mind of the witness to such an extent that a recognisable psychiatric illness supervened. If the plaintiff is entitled to recover damages, it must be because such damages can be recovered in respect of a psychiatric disorder brought about otherwise than by “nervous shock”: in this case, by a combination of anger and anxiety which was the result of the plaintiff having been informed of his exposure to the risk of contracting mesothelioma because of his employers’ negligence.
48. This, as Geoghegan J points out, is uncharted territory for our courts. It has been argued in this case that there is no reason in principle why the law should differentiate between a psychiatric illness which is induced by nervous shock and one such as the plaintiff in the present case has suffered, where both are the foreseeable result of the wrongdoing of the defendants. That issue must be resolved by determining whether or not the extension of the law to permit the recovery of damages in cases such as the present should be excluded on policy grounds.
49. I would have no hesitation in rejecting the proposition that, in considering whether particular categories of negligence which have not hitherto been recognised by judicial decision should be so recognised, policy decisions should play no part. That doctrine, in its most extreme form, is to be found in the speech of Lord Scarman in McLoughlin –v- O’Brian. However, as the speech of Lord Edmund-Davies in the same case demonstrated, judges have for long invoked policy considerations in determining where the boundaries of legal liability for negligence should be fixed. Thus, in principle it would have been possible to extend liability for negligence far beyond the traditional ambit of wrongs causing personal injuries or physical damage to property: the ground for not extending liability to all forms of economic loss (save where caused by negligent misstatement) is the undesirability of courts extending the range of possible liability in so uncontrolled and indeterminate a manner without any legislative intervention. Thus, if Irish courts were to adopt the same approach to the law of tort in cases of economic loss as the English courts have more recently adopted, it would be because of policy considerations which outweigh what otherwise be seen as a principled development of the existing law. (As the decision of this court in Glencar Exploration Plc –v- Mayo County Council (2002) 1 ILRM 481 made clear, the question as to whether economic loss is recoverable in cases other than those of negligent misstatement and within the categories laid down in Siney –v- Dublin Corporation (1980) IR 400 and Ward –v- McMaster (1988) IR 337 still awaits authoritative resolution.)
The policy issues.
50. Before considering the policy arguments that arise in the present case, it is right to say that although, as I have already pointed out, the courts have for long approached cases of psychiatric disorder on the basis that illness of that nature can be as real, painful and disabling as physical injuries, that is not to say that there are not special considerations applicable to such cases which must be borne in mind when the broader policy arguments are being considered.
51. Thus, as I have already noted, the law, while recognising that damage in the form of a recognisable psychiatric disorder is compensatable, does not permit the recovery of damages for mental anguish or grief which results from a bereavement or injury to a member of one’s family caused by another’s wrong. It is clear, however, that grief or mental anguish of that nature can result in recognisable psychiatric illnesses such as a reactive depression, and, in the light of developments in psychiatric medicine in recent decades, it must surely be questionable whether the inflexible boundary drawn by the law between recognisable psychiatric conditions which are compensatable and grief or mental anguish, which is not, is entirely logical. The fact that the latter category is not compensatable is because the courts have adopted a pragmatic approach and have left it to the legislature to determine when, and to what extent, such undoubted suffering should be the subject of an award of damages.( As under s49 of the Civil Liability Act, 1961)
52. Secondly, it is an inescapable fact that, because psychiatric illness is frequently less susceptible to precise diagnosis, the courts may have to adopt a more circumspect approach to such cases. Thirdly, the phenomenon, familiar to all judges and practitioners who have been concerned in personal injury cases, that the prospect of compensation at a subtle and subconscious level does nothing to assist a plaintiff’s recovery from physical injury and may positively impede it, can arise even more acutely in cases of alleged psychiatric illness.
53. Again, as pointed out by Lord Steyn in his instructive discussion of the problem in White, the abolition or relaxation of the special rules governing the recovery of damages for psychiatric harm would greatly increase the class of person who can recover damages in tort and may result in a burden of liability on defendants disproportionate to the wrongful conduct involved. He cites the example of motorcar accidents with may involve a momentary lapse of concentration.
54. However, the policy arguments in the present case against a finding of liability for psychiatric injury are not confined to those factors or the so called “floodgates” factors, i.e., the possibility of the courts being swamped with trivial and unmeritorious claims, imposing particular strains on the legal system and making severe demands on judges who have to segregate serious claims from the trivial or even fraudulent. That is not to say that such considerations may not be important, but, in my view, there are specific policy considerations which, in the case of what can be conveniently catagorised as “fear of disease” cases, such as the present, argue even more powerfully against the imposition of liability.
55. There is first the undesirability of awarding damages to plaintiffs who have suffered no physical injury and whose psychiatric condition is solely due to an unfounded fear of contracting a particular disease. A person who prefers to rely on the ill informed comments of friends or acquaintances or inaccurate and sensational media reports rather than the considered view of an experienced physician should not be awarded damages by the law of tort. As McNulty J put it, delivering the judgment of the Appellate Court of Illinois in Majca –v- Beekil 682 NE 2D 253:
“Where hysterical fear of disease is sufficiently widespread, and popular knowledge concerning its etiology is limited, a plaintiff may foreseeably experience severe emotional distress without medically verifiable evidence of a substantially increased risk of contracting the disease. Most courts have held that recovery for fear of disease should not extend to such foreseeable fears, because, as commentators have noted, such broad recovery rewards ignorance about the disease and its causes.”
56. The second policy argument is closely related to that first consideration. It relates to the implications for the health care field of a more relaxed rule as to recovery for psychiatric illness which were summarised as follows by Baxter J giving the opinion of the majority of the Californian Supreme Court in Potter and Others –v- Firestone Tyre and Rubber Company 25 Cal Rptr 2d 550:
“Access to prescription drugs is likely to be impeded by allowing recovery of ‘fear of cancer’ damages in negligence cases without the imposition of a heightened threshold. To wit, thousands of drugs having no known harmful effects are currently being prescribed and utilised. New data about potentially harmful effects may not develop for years. If and when negative data are discovered and made public, however, one can expect numerous law suits to be filed by patients who currently have no physical injury or illness but who nonetheless fear the risk of adverse effects from the drugs they used. Unless meaningful restrictions are placed on this potential plaintiff class, the threat of numerous large, adverse monetary awards, coupled with the added cost of insuring against such liability (assuming insurance would be available) could diminish the availability of new, beneficial drugs or increase their price beyond the reach of those who need them most.”
57. It was also pointed out that there would also be serious implications for medical negligence cases grounded on the fear of the plaintiffs having contracted a disease as the result of having been prescribed a particular drug.
58. At an earlier point in this judgment, I expressed the view that the law would be in an unjust and anomalous state if a plaintiff who was medically advised that he would probably suffer from mesothelioma as a result of his negligent exposure to asbestos could not recover damages for a recognisable psychiatric illness which was the result of his being so informed. I am also satisfied, however, that in cases where there is no more than a very remote risk that he will contract the disease, recovery should not be allowed for such a psychiatric illness. That is because the policy considerations which I have summarised point clearly to the necessity for imposing some limitation on the number of potential claims which might otherwise come into being.
59. Claims for emotional distress arising out of exposure to asbestos came before the United States Supreme Court in Consolidated Rail Corporation –v- Gottshall 512 US 532, and Metro North Commuter Railroad Company –v- Michael Buckley 117 SCT 2113. In both cases, a majority of the court concluded that it was an essential precondition to the recovery of damages for emotional distress under the Federal Employers Liability Act that the plaintiff should have sustained a “physical impact” and that the plaintiff’s contact in each case with asbestos laden insulation dust did not constitute such a “physical impact”. Again, the majority of the court rested their conclusions on policy considerations, Breyer J observing in the latter case that:
“…the common law in this area does not examine the genuineness of emotional harm case by case. Rather, it has developed recovery permitting categories the contours of which more distantly reflect this, and other, abstract general policy concerns. The point of such categorisation is to deny courts the authority to undertake a case by case examination.”
60. A similar approach was adopted by the Supreme Court of Texas in Temple – Inland Forest Products Corporation –v- Carter and Another 993 SWR 2D. Delivering the unanimous judgment of the Court, Hecht J, having referred to Buckley, went on to say
“A person exposed to asbestos can certainly develop serious health problems, but he or she also may not. The difficulty in predicting whether exposure will cause any disease and if so, what disease and the long latency period characteristic of asbestos related diseases, make it very difficult for judges and juries to evaluate which exposure claims are serious and which are not. This difficulty in turn makes liability unpredictable, with some claims resulting in significant recovery while virtually indistinguishable claims are denied altogether. Some claimants would inevitably be over- compensated, when, in the course of time, it happens that they never develop the disease they feared, and others would be under compensated when it turns out that they developed a disease more serious even than they feared. Also, claims for exposure could proliferate because in our society, as the Supreme Court observed, ‘contacts, even extensive contacts, with serious carcinogens are common.’ Indeed, most Americans are daily subjected to toxic substances in the air they breathe and the food they eat. Suits for mental anguish damages caused by exposure that has not resulted in disease would compete with suits for manifest diseases for the legal system’s limited resources. If recovery were allowed in the absence of present disease, individuals might feel obliged to bring suit for such recovery prophylactically, against the possibility of future consequences from what is now an inchoate risk. This would exacerbate not only the multiplicity of suits but the unpredictability of results”.
Conclusions.
61. I am, accordingly, satisfied that the law in this jurisdiction should not be extended by the courts so as to allow the recovery by plaintiffs of damages for psychiatric injury resulting from an irrational fear of contracting a disease because of their negligent exposure to health risks by their employers, where the risk is characterised by their medical advisors as very remote.
62. I would add two final observations. First, we are not in this case concerned with the question as to whether an employer should be held liable where it is reasonably foreseeable that an employee might suffer a nervous breakdown because of the stress and pressures of his workload, an issue resolved in favour of the plaintiff by the English High Court in Walker –v- Northumberland County Council (1995) 1 All ER 737. Secondly, the claim of the plaintiff in the present case was grounded on breach of statutory duty in addition to common law negligence. It is clear, that in the absence of any specific statutory provision entitling the plaintiff to recover damages for psychiatric injury, the same principles as to liability must apply.
63. I would allow the appeal and substitute for the order of the High Court an order dismissing the plaintiff’s claim.
Geoghegan J.
Introduction
64. This appeal raises an important question which has not been considered by this court before, namely, whether and if so to what extent and subject to what limitations an action may lie in negligence where the sole injury for which damages are sought to be recovered is a psychiatric condition resulting from fear of contracting an illness (in this case asbestos related diseases) in the future as a consequence of the alleged negligent acts and omissions. It is conceded by the defendants/appellants that the plaintiff/respondent was negligently exposed to asbestos dust but the medical evidence was to the effect that the risk of contracting any serious or fatal disease as a consequence thereof is remote. Nevertheless it has been found as a fact by the trial judge that the plaintiff suffered from severe worry and anger which resulted in a psychiatric condition and the plaintiff has been awarded substantial damages.
65. I will return to it later in the judgment, but I should mention in passing at this stage that the plaintiff alleged that he had heard of a workmate, a Mr. O’Connor, contracting an asbestos related disease and, indeed, subsequently dying. It was never established in evidence what the illness of Mr. O’Connor was or the cause of his death. The medical advice which the plaintiff received was that the danger of contracting any disease as a consequence of this asbestos exposure was minimal and, therefore, objectively, at least, the extreme worry leading to psychiatric illness was irrational.
66. Questions of law obviously arise as to what in these circumstances was the duty of care, as to what relevant injury might be regarded as having been reasonably foreseeable and as to whether for public policy or other reasons the courts should regard the damage claimed in this case to be irrecoverable. The question of “control mechanisms” as they are often described in the case law arises not only in relation to the last question but also in relation to the duty of care and the question of foreseeability. That is a brief sketch of the legal issues involved. Obviously, I will return to them in due course but it is essential to treat first of the evidence which was before the High Court and the terms of the judgment of the trial judge.
The evidence and the judgment
67. In evidence the plaintiff described similar feelings of anxiety and annoyance as a consequence of his learning of his exposure to asbestos. When it began to dawn on him that he was working with asbestos he took legal advice because he had read articles about it. He also went to his GP, Dr. Coodavia. The doctor gave him tablets for anxiety. He later attended the psychiatrist, Dr. Griffin, and the respiratory surgeon, Professor Clancy. In answer to the question as to whether they had been able to give him any help he replied as follows:-
“They tell me not to be worried and all that, but then people – I know they are professional people, but when I go out the door, I am back to square one, so it doesn’t matter what they tell me. I was being exposed to asbestos in 85/86 and that’s in me mind.”
He was then asked what was his principal fear and he said “death”. He indicated that he tried to forget about his anxiety when he went to work and that at times his sleep was affected. His wife was not well and had to have a mastectomy and to some extent he blamed himself about this. He underwent a pulmonary function test and also psychiatric counselling. He accepted that Professor Clancy’s advice to him was that there was merely “a minimal risk of something”. He admitted he had no current disease. At p. 38 of the transcript of the first day O’Neill J., the trial judge, summed up the position in a question to Mr. Fletcher which I quote:-
“Q. Mr. Justice O’Neill: There is nothing wrong with you at the moment Mr. Fletcher, but you fear that there may be a risk that something may go wrong?
A. Yes, that is right.”
68. Mr. Fletcher admitted that he went to a solicitor first because after looking at television programmes about asbestos he thought he should get legal advice. Mr. Fletcher was cross-examined by Mr. McCullough on the basis that he appeared to have gone to Dr. Clancy before he went to his GP, Dr. Coodavia. Mr. Fletcher did not accept this. He thought that he might have heard in talk that Dr. Clancy was the expert. He admitted that Dr. Clancy had told him the risk was minimal. Dr. Clancy had told him that even though he was a non-smoker, passive smoking was more of a risk to him than the exposure to asbestos. Mr. Fletcher admitted that he might have first suggested that he needed psychiatric treatment. He also admitted to Mr. McCullough that Dr. Griffin, the psychiatrist, had also tried to explain to him that he should not really be worrying himself.
69. In evidence Professor Clancy said that there was virtually no risk in this case of asbestosis but there was the usual minimal risk of mesothelioma. Dr. Clancy accepted that as a matter of probability the fibres would have been inhaled. He said however that asbestosis depended on a fairly high exposure over a long time whereas mesothelioma was quite different. Even cursory exposure increases the risk so that it is not dose dependent. Dr. Clancy did not accept that all persons who are exposed to asbestos remained in similar anxiety. Some were heartened by optimistic advice given and others remained in a state of anxiety.
70. Dr. Griffin gave evidence that he thought that the plaintiff had been traumatised by the knowledge that he had worked in an undetected situation with asbestos and it was very difficult to reassure him about his future. He was asked in terms of psychiatric illness where he would put the plaintiff. His answer was that on both occasions on which he saw him he thought he was severely anxious and had suffered from anxiety neurosis or more correctly reactive anxiety neurosis. He said that that was a psychiatric illness. Dr. Griffin elaborated on that and said it would come within the international classification of psychiatric diseases. The plaintiff’s condition was moderate to severe. He had the usual feelings of anger and anxiety. Dr. Griffin said medication would be helpful in the form of an anti anxiety agent like “Lexotan”. In cross-examination it was put to Dr. Griffin that no amount of medical advice can displace the irrational anxiety it would seem. Dr. Griffin answered that he was not sure the anxiety was all that irrational. In other words, the plaintiff believed he had been exposed to asbestos and that in time he might develop asbestos related diseases or he might not and he carried that worry with him. Dr. Griffin told the learned trial judge that he thought the plaintiff was suffering constantly to some degree perhaps to a small degree and every now and then episodically he became acutely anxious and stressed. Dr. Griffin thought that this would be ongoing. The plaintiff could not be reassured on foot of the slight chance of disease. He still carried that worry and it was likely to remain in his mind indefinitely.
71. The judgment delivered by O’Neill J. on the 15th of June, 2001 reflected the detailed legal submissions which had been made to him by counsel on behalf of the appellants. The learned trial judge summed up the defendants’ case as argued as follows:-
“The defendants called no evidence and they made submissions on the following basis. Firstly, that the plaintiff’s anger and anxiety reaction, or that complex, was not caused by the exposure to asbestos dust itself but was, so to speak, caused by his exposure to the knowledge of it which he gained through the media in late 1996. They then, the defendants, rely upon the authority of the case of the CJD Litigation Group B v. The Medical Research Council 2000 Lloyds Reports, Medical Reports 161 to say the following:-
‘That the plaintiff is to be treated as a secondary victim in so far as this claim is concerned, and that he must, therefore, prove that he has been suffering from a recognised psychiatric illness that was foreseeable to the defendants at the time of the alleged wrong.
Secondly, that in a person of normal fortitude that the plaintiff’s bad reaction, that is to say his bad anxiety reaction, was not something that would have been foreseeable to the defendants at the relevant time’.”
72. The learned trial judge observed that that raised an issue of law which he found it unnecessary to resolve because, as he pointed out, essentially what counsel for the appellants was arguing was that the plaintiff should be regarded as being in the category of persons who would have to meet the tests laid down in Kelly v. Hennessy [1995] 3 IR 253. But the learned judge went on to express the view that it did not matter whether he was “a primary victim” or a “secondary victim” because in either case the relevant tests would have been satisfied. He said that the plaintiff had been suffering from a recognisable psychiatric illness and that that was brought about by the shock and upset that the plaintiff suffered as a result of his learning through the media “in the sensationalist way that that would have occurred” of the existence of his problem. O’Neill J. was satisfied that the actual problem itself was caused by the appellants’ “original omission”. The judge went on to say that any other view was unreal, that the essential ingredient in the development of the plaintiff’s illness i.e., his psychiatric illness was the exposure to the asbestos dust and not the exposure to the knowledge of it. The judge accepted that the plaintiff’s exposure to the knowledge of it was the trigger factor which started the complaint but that did not mean that the psychiatric illness did not arise from the exposure to the asbestos dust. The learned trial judge indicated that he was happy to assume that the plaintiff was in an analogous position to the plaintiff in Kelly v. Hennessy. In other words psychiatric illness was foreseeable and that that being so, the appellants owed the plaintiff a duty of care not to cause him a reasonably foreseeable injury. The judge laid emphasis on the fact that the appellants were the plaintiff’s employer.
73. O’Neill J. then went on to deal with the argument that in relation to foreseeability it is necessary to consider the position of a person of “normal fortitude”. The learned trial judge, however, took the view that it was reasonably foreseeable that a person of “normal fortitude” would suffer from the kind of anxiety described in the evidence and would develop the psychiatric condition proved. In this connection he seemed particularly to rely on the CJD case. The learned judge then said the following:-
“It was entirely foreseeable in my view that the plaintiff would learn of this condition at some stage from the media or some other source, probably in circumstances which would sensationalise the problem and cause him the kind of reaction which he unfortunately had suffered. I think that was foreseeable. I think it was also foreseeable that in somebody of ordinary fortitude, a normal person, in other words, which the plaintiff was, prior to these events, this would produce an anxiety reaction and that is precisely what happened.”
74. The plaintiff, in the view of the judge, had satisfied all the relevant tests whether he was to be treated as a primary victim or a secondary victim. O’Neill J. assessed general damages at IR£45,000 and added a further sum of special damages of £3,760.
The Law
75. The learned trial judge decided this case in favour of the plaintiff/respondent on the basis that the plaintiff in relation to his psychiatric injury had passed the test of “reasonable foreseeability”. There is no doubt that the passing of such a test was an essential requirement. But as is clear from all the leading cases in common law jurisdictions, “reasonable foreseeability” is not the only determining factor. Elements such as proximity (a concept given wide meaning in the case law), reasonableness in the imposition of a duty of care and public policy may all play a role. Furthermore, in the law of tort there is a double aspect to “reasonable foreseeability”. Foreseeability is relevant in considering whether there is a duty of care in the first instance and it again becomes relevant in considering, whether, assuming there was such a duty of care and a breach thereof, a particular item of damage alleged to have resulted is recoverable. Indeed, it would seem from the authorities that the test for each type of foreseeability is different. As was accepted by the learned trial judge, the test of foreseeability for the purposes of liability to a non-primary victim at least for psychiatric injury is based on a person of “normal fortitude”. However, when it would come to assessing damages and the application of reasonable foreseeability to items of damage, the “thin skull” principle would come into play.
76. In an ordinary motor accident or factories injury case or even indeed a medical negligence action the trial judge does not normally have to consider aspects of the tort of negligence other than reasonable foreseeability. The “neighbour” of a motorist for the purposes of negligence liability is the person whom it can be reasonably foreseen he may injure through the negligent use of a motor vehicle. It has always been considered reasonable that liability should arise in such circumstances and reasonable foreseeability and proximity become effectively merged. In the vast majority of negligence actions, therefore, a close analysis of the different constituents of the tort i.e. the duty of care, the breach of that duty and the damage which results is not necessary.
77. I now turn to consider the arguments made by Mr. Dermot Gleeson, S.C., counsel for the appellants at this appeal or more precisely to consider the question as to whether an award of damages ought to have been made at all if the trial judge had addressed his mind to the correct questions.
78. Mr. Gleeson’s primary submission was that these cases were governed by the decision in Kelly v. Hennessy cited above. In that case the plaintiff’s family had been involved in a serious car crash caused by the negligence of the defendant. The plaintiff’s husband and one of her daughters suffered permanent brain damage. The plaintiff had not been present at the accident but had learned of it by a telephone call. It was accepted that the plaintiff suffered as a consequence from post-traumatic distress disorder. It was held by this court that where a plaintiff came on the immediate aftermath of an accident either at the scene or in hospital involving a person with whom the plaintiff had a close relationship, a duty of care arose. But it had been argued before the court on behalf of the defendant that psychiatric illness was in a different category from physical injury and that damages could only be recovered for it in very limited circumstances. All three judges of the court were in agreement that damages were recoverable but the principal judgment was that of Hamilton C.J. with whom Egan J. agreed, Denham J. writing a separate judgment. In the judgment of Hamilton C.J. it was held that in order to recover damages for nervous shock a plaintiff must establish
(a) that he or she actually suffered a recognisable psychiatric illness;
(b) that such illness was shock induced;
(c) that the nervous shock was caused by the defendant’s act or omission;
(d) that the nervous shock sustained was by reason of actual or apprehended physical injury to the plaintiff or a person other than the plaintiff;
(e) that the defendant owed him or her a duty of care not to cause him or her a reasonably foreseeable injury in the form of nervous shock as opposed to personal injury in general.
79. Without necessarily endorsing the terminology “primary victim” and “secondary victim” which has received judicial and academic criticism, it is not entirely clear whether the judgment of Hamilton C.J. applies only to a so-called secondary victim or whether it applies to a claim for damages for psychiatric injury only brought by any victim whether primary or secondary. It must be remembered that the plaintiff in that case was a so called secondary victim and, indeed, that terminology is used in the judgment of Denham J. Furthermore, Hamilton C.J. when laying down the principle that a plaintiff must establish that his or her recognisable psychiatric illness was “shock-induced” relied for support on passages contained in a judgment of Brennan J. (as he then was) in the Australian High Court case of Jaensh v. Coffey (1984) 155 C.L.R. 549 in which that learned judge said as follows:-
“A plaintiff may recover only if the psychiatric illness is the result of physical injury inflicted on him by the defendant or if it is induced by shock. Psychiatric illness caused in other ways attracts no damages, though it is reasonably foreseeable that psychiatric illness might be a consequence of the defendant’s carelessness.”
80. The former Chief Justice, however, then goes on to cite two examples which Brennan J. gave in support of that proposition, the relevant passages reading as follows:-
“The spouse who is being worn down by caring for a tortiously injured husband or wife and who suffers psychiatric illness as a result goes without compensation: a parent made distraught by the wayward conduct of a brain damaged child and who suffers psychiatric illness as a result has no claim against the tortfeasor liable to the child.”
81. The two examples given clearly relate to so called secondary victims. But whereas Mr. Gleeson’s main argument is that Kelly v. Hennessy governs all claims for psychiatric damage he makes the fallback argument that even if he were wrong about that, all five respondents on this appeal were “secondary victims” in the sense that their psychiatric conditions arose from anxieties which in turn were sparked off not, as he would argue, from the exposure to asbestos but from learning of the exposure to asbestos and the possible dangers therefrom. With reference to Kelly v. Hennessy also, Mr. Gleeson says that the psychiatric condition in these cases was not “nervous shock” within the meaning of Kelly v. Hennessy in that it did not arise out of some trauma and secondly, that even if such psychiatric condition could ever be characterised as “nervous shock” within the meaning of the case law it was not reasonably foreseeable as being wholly irrational. His argument on irrationality has a second leg to it also. Quite apart from arguing that having regard to the medical advice as to a minimal risk, the irrational worry leading to a psychiatric injury could not have been reasonably foreseen, he says that even if it could have been reasonably foreseen, as a matter of policy, the court should not award damages for irrationality, or alternatively the courts should hold that to permit the recovery of such damages would be unreasonable.
82. I take the view that Kelly v. Hennessy does not govern these appeals. Whether one adopts the wider or narrower interpretation of Kelly v. Hennessy to which I have already referred, the decision should only be taken to relate to accident damage. Given that the courts in all common law jurisdictions have always shown caution in relation to the circumstances in which damages for psychiatric injury can be recovered it is important to consider each kind of liability situation separately. Cases of a mother suffering from great shock on learning that her child has been killed in an accident have almost no factual connection with cases involving fear of disease not actually contracted arising from negligent exposure to such disease. Unless one puts all psychiatric injury on an exact par with all physical injury it makes little or no sense to regard these two examples as being analogous to one another in any relevant way.
83. That being my view, I consider that this court is into virgin territory and that it must consider unguided by any Irish precedent whether damages were properly recoverable in this case. For this purpose I think it helpful to review a number of authorities cited in the appeals, not necessarily on the basis that they give direct guidance in these cases as many of them are more like Kelly v. Hennessy but rather because of the recognition shown by judges in those cases of the necessity for control mechanisms in relation to the recovery of damages for psychiatric disease. I will also be referring to a small number of cases involving fear of illness and, therefore, directly in point, but it is fair to say that they are of limited assistance only.
84. The Irish courts historically took a progressive attitude to psychiatric illness and did so at a time when it would have been treated in many quarters with some scepticism. In Bell v. the Great Northern Railway Company of Ireland (1890) 26 LR Ir 428 the plaintiff had been a passenger in an excursion train when the train proved to be too heavy to be carried by the engine up an incline and was divided by the railway company’s staff, the carriage occupied by the plaintiff remaining attached to the engine. The dislodged part of the train descended the incline with great speed and then the engine was reversed with the remaining carriages in which the plaintiff was seated attached but it also went down at a higher speed and stopped with a violent jerk. The plaintiff suffered great fright and nervous shock as a consequence. The case had been heard by a judge and jury and the judge had charged the jury that if great fright was in their opinion a reasonable and natural consequence of the circumstances in which defendants had placed the plaintiff and she was actually put in fright by these circumstances and if injury to her health was, in their opinion, a reasonable and natural consequence of such fright and was actually occasioned thereby, damages for such injury would not be too remote and might be given for them. A court of three judges in the Exchequer Division presided over by Palles C.B. held that the trial judge had correctly instructed the jury on the liability of the defendants. In so holding, the court followed an earlier decision in 1884 of the Irish Court of Appeal (unreported) in the case of Byrne v. Great Southern and Western Railway Co. of Ireland and refused to follow a Privy Council decision to the opposite effect in the Victorian Railway Commissioners v. Coultas 13 App Cas 222. The Bell case has been regarded as seminal and has been cited in subsequent Irish, English and Australian courts. It should be noted in passing, however, that it is a clear case of nervous shock directly arising from a particular incident involving trauma.
85. The next Irish case of any real significance in relation to damages for psychiatric injury was Mullally v. Bus Éireann [1992] ILRM 722. In that case Denham J. followed Bell v. The Great Northern Railway Company of Ireland and held in what was clearly a so called “secondary victim” case, that the shock arose from aftermath news of injury involving the plaintiff’s family, that the bus company’s duty of care extended to injuries which were reasonably foreseeable and that this psychiatric illness caused by nervous shock was itself reasonably foreseeable and damages for it could be recoverable. That again is an accident case analogous to Kelly v. Hennessy. The decision of Denham J. corresponds with the recognised line of authorities in other common law jurisdictions treating of nervous shock. Denham J. did not go into the more general question of whether and in what circumstances there were limits on the recovery of damages for psychiatric injuries. She did, however, refer to McLoughlin v. O’Brian [1982] 2 All ER 298 and in particular to the speech of Lord Bridge of Harwich in that case. I will be returning to it in due course.
86. What does emerge from the English and Australian authorities and, indeed, U.S.A. cases is that there are control mechanisms which the courts apply to actions for damages for psychiatric conditions and for that reason, I intend to consider five cited English and Australian cases in chronological order for their relevance on the general principles to be applied even though they are not “fear of disease” cases.
87. The first of these is McLoughlin v. O’Brian already referred to. That was a case where the House of Lords reversed the English Court of Appeal and allowed the plaintiff to recover damages in the following circumstances. The plaintiff’s husband and three children had been involved in a motor accident when their car was in collision with a lorry driven by one defendant and owned by the other. The plaintiff, who was at home at the time two miles away was told of the accident two hours after it happened by a neighbour who took her to hospital to see her family. When she arrived she learned that her youngest daughter had been killed and saw her husband and the other children and the severe injuries caused. She claimed that the impact of what she heard and saw caused her severe shock resulting in psychiatric illness. It is clear that in that case there was evidence that the plaintiff was suffering from depression and change of personality affecting her abilities as a wife and mother. The trial judge dismissed the action on the grounds that the defendants owed no duty of care to the plaintiff because the possibility of her suffering injury by nervous shock in the circumstances had not been reasonably foreseeable. The Court of Appeal affirmed that decision but on a quite different basis. The appellate court held that although it was reasonably foreseeable that injury by shock would be caused to a wife and mother in the position of the plaintiff, it was settled law that the duty of care that was owed by the driver of a vehicle was limited to persons or owners of property at or near the scene of an accident and directly affected by his negligence, that considerations of public policy limited the duty of care in that way and did not require it to be extended and that accordingly, since the plaintiff had been two miles from the accident and had not learned of it or seen its consequences until two hours later, she was not entitled to recover damages for nervous shock. That basis of the Court of Appeal’s decision is important for the purposes of understanding the ultimate decision by the House of Lords. The House of Lords allowed the appeal agreeing with the Court of Appeal that the nervous shock would have been reasonably foreseeable but disagreeing that policy considerations should be applied so as to deny a duty of care and that, accordingly, the plaintiff was entitled to recover. It is important and relevant however to consider the principles which their Lordships recognised as existing in arriving at their decision. Lord Wilberforce came to the conclusion on the facts of that case that the plaintiff fell within the boundaries of the law so drawn and that she was entitled to succeed. But what is important, for the purposes of these appeals is that he made it quite clear that in psychiatric claims control mechanisms were necessary in determining the limits of a duty of care and the limits of the types of damage recoverable. He said this at the bottom of p. 421:
“But, these discounts accepted, there remains, in my opinion, just because ‘shock’ in its nature is capable of affecting so wide a range of people a real need for the law to place some limitation upon the extent of admissible claims. It is necessary to consider three elements inherent in any claim: the class of persons whose claims should be recognised; the proximity of such persons to the accident; and the means by which the shock is caused. As regards the class of persons, the possible range is between the closest of family ties – of parent and child, or husband and wife – and the ordinary bystander. Existing law recognises the claims of the first: it denies that of the second, either on the basis that such persons must be assumed to be possessed of fortitude sufficient to enable them to endure the calamities of modern life, or that defendants cannot be expected to compensate the world at large. In my opinion, these positions are justifiable, and since the present case falls within the first class, it is strictly unnecessary to say more. I think, however, that it should follow that other cases involving less close relationships must be very carefully scrutinised, I cannot say that they should never be admitted. The closer the tie (not merely in relationship, but in care) the greater the claim for consideration. The claim, in any case, has to be judged in the light of the other factors, such as proximity to the scene in time and place, and the nature of the accident.”
88. While obviously some of that passage is directly relevant to the facts of that case involving psychiatric injury arising out of an accident to somebody who was not at the scene of the accident, its relevance to this appeal is the acknowledgment by Lord Wilberforce that control mechanisms (an expression not used by him but used in other cases) are necessary in this area. In an earlier part of his speech at p. 420 he referred to the two judgments delivered in the Court of Appeal. He pointed out that Stephenson LJ had considered that the defendants owed a duty of care to the plaintiff, but that for reasons of policy the law should stop short of giving her damages: it should limit relief to those on or near the highway, at or near the time of the accident caused by the defendant’s negligence. Griffiths LJ on the other hand had taken the view that although the injury to the plaintiff was foreseeable there was no duty of care. In his view the duty of care of drivers of motor vehicles was, according to decided cases, limited to persons and owners of property on the road or near to it who might be directly affected and the line should be drawn at this point. It is quite clear from Lord Wilberforce’s next remarks that he was not querying either the view of Stepehenson LJ that in some cases reasons of policy may deny a plaintiff a remedy nor the view of Griffiths LJ that in some cases notwithstanding foreseeability there may be no duty of care. Indeed, he expressly said that he was impressed by both of those arguments but he then went on to make a pertinent observation.
“Though differing in expression, in the end, in my opinion, the two presentations rest upon a common principle, namely that, at the margin, the boundaries of a man’s responsibility for acts of negligence have to be fixed as a matter of policy. Whatever is the correct jurisprudential analysis, it does not make any essential difference whether one says, with Stephenson LJ, that there is a duty but, as a matter of policy, the consequences of breach of it ought to be limited at a certain point, or whether, with Griffiths LJ, one says that the fact that consequences may be foreseeable does not automatically impose a duty of care, does not do so in fact where policy indicates the contrary. This is an approach which one can see very clearly from the way in which Lord Atkin stated the neighbour principle in Donoghue v. Stevenson [1932] AC 562, 580:
‘Persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected …’
This is saying that foreseeability must be accompanied and limited by the law’s judgment as to persons who ought, according to its standards of value or justice, to have been in contemplation. Foreseeability, which involves a hypothetical person, looking with hindsight at an event which has occurred, is a formula adopted by English law, not merely for defining, but also for limiting, the persons to whom the duty may be owed and the consequences for which an actor may be held responsible. It is not merely an issue of fact to be left to be found as such. When it is said to result in a duty of care being owed to a person or class the statement that there is a duty of care denotes a conclusion into the forming of which considerations of policy have entered. That foreseeability does not of itself, and automatically, lead to a duty of care is I think, clear”.
89. Lord Wilberforce then cites some cases in which that principle is made clear and he refers in particular to a dictum of Lord Reid in McKew v. Holland and Hannen & Cubitts (Scotland) Limited [1969] 3 All ER 1621, 1623:
“A defender is not liable for the consequence of a kind which is not foreseeable. But it does not follow that he is liable for every consequence which a reasonable man could foresee.”
90. Lord Edmund-Davies while likewise rejecting the view of the Court of Appeal that policy considerations should deny recovery by the plaintiff nevertheless went on in strident terms to disagree with the opinion of Lord Bridge of Harwich in the same case where the latter doubted that any regard should have been had to policy considerations by the Court of Appeal. Lord Edmund-Davies was firmly of the view that reasonable foreseeability was not the only test of the validity of a claim brought in negligence. The question of the existence of a duty of care could involve policy questions also. While agreeing that any invocation of public policy calls for the closest scrutiny that does not mean that it should not be invoked to deny a duty of care or a heading of damage in particular cases. He cited with approval the words of MacDonald J. in Nova Mink Limited v. Trans Canada Airlines [1951] 2 D.L.R. 241-256:
“There is always a large element of judicial policy and social expediency involved in the determination of the duty-problem however it may be obscured by the use of tradition or formulae.”
Lord Edmund-Davies went on to say the following:
‘I accordingly hold, as Griffiths LJ. … did, that ‘the test of foreseeability is not a universal touchstone to determine the extent of liability for the consequences of wrongdoing’.
Authority for that proposition is both ample in quantity and exalted in status.”
91. Lord Russell of Killowen in a short speech made it clear that he “would not shrink from regarding in an appropriate case policy as something which may feature in a judicial decision”, but he did not think the policy considerations should prevent the plaintiff succeeding in that case.
92. I do not find it necessary to review the opinions of Lord Scarman and Lord Bridge, both of whom in their own different ways were more sceptical as to the legitimacy of introducing policy considerations at all, but it must be remembered that even in their case these views were being expressed in the context of a nervous shock case where a plaintiff was not at the scene of an accident. They were not making observations that could be remotely relevant to a “fear of disease” case.
93. The next case in sequence is Jaensch v. Coffey already cited. This was an Australian case heavily relied on by Hamilton C.J. in his judgment in Kelly v. Hennessy cited above. In the Jaensch case a motor cyclist had suffered serious injury in a collision with a vehicle which was being driven negligently. His wife was not at the scene of the accident but saw him in hospital where the staff told her he was “pretty bad”. The following day she was told that he was in intensive care and shortly thereafter that he had had a change for the worse. She was asked to come to the hospital as quickly as possible. In the event the husband survived but the wife brought an action for nervous shock. The High Court of Australia held on the facts that there was a duty of care and that the plaintiff was entitled to succeed. As in the McLoughlin case however, although in no sense is this case closely analogous to a “fear of disease” case, there are general principles of tort law stated in the judgments which are relevant. Gibbs CJ in his judgment pointed out that foreseeability is relevant to three different questions that may arise in an action for negligence – “whether there was a duty of care; if so, whether the defendant was negligent; and whether the defendant was liable for the kind of damage that resulted from the negligence” and he pointed out that this sometimes leads to confusion. The learned Chief Justice expressly agreed with the views of Lord Wilberforce in the McLoughlin case that foreseeability cannot be the sole criterion for the existence of a duty of care. There may also be considerations which ought to negative or reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise. Gibbs C.J. said that this was clearly in line with Australian law and he referred to a judgment of Mason J. in Wyong Shire Council v. Shirt (1980) 146 C.L.R. 40 at p. 44. In adverting to the fact that there was a difference of opinion between the Law Lords in McLoughlin v. O’Brian as to the part played by policy in the formulation of the rule governing the recovery of damages for nervous shock Gibbs CJ made it clear that in his opinion, the view of Lord Wilberforce was “realistic and correct”. He referred to the passage where Lord Wilberforce said that “foreseeability must be accompanied and limited by the law’s judgment as to persons who ought, according to its standards or value or justice, to have been in contemplation.”
94. I would express the view in passing at this stage, though I will obviously be returning to it, that if policy considerations are relevant in considering the extent of a duty of care in “nervous shock” cases arising out of accidents or traumas, such considerations would seem to be all the more necessary in the much vaguer cases where a condition considered psychiatric by the medical profession has arisen merely from worry that a disease might be contracted.
95. In considering the principle that reasonable foreseeability is separate from or at the very least only one element in the question of the existence of a duty of care, I have found particularly helpful the analysis by Deane J. in his judgment in the Jaensch case. In rather colourful language he pointed out that the common law duty to a “neighbour” had “scant in common with its new testament equivalent; both priest and Levite ensured performance of any common law duty of care to the stricken traveller when, by crossing to the other side of the road, they avoided any risk of throwing up dust in his wound” … in Donoghue v. Stevenson, the common law duty of care was defined, for the purposes of the law of negligence, as the duty to take reasonable care when it can be reasonably foreseen that one’s ‘acts or omissions’ are likely to injure one’s ‘neighbour’. A ‘neighbour’ was identified as being in the view of the common law, a person who is ‘so closely and directly affected by my act that I ought reasonably to have him in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question”. The learned judge goes on to point out that under Lord Atkins’ test there was an important proximity requirement “that constituted an overriding control of the test of reasonable foreseeability in the law of negligence” and that it was clear that the notion of proximity was not confined to mere physical proximity. Later on in his judgment Deane J. points out that the fact that as a practical matter any separate requirement of proximity i.e., separate from reasonable foreseeability is commonly disregarded does not mean that it does not exist as a matter of principle. The ordinary negligence cases which are heard day in, day out do not involve any analysis by the trial judge of the distinction between proximity and reasonable foreseeability. A passage at the top of p. 583 of the judgment of Deane J. is, I think, relevant to these appeals.
“It is not and never has been the common law that the reasonable foreseeability of risk of injury to another automatically means that there is a duty to take reasonable care with regard to that risk of injury … Reasonable foreseeability on its own indicates no more than that such a duty of care will exist if, and to the extent that, it is not precluded or modified by some applicable overriding requirement or limitation. It is to do little more than to state a truism to say that the essential function of such requirements or limitations is to confine the existence of a duty to take reasonable care to avoid reasonably foreseeable injury to the circumstances or classes of case in which it is the policy of the law to admit it.”
96. A number of cases are cited in support of these propositions including well known cases such as Rondel v. Worsley [1969] 1 AC 191 and Hedley Byrne and Co. Limited v. Heller and Partners Limited [1964] AC 465.”
97. Towards the bottom of p. 592 of the judgment Deane J. makes this pertinent observation:
“Unless one is to mutilate reasonable foreseeability to accord with operative but concealed considerations of policy, it must be acknowledged that the decided cases strongly support the view that the requirement of a relationship of proximity operates to impose particular criteria which must be satisfied by a plaintiff before a duty of care in respect of a reasonably foreseeable injury in the form of nervous shock will be held to have arisen in her or his favour.”
98. That passage is relevant to these appeals because in my view, it was perfectly open to each of the trial judges to have found as they did, that the anxiety condition labelled by the medical profession as “psychiatric” arising from the worry of contracting asbestos disease was reasonably foreseeable notwithstanding medical advice to the effect that the risk of contracting such disease was minimal. To that extent, I would reject the arguments put forward by counsel for the appellants that in any sense the injuries in these cases must necessarily have been regarded as unforeseeable. But as Deane J. and other judges have pointed out this does not necessarily mean that there was a duty of care. At p. 604 of the judgment Deane J. observes as follows:
“Once mere psychiatric injury is accepted as sounding in damages for the purposes of the law of negligence and as being, in an appropriate case, reasonably foreseeable in the relevant sense, the duty of care in respect of a foreseeable risk of mere psychiatric injury is an independent and primary duty owed to the person at risk of such injury.”
99. In his judgment in the same case Brennan J. at p. 564 sets out what he sees are the limits to actions for the recovery of damages for psychiatric illness. He said the following:
“A broadening of the test of foreseeability and a readier judicial acceptance of the foreseeability of shock induced psychiatric illness had combined to expand the scope of a defendant’s liability beyond what it was thought to be half a century ago. Liability for negligence occasioning nervous shock has not been readily accepted, perhaps because the courts found evidence of psychiatric illness and of its aetiology to be too vague to warrant a finding of a causal relationship between psychiatric illness and careless conduct. Curial wariness of vague notions is as Sir Owen Dickson said, perhaps the ‘reason that scorn of the law is more widespread among psychiatrists than anatomists’: Jesting Pilate (1965), p. 18. The courts have insisted on proof of a demonstrable and readily appreciable cause of psychiatric illness – the cause itself being a result of the defendant’s careless conduct – before damages for negligence occasioning psychiatric illness are awarded. A plaintiff may recover only if the psychiatric illness is the result of physical injury negligently inflicted on him by the defendant or if it is induced by ‘shock’. Psychiatric illness caused in other ways attracts no damages, though it is reasonably foreseeable that psychiatric illness might be a consequence of the defendant’s carelessness. The spouse who has been worn down by caring for a tortiously injured husband or wife and who suffers psychiatric illness as a result goes without compensation; a parent made distraught by the wayward conduct of a brain damaged child and who suffers psychiatric illness as a result has no claim against the tortfeasor liable to the child.”
Later on in the judgment Brennan J. points out that a psychiatric illness induced by mere knowledge of a distressing fact is not compensatable.
100. What clearly emerges from the judgments in that case is that the control mechanism applied in the case of actions for pure psychiatric damage is that that particular kind of damage must have been reasonably foreseen. This is in line with the judgment of this court in Kelly v. Hennessy.
101. The next case in sequence is Alcock v. Chief Constable of South Yorkshire Police [1992] 1 AC 310. In that case the defendant was responsible for the policing of a football match at which because of overcrowding ninety-five people died and many others sustained crushing injuries. Live pictures of the disaster could be seen on television. The plaintiffs were all related to or friends of spectators. Some witnessed the events from other parts of the stadium, one saw them on television and went to search for his missing son and others were at home watching the events or heard of them from friends or through radio reports but only later saw recorded pictures. All of these plaintiffs claimed damages for nervous shock. They all claimed that they had sustained psychiatric illness as a consequence of the shock. At the trial nine of the plaintiffs who were either parents, spouses or siblings of the victims and who were eye witnesses of the disaster or who saw it live on television were held to be entitled to damages. The remaining six were excluded. The Court of Appeal held that none of the plaintiffs were entitled to succeed. There was then a further appeal to the House of Lords which was dismissed. It was held by the House of Lords that in order to establish a claim in respect of psychiatric illness “resulting from shock” it was necessary to show that the relationship between the plaintiff and the defendant was sufficiently proximate; that the class of persons to whom a duty of care was owed as being sufficiently proximate was not limited by reference to particular relationships such as husband and wife or parent and child but was based on ties of love and affection, the closeness of which would need to be proved in each case; and that a plaintiff also had to show propinquity in time and space to the accident or its immediate aftermath, and that in the cases of the plaintiffs who had been present at the match the mere fact that the relationship was shown was insufficient to give rise to a duty of care that the viewing of the disaster on television could not be said to be equivalent to being within sight and hearing of the event or its immediate aftermath and that, accordingly, the plaintiffs’ claims failed.
102. I am referring to this case only for the purposes of again eliciting some general principles that might be applicable to other cases in which claims are made for psychiatric damage. As has been pointed out in later cases there are great problems arising out of the actual decision and I am not in any way intending either to approve or disapprove of it. The idea that as between siblings the plaintiff would have to prove special love and affection for the brother or sister in question with that perhaps being hotly opposed in cross-examination is certainly not a desirable vista, if it could be avoided in other ways. There are, however, relevant general principles referred to in the speeches of the law lords. Lord Ackner, for instance, clearly accepts the general principle “the application simpliciter of the reasonable foreseeability test is, today, far from being operative”. He goes on at p. 400 to set out principles which may not be entirely consistent with the later House of Lords decision in Page v. Smith [1996] 1 AC 155 which itself has been criticised and to which I will refer. But whether one accepts them in full or not I think it helpful to set them out as stated by Lord Ackner because they highlight factors which this court might have to consider in determining whether there was a duty of care in the quite different circumstances of these appeals. The five principles as set out are as follows:
“(1) Even though the risk of psychiatric illness is reasonably foreseeable, the law gives no damages if the psychiatric injury was not induced by shock. Psychiatric illness caused in other ways, such as by the experience of having to cope with the deprivation consequent upon the death of a loved one, attracts no damages. Brennan J. in Jaensch v. Coffey 155 C.L.R. 549, 569 gave as examples, the spouse who has been worn down for caring for a tortuously injured husband or wife and who suffer psychiatric illness as a result, but who, nevertheless, goes without compensation; a parent made distraught by the wayward conduct of a brain damaged child and who suffers psychiatric illness as a result also has no claim against the tortfeasor liable to the child.
(2) Even where the nervous shock and the subsequent psychiatric illness caused by it could both have been reasonably foreseen, it has been generally accepted that damages for merely being informed of, or reading, or hearing about the accident are not recoverable. In Bourhill v. Young [1943] AC 92, 103 Lord MacMillan only recognised the action as lying where the injury by shock was sustained ‘through the medium of the eye or the ear without direct contact’. Certainly, Brennan J. in his judgment in Jaensch v. Coffey recognised:
‘A psychiatric illness induced by mere knowledge of a distressing fact is not compensatable; perception by the plaintiff of the distressing phenomenon is essential’…
(3) Mere mental suffering, although reasonably foreseeable, if unaccompanied by physical injury, is not a basis for a claim for damages……
(4) As yet there is no authority establishing that there is liability on the part of the injured person, his or her estate, for mere psychiatric injury which was sustained by another by reason of shock, as a result of a self-inflicted death, injury or peril of the negligent person, in circumstances where the risk of such psychiatric injury was reasonably foreseeable. On the basis that there must be a limit at some reasonable point to the extent of the duty of care owed to third parties which rests upon everyone in all his actions, Lord Robinson, the Lord Ordinary, in his judgment in the Bourhill case … did not view with favour the suggestion that a negligent window cleaner who loses his grip and falls from a height impaling himself on spike railings would be liable for the shock induced psychiatric illness occasioned to a pregnant woman looking out of the window of a house situated on the opposite side of the street.
(5) ‘Shock’, in the context of this cause of action involves the sudden appreciation by sight or sound of a horrifying event, which violently agitates the mind. It has yet to include psychiatric illness caused by the accumulation over a period of time of more gradual assaults on the nervous system.”
103. I find the last of those principles particularly instructive. There is no doubt that in a “fear of disease” case particularly when the disease is most unlikely to occur, psychiatric illness caused in such circumstances cannot be said to have arisen suddenly.
104. The speech of Lord Oliver of Aylmerton is mainly of importance in the developing law in this area because of his introduction of the distinction between primary and secondary victims. For the purposes of these appeals that distinction is of little importance, but a passage from Lord Oliver’s speech at the bottom of p. 409 of the report has some relevance and is worth quoting. It reads as follows:
“Beyond this, however, the law in general provides no remedy, however severe the consequences of the distress or grief may be to the health or wellbeing of the third party and however close his relationship to the victim. I doubt whether the reason for this can be found by an appeal to logic, for there is, on the face of it, no readily discernible logical reason why he who carelessly inflicts an injury upon another should not be held responsible for its inevitable consequences, not only to him who may conveniently be termed ‘the primary victim’ but to others who suffer as a result. It cannot, I think, be accounted for by saying that such consequences cannot reasonably be foreseen. It is readily foreseeable that very real and easily ascertainable injury is likely to result to those dependent upon the primary victim or those upon whom as a result of negligently inflicted injury the primary victim himself becomes dependent.”
105. While that passage was intended to refer to the compensation which might be recoverable by a so called “secondary victim”, a similar pragmatism may in other circumstances also render unavailable a remedy to recover damages for ill-effects of negligent conduct. For instance, there is no action for distress, worry or anxiety as such. There must at the very least be a recognised psychiatric condition. For reasons which I will elaborate on, I do not accept that in all circumstances, feelings which result in psychiatric disease necessarily by that reason alone give rise to an actionable claim for damages. The judgment of Lord Oliver highlights the usual problem already referred to by Lord Wilberforce in the McLoughlin case that what I might describe as a hidden agenda of “policy” can be buried in concepts of proximity or foreseeability or indeed be not buried at all but appear free standing. In setting the bounds for the so-called “secondary victim” cases Lord Oliver, although choosing the “proximity” route is forced to admit at the middle of p. 411 that the concept of proximity is “an artificial one which depends more on the court’s perception of what is the reasonable area for the imposition of liability than upon any logical process of analogical deduction.”
106. At p. 418 of the speech Lord Oliver comes down firmly in favour of policy in each individual case determining whether a duty of care arose or not in a secondary victim case. He, again, pointed out that logic cannot determine it because there is no logic in the lines which the courts have drawn. Once again, therefore, the importance of pragmatism and policy raises its head in the law of tort.
107. There is nothing in the other speeches which requires comment and I move now to the fourth of the five cases which I am reviewing. This is a case heavily relied on by counsel for the respondents, Mr. Sweetman. It is Page v. Smith [1996] 1 AC 155. The case involved a so-called “primary victim”. It was an ordinary running down action, but the plaintiff suffered no physical injury. Three hours after the accident, however, the plaintiff felt exhausted and that exhaustion continued. Prior to the accident the plaintiff had been suffering from a chronic fatigue syndrome and he claimed that as a result of the accident that condition had become chronic and permanent when it had been spasmodic. The plaintiff recovered damages in the High Court but this judgment was set aside by the Court of Appeal on the grounds that the injury was not reasonably foreseeable. There was then a further appeal to the House of Lords and it was held (Lord Keith of Kinkel and Lord Jauncey of Tullichettle dissenting) that once it was established that the defendant was under a duty of care to avoid causing personal injury to the plaintiff, it did not matter whether the injury in fact sustained was physical, psychiatric or both. Applying that test it was sufficient to ask whether the defendants should have reasonably foreseen that the plaintiff might suffer personal injury so as to bring him within the ambit of the duty of care. It was unnecessary to consider whether the defendant should reasonably have foreseen injury by shock.
108. This statement of law (if correct) could be helpful to the respondents only if they first establish a duty of care. Even if I came to the conclusion that the relevant question in this case was not was there a duty of care to prevent the kind of damage claimed but rather was damage of that kind recoverable for breach of such a duty of care, I would still be of opinion that the respondents in this case would not be able to rely to any great extent on Page v. Smith. There is a world of a difference between direct injury resulting from a motor accident in which the plaintiff was involved on the one hand and a condition of anxiety emerging from information being gained as to the possible effects of negligent exposure over a long period of time to asbestos or the other. The views of the majority of the Law Lords and particularly of Lord Lloyd of Berwick in Page v. Smith are highly controversial and have been sharply criticised by Lord Goff of Chievley in the fifth case to which I will be referring. But even if the majority decision in Page v. Smith is in line with the law in this jurisdiction, I do not think that it is relevant to the wholly different set of circumstances in which these appellants were involved. It is quite clear at any rate that the only substantial issue in Page v. Smith and the issue on which there was disagreement between the Law Lords was whether in the case of a primary victim claiming for psychiatric injury it was necessary to prove that such psychiatric injury was foreseeable or whether it was merely necessary to prove that some injuries were foreseeable. I have already expressed the view that I can find no fault in the findings of the respective trial judges to the effect that psychiatric disease in these cases was reasonable foreseeable. Therefore, nothing turns in these appeals on the issues in dispute in Page v. Smith. There is one passage in the speech of Lord Lloyd however which is worth quoting. It is at p. 189 of the report and reads as follows:-
“Are there any disadvantages in taking the simple approach adopted by Otton J.? It may be said that it would open the door too wide, and encourage bogus claims. As for opening the door, this is a very important consideration in claims by secondary victims. It is for this reason that the courts have as a matter of policy rightly insisted on a number of control mechanisms. Otherwise, a negligent defendant might find himself being made liable to all the world. Thus in the case of secondary victims foreseeability of injury by shock is not enough.”
109. Mr. Gleeson has argued that the respondents in these cases are secondary victims, and that is why I cite that passage. Towards the end of his judgment at p. 197 Lord Lloyd says the following:
“In conclusion, the following propositions can be supported.
1. In cases involving nervous shock, it is essential to distinguish between the primary victim and secondary victims.
2. In claims by secondary victims the law insists on certain control mechanisms, in order as a matter of policy to limit the number of potential claimants. Thus the defendant will not be liable unless psychiatric injury is foreseeable in a person of normal fortitude. These control mechanisms have no place where the plaintiff is the primary victim.
3. In claims by secondary victims, it may be legitimate to use hindsight in order to be able to apply the test of reasonable foreseeability at all. Hindsight however has no part to play where the plaintiff is the primary victim.
4. Subject to the above qualifications, the approach in all cases should be the same, namely, whether the defendant can reasonably foresee that his conduct will expose the plaintiff to the risk of personal injury whether physical or psychiatric. If the answer is yes then the duty of care is established, even though physical injury does not in fact occur. There is no justification for regarding physical and psychiatric injury as different ‘kinds of damage’.
5. A defendant who is under a duty of care to the plaintiff whether as primary or secondary victim is not liable for damages for nervous shock unless the shock results in some recognised psychiatric illness. It is no answer that the plaintiff was predisposed to psychiatric illness nor is it relevant that the illness takes a rare form or is of unusual severity. The defendant must take his victim as he finds him.”
110. It is understandable that Mr. John Sweetman, S.C. counsel for the plaintiff/respondent should seek to find comfort in these statements of principle. But in my view they have little relevance to the issues involved in these appeals. First of all these actions are not claims for damages for “nervous shock” as that expression has been understood in the English case law as directly flowing from an accident or trauma. The second of those principles acknowledges that in the case of certain types of victims, control mechanisms are necessary so as to limit the number of potential claimants. The House of Lords therefore, has rather arbitrarily held that in the case of secondary victims but not in the case of primary victims the defendant will not be liable unless psychiatric injury is foreseeable in a person of normal fortitude. That is also the law here in relation to secondary victims and it may well be the law in relation to primary victims having regard to the decision of this court in Kelly v. Hennessy.
111. Under the fifth principle the shock must result in some recognised psychiatric illness but the severity or unusualness of the psychiatric illness is irrelevant. That would also be the case here if there was a duty of care and there was foreseeability of psychiatric injury. It is the principle relating to damages usually known as “the thin skull” principle.
112. But there is no logical reason, why, assuming that control mechanisms are necessary there should be any similarity between the control mechanisms operative in the case of “aftermath” or “rescuer” cases on the one hand and “fear of disease” cases on the other. In the absence of firm precedent this court must consider whether control mechanisms are necessary in “fear of disease” cases and if so what those mechanisms should be.
113. The fifth of the “nervous shock” cases to which I intend to refer is White v. Chief Constable of South Yorkshire Police [1999] 2 AC 455 but otherwise known as Frost v. Chief Constable of South Yorkshire Police and hereinafter referred to as “the Frost case”. The case is partly remarkable for a strident attack in a dissenting opinion by Lord Goff of Chieveley on the speech of Lord Lloyd of Berwick in Page v. Smith. But that relates to an issue which does not really arise in these appeals namely, whether foreseeability of psychiatric injury is always necessary if damages are to be recovered for it irrespective of whether the victim is primary or secondary or whether, as Lord Lloyd considered, such a rule only applies to secondary victims. As I have already indicated there is some ambiguity in this jurisdiction on this point as it is not entirely clear from the judgment of Hamilton CJ in Kelly v. Hennessy which of those two approaches he was taking. But the Frost case is of some relevance, nevertheless, particularly having regard to the principles of policy considerations set out in the speech of Lord Steyn. He points out at p. 492 of the report that “the contours of tort law are profoundly affected by distinctions between different kinds of damage or harm.” He speaks of the analogy of the relatively liberal approach to recovery of compensation for physical damage and the more restrictive approach to the recovery for economic loss.” Policy considerations come into play and in the view of Lord Steyn they have always come into play in relation to distinctions between physical injury and psychiatric harm. There has always been the frightening spectre of an unlimited number of claimants. Lord Steyn goes on to point out that “in cases of pure psychiatric harm there is potentially a wide class of plaintiffs involved”.
114. I think it useful next to refer to a passage in the speech of Lord Hoffmann at p. 501. It reads as follows:
“For a long time during this century it remained unclear whether the basis of liability for causing a recognised psychiatric illness was simply a question of foreseeability of that type of injury in the same way as in the case of physical injury. The decision of the House of Lords in Bourhill v. Young [1943] AC 92, appeared to many to combine what was in theory a simple foreseeability test with a robust wartime view of the ability of the ordinary person to suffer horror and bereavement without ill effect. Cases soon afterwards, like King v. Phillips [1953] 1 Q.B. 429, followed this approach, treating foreseeability as a question of fact but keeping potential liability within narrow bounds by taking a highly restrictive view of the circumstances in which it was foreseeable that psychiatric injury might be caused. But such decisions were criticised as out of touch with reality. Everyone knew that some people did suffer psychiatric illness as a result of witnessing distressing accidents in which other people particularly close relatives were involved. Some judges, sympathetic to the plaintiff in the particular case, took the opportunity to find as a fact that psychiatric injury had indeed been foreseeable. This made it difficult to explain why plaintiffs in other cases had failed. It seemed that if the foreseeability test was to be taken literally and applied in the same way as the test for liability for physical injury, it would be hard to know where the limits of liability could be drawn. In all but exceptional cases, the only question would be whether on the medical evidence, the psychiatric condition had been caused by the defendant’s negligent conduct.
There was a time when it seemed that English law might arrive at this position. It came within a hair’s breadth of doing so in McLoughlin v. O’Brian …, one of those cases in which one feels that a slight change in the composition of the appellate committee would have set the law on a different course. But the moment passed and when the question next came before Your Lordships House in Alcock v. Chief Constable of South Yorkshire Police …, judicial attitudes had changed. The view which had for some time been in the ascendancy, that the law of torts should, in principle aspire to provide a comprehensive system of corrective justice, giving legal sanction to a moral obligation on the part of anyone who has caused injury to another without justification to offer restitution or compensation, had been abandoned in favour of a cautious pragmatism. The House decided that liability for psychiatric injury should be restricted by what Lord Lloyd of Berwick in Page v. Smith afterwards called ‘control mechanisms’ that is to say more or less arbitrary conditions which a plaintiff had to satisfy and which were intended to keep liability within what was regarded as acceptable bounds.”
115. I shall signpost here the view expressed by me later on in this judgment that mechanisms are necessary to control the potential number of claims that may be made arising out of negligent exposure to asbestos. I have already indicated that as to the kind of control which should be applied, these five “nervous shock” cases arising out of “once off” accidents do not afford much assistance.
116. The question of controls is difficult and a reading of the Frost case makes it clear that there is considerable academic criticism of the relevant House of Lords decisions with opinions coming from both extremes, that is to say, the view that psychiatric injury should be treated no differently in any case than physical injury on the one hand and the view that damages should never be recoverable for psychiatric injury on the other. In relation to these opposing proposals Lord Hoffman had this to say at the bottom of p. 503:
“The appeal of these two opposing proposals rather depends upon where one starts from. If one starts from the proposition that in principle the law of torts is there to give legal force to an Aristotelian system of corrective justice, then there is obviously no valid distinction to be drawn between physical and psychiatric injury. On this view, the control mechanisms merely reflect a vulgar scepticism about the reality of psychiatric injury or a belief that it is less worthy of compensation than physical injury: therein the patient must minister to himself. On the other hand, if one starts from the imperfect reality of the way the law of torts actually works, in which the vast majority of cases of injury and disability, both physical and psychiatric, go uncompensated because the persons (if any) who cause the damage were not negligent (a question which often involves very fine distinctions) or because the plaintiff lacks the evidence or the resources to prove to a court that they were negligent, or because the potential defendants happen to have no money, then, questions of distributive justice tend to intrude themselves. Why should X receive generous compensation for his injury when Y receives nothing? Is the administration of so arbitrary and imperfect a system of compensation worth the very considerable cost? On this view, a uniform refusal to provide compensation for psychiatric injury adds little to the existing stock of anomaly in the law of torts and at least provides a rule which is easy to understand and cheap to administer.”
117. Like the English courts, I would not favour either of these extreme solutions but I would agree that pragmatic control mechanisms must be applied in actions for pure psychiatric damage and in many instances even in the interests of distributive justice.
118. Lord Hoffman at the end of p. 509 considers the suggestion of taking the incremental step of extending liability for psychiatric injury “to rescuers”. He points out that this would mean that the category of secondary victims would be confined to “spectators and bystanders” who take no part in dealing with the incident or its aftermath. He is against taking this step for two reasons. The first reason relates to difficulties of definition and is not really relevant to these appeals but the second reason is of some relevance as will be apparent when I come to giving my final conclusions. It is contained in the following passage:
“But the more important reason for not extending the law is that in my opinion the result will be quite unacceptable. I have used this word on a number of occasions and the time has come to explain what I mean. I do not mean that the burden of claims would be too great for the insurance market or the public funds, the two main sources for the payment of damages in tort. The Law Commission may have had this in mind when they said that removal of all the control mechanisms would lead to an ‘ unacceptable’ increase in claims, since they described it as a ‘floodgates’ argument. These are questions in which it is difficult to offer any concrete evidence and I am simply not in the position to form a view one way or the other. I am therefore willing to accept that, viewed against the total sums paid as damages for personal injury, the increase resulting from an extension of liability to helpers would be modest. But I think that such an extension would be unacceptable to the ordinary person because (though he might not put it this way) it would offend against his notions of distributive justice. He would think it unfair between one class of claimants and another, at best not treating like cases alike and, at worst, favouring the lest deserving against the more deserving. He would think it wrong that policemen, even as part of a general class of persons who rendered assistance, should have the right to compensation for psychiatric injury out of public funds while the bereaved relatives are sent away with nothing.”
119. I think that there are issues of distributive justice involved here in considering whether this court ought to allow these claims or not and I will return to this question in due course.
120. I turn now to the few “fear of disease” cases to which the court has been referred. These have included some American cases and in particular the case of Majca v. Beekil 682 ME 2d 253 Ill App 1 Dist (1997) (Illinois Appellate Court) which I have found helpful in clarifying my mind. In that case a woman who worked in a medical office and who had been crushed by a scalpel which had been placed in garbage by physicians brought an action for damages for her fear that she had contracted HIV. She and her husband were suing the physician in charge of the office who had since died of AIDS though that information only reached the plaintiffs after the woman’s cut. By that time she had undergone two tests which showed her to be HIV negative. The Court of first instance gave summary judgment in favour of the defendants and the plaintiffs appealed. The appellate court held that any reasonable fear by the woman and her husband that they had acquired HIV was not compensatable as they did not learn that the physician had AIDS until eight months after the woman’s cut, at which time she had undergone two tests which showed her to be HIV negative. In the judgment of the appellate court it was stated that Illinois courts permit a plaintiff who had suffered a physical impact and injury due to a defendant’s negligence to recover for the mental suffering that the injury directly causes, but, to use the English terminology, it would seem clear from the judgment of this court that the Illinois courts apply “control mechanisms”. Not only do they require “medically verifiable manifestations of severe emotional distress” but the foreseeable fear and distress must reach a degree of severity that justifies tort compensation. To quote the judgment “Thus, not all negligently caused fears are compensable”. Where there is a fear of future illness the court took the view that recovery of compensation should be restricted to severe emotional distress arising from serious fear occasioned by a substantial medical verifiable possibility of contracting the disease. A foreseeable fear of deadly disease may not be compensatable if the feared contingency is too unlikely. There is then an interesting passage of some relevance to these appeals.
“Where hysterical fear of a disease is sufficiently widespread, and popular knowledge concerning its aetiology is limited, a plaintiff may foreseeably experience severe emotional distress without medically verifiable evidence of a substantially increased risk of contracting the disease. Most courts have held that recovery for fear of disease should not extend to such foreseeable fears, because as commentators have noted, such broad recovery rewards ignorance about the disease and its causes.”
121. In Potter v. Firestone Tire and Rubber Company the Supreme Court of California in a judgment of Baxter J. held that:
“In the absence of present physical injury or illness recovery of damages for fear of cancer in a negligence action should be allowed only if the plaintiff pleads and proves that the fear stems from a knowledge which is corroborated by reasonable medical and scientific opinion that it is more likely than not that cancer will develop in the future due to toxic exposure.”
In a later part of the judgment under the heading “Damages” it is stated as follows:-
“Toxic exposure plaintiff is required to establish reasonableness of his or her fear of cancer in order to recover for damages for that fear, and reasonableness is not established by mere fact of exposure or significant increase in risk of cancer; carcinogenic or other toxic ingestion or exposure, without more, does not provide basis for fearing future physical injury or illness which law is prepared to recognise as reasonable, and the fact that one is aware that he or she has ingested or otherwise been exposed to carcinogen or other toxin without any regard to the nature, magnitude and proportion of the exposure or its likely consequences, provides no meaningful basis upon which to value the reasonableness of one’s fear.”
Again, at p. 800 of the report the following passage appears in the judgment:
“Our analysis of existing case law and policy consideration relevant to the availability of damages for emotional distress leaves us to conclude that, generally, in the absence of a present physical injury or illness, recovery of damages for fear of cancer in a negligence action should be allowed only if the plaintiff pleads and proves that the fear stems from a knowledge, corroborated by reliable, medical and scientific opinion, that it is more likely than not that the feared cancer will develop in the future due to the toxic exposure.”
122. The judgment sets out a number of public policy reasons for denying redress in such cases. Some of these are more relevant than others to the Irish situation. But I would summarise them as follows:
“1. Likely scarcity and high expense of insurance liability.
2. Undue conservatism in the testing of new drugs which may be of great benefit to the public.
3. Allowing recovery to all victims who have a fear of cancer may work to the detriment of those who sustain actual physical injury and those who ultimately develop cancer as a result of toxic exposure. Defendants and insurers may be unable to insure adequate compensation for the victims who actually develop cancer having regard to the heavy liability to those who merely fear it.
4. The difficulty of definition of a predictable threshold for recovery.
5. The necessity to limit the number of potential plaintiffs if emotional injury absent physical harm is to continue to be a recoverable item of damages in a negligence action. Having regard to the intangible nature of the loss the inadequacy of monetary damages to make whole the loss, the difficulty of measuring the damage and the societal cost of attempting to compensate the plaintiff.”
123. Other public policy considerations which have been put forward in other cases and, indeed, were put forward by Mr. Gleeson in this case are the dangers of fraudulent claims and problems of proof.
124. The next case is a fear of asbestos disease case. It is Temple-Inland Forest Products Corporation v. Reeves Carter [1993] S.W. 2nd 88 (Supreme Court of Texas) (1999). In that case electrical workers exposed to asbestos in business premises sued the business for negligence. They were not seeking damages for having contracted any disease arising from asbestos exposure but rather for “mental anguish damages for their fear of possibility of developing asbestos-related disease in future”. The court of first instance had dismissed the action. That decision had been affirmed in part and reversed in part by a regional Court of Appeal in Texas and it then ultimately came before the Supreme Court of Texas by way of writ of error. The unanimous opinion of the latter court was delivered by Justice Hecht and I will quote the following passage in his judgment:
“For the same reasons, like the Supreme Court and courts in most other jurisdictions, we cannot permit recovery of mental anguish damages in cases like this one. In almost all instances involving personal injury, the law allows for the recovery of accompanying mental anguish damages, even if the mental anguish is not itself physically manifested. But if bodily injury is at most latent and any eventual consequences uncertain as when a person’s exposure to asbestos has not produced disease then the case for recovery of mental anguish damages is much weaker. A person exposed to asbestos can certainly develop serious health problems, but he or she also may not. The difficulty in predicting whether exposure will cause any disease and if so, what disease, and the long latency period characteristic of asbestos-related diseases, make it very difficult for judges and juries to evaluate which exposure claims are serious and which are not. This difficulty in turn makes liability unpredictable, with some claims resulting in significant recovery while virtually indistinguishable claims are denied altogether. Some claimants would inevitably be overcompensated when, in the course of time, it happens that they never develop the disease they feared and others would be under compensated when it turns out that they developed a disease more serious even than they feared. Also claims for exposure could proliferate because in our society, as the Supreme Court observed ‘contacts, even extensive contacts with serious carcinogens are common’. Indeed most Americans are daily subjected to toxic substances in the air they breathe and the food they eat. Suits for mental anguish damages caused by exposure but which had not resulted in disease could compete with suits for manifest diseases for the legal system’s limited resources. If recovery were allowed in the absence of present disease, individuals might feel obliged to bring suit for such recovery prophylactically, against the possibility of future consequences from what is now an inchoate risk. This would exacerbate not only the multiplicity of suits but the unpredictability of results.”
125. We have been referred to three other fear of disease cases. The first is CJD Group B v. MRC [2000] Lloyds Rep Med 161. In that case the claimants were members of a group who as children suffered from dwarfism. They took part in clinical trials run by the defendants to improve their prospects of adulthood. Those trials included injection of Hartree HGH. At a later stage the defendants became aware of the risk that the HGH injection might carry a potentially lethal dose of the CJD agent. Nevertheless, they continued the trials. The claimants all discovered the dangers subsequently though clinicians, councillors or the media and it was assumed then for the purposes of a trial of a preliminary issue that all the claimants had a psychiatric injury derived from the awareness that they might develop CJD. In the course of his judgment, the trial judge Morland J. at p. 165 said the following:
“I am persuaded that the Group B plaintiffs should not be treated as primary victims. I accept the submissions of Mr. Fenwick that if they were, the ramifications would be incalculable. If they were primary victims so would be those exposed to asbestos or radiation, for primary liability may depend not upon common law negligence but on statutory duty or even strict liability even if they became aware of the risk of physical injury years later and consequently developed psychiatric injury. The potentiality of a huge number of claims in similar situations would arise making insurance difficult or impossible. It could involve all manner of products and a huge range of potential tortfeasors. It could inhibit the producers, prescribers and suppliers of a product from warning the public of the danger of a product. For example, a potentially lethal substance has been negligently introduced into a production batch of canned fruit. It would be disastrous if a supplier or producer were inhibited from warning the public of danger for fear that some of those who had already eaten the canned food might bring a claim as a primary victim for psychiatric injury triggered by the warning. Against such a claim the producer could not raise defences either that the psychiatric injury was unforeseeable to a person of normal fortitude or that the law insists upon certain control mechanisms to limit the number of potential claimants.”
Again, later on in the same page the learned judge makes the comment:
“Unlike some of the examples given by Mr. Fenwick in his ‘floodgates’ argument such as exposure to asbestos, radiation and contaminated blood transfusions the cohort of potential victims of psychiatric injury is small.”
126. I agree with the view expressed in the written submissions lodged in this appeal on behalf of the appellants that for very understandable reasons the judge was clearly highly sympathetic to the claimants in that case. The general tenor of the judgment would seem to indicate that he was treating them as a special case. Furthermore, he sought to rely on the speech of Lord Scarman in the McLoughlin case who expressed the view that if a psychiatric injury was reasonably foreseeable it should be untrammelled by spatial, physical or temporal limits. As counsel for the appellants point out in the written submissions, that view is not in accordance with established English law and clearly conflicts also with Kelly v. Hennessy at least in relation to non-primary victims. It is perfectly clear from his judgment, that Morland J. did not think that his decision could have any relevance to a fear of asbestos case.
127. The next such case is Bryan v. Phillilps New Zealand Limited ]1995] 1NZLR 633. This was a case where a New Zealand High Court judge refused to strike out an amended statement of claim in a fear of asbestos related disease case where the amended statement of claim included a claim for damages for “cancerphobia”. The judge pointed out that it was “a developing field of law” and that although there were American cases which made it clear that fear of cancer had to be reasonable and causally related to a defendant’s negligence the correct legal parameters had not been fully established and that it would be a matter for the trial judge. The case was not unstateable so that it could be struck out. That is all I need say about that case. It is perfectly clear that it is of no assistance. Indeed, no matter what the outcome of this appeal is, if a motion had been brought to strike out these actions in the High Court it would have had to be refused.
128. Finally, I would refer to an unreported judgment of Girvan J. delivered the 24th of May, 2000 in the High Court of Northern Ireland in a case called Bittles v. Harland and Wolffe Plc [2000] NIJB 209. In that case a plaintiff brought an action claiming damages for personal injuries sustained as a result of being exposed to asbestos dust during an earlier working life with the defendants. His case was that as a result of his exposure to asbestos in those years he had subsequently developed asymptomatic pleural plaques and that he had also suffered severe clinical depression as a result of the discovery that he had an asbestos related condition. The learned trial judge found as a fact that the plaintiff did suffer a depressive condition “which was significantly aggravated by the diagnosis of an asbestos related illness”. The relevant international cases do not seem to have been cited in court and the judge’s decision largely turned on the view he took that the pleural plaques constituted a physical injury (a view which would be controversial at least in this jurisdiction especially having regard to the definition of injury in the Civil Liability Act, 1961), Girvan J. effectively was treating the psychiatric injury as parasitic to the physical injury. At any rate, the plaintiff in this appeal had no pleural plaques. For these reasons the Bittles case would seem to be of no assistance to the respondent in this appeal.
129. It is against that background of the case law which I have reviewed that this court must decide as a matter of policy and of reasonableness whether claims for damages for psychiatric injury only and resulting from fear of asbestos related diseases of a degree which is objectively irrational are recoverable. Traditionally, courts do not always use the actual word “policy”. They may attempt to draw artificial limits to what can be regarded as being reasonably foreseeable or they may in considering proximity or other questions in relation to the existence of a duty of care invoke the concept of reasonableness so that a duty of care will not in fact be imposed if the court considers it unreasonable to do so. The third control mechanism which the court may impose is in relation to particular heads of damage or finally, they may expressly deny a claim on grounds of public policy.
130. I am quite satisfied that for the kind of reasons adumbrated in the American cases and also by reason of the objective irrationality of the fears of these respondents that they will contract asbestos related diseases, the appeal should be allowed. As I have already pointed out, the learned trial judge in this case considered that the psychiatric condition was reasonably foreseeable even when applying the “person of reasonable fortitude” standard. In relation to the issue of reasonable foreseeability I would not attach significance to the irrationality aspect. There has been such alarming treatment by the media about asbestos that it would be reasonably foreseeable that a person of normal fortitude might seriously suffer from irrational fears of contracting the diseases. But that is quite different from saying that the irrationality is irrelevant to the questions at issue on this appeal. In my view it would be unreasonable to impose a duty of care on employers whether they be State or non-State (there being no known justification for making any distinction) insured or uninsured to take precautions not merely that their employees will not contract disease but that they will not contract so serious a fear of contracting a disease however irrational that they develop a psychiatric overlay. The court should not permit compensation for irrationality in that way. It is quite different from the case of a plaintiff who suffers from traumatic neurasthenia linked with physical illness directly resulting from an accident. Furthermore, there would be an element of unfairness of the kind adverted to by Lord Hoffman as between employees exposed to such asbestos who may in fact suffer from great anxiety for the remainder of their lives but not such as could be characterised as psychiatric injury on the one hand and those who suffer from such anxiety which can be characterised as psychiatric injury on the other. Is it just that a worrier who has to take medication for his worry receives sums in the order of €50,000 or more whereas worriers who do not have to take such medication get nothing? I think not.
131. As I have reviewed the case law at some length with the result that my own views on the legal principles involved which I have expressed as they arose at different points in the judgment are in danger of becoming somewhat buried, I think it useful to gather together the more important principles which I perceive as applying. They are as follows:
1. Reasonable foreseeability is not the only determining factor in establishing a duty of care. “Proximity” which is given an elastic definition in the decided cases, the reasonableness of the imposition of a duty of care and questions of public policy can be additional determining factors.
2. The learned High Court judge after hearing submissions on the English case law in relation to secondary victims and bearing in mind the submission by counsel for the defendant that this was a claim by a “secondary victim” held that if he was bound to apply the standard of “a person of normal fortitude”, he considered it was reasonably foreseeable that such a person might develop an irrational worry that he would contract such disease notwithstanding the advice of his doctors and the consequent psychiatric condition. I am of opinion that it was open to the trial judge to take that view.
3. Mr. Gleeson argued on the appeal before this court that the respondent was a “secondary victim” in that, the respondent did not develop the worry and consequent psychiatric illness directly from the exposure to asbestos but rather from subsequent media information etc. There was some limited judicial support in the English case law for that extended meaning of “secondary victim”. Having regard to the view I have taken as to O’Neill J’s finding I do not find it necessary to express any final opinion on this matter not least because the primary/secondary distinction has been criticised (see for instance the judgment of Judge McMahon in Curran v. Cadbury (Ireland) Ltd. [2000] 1ILRM 343).
4. Having regard to factors to which I have referred in this judgment and indeed the factors also referred to in the judgment of the Chief Justice I take the view that it would be unreasonable to impose a duty of care on employers to guard against mere fear of a disease even if such fear might lead to a psychiatric condition.
5. I have deliberately refrained from expressing any view as to whether the implantation of fibres into the lung (which did occur in this case) or the development of pleural plaques (which did not occur) and in neither case involving any immediate symptoms could be described as a physical injury especially having regard to the definition of injury in the Civil Liability Acts. At the hearing of this appeal it was accepted that the damages were awarded for psychiatric injury only and I am approaching the case on that basis.
132. I would allow the appeal and set aside the judgment obtained in the High Court.
Kennedy -v- The Law Society
; [2005] IESC 23 [2005] 3 IR 228
Geoghegan J.
This appeal has a long history which includes two substantive judgments of this court delivered by Murphy J. and Fennelly J. on the 4th April, 2001 and the 20th December, 2001 respectively. The issues of fact in the dispute between the parties have long been finally determined and I do not intend to review them in any detail in this judgment. What is at issue in this appeal can be shortly explained by reference to the two previous decisions of this court already referred to. Originally, the third- named respondent, as an investigating accountant on behalf of the first-named respondent (“the Law Society”), had been entrusted by the Society with what has been described as a “two-pronged investigation”. One prong of the investigation was the ascertainment by her of whether the appellant had complied with the Accounts Regulations. That was the only disclosed purpose of the investigation. The other prong, however, which was not originally disclosed, was the investigation of suspect litigation processed by the appellant.
For the purposes of these investigations, the Law Society instituted proceedings by way of plenary summons seeking injunctions against the appellant in relation to his files. In those proceedings there was an application for interlocutory injunctions against the appellant which came on for hearing before Costello J. and which feature quite prominently in this appeal. At this stage of the judgment it is sufficient to note that, as of that stage, the appellant had become aware of the second purpose of the investigation.
The appellant delivered a defence and counterclaim in those proceedings. In the prayer part of the counterclaim he sought damages. In the body of the counterclaim taken in conjunction with the pleas in the Defence which of course were repeated for the purposes of the counterclaim the case pleaded for the purposes of the damages claim was essentially confined to an allegation that the Law Society and its officers, the two other respondents had acted ultra vires in authorising and carrying out the second prong of the investigation.
The appellant also instituted judicial review proceedings which were, in due course, consolidated with the plenary action to which I have already referred. For all practical purposes the issues raised by the judicial review proceedings were similar to the issues involved in the counterclaim to the plenary proceedings. In the statement grounding the judicial review application there was also a claim for damages as well as various judicial review type reliefs but in this instance the actual claim for damages was worded as “damages for breach of statutory and public duty”. Nothing, however, turns on this in my view.
Murphy J. in his said judgment of the 4th April, 2001 with whom the other members of the Supreme Court agreed concluded that the investigation of fraudulent claims is not an authorised purpose under the Solicitors Accounts Regulations, 1984. Murphy J. went on to observe:
“As an investigating accountant is not empowered by the Regulations to investigate fraudulent claims processed by a solicitor he may not be appointed for that purpose.”
On that occasion this court left over for further consideration the question of the legal consequences of these findings. A resumed hearing took place for that purpose and, as already mentioned, a secondary judgment was delivered by Fennelly J. on the 20th December, 2001 with which again all the other members of the court agreed. In that judgment, Fennelly J. pointed out that the issue then before the court flowed from the following passage in the earlier judgment of Murphy J.:
“In the present case it would seem that Ms Foley was appointed for a duality of purposes or on the basis of an ulterior motive. As the learned trial judge held, Ms Foley was required to undertake a ‘two-pronged investigation’. One prong of the investigation, that is to say, the ascertainment by her of whether Mr. Kennedy had complied with the Accounts Regulations was fully and properly disclosed; the other prong, the investigation of suspect litigation processed by Mr. Kennedy’s firm, was concealed initially though quickly became apparent.
Both investigations proceeded and were completed in spite of the objection by Mr. Kennedy to the production of certain confidential documents which, ultimately, he was required to produce by the order of Costello J. made on the 29th day of July, 1993. The report of Ms Foley formed the basis of the decision of the Society to seek an inquiry (in February 1996) by the Disciplinary Tribunal of the High Court into the conduct of Mr. Kennedy. Whether in reaching that decision the Society was entitled to rely on all or any part of Ms Foley’s report is a matter which would require further consideration …”
Fennelly J. goes on to quote the following passage in the last page of the
judgment of Murphy J.:
“There remains the question as to what legal consequences flow from the appointment by the Society for two purposes one of which was ultra vires and the other intra vires. The matter must be remitted to the High Court for the purposes of assessing damages (if any) to be awarded to Mr. Kennedy but it would seem appropriate for this court to determine, first, whether the appointment of Ms Foley was defective in whole or in part and, secondly, whether the report prepared by her or any part of it can be relied upon by the Society for any purpose. It will be necessary also to consider the nature of the order to be made by this court having regard to the complex history of the proceedings and the orders already made herein.”
Fennelly J. in his judgment came to the conclusion that although the appointment was invalid in his view and that the report the product of the inquiry was indissociable from the decision of the Compensation Fund Committee based upon it which had to be quashed, nevertheless by analogy with the views expressed by Kingsmill Moore J. in the famous O’Brien case, Fennelly J. expressed the view that in the absence of evidence of deliberate and known abuse, the Law Society would not be inhibited from relying on evidence which though unlawfully acquired in the circumstances could have been lawfully acquired.
The Supreme Court in its earlier decision had reserved to the High Court any question of damages to be paid to the appellant but Fennelly J. made clear that nothing in his judgment implied any entitlement to damages flowing from the invalidity of the appointing decision. The High Court were to consider the matter in the light of the general law including the then recent decision of this court in Glencar Exploration Plc v. Mayo County Council which had been decided on the 19th July, 2001 and, therefore, subsequently to the earlier Supreme Court decision.
That was the state of play in which this case returned to Kearns J. in the High Court. There would appear to be strong internal evidence to suggest that up to that point, the appellant and his legal advisers had believed that a finding of ultra vires would lead automatically to damages. In addition to submissions and comments which would seem to have that effect in the course of trials in the High Court both the counterclaim in the plenary proceedings and the grounding statement in the judicial review proceedings would give that impression. Clearly, the express clarification on this point given by Fennelly J. raised alarm bells. An application was brought to the High Court by the appellant seeking amendment of the Points of Claim so as hugely to increase the amount of damages claimed and to allege nine causes of action. On the 14th February, 2003 the High Court (Kearns J.) refused that motion to amend. No appeal was brought from that order. It is now attempted to appeal that order by way of this appeal but clearly that cannot be permitted. It would, at any rate, seem improbable in the extreme that this court would ever have allowed such an appeal having regard to the wide ranging amendments sought in the context of there having been a full trial in the High Court in 1999 of all factual issues lasting some nineteen days.
In refusing the application to amend, Kearns J. expressed the view that the existing pleadings were adequate to ground a damages claim. This is strongly disputed by the respondents who maintain that once the appellant is not entitled to damages for ultra vires conduct per se the pleadings do not disclose any other cause of action.
Kearns J., however, did not take this extreme view of the pleadings. In his judgment which is the subject of this appeal and is dated the 30th July, 2003, he said the following:
“The matter therefore comes back before this court on the original pleadings, coupled with additional particulars of personal injury, loss and damage which have been delivered on behalf of the plaintiff. On the question of any entitlement to damages it seems to me that two basic questions fall to be determined:
(a) Was the Law Society, by acting ultra vires in the manner found by the Supreme Court, guilty of misfeasance of public office?
(b) In the unauthorised use of its statutory powers, was the Law Society guilty of negligence such as would entitle the applicant to damages?
I propose to address these two primary issues, and then consider the remaining additional or ancillary claims at the conclusion of this judgment.”
For all practical purposes the learned trial judge in his judgment summarily dismissed the so-called “remaining additional or ancillary claims” and in my opinion, he was quite right to do so. He pointed out that they were not pleaded in the original pleadings and, of course, neither were they. He added that he was, in any event, satisfied that the facts as already found did not support any of these claims. I agree with both observations.
For much the same reasons, however, the learned trial judge, should not have embarked on a detailed treatment of the claims in negligence and breach of statutory duty. As a general proposition it can safely be said that apart from exceptional circumstances, a body such as the Law Society carrying out a public function in pursuance of a public duty is not liable to a private individual in tort unless the authority in so acting has committed the tort of misfeasance in public office. I will be explaining this tort in more detail later on in this judgment but subjective mala fides is an essential feature of it. To allow damages to be awarded for breach of an alleged duty of care owed to the individual on the basis of what a reasonable person might have done (and therefore an objective test) would be to undermine the clear limits attached to the tort of misfeasance in public office. I would accept that there may be circumstances where, without undermining the tort of misfeasance in public office, a private duty of care may be owed in respect of some particular aspect of the carrying out of the duty. But in such a case, the negligence would have to be precisely pleaded, if for no other reason, so as to enable it to be properly answered at the trial. The main item of negligence suggested in this case is that independent legal advice should have been obtained by the Law Society. But that case was neither pleaded nor made at the trial. I agree with the views expressed by Fennelly J. that effectively an administrative body could ground to a halt if it was under some legal obligation to obtain legal advice in relation to every issue that might arise. While I would not absolutely rule out that there may not be exceptional circumstances where such a duty would arise, it would be quite wrong to entertain it now on a hearing confined to the issue of damages and in circumstances where it has not been properly pleaded. Even if it had been properly pleaded and the Law Society had had a proper opportunity to meet it, it is difficult to conceive that it could possibly have succeeded. Being of that view, I do not consider that this is an appropriate case to consider again the interesting questions arising from the interplay particularly of Anns v. London Borough of Merton [1978] AC 728, Ward v. MacMaster [1988] I.R. 337 and Caparo v. Dickman [1990] 2 AC 605. Having regard to the constituents of the tort of misfeasance in public office, I think it unlikely that Lord Wilberforce (whose speech in Anns is now overruled by the House of Lords) would ever have countenanced a parallel Donoghue v. Stevenson private duty of care in a case such as this and I rather suspect that McCarthy J. who had expressed similar views in Ward would have considered that there was a “compelling exemption based upon public policy” given the ingredients of the tort of misfeasance in public office. I would have no hesitation, therefore, in rejecting the grounds of appeal based on negligence and breach of statutory duty.
Notwithstanding the infirmity of pleading, the learned trial judge acted correctly and within his discretion in my view in embarking upon a consideration of the first of the two main issues which he perceived as arising. Whatever the appellant and/or his legal advisers may have believed there was never a valid claim for damages for ultra vires conduct unless there was misfeasance of public office. That must, therefore, be implied in the claim for damages. Ideally, the Points of Claim should have contained more precise details of how it was alleged that the tort arose. But once the case had been sent back to the High Court by this court with a view to considering whether a damages claim arose or not I think it was reasonable for the learned High Court judge to adopt the course which he did adopt in relation to this aspect of the case.
The tort of misfeasance in public office has been variously though not inconsistently defined. Kearns J. in commencing his treatment of the subject said the following:
“Misfeasance in public office consists of a purported exercise of some power or authority by a public officer otherwise than in an honest attempt to perform the functions of his office whereby loss is caused to a claimant. Lack of vires is insufficient of itself to ground a cause of action sounding in damages. In the ordinary course, the quashing of the decision by judicial review completes the remedy.”
That is, I think, a reasonable summing up of the result of the authorities. The learned trial judge goes on to quote Keane J. (as he then was) in McDonnell v. Ireland [1998] 1 I.R. 134 at 156 –
“the … tort is only committed where the act in question is performed either maliciously or with actual knowledge that it is committed without jurisdiction and with the known consequence that it would injure the plaintiff …”
This passage begs the question to some extent as to what is meant by “maliciously”. Counsel for the appellant made it clear both in the court below and in this court that although malice was alleged it was not malice in the sense of an intention at the relevant time to injure the appellant. Rather it was malice in the sense of mala fides.
The most exhaustive treatment of the subject is to be found in the speech of Lord Steyn in the relatively recent decision of the House of Lords in Three Rivers District Council and Others v. Bank of England [2000] 3 All ER 1 as pointed out by Kearns J. Lord Steyn identified two different forms of liability in misfeasance of public office. There is what he called “targeted malice” by a public officer which is conduct intended to injure. That necessarily involves bad faith in the exercise of the public power for an improper or ulterior motive. The second form of liability identified by Lord Steyn is where a public officer acts knowing that he has no power to do the act complained of and that the act will probably injure the plaintiff. As Lord Steyn then puts it “it involves bad faith in as much as the public officer does not have an honest belief that his act is lawful.” It is the second type of liability which is claimed by the appellant in this case. Lord Steyn, however, expands on those definitions by pointing out that “reckless indifference to consequences is as blameworthy as deliberately seeking such consequences. It can therefore now be regarded as settled law that an act performed in reckless indifference as to the outcome is sufficient to ground the tort in its second form.”
Subjectivity and recklessness are not easy bedfellows though analogous concepts do apply in the criminal law in relation to say manslaughter and certain types of non-fatal injury offences. It is, I think necessary to consider whether this court should adopt this extension into the concept of “reckless indifference”.
Lord Steyn, with minor qualifications, was effectively approving the lengthy reasoned judgment at first instance of Clarke J. In the following passage of his speech at p. 9 of the report, Lord Steyn puts in context the relevance of “recklessness”:
“The basis for the action lies in the defendant taking a decision in the knowledge that it is an excess of the powers granted to him and that it is likely to cause damage to an individual or individuals. It is not every act beyond the powers vesting in a public officer which will ground the tort. The alternative form of liability requires an element of bad faith. This leads to what was a disputed issue. Counsel for the bank pointed out that there was no precedent in England before the present case which held recklessness to be a sufficient state of mind to ground the tort. Counsel argued that recklessness was insufficient. The Australian High Court and the Court of Appeal of New Zealand have ruled that recklessness is sufficient (see Northern Territory of Australia v. Mengel (1995) 185 CLR 307, Garrett v. A-G [1997] 2 NZLR 332, Rawlinson v. Rice [1997] 2 NZLR 651). Clarke J. (at 581) lucidly explained the reason for the inclusion of recklessness:
‘The reason why recklessness was regarded as sufficient by all members of the High Court in Mengel is perhaps most clearly seen in the judgment of Brennan J. It is that misfeasance consists in the purported exercise of a power otherwise than in an honest attempt to perform the relevant duty. It is that lack of honesty which makes the act an abuse of power’.”
Lord Steyn went on to deal with the limits of the tort. He had no hesitation in rejecting a test which had been suggested in the Court of Appeal and which was stricter than any test laid down by Clarke J., namely, a test of knowledge or foresight that a decision would cause damage. His Lordship did not consider that such a test readily fitted into the standard of proof generally required in the law of tort and specifically in the case of an intentional tort. Indeed he considered that such a test would unnecessarily emasculate the effectiveness of the tort. Lord Steyn considered that the real choice was between the test of knowledge that the decision would probably damage the plaintiff (which was the test suggested by Clarke J.) and the test of reasonable foreseeability which was contended for by counsel for the plaintiffs in that case. Lord Steyn went on to make the following comment at p. 12 of the report:
“And there has been no academic criticism of the view of Clarke J. that a test of foreseeability is not enough in this tort. Given that his groundbreaking first instance judgment has been poured over by many judicial and academic eyes, this is a factor of some significance. Nevertheless, it is necessary to consider the merits of the competing solutions from the point of view of principle and legal policy.”
In the event Lord Steyn came down firmly in favour of the test enunciated by Clarke J. and I find myself in agreement with his reasoning. If the “reasonable foreseeability” test was permitted it would introduce an objective element and effectively remove the requirement of bad faith. To the argument that recovery of all foreseeable losses was necessary in a democracy as a constraint upon abuse of executive and administrative power, Lord Steyn pointed out that the force of that argument was “substantially reduced by the recognition that subjective recklessness on the part of a public officer in acting in excess of his powers is sufficient. Recklessness about the consequences of his act, in the sense of not caring whether the consequences happen or not, is therefore sufficient in law.” He went on to point out that this test represented a satisfactory balance between two competing policy considerations, that is to say, invoking the law of tort on the one hand to combat executive and administrative abuse of power and on the other hand not allowing public officers to be “assailed by unmeritorious actions”.
A feature of advocacy in this court in recent years, largely due to the internet, has been the extensive citing of case law from common law jurisdictions such as Australia, New Zealand and Canada quite apart from UK decisions. In cases therefore involving pure common law unmodified by either the Constitution or Irish statute law it would seem to me to be particularly important that considerable respect be paid to any consensus that may have emerged in these common law jurisdictions without in any way surrendering the right to disagree. I do not think that there is any Irish authority which prevents the element of subjective recklessness being introduced into the ingredients of the tort of misfeasance in public office (a tort which has not received much judicial consideration in this jurisdiction at any rate). I would, therefore, favour acceptance in this jurisdiction of that concept in the context in which it is introduced by Clarke J. and ultimately in the House of Lords by Lord Steyn.
I turn now to consider whether the respondents acted in bad faith in the sense relevant to the tort the ingredients of which have been defined. The case made in this regard is extremely thin. It is largely based on a hearing of an interlocutory injunction application made before Costello J. in the High Court on the 30th July, 1993. The Law Society’s counsel on that occasion was Mr. Patrick MacEntee, S.C. and there was an issue of getting access to client files in the possession of the appellant. After the judge had indicated that following a decision of the English Court of Appeal he was of the view that privilege as such did not arise but that there could be questions as to the duty of confidentiality being a contractual duty. Mr. MacEntee then said the following:
“That would be my submission, as far as it goes. But in this case the situation is that, having gone in, certain matters have come to our attention, matters which lead us to believe that we should investigate matters that are possibly outside the strict scope of the Solicitors’ Accounts Regulations. These are matters on which we have a well grounded suspicion of irregularity and no more than that.
The matter that the Society would like Your Lordship to decide is whether having gone in under the Solicitors’ Accounts Regulations and matters having come to our attention which oblige us to use or to exercise the obligation of the general supervision of solicitors imposed upon us by our Charter and by the 1954 and 1960 Acts and by the legislative process in giving us power to control solicitors and regulate their professional conduct, we are obliged as we believe, to enlarge our inquiry and to see documents and papers relating to matters that may not be confined exclusively to the investigation of irregularities under the Solicitors’ Accounts Regulations but may disclose other irregularities.
There is no express power to do this given by statute that I have been able to find but the Solicitors Act, 1954 is expressed in its opening preamble to be ‘an Act to provide for the admission enrolment and control of solicitors’.”
After some further discussion between the judge and Mr. MacEntee, Costello J. said the following:
“… it seems to me that under the statutory regulations you have a very clear power. Certainly there is a statutory duty on the solicitor. If in the course of carrying out an investigation you have now come to the conclusion that you want wider inspection, then you would have to show – and there is a legal basis for this – why in the circumstances. Need we go into that today. If the regulations are construed as you want them construed, the accountant can ask for all the files for the purposes of the regulations and Mr. Kennedy will have to cooperate and produce all the files. If you want to carry out an investigation for other purposes, you could then take such steps as are necessary to do that if Mr. Kennedy objects to your doing so.”
Mr. MacEntee replied as follows:
“Mr. Kennedy has indicated objections to our doing so, My Lord. As Your Lordship will readily appreciate, any investigation into suspected irregularities – and I hasten to say that it is no more than a suspicion – must be carried out with dispatch. As Your Lordship is aware from the affidavit of Mr. Connolly, Mr. Kennedy has apparently been writing to clients and they have been taking their files away.”
Mr. MacEntee then addressed the judge on what he considered to be the wide powers confirmed by regulation. Costello J. proceeded to grant a number of injunctions and in the course of doing so he referred to the wider claim and said the following:
“Any rights which the Society may have in relation to this second claim, a claim on which I am expressing no opinion, will be protected. It is then for the Society to decide whether they want to re-enter this matter in the Long Vacation and I will give them liberty to do so.”
After dealing with questions there was then the following exchange between Mr. MacEntee and the judge.
“Mr. MacEntee: I should tell Your Lordship that it is the intention of the Society to continue its investigation and to call for the production of all files which it feels it ought to examine, be they files in relation to which they have no suspicions whatever or files in relation to which it has a suspicion other than an accounts suspicion.
Judge: That is a fair point. You have indicated what the Society wants to do, Mr. MacEntee. Should there be any dispute about it, it can be raised on motion.”
It became quite clear that there was no bad faith on the part of the Society in initially not disclosing the second reason why it wanted the files. The investigation could have been defeated if there was such disclosure and that appears to have been the only motive. Furthermore, the transcript of the hearing before Costello J. does not, in my opinion, support the view either that the Law Society knew that it was acting illegally or that there was any order or ruling by Costello J. that the Law Society had to return to the court for permission to carry out any investigations which went beyond what was specified in the Accounting Regulations. All the findings of fact by Kearns J. on the issue of mala fides would appear to me to be well-founded and were entirely open on the evidence. It is rather absurd, indeed, to suggest that the Law Society allegedly knowing at this very early stage that they were acting illegally but had then gone through all the processes of High Court and Supreme Court etc. purporting to establish otherwise.
There is, of course, a further problem for the appellant on this appeal which has been pointed out by counsel for the respondents in their written and oral submissions. It is said by reference to transcript that the appellant disclaimed reliance on malice in relation to the period for which the court was dealing, that is to say, April to October 1993. In their written submissions, counsel for the respondents set out the transcript of an exchange between the court and Mr. Gilhooly, S.C. counsel for the appellant, at the hearing. The trial judge pressed Mr. Gilhooly very hard to make it clear whether he was making a case of malice or not. I am not satisfied that the matter was ever in fact clarified even though the judge thanked counsel for the clarification. Nor was it all that clear at the hearing before this court as to what Mr. Gilhooly had conceded in the court below. The trial judge appears to have dealt with the matter in fact on the assumption that “targeted malice” was not being alleged but that the second basis for the tort of malfeasance in public office was an issue. I am approaching the appeal also on that assumption though the position is none too clear.
Returning to the facts, it is to be noted that Kearns J. in his original judgment of the 5th October, 1999 at p. 39 said the following:
“According to Mr. Kennedy, he informed Mr. Galvin that the files were targeted and that there was a clear pattern to the manner in which the inspector was looking at the files.
Mr. Galvin for his part has quite a different recollection of this telephone conversation with Mr. Kennedy. His recollection, which I accept, is to the effect that Mr. Kennedy was concerned that some individual members of the Council of the Law Society might ‘have it in for him’ and that he Mr. Galvin was able to reassure Mr. Kennedy that that was not in fact the position.
From his own description of these conversations both with Mr. Galvin and Ms. Foley, I am quite satisfied that Mr. Kennedy was well aware within days of the inception of this investigation that the question of fraudulent claims was in fact being looked at by the Law Society accountant in addition to a thorough ‘root and branch’ investigation of the books and accounts of the practice which was proceeding simultaneously and which came across evidence of many apparent irregularities.”
In an earlier part of the same judgment at p. 13 the learned judge referred to the evidence of Mr. Ward McEllin, the then Chairman of the Compensation Fund Committee of the Law Society and said that Mr. McEllin had explained more frankly the policy of the Law Society in the course of his evidence. The judge went on to note “his view simply was that the investigation of fraudulent claims could not be disclosed to the investigation subject. He advised the court that if a solicitor is being dishonest and is involved in fraudulent claims, ‘you do not knock on his door to say … we are here to look at your files to see if you are fraudulent. If you do the files will disappear or be filleted or be recreated.”
At p. 13 of the judgment of Kearns J. of the 30th July, 2003 which is the judgment now under appeal, the learned judge made the following crucial finding:
“Accepting as I do that the foregoing accurately represents the applicable law on this topic, it follows that the court must consider all the surrounding facts and circumstances of this investigation to see if the Law Society, as alleged by the applicant, either had actual knowledge that it lacked the necessary statutory powers to do what it did, or was guilty of ‘reckless indifference’ as to the legality of its actions.
For the purpose of arriving at a conclusion in this regard I have re-read the portions of transcript to which I have been referred by the parties, including the evidence of Mr. Connolly, Ms. Foley, Mr. Galvin, Mr. McEllin and Mr. O’Rourke, the accountant whose evidence I was specifically asked to read by Mr. Gilhooly on behalf of Mr. Kennedy. I have also had regard to the documentation prepared for the injunction application before Costello J. and to the transcript of those proceedings. Furthermore, I have had regard to my own findings of fact already made, which have been neither challenged nor disturbed on appeal.
I conclude that the applicant falls short, on the balance of probabilities, of establishing a case of misfeasance in public office either on the basis that the Law Society had actual knowledge, or was recklessly indifferent to the possibility, that it lacked appropriate statutory powers for the form of investigation which it in fact undertook. The factors or reasons which persuade me to this conclusion are as follows:
(a) The Law Society, at the time of its decision to investigate, had available to it information from reliable sources indicating a connection between Mr. Kennedy and Mr. Rossi Walsh, a notorious criminal, who was involved in promoting fraudulent claims. Walsh had referred 22 claims to Mr. Kennedy’s office. This information can only be seen, in my view, as providing a reasonable cause or basis (and not a capricious or malicious one), for the Law Society to take action by way of investigation, even if the decision itself to rely on the 1984 Regulations for that – and the other ‘legal’ purpose was ultra vires.
(b) The statutory powers availed of by the Law Society for the purposes of this investigation had been relied upon by the Law Society without objection or legal challenge, to investigate other solicitors’ practices for fraudulent claims.
(c) An investigation under the Regulations was in no sense untimely, having regard to the lapse of time since the last investigation and the policy of the Society to conduct regular investigations or inspections. Additional factors considered at the time and referred to in evidence by Mr. Connolly, Registrar of the Law Society, including a history of 23 complaints against the practice over the preceding seven years and the discovery of irregularities on previous investigations.
(d) The express finding in my judgment in favour of Mr. Galvin’s account of a conversation between Mr. Kennedy and Mr. Galvin when he contradicted Mr. Kennedy’s belief that members of the Law Society ‘had it in for him’ (p. 39). Further, it has now been clearly accepted by or on behalf of the applicant that no question of malice in its subjective sense arises in relation to either the decision to investigate or the course of the investigation up to October, 1993.
(e) The finding in my judgment that the purpose of the investigation was as to 50% an investigation into the books and accounts of the practice, and 50% into the possibility of fraudulent claims was replicated on the issue of purpose or motive and has not been challenged. Such a finding is incompatible with any suggestion that the inquiry as a whole was launched either with malice or reckless indifference.
(f) While the applicant contends that the initial non-disclosure of the ‘hidden agenda’ is indicative of bad faith, I prefer and accept the explanation offered by Mr. Ward McEllin that the reason for non- disclosure was to protect the investigation from the possibility that files might be removed, ‘filleted’ or destroyed. Furthermore, the accountancy evidence before me indicated that non-disclosure of this part of an investigation to a person investigated might be permissible where fraud was suspected (p. 110). Counsel for Mr. Kennedy referred the court to the Registrar’s statement in evidence (Day 12, p. 79) to the effect that if suspicions of fraudulent claims were mentioned to him when writing to Mr. Kennedy it could leave the Society open to being sued. While Mr. Gilhooly relies on this evidence as showing bad faith and an absence of honest belief on the part of the Registrar that the Society possessed the requisite powers under the Regulations, it seems to me to be no more than an expression of prudence or caution to which the Registrar typically had regard when notifying solicitors of pending investigations. He explained (pp. 79/80) that it was not the practice of the Law Society to alert individual solicitors that they had suspicions or that there were allegations. As he stated, the practice was that the investigators ‘would do the entire investigation from A to Z’ and not concentrate on one particular area. It seems to me that Mr. Connolly had more in mind the possibility of defamation proceedings if his letter went too far and the investigation yielded up nothing. While this was undoubtedly flawed reasoning on Mr. Connolly’s part, and while the Law Society, as they now admit, handled this part of the investigation badly, I do not find that these shortcomings, on the balance of probabilities, establish actual knowledge or reckless indifference of the want of statutory authority for the form of investigation which occurred.
(g) In so far as the injunction application before Costello J. is concerned, I am satisfied that the fact that ‘other inquiries’ were in contemplation by the Law Society was disclosed during that hearing. Furthermore, the actual nature of the ‘hidden agenda’ was spelled out in open court by counsel for the applicant without demur from counsel for the Law Society. I am satisfied there was no material non-disclosure in the context of the injunction application which would establish actual knowledge or reckless indifference on the part of the Law Society that they lacked statutory authority to investigate the possibility of fraudulent claims.”
I have deliberately included this lengthy quotation from the judgment of Kearns J. because the findings of fact contained within that passage would seem to me to be fatal to the appellant’s appeal. What clearly emerges from the judgment of the learned trial judge was his view that there was no evidence of bad faith on the part of the Law Society which would support an allegation by the appellant of deliberate or reckless behaviour. In so far as he has made primary findings of fact these cannot be interfered with by this court. In so far as he has drawn inferences it would seem to me that they were legitimate inferences.
Accordingly, I would dismiss the appeal.
McComiskey v. McDermott
[1974] IR 75
Walsh J. Supreme Court
On the 25th October, 1968, the plaintiff and defendant were participating in a motor-car rally in County Wicklow. The defendant was driving his motor car as a competitor in the rally and the plaintiff was his navigator and was a passenger in the motor car. The rally took place on the public road at a time when it was being used by other members of the public. The road was not closed to other users during the course of the rally and participation in the rally did not necessarily involve any breach of the road-traffic laws or regulations. The rally was a competition among the various motorists participating and was a test of driving ability and skill. One of the characteristics of this type of motor sport is that the competitors are penalised if they are late at arriving at various checkpoints and are penalised if they arrive there too early. They are also required to maintain an average speed of 35 m.p.h. which is only 5 m.p.h. more than half of the maximum speed permitted on the public roads in this country. There is therefore no question of either the plaintiff or the defendant being engaged in some unlawful act. The principles of law which relate to the liability of a defendant or the right of a plaintiff which have arisen in cases of motor cars racing on public highways do not arise in this case.
In the course of this particular rally the defendant’s motor car overturned and the plaintiff was injured. The circumstances which led to the overturning of the motor car were that, as the motor car came around a bend, two cars were observed to be blocking the roadway about 45 yards ahead. One of these cars belonged to an official who was engaged in the rally, and the other belonged to a competitor. The defendant initially tried braking his motor car but, when he believed that this would not be effective to avoid a collision with the two parked cars, he directed his motor car into the ditch on the right-hand side of the road and this caused it to overturn.
The plaintiff instituted proceedings for damages for negligence against the defendant and the case was tried before Mr. Justice Murnaghan and a jury in the High Court on the 25th and 26th November, 1970. At the conclusion of the case the following questions were left to the jury by the learned trial judge.
“1. Did the plaintiff impliedly agree with the defendant to waive his legal right in respect of any negligence of the defendant causing injury to the plaintiff? Answer: Yes.
2. Was the defendant negligent? Answer: No.
3. Was the plaintiff negligent? Answer: [None]”
In the result no damages were assessed and judgment was entered for the defendant.
The circumstances which caused the judge to leave the first question to the jury were that there was attached to the instrument board of the defendant’s motor car a notice to the effect that passengers travelled in the car at their own risk. In fact this notice was on the car when the defendant purchased it second-hand in England and he had not bothered to remove the notice. The plaintiff was aware that this notice was on the car when the defendant bought it and it is abundantly clear from the evidence in this case that neither the plaintiff nor the defendant regarded the notice as affecting their relationship. It was not intended by the defendant to be an intimation to the plaintiff of the terms or conditions under which he travelled in the car, nor was it accepted by the plaintiff as such. For the reasons given in O’Hanlon v. Electricity Supply Board 11, the statutory defence afforded by s. 34, sub-s. 1, of the Civil Liability Act, 1961, did not arise in this case.12In so far as the plaintiff’s appeal is being taken against the fact that the judge left this question to the jury, it should succeed. There was no evidence in this case which warranted leaving the question to the jury.
The plaintiff has also appealed on the grounds that the finding of the jury that the defendant was not negligent was without evidence and perverse, and that the jury’s answer to this question was coloured and prejudiced by their consideration of the answer to the first question which ought not to have been left to them. The notice of appeal also claimed that the learned trial judge was incorrect in law in not telling the jury that on the defendant’s own evidence on the issue of liability they ought to have found him guilty of negligence, and that the judge did not adequately deal with or explain to the jury the evidence on the issue of the defendant’s liability. In effect, the plaintiff also says that the evidence against the defendant on the issue of liability was so coercive that it was not open to a jury to acquit the defendant of negligence.
In the main, the submissions made on behalf of the defendant in the course of this appeal were to the effect that since a negligence action is an action for breach of duty, the duty is to be measured in the light of the circumstances governing the situation in which the act complained of happened. Reduced to simpler terms, the defendant has submitted that the only duty the defendant owed to the plaintiff was to act in accordance with the standards of the ordinary, reasonable and prudent rally driver. In my view this submission is an over-simplification. The most important and the governing circumstance of this episode was that it occurred on the public highway at a time when the highway was open to use and was being used by other members of the public. If this particular competition had taken place in a private place or on the highway at a time when it was closed to ordinary use by members of the public, the circumstances would be different even for such members of the public as attended as spectators. There have been a number of cases dealing with episodes leading to injury to either participants or spectators at horse shows, motor races, motor-cycle races or competitions held in places which were not open to ordinary public traffic. One of these cases ( Wilks v.Cheltenham Cycle Club 13) was cited and relied upon in the present case. In my view, there is no parallel between the circumstances of that case and the present one. Nettleshipv. Weston 14 is closer to the present case; in that case the act of a learner driver caused injury to a passenger instructor, who was seated beside the learner, while the car was being driven on the public highway and it was held by the English Court of Appeal that the duty owed
by the learner driver to the passenger instructor was the same objective standard as was owed by every driver on the public highway to other persons using the highway. The fact that the driver in question was so inexperienced or so unskilled as not to have the ability or skill of the ordinary reasonable and prudent driver was irrelevant.
In my view, in the present case the governing circumstance is that the motor car was being driven on the public highway at a time when the highway was being used as such. The duty which the defendant owed to all persons using that highway, including the passenger in his own car, was the same. To hold otherwise would lead to rather absurd results. For example, if during the course of the rally the defendant had picked up a passenger who knew that he was in a participating motor car (but who was not himself in any sense a participant) and if the car had been involved in an accident, due to the negligent driving of the defendant, which injured not merely the navigator but also the casual passenger and a pedestrian who happened to be walking along the road at the same time, it could not be seriously contemplated that the liability of the driver of the motor car to each of the injured parties would be governed by different standards of duty. Apart from facts which would warrant the application of the statutory defence given by s. 34, sub-s. 1, of the Act of 1961, the conduct of the plaintiff during the course of the exercise or the fact that he participated in this competitive venture with the driver may be relevant in terms of contributory negligence but they are not relevant in determining the standard of care which is to be observed by the defendant. It was the duty of the defendant to use proper care not to cause injury to persons using the highway, including his own passengers, and that involved not merely avoiding excessive speed but also keeping a proper look out. This duty was owed to the plaintiff as he was a person who might reasonably expect to be injured by the omission to take such care. If a pedestrian had been hit by the defendant’s motor car and the facts of the case warranted a finding of negligence against the defendant, then the plaintiff would have been equally entitled to a verdict on this issue against the defendant.
The immediate cause of the accident in question was the fact that the defendant approached and rounded a bend without knowing what a bad bend it was and without slowing down to ascertain that fact and apparently without making provision for the possibility of something being on the roadway around the bend, which in fact was the case. While it is true that he relied upon the plaintiff, or passenger-navigator, to inform him of the nature of the bend, I do not think that that exonerates him from taking care. Furthermore, the navigator could not have told him that there was something, which was invisible to both of them, on the road around the bend. Persons rounding a bend, particularly one which is unknown to them, should always anticipate at least the possibility of there being something on the roadway around the bend and should take precautions as the circumstances would dictate to enable them reasonably to cope with such a situation. This the defendant did not do and when the situation revealed itself he found he was unable to control the situation because of the bad road surface and the downward gradient, so he chose to go into the ditch. In his evidence he agreed that he knew there would be such a risk because of the nature of the roads used. According to his evidence he was also aware that every time he came to a bend he had to have due regard to the fact that he might encounter a pedestrian or an animal or another vehicle around the bend. In my view, the defendant’s evidence was such as to make a finding of negligence against him coercive.
Apart from that conclusion, it should be noted that the learned trial judge in his directions to the jury correctly pointed out to them that the defendant had to take care by looking out for the ordinary things one might expect to meet on a road. The learned trial judge also informed the jury that a person driving a motor car had a duty to take such care “as the circumstances demand not to cause injury to anybody else.” The learned trial judge did not, however, explain to the jury that the duty which the defendant owed to the plaintiff was no less than that which he owed to other users of the road. In fact his address to the jury tended to give a somewhat opposite impression by the amount of attention and time he devoted to the allegations of negligence on the part of the plaintiff, and by indicating that part of the case against the plaintiff was that he had failed to give proper instructions to the defendant as to the location and severity of the bend and the position of the checkpoint. Speaking of the defendant’s duties, he said: “But at the same time he has to remember the other things to do. This is to try to drive so as to be at a certain point at a certain time and, as I say, at all times influenced by this element of competition. These are the matters that have to be borne in mind, as I say, to keep this case in proper perspective.” In my view, this, taken in conjunction with his observations about the possibility of the failure of the plaintiff at his task as navigator, were calculated to give the jury the impression that the duty owed by the defendant was something other than the ordinary duty of care and was something special and peculiar to the plaintiff.
Lastly, a complaint was made as to the position of the questions on the issue paper. Although the trial judge, before he came to the question of the statutory defence, addressed the jury on the topic of the negligence of both the defendant and the plaintiff, the first question on the issue paper referred to the statutory defence and the second question referred to the defendant’s negligence and the third referred to the plaintiff’s negligence. In my view, it was unwise to have put the questions in this order, first, because the question of whether or not the statutory defence arises is irrelevant unless and until the jury have found the defendant was negligent. Secondly, the judge told the jury that the effect of an affirmative answer to the first question would be to hold that the plaintiff had exonerated the defendant from the negligence which ultimately caused the damage to the plaintiff, and he made it quite clear to the jury that in such circumstances the plaintiff could not succeed. At the same time the learned trial judge expressly required the jury to make a finding also on the second question. It appears to me that this order of putting the questions left open the danger of the jury’s answer on the second question being influenced by their answer to the first question. However, I am not prepared to hold that the trial was unsatisfactory on this count: I am content to point out the inadvisability of thiscourse, particularly where the judge was, as in this case, anxious to have a finding under both headings. In such a case the questions should be placed in the order in which the answer to one is least likely to influence the answer to the other.
For the reasons I have given I am of opinion that the judgment in favour of the defendant in this case should be set aside. I do not think it is a proper case in which to order judgment to be entered for the plaintiff in respect of the issue of the negligence of the defendant though, for the reasons I have already given, I believe that evidence to be coercive because there is still the issue of the plaintiff’s negligence to be tried and I think it would be more satisfactory in the circumstances of this case that the whole issue of negligence between the parties should be the subject of a retrial. I would order a new trial on the issue of the defendant’s negligence and the plaintiff’s negligence and, if the matter should arise, the apportionment of fault.
HENCHY J.
:
In October, 1968, the plaintiff and the defendant were students in University College, Dublin. The plaintiff was studying medicine and the defendant engineering. Their common interest was motor cars and, more particularly, the sport of motor rallying. In a motor rally the competing cars start one after the other at fixed intervals from the same point, and they are expected to arrive at a series of checkpoints at predetermined times. If they are late at any checkpoint, they incur penalty marks; if they are early, they are penalised even more. Each car is manned by a team consisting of a driver and a navigator. The navigator’s task is to guide the driver by reference to a map and to act as time-keeper.
The plaintiff and the defendant decided to enter as a team in a rally for novices that was being held on the night of the 25th October, 1968, by the Dublin University Motor Club. The plaintiff had been rallying for three years, but this was only the defendant’s second rally. They were to compete in the defendant’s car, and the defendant was to be the driver. The plaintiff, with the help of a special lamp, a half-inch road map and a compass, was to be the navigator. They started off from Kilmacanogue, County Wicklow, on what was a dark, wet night. The cars moved off at one-minute intervals and were expected to pass 35 checkpoints. To cover the route (of which the teams were informed only shortly before starting) without incurring penalties, the drivers would have to maintain an average speed of 35 m.p.h.
The plaintiff and the defendant had negotiated four checkpoints without incurring penalties when they found themselves on a narrow secondary road in the Wicklow hills. The plaintiff advised the defendant that in a matter of seconds they would arrive at the fifth checkpoint. Just then they came to a sharp left-hand bend. The defendant says that when he came around the bend he saw, about 45 yards ahead and downhill, two cars blocking the road. It later transpired that this was the next checkpoint and that one of the cars, which was not blocking the road, was that of an official who was checking the competitors’ cars as they arrived there, and that the other car, which was causing the obstruction, was that of a competitor. The defendant braked as soon as he saw the obstruction but, because of the muddy downhill road, the braking was not effective and the defendant, believing that he could not pull up before he reached the two parked cars, released the brake and directed his car into the ditch at the right-hand side of the road. The car overturned and the plaintiff was injured.
The plaintiff instituted proceedings in the High Court in which he claimed damages for negligence against the defendant, but judgment was given against him for the jury held (a) that his claim was defeated because he had impliedly agreed to waive his legal right in respect of any negligence of the defendant causing injury to him, and (b) that the defendant was not negligent. From those findings the plaintiff now appeals to this Court.
The question whether the plaintiff had agreed to waive his legal rights in respect of the defendant’s negligence so as to enable the defendant to rely on the statutory defence15 given by s. 34, sub-s. 1, of the Civil Liability Act, 1961, arose in this way. When the defendant purchased this car in England it had attached to the
instrument fascia a notice to the effect that passengers travelled in the car at their own risk. The defendant had not bothered to remove the notice. The plaintiff was present when the car was bought by the defendant and consequently knew of the notice. The only reference made to it before the accident was on one occasion when the plaintiff jokingly said to the defendant that unless he removed the notice no one would sit in the car. The plaintiff denied in evidence that he took the notice seriously when he travelled as a passenger in the car; and the defendant, although his defence formally pleaded that the plaintiff had waived his right to sue, failed to state in evidence that he was relying on the notice when he carried the plaintiff as a passenger. Because the plaintiff was present when the defendant bought this car, he knew that it was the former owner who put the warning notice in the car, so the mere continuance of the notice in the car would not be sufficient to absolve the defendant unless it was proved, or could be inferred, that the defendant adopted the notice as one coming from him and intended to bind the plaintiff and that the plaintiff so accepted it: see O’Hanlon v. Electricity Supply Board. 16 The evidence fell short of that. In fact, the plaintiff said in evidence that he disregarded the notice, and the defendant failed to assert that he intended or expected the plaintiff to treat the notice as a binding or effective one. In these circumstances, I consider the jury’s verdict that the plaintiff had waived his right to sue to be unsupported by evidence and to be therefore invalid.
There remains the finding by the jury, in answer to the second question, that the defendant was not negligent. Counsel for the plaintiff suggest, in the first place, that this finding may be vitiated because it was made after the jury had wrongly held, in answer to the first question, that the plaintiff had waived his right to sue in respect of the negligence of the defendant. Having regard to the sequence of the directions given by the judge to the jury, I do not think it can be assumed that the jury necessarily answered the first question before they answered the second. However, even if they did, the fact that they unnecessarily and incorrectly answered the first question does not invalidate their answer to the second question. They had been fully and correctly instructed by the trial judge as to the legal approach to each of those questions and there was nothing in the judge’s charge to suggest that the answer to the first question should, or could, govern the answer to the second. Therefore, if the answer to the second question is otherwise sustainable, I do not think that it should be set aside because of the answer to the first question.
However, counsel for the plaintiff contend that the answer cannot stand in the light of the evidence. It is conceded that the relevant evidence for the purpose of this submission is the version given by the defendant. Briefly, that evidence is that the defendant rounded a sharp bend on this narrow, muddy, second-class, mountain road on a dark night with heavy rain. When he came round the bend he saw, about 45 yards ahead of him on a 1:10 downhill slope, the car of the preceding competitor blocking the road. He braked ineffectively because of the muddy surface and, believing that he would not be able to stop before reaching the car ahead, he drove into the ditch at the side of the road thus causing his car to overturn and the plaintiff to be injured.
Was that conduct negligence on his part? Counsel for the plaintiff say that it was; they say that he should have been driving at a speed which would have enabled him to cope with an emergency such as this, and that the duty he owed to the plaintiff was no more nor less than the duty to show care that a motorist owes to other users of the road. I think it is important to bear in mind that, while the general duty owed by a motorist to other users of the road is the objective one of showing due and reasonable care, the duty becomes particularized and personalized by the circumstances of the case. For example, it might be negligence to drive at 50 m.p.h. past a group of boisterous children coming from school, and yet it may not be negligence to drive at that speed past a group of adults. Therefore, it is necessary in each case to consider who is the person claiming to be owed the duty of care, who is the person it is claimed against, and what are the circumstances.
The essential feature of the relationship between the plaintiff and the defendant in this case is that they were bound together as a team engaged in a joint competitive venture. Each undertook to use his skills towards the common end of scoring as well as possible in the competition. To achieve this the plaintiff, as navigator, had to act as a map-reader and time-keeper and to convey the necessary information to the defendant, as driver; and then it was for the defendant to use his driving skill to the best advantage in the light of that information. All this had to be done in the context of the prevailing climatic and other conditions, the fact that to keep up with the time schedule laid down for the event an average speed of 35 m.p.h. had to be maintained, and the fact that a team had started out one minute before them and another one minute after them.
The law of negligence lays down that the standard of care is that which is to be expected from a reasonably careful man in the circumstances. Because the particular circumstances dictate the degree of care required, decisions in other cases are frequently of little guidance. In the present case we have been referred to cases such as Insurance Commissioner v. Joyce 17 and Nettleship v.Weston 18 which raise the vexed question as to the standard or degree of care required to be shown by a driver towards a passenger who knows that the driver lacks the capacity to drive with reasonable care. In my view, such cases are not to the point in the present case where the passenger, far from committing himself to the care of a driver whom he knew to be incompetent, allied himself to the driver as navigator in the hope that by the assiduous application of their respective skills they would win a prize in the competition.
I consider that the duty of care owed by the defendant to the plaintiff was to drive as carefully as a reasonably careful, competitive rally-driver would be expected to drive in the prevailing circumstances. The jury were fully and carefully instructed by the trial judge to apply that standard to the facts as they found them. The jury were entitled to find that the accident happened because on a wet, dark night on a muddy, narrow road in the Wicklow hills, in the course of a motor rally, the defendant drove around a bend in the road only to find an unexpected motor car 45 yards ahead on a pronounced downhill slope, blocking the road and that, not being able to brake effectively because of the muddy downhill surface, he had to drive his car against a bank at the side of the road thus causing it to overturn.
The question whether the defendant was negligent on that version of the circumstances of the accident was pre-eminently one for the jury, and their answer in the negative cannot be disturbed unless it could be said to be unreasonable. I am unable to say that it was. For those reasons, I would uphold the jury’s verdict of no negligence and dismiss this appeal.
GRIFFIN J. :
This action arose out of an accident which occurred on the 25th October, 1968, at Carrigower in County Wicklow, in consequence of which the plaintiff suffered injuries whilst travelling as a passenger in the defendant’s motor car. The accident happened during the hours of darkness and both parties were taking part in a novice rally organised by the Dublin University Motor Club. The plaintiff was at the time a medical student at University College Dublin and the defendant was then an engineering student at the same college. The plaintiff and the defendant were, in the plaintiff’s words, “a team” and they were taking part in the competition with the defendant driving the car and the plaintiff acting as navigator. This was only the second occasion on which the defendant drove or took part in a rally but the plaintiff had three years experience of rallies in which he drove different cars. He could not recollect which car he drove in any particular rally, because, to quote his own words, “we chop and change sometimes” from which I infer that during the course of a rally he was sometimes the driver and sometimes the navigator.
The objective in this particular rally was to maintain an overall average speed of 35 m.p.h. Prizes were awarded to the competitors and, according to the plaintiff, there is all element of competition and the sport is essentially an exercise in navigation. The plaintiff, as navigator, had a watch, a map, and a special reading light. Details of the course to be travelled by the competitors were supplied to the competitors only a very short time prior to the commencement of the rally, the estimate of time by the plaintiff being between five and ten minutes before the start. On being supplied with the necessary details, the navigator then plotted the checkpoints on the map and his duty essentially consisted in watching the speed of the car, calculating whether at any given time the car was maintaining the average speed of 35 m.p.h. or a slower or higher rate, advising the driver accordingly, ensuring that they were on the correct course, and warning the driver that they were approaching a checkpoint, of which there were somewhat over thirty in this rally. The rally taking place at the time of this accident was over a course in the Wicklow hills and at the material time the road over which they were travelling was a poor road, unmetalled, with a base of rough stones and was described by the plaintiff as being really a laneway. No map was produced at the hearing but from the evidence it would appear that in all probability this particular road or laneway was from 12 to 15 feet in width.
In his evidence the plaintiff stated that at the time of the accident they were up to time, being neither early nor late in approaching the checkpoint close to which the accident happened. Penalties were incurred for arriving either early or late at a checkpoint but greater penalties were incurred for arriving early than for arriving late. He stated that about ten to fifteen seconds prior to the accident he warned the defendant that they were approaching a checkpoint. This the defendant strenuously denied stating that he got no warning whatever of the approach to the checkpoint. The plaintiff stated that shortly after the aforesaid warning, as they were coming around a bend, he was looking at the map when he heard the defendant say something and the next thing he knew was that they were in the ditch and the car had overturned. He “felt”that the car had drifted out to the right into the ditch this was the impression he got. In fact they were close to a checkpoint and the plaintiff estimated the distance from the bend to the checkpoint at approximately 70 yards. There was a fall in the road from the bend to the checkpoint but the plaintiff and the defendant disagreed on the nature of the gradient. The checkpoint consisted of an official car parked at the edge of the road and on this occasion there was another car parked alongside the official car, presumably being checked, so that for all practical purposes the road was obstructed by these two cars. Under cross-examination, the plaintiff stated that his impression was that the car came around the bend slightly too fast “an error of judgment” and just drifted into the ditch.
In his evidence, the defendant stated that the road was little better than a mud track with grass growing in the centre. He came around the bend in third gear at between 25 and 30 m.p.h. when he saw the road blocked about 40 to 50 yards away. He applied the brakes and then the car started to skid downhill; the brakes did not hold and he took his foot off the brake and drove for the ditch on the right because the car on the outside of the two parked vehicles and a pedestrian standing nearby were in danger. The car travelled along the ditch and collided with a projecting stone and overturned. He stated that if he had been warned of the fact that they were approaching a checkpoint he would have been travelling much slower around the bend because there was always a danger of stationary cars at or close to a checkpoint. The plaintiff agreed that there was mud on the laneway but he did not think that the brakes were applied at any time.
Affixed to the dash-board of the car on the passenger side was a notice to the effect that any person travelling as a passenger in the car did so at his own risk. Neither the plaintiff nor the defendant was able to recollect the exact wording or terms of this notice but they agreed that the effect was as stated. This car had been purchased in England some months previously when the plaintiff and the defendant were working together in England; at the time of the purchase the notice was already affixed to the dash-board and the defendant did not remove it. The plaintiff was with the defendant when the purchase of the car took place. The plaintiff stated that sometime prior to the accident the defendant made some flippant or jocose remark about the notice but the defendant stated that there was no discussion whatever between him and the
plaintiff in connection with this notice at any time subsequent to the purchase of the motor car.
Only the first two questions on the issue paper19 were answered by the jury; they did not answer the remaining questions because of the answers given to the first two questions. The plaintiff has appealed to this Court on the ground that the trial judge was wrong in law in leaving the first question to the jury; he submits that there was no evidence to justify leaving this particular question to the jury and that they were wrong in answering it in the affirmative. In regard to the second question, he submits that on the evidence the jury should have found the defendant negligent; that their finding on this question was perverse, and that their answer to this particular question was coloured and prejudiced by their consideration of, and their answer to, the first question which should not have been referred to them.
The first question is based on what used to be called the defence of volenti non fit injuria which, since the Civil Liability Act, 1961, is “the defence that the plaintiff before the act complained of agreed to waive his legal rights in respect of it.”20 The law on this topic was settled by this Court in O’Hanlon v. Electricity Supply Board. 21 The majority decision of the Court was delivered by Mr. Justice Walsh and, having set out the terms of s. 34 of the Act of 1961, he stated at pp. 91-2 of the report:”Under the terms of the Act of 1961 the defendants must establish that the plaintiff agreed to waive his legal rights in respect of the act complained of and that such agreement was made before that act. As no question of statutory duty arises in this appeal it is unnecessary to consider whether any such agreement, if it did exist, would be contrary to statute or to public policy. In my opinion, the use of the word ‘agreed’ in the Act of 1961 necessarily contemplates some sort of intercourse or communication between the plaintiff and the defendants from which it could be reasonably inferred that the plaintiff had assured the defendants that he waived any right of action that he might have in respect of the negligence of the defendants. A one-sided secret determination on the part of the
plaintiff to give up his right of action for negligence would not amount to an agreement to do so. Such a determination or consent may be regarded as ‘voluntary assumption of risk’ in terms of the Act but, by virtue of the provisions of the Act and for the purposes of the Act, this would be contributory negligence and not the absolute defence mentioned in the first part of sub-s. 1(b) of section 34.”Later, at p. 95, Mr. Justice Walsh stated: “The real question, and it was not put to the jury, was whether the plaintiff undertook the operation in question in circumstances from which it could be inferred, if it was not actually expressed, that he had agreed with the defendants before the dangerous operation was undertaken that he was exonerating them from liability for their negligence in not furnishing him with the means of disconnecting the current. The judge’s charge erroneously permitted the jury to infer agreement from knowledge only and erroneously permitted them to equate a unilateral private determination with an agreement between two parties.”
Counsel for the plaintiff submitted that there was no evidence of any “communication” between the plaintiff and the defendant from which the inference could be drawn that the plaintiff waived his right of action against the defendant, and that the existence of the notice on the dash-board of the car did not convey a message from the defendant to the plaintiff nor did it represent the state of mind of the defendant. Counsel for the defendant cited Bennett v. Tugwell 22 in which the defendant successfully relied on the defence of volenti non fit injuria where the plaintiff was injured whilst travelling in the defendant’s car to which had been affixed a notice stating:”Passengers travelling in this vehicle do so at their own risk.” On the facts of that case Ackner J. held that the consent of the plaintiff was clearly to be inferred from the facts. The trial judge in that case did not, of course, have to consider the provisions of s. 34 of the Act of 1961. In an appropriate case the affixing of a notice to the dashboard might lead to the inference that there was agreement between the passenger and the owner sufficient to set up the statutory defence under the Act of 1961, but such an
inference could not, in my view, be drawn from the facts in the present case. In view of the fact that the defendant himself in evidence at no time relied on the notice, Mr. Ellis was driven to concede that there was no evidence to indicate that the notice in the car on this occasion did in fact represent a communication to the plaintiff by the defendant or the state of mind of the defendant and, in my opinion, there was no evidence which warranted leaving the first question to the jury and, accordingly, the question should not have been left for their consideration.
With regard to the second question, counsel for the plaintiff contend that the jury should have answered it in favour of the plaintiff. They submitted that the duty owed to the plaintiff as navigator was exactly the same as that owed to any other passenger in a car or to any other pedestrian or road user; they submitted that there was a breach of that duty on any view of the facts, and that the fact that the plaintiff and the defendant were together competing in a rally was irrelevant. They relied on the majority judgment of the Court of Appeal in England in Nettleship v. Weston 23 in which it was held by Lord Denning M.R. and Megaw L.J. (Salmon L.J. dissenting) that the duty owed by a learner driver to a passenger instructor was the same objective and impersonal standard as that owed by every driver, including the learner, to passengers, the public and property on and off the highway. In my view, the decision in that case is not of assistance in considering the position of a navigator competing as one of a team in a rally.
The duty of care owed by the defendant to the plaintiff was a duty, having regard to all the circumstances, to take the care reasonably to be expected from a prudent and careful rally driver. The circumstances in this case included the fact that the plaintiff and the defendant were members of a team competing for prizes in a rally, that all average speed of 35 m.p.h. over difficult terrain and rough muddy roads had to be maintained and that, although the actual driving was being done by the defendant, the navigator’s duty included directions to the driver to drive faster or slower as the case may be. In addition, it appears
from the evidence that a speed test would have taken place on the next section. If, for example, the accident had occurred in the course of the speed test, when presumably the defendant and the plaintiff would be going all out to win, it appears to me that the plaintiff would be in no better position than an injured spectator in such cases as Wilks v. Cheltenham Cycle Club. 24
In my opinion, the trial judge correctly directed the jury on the matters to be considered by them in considering the question of the defendant’s negligence at pp. 84-87 of the transcript of evidence; no objection was taken to the judge’s direction on this issue. The jury is the appropriate tribunal to consider the facts and, as they have found that the defendant was not negligent in all the circumstances of this particular case, in my opinion their verdict should not be disturbed.
Having regard to the careful manner in which the trial judge segregated his charge in relation to the first and second questions, and in particular bearing in mind that in his charge the trial judge first dealt with the second question, it seems to me that there is no foundation for the submission that the consideration of the jury was coloured by the existence of a question which should not have been on the issue paper. In the result, the jury were in my judgment entitled to answer the second question in the negative, and the plaintiff’s appeal should be dismissed.
Wildgust v Bank of Ireland
JUDGMENT of Mr. Justice Geoghegan delivered the 22nd day of March 2006
This is an appeal by the above-named appellants/plaintiffs from an order of the High Court (Morris P.) dated 15th October, 2001 dismissing an action for damages for negligence against the above-named respondent/second-named defendant. There is also a cross-appeal by the said respondents against the particular costs order made in the High Court and I will return to that in due course.
I gratefully adopt the full account of the relevant facts in the case as well as its complex procedural history set out in the judgment about to be delivered herein by Kearns J. I will content myself by giving a shorthand account of the salient facts as found by the trial judge. The first-named appellant (hereinafter referred to as “Mr. Wildgust”) and his late wife had effected a life policy of insurance on each of their lives with the respondent insurance company. Mr. Wildgust carried on business through a company controlled by him namely, the second above-named appellant, Carrickowen Limited. In the late nineteen eighties Carrickowen Limited purchased certain properties and for that purpose obtained loan facilities from Hill Samuel Bank Limited (“Hill Samuel”). In accordance with normal practice, Hill Samuel required collateral security for the loan. As a consequence, personal guarantees were entered into by Mr. Wildgust and his late wife, Margaret Wildgust. The properties acquired were to be mortgaged to Hill Samuel and two life policies including the policy already referred to were to be assigned by way of mortgage to Hill Samuel. Carrickowen Limited held an account with the first-named defendant, Bank of Ireland, and the arrangement was that the premiums on the relevant life policy were to be paid for by way of direct debit from that account. The mortgage assignment of the life policy to Hill Samuel contained a covenant by Mr. Wildgust and his wife to pay and keep up the premiums on the policy. A monthly premium became due on the 23rd March, 1992 but the direct debit for that month was not paid.
I should explain that Mr. Wildgust took the view that the Bank of Ireland had wrongly neglected to pay the direct debit and in that connection the Bank of Ireland was originally a defendant in these proceedings. In the course of the hearing, the claim against the Bank of Ireland became settled and that bank is no longer involved.
Returning to the action against the respondent on the appeal, i.e. the Norwich Union, that company notified Hill Samuel but not the Wildgusts or their insurance broker that there had been default in the direct debit. Mr. Declan O’Hanlon was the relevant manager of Hill Samuel at the time and when he received the notification of the default, he contacted Mr. Wildgust. It was of considerable concern to Mr. O’Hanlon that the policy should not be allowed to lapse and he was aware at the time that Mrs. Wildgust was seriously ill. Indeed around that time, she was diagnosed as terminally ill. Mr. Wildgust assured Mr. O’Hanlon that he, Mr. Wildgust, had sent a cheque or more accurately a bank draft that would cover the premium. In giving this assurance, Mr. Wildgust appears to have acted bona fide but as is explained in the judgment of Kearns J. that particular payment had been treated as an excess payment and was refunded not to Mr. Wildgust but to his company, Carrickowen Limited, a fact of which Mr. Wildgust only became aware after the policy lapsed in May, 1992.
On the 22nd April, 1992, Mr. O’Hanlon, working off his diary, telephoned the respondent to make absolutely sure that the March payment had been made notwithstanding the assurance given to him by Mr. Wildgust. He did not personally remember making the call but he had a clear file note which showed that it had been made and detailing the contents of the call. The learned trial judge accepted that the file note was accurate.
The file note read as follows:
“File note
Carrickowen Limited
With regard to the above account I have been advised by Mr. Harry Wildgust that Mrs Margaret Wildgust has been diagnosed with cancer. We hold as security a policy assigned to ourselves with Norwich Union Life Insurance Society.
On the 6th April 1992 we received an advice from Norwich Union Life Insurance Society that the direct debit on the policy had been returned unpaid. I contacted the clients and was informed that they had forwarded a cheque to Norwich Union to keep the policy in order.
I rang Norwich Union today, 22nd April, to confirm that the policy was correct and in order. Norwich Union confirmed that the cheque had been received and everything was correct and in order.”
Although the respondent, at the trial, disputed the facts contained in that file note, the learned President, as I have already mentioned, accepted them as true. In fact the policy was not “correct and in order” and it became a lapsed policy.
Mr. O’Hanlon had not informed Mr. Wildgust that he had sought confirmation from the respondent that the premiums were paid up. Mr. Wildgust, therefore, cannot be said to have personally relied on the information given to Mr. O’Hanlon by the respondent. By reason of that fact, the learned President held that Mr. Wildgust was not entitled to recover damages in negligence against the respondent for loss resulting from the lapse of the policy. As is clear from the summary of facts which I have given and indeed the more detailed account of the facts set out by Kearns J. in his judgment, Mr. Wildgust was successful in the High Court on every relevant issue of fact. On some crucial facts there was no real controversy, such as for instance that it would generally have been known that where a life policy is mortgaged to a bank, the bank in its own self-interest would pay up any default premiums so as to prevent the policy lapsing. Mr. Wildgust failed, however, on the single legal ground of non-reliance. As it is quite crucial, it is worthwhile in my view quoting in full the final paragraph in the second reserved judgment of the President as it contains the basis on which the action was dismissed.
“In my view the one major insurmountable difficulty for the plaintiff is that at no stage did he, Mr. Wildgust become aware of the fact that the misstatement had been made by the Norwich Union nor did he place any reliance upon it. He was not misled by the misstatement because he was not aware of it. He was not prejudiced by it. It was not until two months later that he became aware of the fact that the premium had not been paid. In my view the misstatement in no way influenced or contributed towards the conduct of the plaintiff. It did not influence him or cause him to act to his detriment. I do not believe that it would be reasonable that the law should impose a duty on the defendant for the benefit of the plaintiff in these circumstances. In my view to do so would, as Brennan J., said in Caparo Industries Limited Plc v. Dickman BA ‘massive extension of a prima facie duty of care’ which is not my understanding of the law in this jurisdiction.”
The quote from Brennan J. comes of course from Sutherland Shire Council v. Heyman 60 A.L.R. 1, 43-44 an Australian case but it is cited in the speech of Lord Oliver of Aylmerton in Caparo Industries Plc v. Dickman [1990] 2 AC 605. Even if the learned President is right in his apparent view that reliance on the statement by the actual plaintiff is essential to recovery, a proposition which I will be examining, I find it surprising that a win for Mr. Wildgust in this case could conceivably be thought of as a “massive extension of a prima facie duty of care”.
The law
If the former President is correct in his view that reliance by the actual plaintiff on the truth of an incorrect statement negligently made is an essential ingredient of liability in all cases of negligent misstatement then this appeal must obviously be dismissed. Having read all the relevant authorities, I am not satisfied that such personal reliance is always essential. The facts of this particular case are most unusual and I have not come across any reported case sufficiently analogous to this case as to be of definitive assistance. The wide interpretation of Donoghue v. Stevenson [1932] AC 562 in relation to liability for negligence prevalent until recently made it important to make a sharp distinction between negligence in act on the one hand and negligence in a statement on the other hand. Pragmatically, some kind of control mechanism was necessary in relation to liability for negligent misstatement as otherwise an action might lie at the suit of large numbers of people influenced and reasonably foreseen to be influenced by the erroneous statement. By contrast a negligent act will for the most part foreseeably damage only a small category of people. The more recent English case law coming from the House of Lords with particular reference to Caparo Industries v. Dickman [1990] 2 AC 605 has introduced a third element into liability for negligence in addition to reasonable foreseeability and proximity and that is reasonableness in the imposition of a duty of care. That principle has been endorsed albeit obiter by Keane C.J. in his judgment in this court in Glencar Exploration Plc v. Mayo County Council (No. 2) [2002] 1 IR 84. The different route ultimately traversed by the courts in England in relation to negligent statements was partly based on the necessity for a control mechanism for the reason which I indicated and partly because of pre Donoghue v. Stevenson authorities which were not mentioned and still less expressly overruled by that case. Those earlier authorities would not be binding in this jurisdiction and now that the concept of reasonableness in imposing a duty of care appears to be accepted, concepts which run through the English case law relating to negligent misstatements and negligent misrepresentations such as reliance by the plaintiff on the truth of the statement, “assumption of risk” by the maker of the statement, “special relationship”, “relationship analogous to contract”, or even for that matter the will-o’-the-wisp concept of “proximity” may not be all that necessary. For the purposes of this case however, I am prepared to assume that the law of negligent misstatements is a separate code from the law of negligent acts. This has the advantage that I do not have to consider the law relating to the recoverability of damages for economic loss arising from negligence in general as it has always been accepted that such loss is recoverable if it derives from an actionable negligent misstatement.
The tort of negligent misstatement has its origins in England in Hedley Byrne and Co. Limited v. Heller and Partners Limited [1964] AC 465. It has an even earlier link with the famous minority Court of Appeal judgment of Denning L.J. (as he then was) in Candler v. Crane, Christmas and Co. [1951] 2 K.B. 164. As Kearns J. has pointed out, at an early stage Hedley Byrne was accepted by the Irish High Court as representing the law in this jurisdiction also (see Securities Trust Limited v. Hugh Moore and Alexander Limited [1964] I.R. 417 (Davitt P.) and Bank of Ireland v. Smyth [1966] I.R. 646 (Kenny J.). There has not been much discussion or analysis of the problems however in this court. The most relevant case law is essentially a succession of judgments from the House of Lords. In his speech in Hedley Byrne Lord Reid cited with approval a passage from the speech of Viscount Haldane LC in Naughton v. Lord Ashburton [1914] A.C. 932. He clearly indicated that quite apart from contractual or fiduciary relationships a duty of care in the making of a statement may arise “from other special relationships which the courts may find to exist in particular cases.” Lord Reid attached considerable importance to the expression “other special relationships” and he went on to observe as follows at p. 486:
“I can see no logical stopping place short of all those relationships where it is plain that the party seeking information or advice was trusting the other to exercise such a degree of care as the circumstances required, where it was reasonable for him to do that, and where the other gave the information or advice when he knew or ought to have known that the inquirer was relying on him.”
In Hedley Byrne the only relationship alleged was the relationship between the enquirer and the person giving the information. Hence the emphasis on reliance by the enquirer. It is, however, a small extension of this and justified in my view by later case law, that where a person who is not the enquirer is damaged as a consequence of the wrong answer and where the existence of such a person and the reasonable foreseeability of such damage ought to have been present in the mind of the person giving the information, there was a special relationship with that person also which gave rise to a duty of care.
There were nuanced differences of emphasis in the speeches of the Law Lords in Hedley Byrne but overall, the concept of “special relationship” was accepted even though different characterisations were given. Lord Devlin, for instance, made a distinction between social and professional relationships and between those which are of a contractual character or equivalent to contract. He pointed out that
“it may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form. The service that a bank performs in giving a reference is not done simply out of a desire to assist commerce. It would discourage the customers of the bank if their deals fell through because the bank had refused to testify to their credit when it was good.”
Before I further travel into the case law, I would pause here to consider the facts of this case. The person in the Norwich Union giving the information had reason to believe that Mr. Wildgust may have been under the impression that his account was in order and he would also be aware or ought to have been aware that the respondent would have paid the premium if a negative answer had been given. It should have been clear, therefore, that an incorrect answer would potentially damage Mr. Wildgust. That was enough, in my view, to create the “special relationship”, if such is needed but quite apart from that, given that the assignment of the policy to the respondent was by way of mortgage, Mr. Wildgust had an equity of redemption in the policy. Even though Hill Samuel was making the request in its own business interest, nevertheless in providing the information the Norwich Union would reasonably be expected to treat the respondent and their customer the mortgagor as identified with each other. Even if one might quibble with the word “identified” there was sufficient linkage to create a special relationship but as I have already indicated, I think that such relationship existed at any rate. I do not think that Hill Samuel or Mr. O’Hanlon can be said to have been an agent of Mr. Wildgust in making the enquiry or in relying on the answer but proof of such agency is not necessary in my view to establish liability.
In Smith v. Bush [1990] 1 AC 831 at 846 Lord Templeman cited with apparent approval dicta of Lord Denning M.R. in Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223 at 268 where Lord Denning rejected the argument
“that a duty to use due care (where there was no contract) only arose when there was a voluntary assumption of responsibility … Lord Reid in Hedley Byrne’s case … and Lord Devlin at p. 529 … used those words because of the special circumstances of that case (where the bank disclaimed responsibility). But they did not in any way mean to limit the general principle. In my opinion the duty to use due care in a statement arises, not from any voluntary assumption of responsibility, but from the fact that the person making it knows, or ought to know, that others, being his neighbours in this regard, would act on the faith of the statement being accurate.”
Lord Templeman also cited from the judgment of Salmon L.J. in that case where he indicated that he did not accept that in all cases the obligation to take reasonable care necessarily depends on the voluntary assumption of responsibility. Of course, the citation from Lord Denning must itself be related to the case with which he was dealing. It is in that context, in my view, that he speaks of “neighbours” who “would act on the faith of the statement being accurate”. It is quite true and it is not in dispute that Mr. Wildgust did not himself personally rely on the information given. But on any reasonable view of the case he was nevertheless vis-à-vis the person giving the information a proximate “neighbour” who could foreseeably be damaged. As I have already pointed out, the facts of this case simply do not fit into the facts of any other relevant case. But I take the view that all the qualifications and controlled mechanisms referred to in the different cases are just that. They are to prevent a potential liability to large numbers of people. That is simply not a problem here.
The case from which I found the greatest assistance is White v. Jones [1995] 2 AC 207 and in particular the speech of Lord Browne-Wilkinson. This is the famous case in which the House of Lords held by a majority that the assumption of responsibility by a solicitor to his client who had given instructions for the drawing up of a will for execution extended to an intended beneficiary under the proposed will in circumstances where the solicitor could foreseeably foresee that a consequence of his negligence might be a resultant loss of the intended legacy without either the testator or his estate having a remedy against him; and that accordingly in the circumstances the plaintiffs were entitled to the relief sought. Interestingly, though perhaps irrelevantly, the Irish High Court (Barrington J.) had long before that made a similar decision in Wall v. Hegarty [1980] ILRM 124. I say “irrelevantly” because the importance of White v. Jones lies more in the further analysis by the Law Lords of the principles underlying Hedley Byrne. With reference to that case, Lord Browne-Wilkinson at p. 272 made the following observation:
“… since this House was concerned with cases of negligent misstatement or advice, it was inevitable that any test laid down required both that the plaintiff should rely on the statement or advice and that the defendant could reasonably foresee that he would do so. In the case of claims based on negligent statements (as opposed to negligent actions) the plaintiff will have no cause of action at all unless he can show damage and he can only have suffered damage if he has relied on the negligent statement. Nor will a defendant be shown to have satisfied the requirement that he should foresee damage to the plaintiff unless he foresees such reliance by the plaintiff as to give rise to the damage. Therefore, although reliance by the plaintiff is an essential ingredient in a case based on negligent misstatement or advice, it does not follow that in all cases based on negligent action or inaction by the defendant it is necessary in order to demonstrate a special relationship that the plaintiff has in fact relied on the defendant or the defendant has foreseen such reliance. If in such a case careless conduct can be foreseen as likely to cause and does in fact cause damage to the plaintiff that should be sufficient to found liability.”
That quotation does not fully avail the appellant in this case. However, he does place some of the apparent principles enunciated in Hedley Byrne in the context of the particular facts of that case. At p. 274 Lord Browne-Wilkinson says the following:
“The law of England does not impose any general duty of care to avoid negligent misstatements or to avoid causing pure economic loss even if economic damage to the plaintiff was foreseeable. However, such a duty of care will arise if there is a special relationship between the parties. Although the categories of cases in which such special relationship can be held to exist are not closed, as yet only two categories have been identified namely (1) where there is a fiduciary relationship and (2) where the defendant has voluntarily answered a question or tendered skilled advice or services in circumstances where he knows or ought to know that an identified plaintiff will rely on his answers or advice. In both these categories the special relationship is created by the defendant voluntarily assuming to act in the matter by involving himself in the plaintiff’s affairs or by choosing to speak. If he does so assume to act or speak he is said to have assumed responsibility for carrying through the matter he has entered upon. In the words of Lord Reid in Hedley Byrne [1964] AC 465, 486 he has ‘accepted a relationship … which requires him to exercise such care as the circumstances require’ i.e. although the extent of the duty will vary from category to category, some duty of care arises from the special relationship.”
If interpreted literally those words again do not establish a case for the plaintiff but if the underlying principles are adopted I think that they do. The essence of this case was that the person in the Norwich Union giving the information in response to the request ought to have known that it would be relied on at least by the respondent and that if the statement was incorrect, the policy could lapse to the detriment not just of Hill Samuel but to their customer who was paying the premiums and who had a beneficial interest in the form of the equity of redemption in the policy. I fail to see how that did not amount to a special relationship. Put shortly, Mr. Wildgust was a “neighbour” for the purposes of the law of negligence and a specially close one at that. There is no question here of the respondent being liable to large numbers of perhaps unknown persons. In my view, the respondent is liable to the appellants and I would, therefore, allow the appeal. The terms of the order can be discussed with counsel.
On the amended pleadings there are issues of contributory negligence both directly and vicariously by reason of the involvement of the Bank of Ireland. I express no views on these matters as they were not raised in argument.
As regards the cross-appeal that is essentially a costs matter which can be dealt with when the costs of the appeal as a whole are being considered by the court.
Wildgust & anor. v. Govr. of BOI
JUDGMENT of Mr. Justice Kearns delivered the 22nd day of March, 2006 JUDGMENT of Mr. Justice Kearns delivered the 22nd day of March, 2006
This case raises an important point of law concerning the scope of liability for negligent misstatement. In particular, it gives rise to an important question as to whether a claimant, under the principles of law established in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465, may recover damages in circumstances where he is not the person to whom a negligent misstatement is addressed, has not relied upon it, but nonetheless has suffered loss and damage because an intermediary to whom the negligent misstatement was addressed was in consequence prevented from acting, as he most assuredly would have done, to protect both the claimant and the intermediary from the loss which in fact occurred.
In a judgment Wildgust v. Bank of Ireland, delivered on the 28th July, 1998, Morris P. summarised the background facts of this case in the following manner:-
“The first named plaintiff is a businessman and is the principal if not the sole shareholder in the second named plaintiff company. That company, Carrickowen Ltd., was incorporated for the purpose of holding two commercial units in the Coolock Industrial Estate. The first named plaintiff and his late wife wished to create an arrangement whereby they would sublet smaller units within these commercial units at a rent sufficient to pay the mortgage on the property and thereby create a pension fund for themselves. With this intention they applied for and obtained from Hill Samuel merchant bankers a loan of £215,000 (which sum was subsequently increased by an additional £50,000) which loan was secured by the primary security of a mortgage over the property in favour of Hill Samuel and was backed by a personal guarantee from Mr. Wildgust and the late Mrs. Wildgust. As an additional secondary security, Mr. & Mrs. Wildgust were required to obtain and assign to Hill Samuel a policy of insurance on their joint and several lives. All of these transactions were satisfactorily carried through. Mr. Wildgust put in place an arrangement whereby the rents of the tenants occupying the sub-units were paid direct, in the first instance, into a company account with Allied Irish Banks, but this arrangement was subsequently changed to one whereby the rents were paid into a company account in the Bank of Ireland at their Ballsbridge branch and arrangements were made with the bank that the premiums on the life policy were to be discharged to Norwich Union by direct debit. The premiums were due monthly on the 23rd of each month.
A breakdown in the system occurred as a result of which the direct debit payment due on the 23rd of March, 1992, was not paid. Mr. Wildgust held the Bank of Ireland responsible for this fact. They were accordingly joined as defendants in the present claim. However, after the hearing had progressed for some days a settlement was reached between Mr. Wildgust and the Bank of Ireland as a result of which they were struck out of the case.
Because of the failure to discharge the premium due on the 23rd of March, 1992, the life policy lapsed. The late Mrs. Wildgust died on the 1st of January, 1993. The amount payable under the terms of the policy on her death was not paid as the Norwich Union claimed that the policy had lapsed. Mr. Wildgust brings this action to enforce payment of that amount and claims that as a result of withholding payment consequential loss has been suffered by him and by his company.”
The initial hearing of this case before Morris P. was interrupted at the close of the plaintiff’s case when the defendants raised a pleading point, namely, that a case in negligent misstatement had not been properly pleaded. The learned President acceded to that application and directed that the plaintiffs be at liberty to amend their statement of claim to plead a claim for negligent misstatement of fact or a claim based on the Hedley Byrne v. Heller principle. The plaintiffs appealed this ruling to the Supreme Court where, on the 13th April, 2000, the Supreme Court (McGuinness J.) upheld the ruling of the President and directed that the matter be re-listed before him with a view to continuing and concluding the trial. (See Wildgust v. Bank of Ireland [2001] 1 ILRM 24)
Accordingly, the hearing of the matter before the President recommenced on the 19th July, 2001.
Because the facts of this case are of such vital importance, I propose to quote at some length from the summary of the issues of fact which appear in the judgment of Morris P. delivered on the 17th August, 2001. It is necessary to do so to understand how the claim for negligent misstatement arises in this case.
Morris P. first identified the issues of fact giving rise to that claim in the following manner at p.6:-
“It is alleged that a Mr. Declan O’Hanlon who was the manager of Hill Samuel became aware of the fact that there had been a breakdown in the payment of the direct debit to the Norwich Union Insurance Company by the Bank of Ireland because Hill Samuel were among the persons to whom default notice was sent. He says that he telephoned Mr. Wildgust to enquire about payment of the premium and was told by him that the premium had been paid. Subsequently he says that he telephoned the Norwich Union on the 22nd April, 1992, to enquire about the payment of this direct debit and he was told that the cheque for the premium had been received and that everything was ‘correct and in order’. He says that in reliance upon this he took no action. In fact the premium had not been paid. He said that if he had known that the premium remained unpaid then it would have been paid by Hill Samuel in order to keep the policy alive. He said that he was sure that this would have occurred particularly in view of Mrs Wildgust’s ill health. It is alleged on behalf of the Plaintiff that the information given to Mr. O’Hanlon constituted a negligent misstatement of fact as a result of which the policy was allowed to lapse and the Plaintiff has suffered loss and damage.
It is denied on behalf of the Norwich Union Insurance Company that the telephone call described by Mr. O’Hanlon or any such call was ever made.”
Having identified that issue of fact, the learned President proceeded to summarise the relevant evidence in the following manner at p.7:-
“Mr. Declan O’Hanlon was in the employment of Hill Samuel between 1982 and 1993. At the relevant time he was Manager of the Merchant Bank and became familiar with the commercial mortgage granted to the Second Named plaintiff while he was in the bank. He was aware that an advance of £215,000 was originally made and this was secured by Mr. & Mrs Wildgust’s personal guarantees and an assignment of a life insurance policy on the lives of Mr. & Mrs Wildgust with the Norwich Union Insurance Company. Subsequently the mortgage facility was increased to £275,000. He was aware of an arrangement put in place by Mr. Wildgust for the payment of premiums on the life policy through the Bank of Ireland by way of direct debit. He informed the Court that it is common practice for a Banker in the position of Hill Samuel if they became aware of a default on the payment of a premium which might result in a policy lapsing that the bank would themselves pay the premium.
On the 3rd April 1992 Hill Samuel received a direct debit breakdown advice indicating that a premium of £227.25 due on the 23rd March 1992 was unpaid. Upon becoming aware of this fact Mr. O’Hanlon says that as Account Manager he referred the matter to Senior Management and after discussing it with his superiors he contacted Mr. Wildgust informing him of the breakdown in payment. He says that when he contacted Mr. Wildgust and was informed by him that he, Mr. Wildgust had forwarded a cheque to the Norwich Union to keep the policy in order and he said that on the 22nd April 1992 he telephoned the Norwich Union to confirm that the cheque had been received and that everything was in order. He says that the Norwich Union confirmed that this was so. He says that he has no doubt that if he had known that the premium was not paid arrangements would have been made for Hill Samuel to pay the premium to prevent the policy lapsing. This was of particular importance as Mrs Wildgust had been diagnosed with cancer.”
The President then noted that Mr. O’Hanlon had given this evidence entirely from a contemporaneous note which he made on the 22nd April, 1992. Evidence of the system operating within the Norwich Union at the relevant time was then given by two officials of the company, including Ms. Betty Tuite, who was manager of the premium collection and agency department. She confirmed that there were four people in the direct debit section who were skilled and experienced operatives who were fully trained. She gave further evidence of a detailed nature concerning the electronic recording system within the office and informed the Court that no record of Mr. O’Hanlon’s inquiry existed on the computer records.
In resolving this issue of fact, the President found that, even though there existed a thorough and business-like procedure for noting inquiries in the Norwich Union office, it was not incapable of error and it would have been possible for Mr. O’Hanlon’s inquiry not to have been entered in the system. He also noted that Mr. O’Hanlon had no financial or other interest in the transaction to provide him with any motive to do otherwise than to tell the full truth about the memorandum or file note which he signed on the 22nd April, 1992.
The President thus concluded that Mr. O’Hanlon was given the assurance in the terms which he described to the Court. Having made that crucial finding, the President then proceeded to address the evidence which had been given by Mr. Wildgust, stating at p.13:-
“Mr. Wildgust gave detailed evidence of difficulties which he had with the loan facilities which were made available to him and his company by the Bank of Ireland which are not of any relevance to the present issues save that it emerges from the lack of attention to his dealings with the Bank of Ireland that in late 1991 and early 1992 Mr. Wildgust was apparently preoccupied by his wife’s ill health and allowed his business affairs to lapse.
A premium was due to the Norwich Union on the 23rd March 1992 and default notices were sent by the Norwich Union to Hill Samuel and Mr. Wildgust in respect of that default. Mr. Wildgust says he never received this default notice. He claims there should not have been a failure on the part of the Bank of Ireland to pay the direct debit because he had at that time renegotiated overdraft arrangements with the Bank of Ireland which he believed provided him with the facility for meeting such payments. The first notice that he had that the premium due on the direct debit of the 23rd March 1992 was not paid was in the latter half of the month of June. This delay was due to the bank strike and the postal strike which finished at that time. He said ‘If I had found out before, I would have paid the money straight up.’ He said that between the 23rd March and the end of June he received no communication from the Bank of Ireland in relation to the direct debit nor did he receive any communication whatever from the Norwich Union in relation to the return of the direct debit. It was after June and probably around August that he had communication with the Norwich Union about the direct debit. He says that around the 8th, 9th or 10th April he had a telephone conversation with Mr. O’Hanlon of Hill Samuel. He said that Mr. O’Hanlon told him that the direct debit had not been paid and that he told Mr. O’Hanlon that he had sent a cheque to cover it. This was a reference to a cheque for £681.75 which he believed was to be held by the Bank of Ireland in reserve to meet a contingency such as this. In fact he did not know then but now knows that this reserve was not available because that cheque was returned.”
I pause at this point to make a slight correction which both sides agree should be made to the last two sentences quoted above which are of some relevance in relation to Mr. Wildgust’s state of mind in 1992. On the 9th January, 1990, against a background of some difficulty with the then existing direct debit in favour of Norwich Union made with Allied Irish Banks, Mr. Wildgust caused a bank draft for £681.75, representing 3 months instalments on the life policy, to be sent to Norwich Union. As events transpired, the Allied Irish Bank direct debit had functioned properly and this payment represented a double payment for three months of the policy. The sum in question was received by Norwich Union, but despite a Norwich Union file note dated the 11th January, 1990, noting that the refund should go “immediately to Mr. Wildgust’s a/c”, the repayment was in fact made to the account of Carrickowen Ltd., a fact of which Mr. Wildgust in evidence claimed he only became aware after the policy lapsed in May, 1992. He thus asserted in evidence his belief that he had a “cushion” or “buffer zone” of three overpayments to protect him in the event of any breakdown in the direct debit arrangements. Norwich Union claimed in turn that Mr Wildgust knew, or should have known, about the repayment to Carrickowen’s account and that he had conspicuously failed to raise the issue with Norwich Union either when the policy lapsed or in his solicitor’s preliminary letter in December, 1992.
It is also common case that the assignment of the life policy to Hill Samuel permitted (though did not oblige) Hill Samuel to discharge premiums in respect thereof. For the sake of completeness the court of trial also heard submissions in relation to a mortgage made between Carrickowen and Hill Samuel in connection with the advance of monies by Hill Samuel whereby, under clause 12 thereof, Carrickowen appointed Hill Samuel as its attorney for certain purposes related to Carrickowen’s covenants under the mortgage. However, these purposes appear unrelated to the life policy and the payment of premiums thereunder.
The learned President continued at p.14 of the judgment:-
“I am of the view from the totality of Mr. Wildgust’s evidence that he became aware that the policy had lapsed at the end of June, 1992, when he got his statements.
What emerges from Mr. Wildgust’s evidence is:
(a) At no stage up to the time when the policy lapsed was Mr. Wildgust aware of the telephone conversation between Mr. O’Hanlon and the Norwich Union or of any information given to Mr. O’Hanlon by the Norwich Union.
(b) Mr. Wildgust believed at all times that the Bank of Ireland were in sufficient funds or otherwise obligated to him to discharge the direct debits due to the Norwich Union as premiums on the policy.
(c) At no stage did or could Mr. Wildgust have placed any reliance upon any statements made by the Norwich Union to Mr. O’Hanlon.”
Again, because this portion of the judgment of the learned President so neatly encapsulates the ultimate issue in this case, I propose to set it out in full:-
“Since I delivered judgment on the application for a non-suit on the 28th July 1998, the Supreme Court has considered the law in this jurisdiction having regard to the decision of the Supreme Court in Ward v. McMaster [1988] I.R. 337 and Glencar Explorations Plc & anor v. Mayo County Council [2002] 1 IR 84.
In his judgment, delivered the 19th July 2001, Keane C.J. considered the approach of McCarthy J. in Ward v. McMaster and contrasted it to what he described as the more cautious approach favoured in Caparo Industries Plc. v. Dickman [1990] 2 AC 605 and Sutherland Shire Council v. Heyman [1985] 157 C.L.R. 424, and, having done so, summarising the law had this to say: ‘There is in my view, no reason why courts determining whether a duty of care arises, should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notorious difficulty and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it would be reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J., at first instance in Ward v. McMaster, by Brennan J. in Sutherland Shire Council v. Heyman and by the House of Lords in Caparo Industries Plc. v. Dickman. As Brennan J. pointed out, there is a significant risk that any other approach will result in what he called a ‘massive extension to a prima facie duty of care restrained only by indefinable considerations…’”
The President continued:-
“Accordingly, when McCarthy J. said in Ward v. McMaster ‘whilst Costello J. essentially rested his conclusion on the ‘fair and reasonable’ test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage and the absence of any compelling exemption based upon public policy.’ This is no longer the full test. I must add the further factor of asking myself ‘is it just or reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff?’ I am satisfied that this is the appropriate test in cases where negligent misstatement is alleged.”
Having summarised the relevant legal principles in this way, the President then continued at p.17:-
“It is submitted on behalf of the plaintiff by Mr. Bradley S.C., that it is unrealistic to attempt to separate the coinciding interest of Hill Samuel and the plaintiff since each had an identical and corresponding interest in ensuring that the policy remained in place and accordingly a misrepresentation made to Hill Samuel must, he submits, prejudice Mr. Wildgust since without this misrepresentation the policy would have been renewed by Hill Samuel.
In my view the one major insurmountable difficulty for the plaintiff is that at no stage did he, Mr. Wildgust, become aware of the fact that the misstatement had been made by the Norwich Union nor did he place any reliance upon it. He was not misled by the misstatement because he was not aware of it. He was not prejudiced by it. It was not until two months later that he became aware of the fact that the premium had not been paid. In my view the misstatement in no way influenced or contributed towards the conduct of the plaintiff. It did not influence him or cause him to act to his detriment. I do not believe that it would be reasonable that the law should impose a duty on the defendant for the benefit of the plaintiff in these circumstances. In my view to do so would, as Brennan J. said in Sutherland Shire Council v Heyman be a ‘massive extension of a prima facie duty of care’ which is not my understanding of the law in this jurisdiction.”
Submissions of the parties
On behalf of the plaintiff, Mr. Bradley submitted that the learned President had found a number of crucial facts proven to his satisfaction, including the following:-
(a) The inquiry by Mr. O’Hanlon on behalf of Hill Samuel to the respondent was made by telephone calls specifically to ascertain whether the premium due for the previous month had been paid.
(b) The respondent answered positively and erroneously that the said direct debit payment had been made and that consequently premium payments were in order.
(c) As a result of the aforesaid information and in reliance upon the same Mr. O’Hanlon, as manager of Hill Samuel, took no further steps to ensure that the policy did not lapse. If he had known that the premium in fact remained unpaid, then Hill Samuel would have paid the premium as was its right as assignee of the policy in order to keep the policy alive.
(d) The respondent maintained a thorough and business-like procedure for noting such enquiries concerning the status of insurance policies held with it, but this procedure was not incapable of error and in this instance an error had occurred.
(e) The first appellant did not become aware of the fact that the misstatement had been made by the respondent until two months later when he learned that the premium had not been paid, by which time the policy had lapsed and could not in the particular circumstances be reinstated due to the patent ill health of his wife.
Counsel for the plaintiff contended that these primary facts as so found by the trial judge were based on credible evidence and cannot now be denied by the respondent. It was also implicit from the aforesaid findings of fact that the respondent had not notified Mr. Wildgust of the non-payment of the premium for the month of March at all. In this regard, Mr. Bradley relied upon decisions of this court in relation to primary findings of fact in Hay v. O’Grady [1992] 1 I.R. 210 and Best v. Wellcome Foundation Ltd. [1993] 3 I.R. 421. Counsel for the plaintiff further argued that the trial judge was entitled to infer from the foregoing established facts that the respondent had been guilty of negligent misstatement. It necessarily followed that Hill Samuel had made the inquiry in the capacity of a person who held the benefit of the policy as security and, depending on the answer to the inquiry, would have taken appropriate steps to ensure that the policy did not lapse.
Counsel for the plaintiff further submitted therefore that the only issue in dispute was whether the respondent had been guilty of a breach of duty of care towards the appellants, giving rise to an entitlement to damages in the particular circumstances where they had not in fact been aware of the relevant communication and consequently did not act upon it. While the learned trial judge had held that to include the plaintiff as either a person, or being in a category of persons, to whom a duty was owed would represent “a massive extension of a prima facie duty of care”, counsel for the plaintiff submitted that this conclusion was erroneous. He submitted that for all practical purposes the plaintiff and Hill Samuel could be regarded as having an identical interest, the latter as assignees of the policy, and the plaintiff as a person who had contracted with the respondent and who was entitled to an equity of redemption in the policy in question. He submitted that the trial judge was clearly in error in finding, as he did, that the appellants were not prejudiced in the events which occurred and in further finding that it was necessary for Mr. Wildgust to have actually been misled by the statement and to have actually relied upon it before it would be reasonable to impose a duty of care.
He further contended that it could not be seriously disputed that if the first appellant had made the inquiry on his own behalf and had received the same information as Mr. O’Hanlon with the same consequent effects, then the appellant’s claim for damages for negligence would be unanswerable. Equally, if Hill Samuel itself had suffered the loss and damage which in fact was suffered by the appellants, the respondent could hardly be heard to say that it was not liable to Hill Samuel in negligence in the like circumstances. In the present case, the respondent had a distinct duty of care both to Hill Samuel and to their own policy holder, and counsel for the plaintiff submitted it was unreal and artificial to suggest that the appellants had no case simply because the inquiry was made by another interested party. He submitted that in all the circumstances it was just, fair and reasonable in the present case that a duty of care be imposed.
In response, Mr. Sreenan S.C., on behalf of the respondent insurance company, argued that the plaintiff was now seeking to maintain a cause of action in respect of a statement made, not to him, but to Hill Samuel, about which he did not know and upon which he did not rely. He submitted that the cause of action was not just unsustainable as a matter of law, but was an entirely circular contention since the respondent could not be held liable for loss caused by the plaintiff’s own breach of contract with the respondent and/or by a breach of contract and/or negligence by the plaintiff’s own bank in failing to pay the premium on its behalf, for which as a matter of law the plaintiff was now liable. In essence, counsel for the respondent argued that the plaintiff’s claim was that the respondents owed to him some type of legal obligation to prevent him suffering loss as a result of his own wrongdoing and that of his agent, namely, the Bank of Ireland.
He further submitted there was no evidence to support the suggestion by the plaintiffs that Hill Samuel Bank were acting as the agent of the plaintiffs in making the inquiry of the Norwich Union. Mr. O’Hanlon had specifically indicated that in telephoning the Norwich Union, he was concerned to ensure that things were in order from Hill Samuel’s point of view as the assignee of the policy. When asked whether his concern was to look after the interests of Hill Samuel in this matter, he had answered that that was so. He went on to confirm that he was making the call on behalf of Hill Samuel and that he was contacting the insurance company “independently”. He did not go back to Mr. Wildgust after receiving information from Norwich Union. Further, Mr. Wildgust said that he did not rely on Hill Samuel to contact the Norwich Union.
In order to make a case in negligent misstatement in the instant circumstances, counsel for the respondent contended that the plaintiffs would have to establish:-
(a) That a statement was made by Norwich Union to Hill Samuel, who then communicated same to the plaintiff;
(b) That Norwich Union owed Hill Samuel a duty of care;
(c) That Norwich Union held itself out as holding a special skill;
(d) That Norwich Union intended or knew that Hill Samuel would inform the plaintiffs, who would rely and act upon this statement;
and
(e) That the plaintiffs did so rely and act upon the statement to their detriment.
Counsel for the respondent argued that these requirements had not been met in the instant case. Further, the plaintiffs were attempting to subsume the tort of negligent misstatement into ordinary principles of negligence because the facts of the case could not sustain a claim in negligent misstatement. While the plaintiffs had attempted to rely upon the decision of the Supreme Court in Glencar Exploration plc. v. Mayo County Council (No.2) [2002] 1 IR 84, the Chief Justice had stated in that case that a claim for damages in negligent misstatement was a major qualification to the principle that no action for negligence lay in respect of purely economic loss. The plaintiffs were in effect seeking to extend the law of negligence in respect of purely economic loss in circumstances where they cannot bring themselves within the parameters of the tort of negligent misstatement, nor could they bring themselves within the category of cases represented by Siney v. Dublin Corporation [1980] I.R. 400 and Ward v. McMaster [1988] I.R. 29. Counsel further submitted that there was no basis for an extension of the law of negligence to embrace a claim where the statement of the defendant was unknown to and not relied on by the plaintiff.
Furthermore, counsel for the respondent submitted that before addressing the question of whether the plaintiffs had made out a case in negligent misstatement, this Court should find that no duty of care can or should arise at all by virtue of the fact that the parties were in a contractual relationship and the losses suffered by the plaintiffs were caused by their own breach of contract in failing to pay the premiums due under the policy. Hamilton C.J. quoted from Halsbury (4th ed. Vol.3(1) para. 149) in Kennedy v. Allied Irish Banks [1998] 2 IR 48 as follows:-
“where the parties are in a contractual relationship, it is not to the advantage of the law’s development to search for liability in tort, particularly in a commercial relationship.”
Moreover, counsel for the respondent submitted, in the same case Hamilton C.J. went on to quote from an earlier decision of the English Court of Appeal in National Bank of Greece S.A. v. Pinios Shipping Co. (No. 3) [1988] 2 Lloyds Rep 126 where Lloyd L.J. stated at p.139:- “So far as I know it has never been the law that a plaintiff who has the choice of suing in contract or tort can fail in contract yet nevertheless succeed in tort”.
Having adverted to this passage in Kennedy v. Allied Irish Banks, Hamilton C.J. also observed at p.56:-
“when parties are in a contractual relationship their mutual obligations arise from their contract and are to be found expressly or by necessary implication in the terms thereof and that obligations in tort which may arise from such contractual relationship can not be greater than those found expressly or by necessary implication in their contract.”
Counsel further submitted that the same issue had been revisited by this court in Pat O’Donnell & Co. Ltd. v. Truck & Machinery Sales Ltd. [1998] 4 I.R. 191 at p. 199 where O’Flaherty J. invoked the passage from Hamilton C.J.’s judgment in Kennedy that:-
“the general duty of care in tort cannot be manipulated so as to override the contractual allocation of responsibility between the parties. Thus if, for instance, a contract provides, whether expressly or by necessary implication, that the defendant is not liable for a particular risk, then the law of tort should not be allowed to contradict that.”
Counsel contended that the plaintiff’s policy lapsed as a result of breach of contract, namely the non-payment of the premiums by the plaintiffs and that no issue of duty of care to maintain such contract can be implied after the fact which would have the effect of varying or amending the contract or in imposing a higher contractual duty than that expressly provided for in the contract.
I should also state that counsel made extensive reference to case law on negligent misstatement in their respective submissions and these cases are referred to in the main part of the judgment which follows.
Decision
As was noted by Keane C.J. in Glencar Exploration plc. v. Mayo County Council (No.2) [2002] 1 IR 84 at 136:-
“The decisions in both Donoghue v. Stevenson [1932] AC 562 and Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465 have been considered and adopted by our courts in a number of cases and unquestionably represent the law in this jurisdiction.”
An appropriate starting point therefore is to remind oneself of precisely what was decided by these two cases, firstly, in relation to the tort of negligence generally and secondly, in relation to the more narrowly defined tort of negligent misstatement.
The key passage about the duty of care in the speech of Lord Atkin in Donoghue v. Stevenson at p. 580 is in the following terms:-
“At present I content myself at pointing out that in English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of ‘culpa’, is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
This concept was further elaborated by Lord Atkin when he pointed out at p.581 that “proximity” in this context should not be confined to “mere physical proximity”, but should extend:-
“to such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act.”
The injury for which a claimant might be compensated, however, under the general law of negligence was confined to personal injury to, or damage to the property of, a plaintiff. The Hedley Byrne case was a major milestone in the evolution of the law of negligence, because it extended liability to include pecuniary loss caused by a negligent misstatement. It is important therefore to have regard to the considerations which prompted the House of Lords in Hedley Byrne when it held that a negligent, though honest, misrepresentation, spoken or written, could give rise to an action for damages for financial loss caused thereby, apart from any contract or fiduciary relationship. It did so on a very specific basis, namely, that the law would imply a duty of care when a party seeking information from a party possessed of a special skill trusts him to exercise due care, and that party knew or ought to have known that reliance was being placed on his skill and judgment.
The Court was careful to draw a distinction between negligent words and negligent acts. In the course of his speech, Lord Reid stated at p.482:-
“The most obvious difference between negligent words and negligent acts is this. Quite careful people often express definite opinions on social or informal occasions even when they see that others are likely to be influenced by them; and they often do that without taking that care which they would take if asked for their opinion professionally or in a business connection. The appellant agrees there can be no duty of care on such occasions, and we were referred to American and South African authorities where that is recognised, although their law appears to have gone much further than ours has yet done. But it is at least unusual casually to put into circulation negligently made articles which are dangerous. A man might give a friend a negligently-prepared bottle of homemade wine and his friend’s guests might drink it with dire results. It is by no means clear that those guests would have no action against the negligent manufacturer.
Another obvious difference is that a negligently made article would only cause one accident, and so it is not very difficult to find the necessary degree of proximity or neighbourhood between the negligent manufacturer and the person injured. But words can be broadcast with or without the consent or the foresight of the speaker or writer. It would be one thing to say that the speaker owes a duty to a limited class, but it would be going very far to say that he owes a duty to every ultimate ‘consumer’ who acts on those words to his detriment. It would be no use to say that a speaker or writer owes a duty but can disclaim responsibility if he wants to. He, like the manufacturer, could make it part of a contract that he is not to be liable for his negligence: but that contract would not protect him in a question with a third party, at least if the third party was unaware of it.”
Lord Reid thus concluded that there was good sense behind the existing law that “in general an innocent but negligent misrepresentation gives no cause of action”.
He concluded that before any duty could arise the most “natural requirement would be that expressly or by implication from the circumstances the speaker or writer has undertaken some responsibility.”
The principles laid down in Hedley Byrne & Co v Heller were followed almost immediately in this jurisdiction by the High Court in Securities Trust Ltd. v Hugh Moore & Alexander Ltd. [1964] I.R. 417 wherein Davitt P. defined the context in which liability may arise as follows at p.421:-
“circumstances may create a relationship between two parties in which, if one seeks information from the other and is given it, that other is under a duty to take reasonable care to ensure that the information given is correct.”
Various cases in Britain in the following years attempted to define a single general principle which might be applied in all circumstances to determine the existence, parameters and scope of the duty of care. One such case was Dorset Yacht Co. Ltd. v. Home Office [1970] AC 1004, in which Lord Reid stated at pp. 1026 – 1027:-
“In later years there has been a steady trend towards regarding the law of negligence as depending on principles so that, when a new point emerges, one should ask not whether it is covered by authority but whether recognised principles apply to it. Donoghue v. Stevenson [1932] AC 562 may be regarded as a milestone, and the well known passage in Lord Atkin’s speech should I think be regarded as a statement of principle. It is not to be treated as if it were a statutory definition. It will require qualification in new circumstances. But I think that the time has come when we can and should say that it ought to apply unless there is some justification or valid explanation for its exclusion.”
That case was followed by Anns v. Merton London Borough Council [1978] AC 728 in which a more comprehensive attempt was made to articulate a single general principle when Lord Wilberforce stated at pp.751 – 752:-
“Through the trilogy of cases in this House – Donoghue v. Stevenson [1932] AC 562, Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465, and Dorset Yacht Co. Ltd. v. Home Office [1970] AC 1004, the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise.”
There then followed the further decision of the House of Lords in Caparo Industries plc. v. Dickman & ors [1990] 2 AC 605. This is a case of particular relevance to the instant case because it involves negligent misstatement in a specific way. The plaintiffs were a limited company who had taken over F. Plc. and then sued its directors alleging fraudulent misrepresentation. They also sued its auditors claiming that they were negligent in carrying out the audit and making their report, which they were required to do within the terms of the Companies Act, 1985. The plaintiffs claimed that they relied on the accounts as certified and contended that the auditors owed both shareholders and potential investors a duty of care in respect of the accuracy of the accounts and should have known that the company’s profits were not as high as projected. The House of Lords held, however, that liability for economic loss due to negligent misstatement was confined to cases where the statement or advice had been given to a known recipient for a specific purpose of which the maker was aware and upon which the recipient had relied and acted to his detriment; the Court further held that since the purpose of the statutory requirement for an audit of public companies under the Act of 1985 was the making of a report to enable shareholders to exercise their class rights in general meeting, it did not extend to the provision of information to assist shareholders in the making of decisions as to future investment in the company, and since, additionally, there was no reason in policy or principle why auditors should be deemed to have a special relationship with non-shareholders contemplating investment in the company in reliance in the public accounts, even when the affairs of the company were known to be such as to render it susceptible to an attempted takeover, the auditors had not owed any duty of care to the plaintiffs in respect of their purchase of F. Plc’s shares.
In the course of his speech, Lord Bridge noted at p. 617, “the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed and, if so, what is its scope.” Lord Bridge went on to say at pp. 617-618:-
“What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other. But it is implicit in the passages referred to that the concepts of proximity and fairness embodied in this additional ingredients are not susceptible of any such precise definition as would be necessary to give them utility as practical tests, but amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope. Whilst recognising, of course, the importance of the underlying general principles common to the whole field of negligence, I think the law has now moved in the direction of attaching greater significance to the more traditional categorisation of distinct and recognisable situations as guides to the existence, the scope and the limits of the varied duties of care which the law imposes. We must now, I think, recognise the wisdom of the words of Brennan J. in the High Court of Australia in Sutherland Shire Council v. Heyman (1985) 60 A.L.R. 1, 43-44, where he said:-
“It is preferable, in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable ‘considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed.’”
To the forefront of the considerations referred to by Lord Bridge was the recognition that distinctions were always to be observed in the law’s essentially different approach to the different kinds of damage which one party might suffer in consequence of the acts or omissions of another. He noted that it was one thing to owe a duty of care to avoid causing injury to the person or property of others, it was quite another to avoid causing others to suffer purely economic loss. He stressed that the damage which may be caused by the negligently spoken or written word will normally be confined to economic loss sustained by those who rely on the accuracy of the information or advice they receive as a basis for action. This of course is eminently sensible as otherwise there could be an endless number of third parties who might be affected. Having reviewed a number of cases, including Hedley Byrne & Co. Ltd. v. Heller & Partners [1964] AC 465, Smith v. Bush [1990] 1 AC 831 and Harris v. Wyre Forest District Council [1990] 1 AC 831 Lord Bridge concluded at p.620:-
“The salient feature of all these cases is that the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation. In these circumstances the defendant could clearly be expected, subject always to the effect of any disclaimer of responsibility, specifically to anticipate that the plaintiff would rely on the advice or information given by the defendant for the very purpose for which he did in the event rely on it. So also the plaintiff, subject again to the effect of any disclaimer, would in that situation reasonably suppose that he was entitled to rely on the advice or information communicated to him for the very purpose for which he required it. The situation is entirely different where a statement is put into more or less general circulation and may foreseeably be relied on by strangers to the maker of the statement for any one of a variety of different purposes which the maker of the statement has no specific reason to anticipate. To hold the maker of the statement to be under a duty of care in respect of the accuracy of the statement to all and sundry for any purpose for which they may choose to rely on it is not only to subject him, in the classic words of Cardozo C.J. to ‘liability in an indeterminate amount for an indeterminate time to an indeterminate class:’ see Ultramares Corporation v. Touche (1931) 174 N.E. 441, 444; it is also to confer on the world at large a quite unwarranted entitlement to appropriate for their own purposes the benefit of the expert knowledge or professional expertise attributed to the maker of the statement. Hence, looking only at the circumstances of these decided cases where a duty of care in respect of negligent statements has been held to exist, I should expect to find that the ‘limit or control mechanism . . . imposed upon the liability of a wrongdoer towards those who have suffered economic damage in consequence of his negligence’, Candlewood Navigation Corporation Ltd. v. Mitsui O.S.K. Lines Ltd [1986] AC 1, 25 rested in the necessity to prove, in this category of the tort of negligence, as an essential ingredient of the ‘proximity’ between the plaintiff and the defendant, that the defendant knew that his statement would be communicated to the plaintiff, either as an individual or as a member of an identifiable class, specifically in connection with a particular transaction or transactions of a particular kind (e.g. in a prospectus inviting investment) and that the plaintiff would be very likely to rely on it for the purpose of deciding whether or not to enter upon that transaction or upon a transaction of that kind.”(emphasis added).
It is interesting to observe that Lord Bridge in arriving at this conclusion attached considerable importance to the dissenting judgment in the Court of Appeal of Denning L.J. in Candler v. Crane Christmas & Co. [1951] 2 K.B. 164. That case is of some significance, because he specifically addressed the issue “to whom do these professional people owe the duty”. Denning L.J. stated at pp.180-181:-
“Secondly, to whom do these professional people owe this duty? I will take accountants, but the same reasoning applies to the others. They owe the duty, of course, to their employer or client; and also I think to any third person to whom they themselves show the accounts, or to whom they know their employer is going to show the accounts, so as to induce him to invest money or take some other action on them. But I do not think the duty can be extended still further so as to include strangers of whom they have heard nothing and to whom their employer without their knowledge may choose to show their accounts. Once the accountants have handed their accounts to their employer they are not, as a rule, responsible for what he does with them without their knowledge or consent… The test of proximity in these cases is: did the accountants know that the accounts were required for submission to the plaintiff and use by him?”
The very last sentence from this citation seems particularly apposite in determining whether a duty of care to Mr Widgust should be ascribed to Norwich Union with regard to the information given to Mr O’Hanlon of Hill Samuel.
In considering firstly the general duty of care in this jurisdiction it might be argued that the parameters of the duty were extended somewhat significantly by the judgment of McCarthy J. in this Court in Ward v. McMaster [1988] I.R. 337.
This was a case in which a married couple purchased a house which contained structural defects which had not been picked up on examination on behalf of the local authority by an auctioneer. The plaintiffs sued both the builders and the local authority, their claim against the latter being based on the contention that the local authority should have known that the plaintiffs would rely on an appropriate inspection having been carried out on behalf of the authority. In fact it was carried out by an auctioneer who was not a qualified surveyor and whose report did not reveal the defects in the house. In the High Court, Costello J. held it was within the reasonable contemplation of the second defendant that carelessness on its part in carrying out the valuation of the house might be likely to cause damage to the purchaser. He further held it was consistent with the local authority’s public law powers that they should be accompanied by a common law duty of care in favour of the plaintiffs and he further held that, for similar reasons, it was “just and reasonable” that the Court should hold that a duty of care arose in the case.
Upholding the judgment of Costello J. on appeal, Henchy J. was satisfied that the facts of the case were such that it could be decided in accordance with “well established principles” in that the relationship between the plaintiff and the local authority was such that the latter owed to him a duty of care to carry out an appropriate valuation. McCarthy J., however, went a little further, adopting the two stage test adopted by Lord Wilberforce in Anns v. Merton London Borough Council [1978] AC 728, to state at p. 349:-
“Whilst Costello J. essentially rested his conclusion on the ‘fair and reasonable’ test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.”
However, in Glencar Exploration plc. v. Mayo Co. Co. (No 2) [2002] 1 IR 112, Keane C.J. having considered both the judgments of Henchy J. and McCarthy J. in Ward v. McMaster, expressed the view at p. 138 that:-
“it is not clear that the observations of the latter in relation to the two stage test in Anns necessarily formed part of the ratio of the decision. Given the far reaching implications of adopting in this jurisdiction a principle of liability in negligence from which there has been such powerful dissent in other common law jurisdictions, I would not be prepared to hold that further consideration of the underlying principles is foreclosed by the dicta of McCarthy J. in Ward v. McMaster.”
He thus concluded at p. 139:-
“There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J. at first instance in Ward v. McMaster [1985] I.R. 29, by Brennan J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 and by the House of Lords in Caparo plc. v. Dickman [1990] 2 AC 605.”
This most authoritative recent statement of the law in relation to the general duty of care in negligence is in itself a powerful reason for holding that the test in Caparo, if applicable, must apply with even greater force to cases of negligent misstatement and that Lord Bridge’s caveat at p. 621 that an essential ingredient of the ‘proximity’ between the plaintiff and the defendant in such circumstances must at the very least involve proof “that the defendant knew that his statement would be communicated to the plaintiff, either as an individual or as a member of an identifiable class, specifically in connection with a particular transaction or transactions of a particular kind and that the plaintiff would be very likely to rely on it for the purposes of deciding whether or not to enter upon that transaction or upon a transaction of that kind”.
This strikes me as a particularly appropriate restriction to apply to any duty of care arising in respect of negligent misstatement for all the reasons identified in the cases already considered and bearing in mind always the crucial distinction between words and statements on the one hand and deeds and conduct on the other. It seems obvious that this distinction is one which should not be elided. The question however is whether the principles in Caparo, itself a case in negligent misstatement, should apply to cases of negligent misstatement in this jurisdiction, as distinct from cases of the general duty of care in negligence where application of those principles has been established by the decision of this Court in Glencar plc. v. Mayo Co. Co. (No.2).
There are findings of fact in the present case which place the defendants in an invidious position. This Court, following its own decisions in Hay v. O’Grady [1992] 1 I.R. 210 and Best v. Wellcome Foundation [1993] 3 I.R. 421, must accept as correct the primary findings of fact made by the learned trial judge, which include findings that Mr. O’Hanlon did make the disputed telephone call, was given inaccurate information by specialised and trained staff in relation to the position of premium payments payable under the policy, that the information given was therefore a negligent misstatement and that Hill Samuel did rely upon this negligent misstatement not to intervene on the plaintiff’s behalf, as on the evidence most certainly would have occurred, to pay the premiums in question having regard to the parlous state of health of Mrs. Wildgust and Mr. Wildgust’s then preoccupation with her care and welfare. It is also a further finding of fact by the learned trial judge that Mr. Wildgust only knew about the problem with the premium payments in June, 1992, from which it follows that the trial judge was satisfied that Mr. Wildgust had not received any breakdown notice.
Mr. Sreenan has repeatedly stated that in the absence of the negligent misstatement being addressed directly to the plaintiff, and in the further absence of any communication by Mr. O’Hanlon with Mr. Wildgust to inform him of his conversation with the official in Norwich Union, essential links in the chain of causation are broken because Hedley Byrne & Co. v. Heller & Partners [1964] AC 465 indicates that these are appropriate limbs of the test. Of course it is argued on behalf of the plaintiff that essentially Mr. Wildgust and Hill Samuel were “under the same roof” insofar as any proximity test is concerned, that they both had an equal interest in getting accurate information to prevent the happening of the loss which did in fact occur, and thus may be identified for all practical purposes as being the same person in law in the context of the particular misstatement.
It seems to me that the ‘agency’ argument relied on by the plaintiffs in this respect, whereby it is contended that Hill Samuel were ‘agents’ of the plaintiffs for the purpose of making the particular inquiry is a red herring. Hill Samuel were acting on their own behalf. This does not dispose of the proximity point however because it must have been within the contemplation of the official giving out the information that it would either be relayed to Mr. Wildgust as the person liable for the payments under the policy or acted upon by the bank to prevent the lapse of the policy. It would be absurd to treat Hill Samuel as though it had in some way itself become the sole insured under the policy so as to exclude Mr. Wildgust from the very limited category of persons with an interest in the transaction. It would equally have been well within the understanding of the respondents that Hill Samuel, as a merchant bank in the business of lending money, was holding the policy by way of security subject always to Mr. Wildgust’s equity of redemption. They were thus, in my view, both ‘neighbours’ in the legal sense to whom a duty was owed. Is Mr. Wildgust in these circumstances to be deprived of a remedy because the communication was made to only one of two neighbours where one or other could and would have acted to prevent the loss?
In Spring v. Guardian Insurance plc. [1995] 2 AC 296, the plaintiff was dismissed as an insurance salesman by the respondent company who then supplied a reference for the plaintiff which contained a negligent misstatement. The House of Lords held that an employer who gave a reference in respect of a former employee owed that employee a duty to take reasonable care in its preparation and would be liable to him in negligence if he failed to do so and the employee thereby suffered economic damage. Further, it was held that the plaintiff was entitled to succeed on the principle in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.[1964] AC 465.
At p. 319 Lord Goff of Chieveley stated:-
“The fact that the inquiry in Hedley Byrne itself was directed, in a case concerned with liability in respect of a negligent misstatement (in fact a reference), to whether the maker of the statement was liable to a recipient of it who had acted in reliance upon it, may have given the impression that this is the only way in which liability can arise under the principle in respect of a misstatement. But, having regard to the breadth of the principle as stated in Hedley Byrne itself, I cannot see why this should be so. Take the case of the relationship between a solicitor and his client, treated implicitly by Lord Morris and expressly by Lord Devlin as an example of a relationship to which the principle may apply. I can see no reason why a solicitor should not be under a duty to his client to exercise due care and skill when making statements to third parties, so that if he fails in that duty and his client suffers damage in consequence, he may be liable to his client in damages. The question whether a person who gives a reference to a third party may, if the reference is negligently prepared, be liable in damages not to the recipient but to the subject of the reference, did not arise in Hedley Byrne and so is not addressed in that case. That is the central question with which we are concerned in the present case; and I propose first to consider it in the context of an ordinary relationship between employer and employee and then to turn to apply the relevant principles to the more complex relationships which existed in the present case.
Prima facie (i.e. subject to the point on defamation, which I will have to consider later), it is my opinion that an employer who provides a reference in respect of one of his employees to a prospective future employer will ordinarily owe a duty of care to his employee in respect of the preparation of the reference. The employer is possessed of special knowledge, derived from his experience of the employee’s character, skill and diligence in the performance of his duties while working for the employer…. Furthermore, when such a reference is provided by an employer, it is plain that the employee relies upon him to exercise due skill and care in the preparation of the reference before making it available to the third party. In these circumstances, it seems to me that all the elements requisite for the application of the Hedley Byrne [1964] AC 465 principle are present.”
I cannot see how any different considerations arise in the present case or how any requirement exists to reach a different outcome. Those providing the information within Norwich Union to Mr. O’Hanlon must have been well aware that it might be relied upon as much by Mr. Wildgust as by Hill Samuel. They were both within a limited and determinate class of persons with a direct interest in the transaction, Hill Samuel having the legal assignment of the life policy and Mr. Wildgust the equity of redemption. Either of the parties, had they received accurate information, would, on the evidence, have acted to ensure that premiums were immediately paid, particularly having regard to the poor state of health of the plaintiff’s wife. I therefore have no hesitation in concluding that the respondents did assume a duty towards both the plaintiff and Hill Samuel in making the representation in question. The fact that the representation reached only Hill Samuel makes no difference in my view once it is established that Hill Samuel, as part of the class or category of persons intended to be affected by the representation, would have acted upon it to prevent the loss to the plaintiff which in fact occurred.
From the foregoing it is apparent that I favour an interpretation, or adaptation if needs be, of the Hedley Byrne principles which would include more than just the person to whom the negligent misstatement is addressed. The ‘proximity’ test in respect of a negligent misstatement in my view must go further than that and include persons in a limited and identifiable class when the maker of the statement can reasonably expect, in the context of a particular inquiry, that reliance will be placed thereon by such person or persons to act or not act in a particular manner in relation to that transaction. As I accept the submission of plaintiff’s counsel that Mr Wildgust and Hill Samuel had virtually an identical interest in preserving the policy and that both formed such an identifiable class, either of whom could have acted to prevent Mr. Wildgust’s loss, I believe it is just and reasonable to ascribe to the respondents a duty of care with regard to Mr Wildgust in such circumstances. In a nutshell, I would interpret Hedley Byrne in the light of what was stated in Caparo on the facts of this case.
I am far from convinced that to so hold represents any major extension of the principles in Hedley Byrne v Heller as the facts of that case may indicate.
The appellants in Hedley Byrne were advertising agents who had placed substantial forward advertising orders for a company on terms by which they, the appellants, were personally liable for the cost of orders. They asked their bankers to inquire into the company’s financial stability and their bankers made inquiries of the respondents, who were the company’s bankers. The respondent gave favourable references, and in reliance on these references the appellants placed orders which resulted in financial loss. Without having to specifically decide the particular point of identification, Lord Reid had the following to say at p.482:-
“Before coming to the main question of law, it may be well to dispose of an argument that there was no sufficiently close relationship between these parties to give rise to any duty. It is said that the respondents did not know the precise purpose of the inquiries and did not even know whether the National Provincial Bank wanted the information for its own use or for the use of a customer: they knew nothing of the appellants. I would reject that argument. They knew that the inquiry was in connection with an advertising contract, and it was at least probable that the information was wanted by the advertising contractors. It seems to me quite immaterial that they did not know who these contractors were: there is no suggestion of any speciality which could have influenced them in deciding whether to give information or in what form to give it. I shall therefore treat this as if it were a case where a negligent misrepresentation is made directly to the person seeking information, opinion or advice, and I shall not attempt to decide what kind or degree of proximity is necessary before there can be a duty owed by the defendant to the plaintiff.”
In the same case Lord Morris of Borth-y-Gest, with whom Lord Hodson concurred on this particular point, stated at p 503:-
“if in a sphere in which a person is so placed that others could reasonably rely on his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise.”
Lord Pearce, also in point in the same case at p. 539, added:-
“Was there such a special relationship in the present case so as to impose on the defendants a duty of care to the plaintiffs as the undisclosed principals for whom the National Provincial Bank was making the inquiry? The answer to that question depends on the circumstances of the transaction. If, for instance, they disclosed a casual social approach to the inquiry, no such special relationship or duty of care would be assumed (see Fish v. Kelly 17 C.B.N.S. 194). To import such a duty the representation must normally, I think, concern a business or professional transaction whose nature makes clear the gravity of the inquiry and the importance and influence attached to the answer,”
These dicta, and notably those of Lord Reid, provide a very persuasive basis for concluding that the principles in Caparo may more properly be seen as a clarification of the principles of Hedley Byrne, rather than any major extension thereof. It must also be borne in mind that the plaintiffs lost in Hedley Byrne largely because there was an express disclaimer of responsibility for the accuracy of the information provided by the bank, a feature entirely absent from the present case.
That leaves only the argument that the plaintiff cannot profit from his own breach of contract by invoking a claim in tort. As already indicated, reliance was placed by the respondents on the decision of this Court in Kennedy v. Allied Irish Banks plc [1998] 2 IR 48 in making this submission and on certain dicta of Hamilton C.J. cited above. However the case in question is an authority for the proposition that, irrespective of the existence of a contract, a duty of care may still arise where a party undertakes to exercise a special skill to perform a particular task knowing that the party on whose behalf the task was being performed relied on that skill. In so holding, Hamilton C.J., having invoked Hedley Byrne, stated at p 56:-
“The existence of such a duty was recognised by the High Court in the cases of Tulsk Co-operative Livestock Mart Ltd. v. Ulster Bank Ltd (Unreported, High Court, Gannon J., 13th May, 1983), Towey v. Ulster Bank [1987] ILRM 142 and T.E. Potterton Ltd. v. Northern Bank Ltd. [1993] 1 I.R. 413.
In these cases it is found as a fact that the customer, to the knowledge of the bank, relied on the bank to perform a particular task, that the bank assumed the responsibility of performing that task and failed to exercise the requisite degree of care in the performance of such task.”
This is not a case where it is sought to read into Mr Wildgust’s contract some implied term at variance with those expressly stated with regard to the requirement to pay the premiums in the manner stipulated. On the contrary, the negligent misstatement may be seen as a collateral representation, altogether outside the terms of the contract, which suggested that a particular contractual obligation had in fact been discharged.
Nor does the decision of this Court in Pat O’Donnell & Co. Ltd. v. Truck and Machinery Sales Ltd. [1998] 4 I.R. 191 materially assist the respondent. Having referred to a multitude of cases wherein it was held that there can be concurrent liability in tort and contract, O’Flaherty J. stated at p 199:-
“Thus, where under the general law a person owes a duty to another to exercise reasonable care and skill in some activity, a breach of that duty can give rise to a claim in tort notwithstanding the fact that the activity is the subject matter of a contract between them. There is no general duty of non-cumul des obligations such as is found in civil law systems.”
It was only by way of postscript to those observations that O’Flaherty J. added the rider cited by counsel for the respondent to the effect “that the general duty of care in tort cannot be manipulated so as to override the contractual allocation of responsibility between the parties.”
However, in turning to address the facts of the particular case, O’Flaherty J. then went on to say at p. 200:-
“In the present case, the terms of the contract were duly complied with. To succeed, therefore, the counterclaimant had to establish that duties otherwise owed to it by the plaintiff had been breached.” (emphasis added)
It could not be clearer but that O’Flaherty J. was simply saying that if a contract provides, whether expressly or by necessary implication, that the defendant is not liable for a particular risk, then the law of tort should not, within the four corners of the contract, be allowed to contradict that. That is a completely different situation from that which arises in the present case where no want of care in contravention of the terms of the contract is being contended for.
I would allow the appeal herein.
Gaffey v Dundalk Town Council
[2006] I.E.H.C. 436
Judgment of Mr Justice Michael Peart delivered on the 5th day of December 2006:
On the 23rd April 2004 when this young plaintiff was nine years of age, he was playing football with his slightly older sister on a grassed open space close to where he lives in Cooley Park, Dundalk, which is a small housing estate. While doing so he injured himself when accidentally he fell into a fire hydrant which is located on this grassed area, and he sustained a bad cut to his right shin, and an avulsion fracture to his left ankle.
The hydrant is situated 2.6 metres from the gable end of the adjacent house, and 5.7 metres from the front building line of the houses. The lid is easily lifted since it is not of a design which permits it to be looked in place, and it is not heavy. This lid, and therefore also the hole measures 445mm x 280mm (1’5 x 11”), and the space below the lid where the water connections are, and into which the plaintiff fell is 690mm (2’3”) deep. It could be described as being in the middle of the grassy area where they were playing. He had played on this area before this incident. How often is not clear. The plaintiff says that he had played there only a few times before the accident. I think that it is more probable that it was much more than a few times and that this was an area where he and others regularly played. There is no need to be specific as to how many times,
Prior to these children going out to play, someone in the area had obviously lifted the cast iron lid of the fire hydrant, leaving it on the grass, and exposing the hole.
Without realising that this hazard was present the plaintiff’s left leg went down the opening followed by his right leg. His left leg received a nasty gash requiring eleven stitches. Though it was not realised until some days later, he sustained a fracture to his right ankle.
His father arrived shortly thereafter and lifted him out and brought him to hospital. The plaintiff was very distressed at that time.
The plaintiff’s father has given evidence that children frequently play on this area, and also that this lid is frequently removed and left on the grass. He was aware of this happening before the plaintiff was injured and if he saw the lid off as he passed the green area he was in the habit of replacing it. Since this accident he notices it more often and replaces it. He says that he had never warned his children to watch out for the lid being off the hydrant when they were playing. Neither has he, nor any other person has ever told the defendant Council about the fact that persons unknown are removing the lid leaving the hole exposed in the grass.
It is not clear who lifts the lid or why, but the Court can, I think, presume that it is people in the estate of houses and not anyone from the defendant’s fire department. On the occasion on which the plaintiff’s engineer photographed the hole for this case, there was debris at the bottom in the form of a plastic Coca Cola bottle, some paper debris or maybe a beer can, and cigarette butts.
The Court has been told by Martin O’Neill, an Assistant Engineer with the defendant Town Council that it is responsible for cutting this grassed area and does so about every two weeks. The plaintiff has said that when the grass is long the hydrant cannot be seen as easily as when the grass is cut. I have no evidence as to whether on the date of this accident it had been recently cut. One way or another Mr O’Neill has stated that before this accident nobody had brought to the Council’s attention any recurring problem about this lid being removed from the hydrant. He believes that the hydrant is visible to anyone playing on the grass, and that the grass would have to be very long before it would not be visible.
The plaintiff’s engineer, Robert Burke inspected the hydrant for the purposes of his report, and I have already set out the dimensions of the hydrant as given by him. He has stated in his evidence that the lid of the hydrant is removable, and that it has to be, so that the hydrant can be accessed quickly by the fire services should the need arise. For that reason also these lids are not locked in place. He also stated that the lids on hydrants are no longer of the hinged kind where, when opened, the lid remains attached to the structure. This was in the interests of ease of access by the fire services.
But Mr Burke feels that the hydrant would be better placed off the grassy play area and located on the road which runs along the margin of the grassed area. There is no pavement at that point, although there is a narrow pavement at the gable wall of the house itself. The hydrant could not be placed on that pavement because it would be closer to the house than the regulations permit apparently. But he thinks that it would be better placed on the road, away from where the children play, and that there would be no particular difficulty in doing so.
In cross-examination, Kevin Segrave BL suggested that placing the hydrant on the road could not be a sensible suggestion since access to it in any emergency might be compromised by cars being parked on it.
The Court heard evidence also from Mr Pat Kelly, the Station Officer in the Fire Department of the Council. He has thirty eight years experience in that department. He regards the location of the fire hydrant on the grass as being ideal for his purposes. It is easily accessed and is unlikely to be obstructed by vehicles, and it is easy for the fire services to reach. He stated also that these hydrants are rarely constructed using a larger plinth. He also stated that if it was to be located on the road, it could be blocked by cars, and, in addition, it was his experience that when on a road these hydrants can become filled with mud and other debris from the road. These lids are of a lightweight design, and the constant passing of cars over the lid could deform it so that it is not easily removed in any emergency. In such emergencies time can be critical.
Mr Kelly stated that in the area of responsibility of the Council there were about 2500 hydrants around the town.
Liability of the defendant:
It is certainly not clear that the defendant Town Council can be found to have been negligent. Clearly the mere fact that the plaintiff sustained an injury when he accidentally fell into a hydrant the lid of which had been removed does not mean that the Council caused this to happen, and should be held liable in negligence to pay compensation to the plaintiff. Negligence must be established.
There are 2500 hydrants under the control of the Town Council. Nobody told the Council about this lid being often removed and left on the grass, thereby exposing the hole. I am satisfied from the evidence of the plaintiff’s engineer and the Council’s engineer Mr O’Neill that there is nothing inherently dangerous about either the design of the hydrant or its location. Indeed it would appear that in the present case it is appropriately located in the interests of the houses which it may have to serve in an emergency. It cannot be against the gable end of the adjacent house because by regulation it must be a certain distance away from the wall of a house. Neither can it be located on the road itself since it might be obstructed by a car, and rendered inaccessible.
The best that Mr Burke for the plaintiff will say is that the hydrant might be better located on the road surface. But I am satisfied from Mr O’Neill’s evidence and that of the fire officer, Mr Kelly that there are good reasons why it should not be located on the road, particularly since this grassed area was available for it to be located there. The plaintiff suggests that when the grass is long this hydrant is not clearly visible. But the evidence is that the grass is cut each fortnight, and it is submitted by Mr Segrave that in April such a frequency of cutting is reasonable and sufficient.
Given the large number of hydrants in the town, can it be the case that where some unknown people lift off the cover of one of these, and the Council is not even told about it happening, that the Town Council should be liable to compensate a person who falls into it? The only evidence from which negligence might be established is the assertion by Mr Burke that it would be preferable that the hydrant be located off the grassed area. He makes no complaint about the design of the hydrant, and in particular the lid which can be lifted off. In fact he has stated that it must be capable of being lifted off. There is no evidence that the design of the hydrant makes it in any way an inherent danger to which the plaintiff ought not to have been exposed. If it is suggested that the Council ought, as owner of the hydrant, to have ensured that this hydrant was never left with its lid off, then the evidence that there are some 2500 such hydrants in the town is relevant to the question of whether it would be just and reasonable that a duty of such scope be imposed under the law on the Council. It is also the fact, as already stated, that nobody made the Council aware of this recurring problem.
Patricia Moran SC for the plaintiff submits that in deciding to place the hydrant on this area of grass, the defendant ought to have known that this was an area in which children would be inclined to play, and that it represents a hidden trap to such children. There is no evidence from which the Court could conclude that the hydrant itself in its closed condition constitutes such a trap. The plaintiff in my view would have to go a step further and satisfy the Court that the Council ought to have foreseen that persons would from time to time remove the lid, thereby exposing the hole into which the children playing on the grass might fall. In my view that eventuality is not one reasonably foreseeable, and against which it should have taken precautions by way of notice or otherwise. Clearly it is the intervening act of some third party which has rendered an otherwise safe situation into a hazardous one.
A decision on the scope of the duty of care to be imposed on the Council in this regard requires a consideration of the judgment of Keane CJ in Glencar Exploration Co. Ltd v. Mayo County Council [2002] IR. …… in which the question of the scope of the duty of care owed by a public body such as the defendant Town Council was discussed, and there was restatement of the tests to be applied.
The Chief Justice referred as follows to the now notorious case of Donoghue v. Stephenson which needs no introduction to lawyers:
“The starting point is obviously the famous passage in the speech of Lord Atkin in Donoghue v. Stephenson [1932] AC 562 which, however often quoted, must be set out here again, but including an introductory passage, which is of critical importance, and is frequently omitted:
‘At present I content myself with pointing out that in English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of ‘culpa’ is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which were called in question.’ “
This passage serves the useful purpose in the present case of stating elegantly what I have already alluded to, namely that simply because a person has received an injury does not mean automatically that some other person must pay compensation to the injured party.
The learned Chief Justice then referred to the so-called two stage test enunciated by Lord Wilberforce in Anns v. Merton Borough Council as being:
“First, one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage, there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise. . . .
Thus both proximity and foreseeability were required, followed by consideration of whether there was anything which ought to negative, reduce or limit the scope of the duty. The Chief Justice, having identified some criticisms of this test, went on to refer to a different approach. He stated:
“Ultimately, in Caparo Industries Plc. v. Dickman [1990] 2 AC 605, a different approach was adopted, epitomised in a passage in the judgment of Brennan J in the High Court of Australia in Sutherland Shire Council v. Heyman (1985) 60 ALR 1:
‘It is preferable in my view that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by undefinable considerations which ought to negative, or to reduce or limit the scope of the duty, and the class of person to whom it should be owed.’
In Caparo, Lord Bridge summed up the approach in England as follows:
‘What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there exists between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of proximity’ or ‘neighbourhood’ and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope on the one party for the benefit of the other.’
The Chief Justice then reviewed the law in Ireland and in particular as it appeared from Ward v. McMaster. He referred to a passage from the judgment of Costello J. (as he then was) in the High Court as follows:
“When deciding whether a local authority exercising statutory functions is under a common law duty of care the court must firstly ascertain whether a relationship of proximity existed between the parties such that in the reasonable contemplation of the authority carelessness on their part might cause loss. But all the circumstances of the case must in addition be considered, including the statutory provisions under which the authority is acting. Of particular significance in this connection is the purpose for which the statutory powers were conferred and whether or not the plaintiff is in the class of persons which the statute was designed to assist.
It is material in all cases for the court in reaching its decision on the existence and scope of the alleged duty to consider whether it is just and reasonable that a common law duty of care as alleged should in all the circumstances exist.” (my emphasis)
Of importance is the fact that the Chief Justice also referred to the judgment of McCarthy J. in the Supreme Court wherein the latter stated:
“Whilst Costello J essentially rested his conclusion on the ‘fair and reasonable’ test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.”
The Chief Justice went on to state that while this statement by McCarthy J. had been seen as an endorsement of the two stage test of Lord Wilberforce, it was not necessarily so, and he went on to state that what McCarthy J. had stated was ‘obiter’ and concluded:
“Given the far reaching implications of adopting in this jurisdiction a principle of liability in negligence from which there has been such powerful dissent in other common law jurisdictions, I would not be prepared to hold that further consideration of the underlying principles is foreclosed by the dicta of McCarthy J in Ward v. McMaster.”
He concluded his examination of the duty of care on a local authority by stating:
There is, in my view, no reason why courts determining whether a duty of care arises, should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J at first instance in Ward v. McMaster, by Brennan J in Sutherland Shire Council v. Heyman and by the House of Lords in Caparo Industries plc. v. Dickman. As Brennan J pointed out, there is a significant risk that any other approach will result in what he called a ‘massive extension of a prima facie duty of care restrained only by undefinable considerations…’
This therefore is the test by which the present case should be considered. There is no difficulty in concluding that a relationship of proximity exists between the defendant and a person such as the plaintiff who resides in the estate on which this hydrant is situated. As for forseeability the question is whether it was in the reasonable contemplation of the defendant that placing the hydrant on this grassed area might cause injury to the plaintiff, given the probability that children would play there. One could say with confidence, I think, that the defendant should reasonably foresee that if the hydrant was badly designed or poorly constructed so that it presented a hazard, such children could sustain an injury. I am of the view however that the prospect that mischievous people would lift off the lid and leave it off and that a child such as the plaintiff would fall into the hydrant as a result, is too remote a prospect to be foreseeable. It requires an intervening act.
But even if I am wrong about that, and it was indeed foreseeable, then, under the two stage test in Anns, or as stated by McCarthy J. in Ward v. McMaster, then the plaintiff ought to recover, since there might not exist such a compelling public policy consideration as should deny the plaintiff recovery of compensation.
But under the Glencar test, even if I am wrong in relation to foreseeability, and both ‘proximity’ and ‘foreseeability’ are met, the Court must consider “whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff”.
In this respect, the evidence that there are 2500 such hydrants in the town is important, as is the uncontested fact that neither the plaintiff’s father, nor anybody else had never notified the Council of the fact that the lid of this hydrant was being removed thereby causing a danger to children playing on the grassed area.
It would also be relevant to consider the nature and purpose of the statutory power being exercised by the local authority in placing the hydrant where it is located. In the present case the Council are clearly obliged to place hydrants sufficiently close to houses in the area so that the fire services can be effective in an emergency. Such a duty is an important one, given the capacity for a fire to cause loss of life and serious injury. The design of the lid facilitates the easy access to the water supply in such an emergency. That would need to be balanced against the risk of possible injury by placing the hydrant on this grassed area.
It cannot be reasonable for the Council to have imposed upon it a duty to ensure that the lids are at all times in place on hydrants in the town – the more so in the absence of any information being given to them that lids are being removed. The Council has in place a system of inspection of hydrants on a routine basis to ensure that they are in working order, but it is quite unreal to expect that they could inspect all these installations on a daily basis. As I have stated there is no evidence that the hydrants are inherently dangerous or dangerously located. It requires the mischievous act of an intervening party to create the hazard.
In Whooley v. Dublin Corporation [1960] IR 60, the facts were somewhat similar to the present case. According to the head note of the report of that case, the plaintiff sustained personal injuries through putting her foot into an open fire hydrant box while walking at night along the footpath of a Dublin street. The lid of the hydrant box, which had apparently been removed by some mischievous person, was found on the footpath a short distance from the scene of the accident. The hydrant box was a type no longer being installed, the lid of which could be partially raised by the insertion of a stick in a slot on top of the lid. The type of hydrant in then current use by the defendant local authority had a lid which was heavier, though smaller in diameter, and was designed to be opened by a simple type of key. Both types of hydrant box were so designed as to be easily accessible to the Dublin Corporation fire brigades in case of fire and both types of lid were, consequently, capable of being removed without very great difficulty by mischievous persons. There was evidence that there were instances in which both types of lid were, to the defendants’ knowledge, removed from time to time, but there was no evidence that the older type of lid was removed with an appreciably greater relative frequency than the newer type, or that it was of a type normally easily removed by children.
It was held in the High Court, on appeal from the Circuit Court, that the plaintiff was not entitled to recover damages for negligence against the defendants, since there was no evidence to show that the hydrant box, though old-fashioned, was of a type either intrinsically likely to be interfered with by young irresponsible children or less easily safeguarded than a more modern type against unauthorised interference by mischievous youths and adults. In so deciding, McLoughlin J. stated:
“It is not contended that the Corporation are not under a duty to maintain these hydrants on the footway and that they must be readily accessible for use by the Corporation fire brigade in case of fire, but reliance is placed by the plaintiff on the evidence of an engineer called on her behalf who stated that the type of hydrant and box in this case was thirty to forty years old, that the lid could be removed by a child inserting a stick or some instrument into a slot provided along one side of the lid for that purpose, and that a more modern type has a heavier, though smaller, lid without a slot but with a hole in the centre for the insertion of a simple type of key. He did not, however, suggest that this more modern type of lid was designed to make, or would make, interference by mischievous persons more difficult.
There was evidence also by a lady that some days previous to the accident water was spurting from a hydrant without a lid in Oxford Road which, I am inclined to believe, was this same hydrant.
For the defendant Corporation there was evidence that for paving purposes the hydrants in Oxford Road, including this particular one, were in use during that period, 21st October to 4th November, after which they were inspected and were left in proper and safe condition. There was also evidence of a turncock who was notified of the accident on the same night, shortly after its happening, and inspected this hydrant box and found nothing wrong with it. How the lid came to be replaced is not known.
Having carefully considered all the circumstances and the authorities quoted to me by counsel I cannot find that the Corporation through its officials maintained this hydrant box in a negligent way so as to cause the plaintiff’s injuries. There is, in my view, no reason for holding that this type of hydrant box is of the kind that is likely to be interfered with by young irresponsible children to the knowledge of the Corporation’s officials or that any such knowledge should be imputed to them. It is my opinion that this hydrant was interfered with by some mischievous person and that no other type of hydrant which could be devised, consistent with its necessary purpose, would be safe from such malicious interference.”
I see no meaningful distinction between that case and the present case, and come to a similar conclusion.
Mc Mahon and Binchy in their work ‘The Law of Torts’ cite a case of Kavanagh v. Cork Corporation [DPIJ: Hilary and Easter Terms 1994, p. 78 at p. 80 (HC)] which involved similar facts. I have been unable in the time available to me on circuit to locate a copy of the judgment itself, but the learned authors note that in that case Keane J. (as he then was) stated that
“a fire hydrant, of its nature, has to be readily and quickly accessible to the fire brigade, or anyone else who has to make use of it rapidly in order to deal with an emergency. That is the whole point of it and, consequently , to have them locked in any way would obviously be more dangerous than the dangers caused by the sort of vandalism apparently common in parts of the city…”.
I am satisfied that the hydrant in the present case is designed in a way which facilitates, as it must, easy access to emergency services. It is located in a position which is in conformity with the regulations as to distance from any house, and that for the reasons given in evidence, it could not reasonably and safely placed on the road itself. I am also satisfied that it would not be reasonable to expect that the defendant should itself anticipate and guard against the possibility that the lid would be regularly removed from the hydrant and left on the adjoining grass, thereby exposing playing children to a hazard, even if the fact that children might play there is something which would happen. If the defendant had been notified that the lid was being removed and left off the hydrant, then the Court would have to consider how that might alter the situation, but in the present case it does not arise on the facts.
The plaintiff has failed to establish a breach of the duty of care on the defendant’s part, and with regret the claim must be dismissed.
Lewis v Bus Éireann—Irish Bus
[2006] I.E.H.C. 429
Judgment of Mr Justice Michael Peart delivered on the 6th day of December 2006:
The plaintiff’s background:
The plaintiff is now aged thirty six and has a history of heroine addiction which goes back many years. It would appear that he has been living with his present partner, Lisa Rochford for about ten years – give or take – and they have two young children. He has also two other children from a previous relationship, according to a history contained in a medical report from Dr. Whately.
The plaintiff says that during the nine years or so since the eldest of his children was born, he has been for the most part clean of drugs, although in his own evidence he admitted to what he referred to as a ‘slip’. I suspect that there has been more than the one slip. He appears to be on a methodone programme, part of the requirement of which is that he gives urine samples twice a week. These, he says, have been clean.
The defendant’s medical report from Dr Whately contains a history – presumably on the basis of what he was told by the plaintiff and his partner when he was examined by Dr. Whately for the defendant company. That report states that in 1999 the plaintiff was diagnosed with Hepatitis C associated with liver failure, and that he ceased his employment from that time and draws Disability Benefit. However that report also states that, the plaintiff had last used heroine on the day before this incident, but that the reason that he was travelling on the defendant’s bus on the 15th May 2003 was in order to attend a Dr. Oliver Lynn who was starting him on a methodone programme that very day.
I do not know whether that is true or not, considering that there is evidence that while on the bus on this day he was drinking beer – he says that he had one can of beer on the bus, but I am satisfied that there were other cans found on the bus after the plaintiff alighted at Drogheda Bus depot. It is not clear however how many were empty and how many were still full. He seems to have told Dr Whately that before getting onto the bus he had also consumed one pint of beer. Perhaps there is nothing inconsistent between travelling to commence a methodone programme with Dr Lynn, and consuming alcohol on the way. I do not know whether that would be contradictory. At the end of the day it does not matter to this case.
Dr Whately has also stated in his report that he has looked at the plaintiff’s hospital notes, and amongst these is one noted as being for “08/05/05” to the effect that the plaintiff while in the hospital went missing and security had to be called. When he returned stating that he had been in the car-park he was found to have dilated pupils, and Dr Whately states that this would indicate the use of drugs. He reports also that these records note that “he was to be discharged on Saturday 17th but because of his heroine problem he was detained in hospital until the 19th because he would not have been able to get methodone over the week-end”. The injury sustained on the bus was on the 15th May 2003 and not May 2005, so I am not clear whether the date is incorrect in Dr Whately’s report or whether the plaintiff was in hospital on that occasion in May 2005 for some other reason. The latter may well be true because of the reference to his going missing on “08/05/05” since if it is a mistake as to the year, it would be a week before the incident which this case is all about.
One could speculate and conclude that the aggressive behaviour of the plaintiff while on the bus was the action of a man who had by then consumed much more than a pint of beer and a can of beer, but that behaviour may for all I know be the result of his use of heroine on the previous day, if that is true. I have no medical evidence as such in this regard, and neither have I any evidence except some from John Hetherington the bus driver, which assists in establishing in any clear way whether the plaintiff was what is confusingly yet generally termed ‘drunk’. Accuracy in this regard is not crucial to the Court’s decision, since I am satisfied from the evidence, which I shall come to, that the plaintiff’s behaviour on the bus was aggressive and unacceptable towards the bus driver, John Hetherington. I have no doubt that Mr Hetherington was justified in making arrangements with Drogheda bus depot to have the Gardai present when the bus arrived in Drogheda.
The plaintiff is quite clearly now a very ill man as a result of his liver disease and Hepatitis C. This has nothing to do with the injury to his knee. He is visibly pale, frail, weak and unbalanced on his feet. Dr Whately’s has stated in his report that when the plaintiff attended his surgery for examination for the purpose of his medical report for the defendant the plaintiff was “very pale and very sleepy and nodded off a few times during the consultation”. He also states that the plaintiff has poor recall of events and that much of the history was given by his partner who attended with him. That description of the plaintiff is entirely consistent with how the plaintiff was in Court before me, though he did not as far as I know “nod off” during the case. But he was visibly weak, unclear in his recollection of some events, unclear in his speech, and was generally speaking a witness who had difficulty answering questions clearly, even those asked by his own Counsel.
Some of his evidence was unclear and confused. Some of his evidence was shown to be incorrect, such as in relation to his previous conviction record. Some of his recollection of events is self-serving in as much as, at times, he downplays his own part in what happened on this occasion, and in my view exaggerates the involvement of others. He is a witness who comes to Court with many disadvantages as a witness. His recollection is poor, he is ill in the way I have described, his speech is weak and slurred making it difficult to understand all that he says. But the Court must make allowances for these features in assessing his credibility, since credibility is important in this case, given the conflict of evidence in important matters.
The facts:
On the bus:
This story starts on a bus going from Dundalk to Drogheda in the middle of the day on the 15th May 2003. The plaintiff, his partner and young daughter are on the bus, which appears to have been quite full. The plaintiff says that he was on his way to commence a methodone programme that day with Dr Oliver Lynne.
The plaintiff has stated that as the bus was on its way to Drogheda the driver would stop from time to time to let off passengers near to where they wished to get to rather than at actual bus-stops. The plaintiff states that such passengers would go to the driver and ask if they could get out at that point.
John Hetherington, the driver denies that he stopped other than at official stops. One way or another the plaintiff seems to have got it into his head that this was what was happening, and decided to ask the driver to do the same for him. He went up the bus to the driver and an altercation took place. That altercation seems to have been triggered by the fact that the plaintiff was carrying at that time a can of beer. The driver says that he saw the plaintiff coming up towards him on the bus, and that he was shouting that he wanted to get off the bus. He goes on to state that he told the plaintiff that there was a stop 400-500 yards further on and that he would let him out there, and that he also asked the plaintiff to give him the can of beer. The plaintiff refused, and started to be verbally abusive to the driver, including that he would smash the driver’s glasses with the can. The plaintiff denies saying this on the basis that since he was at that time expert in the art of karate and some other martial arts he would not need a can of beer in order to break the driver’s glasses – hardly a meritorious defence to the allegation made against him.
Mr Hetherington described how the plaintiff then emptied the remaining contents of the beer can around the back of the driver’s seat and on the floor of the bus. The plaintiff’s partner says that only drips of beer were spilt around the bus. The plaintiff’s own evidence about this was not clear.
I am satisfied that the driver’s evidence is to be relied upon in this regard. I am satisfied that at this point the plaintiff’s behaviour was completely unacceptable on the bus. I have not been told whether the driver stopped the bus while this altercation was taking place or whether it happened while the bus was moving. But one way or another, a danger was created for the travelling public by the plaintiff’s behaviour, and I can fully understand why the driver would have felt it appropriate to arrange to have the Gardai present when the bus arrived, so that they could interview the plaintiff about his behaviour on the bus.
He told the plaintiff that he was calling the Gardai to meet the bus at Drogheda. The plaintiff says that he told Mr Hetherington to go ahead and call the Gardai of he wished. The plaintiff, according to Mr Hetherington, resumed his seat on the bus. The plaintiff’s partner also said that the plaintiff sat down after this altercation.
Arrival at the depot:
The plaintiff states that when the bus arrived at the depot he started to get off the bus, and that as he did so the driver grabbed hold of his jacket, that when off the bus he was jumped on from behind by the driver, that he carried this man on his back into the depot, that as he was doing this a second man also jumped on his back and that thereafter because of the weight he fell heavily to the ground thereby injuring his right knee. His right knee cap was badly fractured. In cross-examination the plaintiff denied that he had been ordered off the bus by the bus inspector, Mr Begley who came to the door of the bus when it arrived at the depot. He also denied that as soon as he got off the bus he ran off in order to avoid meeting the Gardai who he saw were about to arrive at the depot. It was put to him by Mr Gleeson for the defendant that he simply fell as he was running away from the bus, but the plaintiff denied that and reiterated that he fell because there were tow men on his back.
The plaintiff’s partner, Ms. Rochford says that she saw the plaintiff’s jacket being pulled by the driver at the depot, and that the driver was trying to keep the plaintiff on the bus until the Gardai arrived. She says that the plaintiff went off the bus and that as he was going into the depot Mr Hetherington jumped on his back, and that another man also was at the plaintiff’s back. She says that she did not know if the second man was just trying to get the driver off the plaintiff. She described the second man as being tall with blond hair, but that she could not see this man in the courtroom. She was asked if it might have been the inspector Mr Begley, but she said it was not. She did not actually witness the first man jumping up on the plaintiff’s back, presumably as she was getting the child’s buggy out from the hold of the bus immediately after she alighted from the bus.
Mr Hetherington’s evidence has been that when he arrived at the depot, the station inspector, Mr Begley was there since he had rung ahead about the incident on the bus. He says that he opened the door of the bus, that people got off, and that the plaintiff got off and headed over to the entrance of the depot. He denies touching the plaintiff at all when they were on the bus. He says that the plaintiff began to run into the depot, and that he ran after him, and that the plaintiff fell on the floor of the depot cutting his knee very badly. When asked whether the plaintiff had carried him on his back into the depot, Mr Hetherington said that did not happen, and that he had simply pursued the plaintiff into the depot and that he fell on the floor. He recalled that Mr Begley, the inspector was behind him and that he lifted the plaintiff onto a chair and phoned an ambulance. The Gardai also arrived into the depot. He thinks that the plaintiff’s partner arrived into the depot a few minutes after the plaintiff had fallen.
When cross-examined by Mr Moylan, Mr Hetherington stated that he had pursued the plaintiff because he thought that he would run away, and he wanted to stop him running away before the gardai arrived. He accepted that he had been somewhat annoyed about the beer can incident on the bus, but stated also that the reason for his concerns in that regard were because he did not want the plaintiff to cause injury either to himself or to others on the bus. He said that the plaintiff “seemed to be under the influence of alcohol”. He was pressed as to whether he was saying that the plaintiff was “drunk” but he did not go that far. Mr Moylan suggested to him that somebody who had consumed alcohol, and certainly somebody addicted to heroine as the plaintiff was at the time, could not have run as fast as somebody sober. Mr Hetherington also stated that the plaintiff’s speech was slurred and that there was a smell of drink from the plaintiff.
Mr Moylan asked him also about what had happened after the plaintiff had got off the bus. He stated that when the door of the bus was opened on arrival, Mr Begley was there and told the plaintiff to get ff the bus. He says that Mr Begley did not do anything to the plaintiff at that time, that the plaintiff went past Mr Begley towards the depot, and that he (Hetherington) went after the plaintiff. He was pressed as to the manner in which he went after the plaintiff. He denies that he jumped onto his back, and says that he just started to run as he got to the doors of the depot and would not have been too far behind the plaintiff at that point. He would not accept that he was actually running after the plaintiff – simply that he was starting to run or trot after him. I am not entirely clear what is meant by that, but I presume that it is intended to convey that at no time was Mr Hetherington running at full tilt so to speak.
He denied jumping on the plaintiff’s back, and reiterates that the plaintiff simply fell on the floor, and that Mr Begley, who was behind him, went to the assistance of the plaintiff and lifted him into a chair to await the ambulance. Mr Moylan suggested that the reason why Mr Hetherington had not given any assistance to the plaintiff was that he felt guilty for having caused the injury, but he denied that this was so.
Mr Hetherington stated that when the Gardai arrived he showed them the beer spilt on the floor of the bus, as well as the other cans on the bus.
Mr Paddy Begley, the station inspector, also gave evidence. He said that he had received a call from Mr Hetherington, and that he had called the Gardai on account of the incident on the bus. He awaited the arrival of the bus to the depot and the arrival of the gardai. He saw passengers get off the bus, and Mr Hetherington identified the plaintiff as being the man who was involved in the incident. He says that he told the plaintiff to get off the bus and that the gardai were arriving. In fact the gardai were only about one hundred yards away at that time. He recalled seeing the plaintiff running away from the bus in the direction of the depot, with Mr Hetherington in pursuit. There are apparently two sets of double swinging doors into the depot and he saw the two men heading through the first set of doors. He then went into the depot himself and saw the plaintiff on the ground. He did not see any contact occur between the plaintiff and Mr Hetherington, and did not see the plaintiff fall.
Garda Hanlon gave evidence of attending at the depot on this occasion in answer to a call. He did not see the plaintiff fall either. The first time he saw the plaintiff was while he was seated in a chair in the depot. He also inspected the bus and saw three or four cans of beer on the bus, and saw that the floor of the bus was wet.
Liability:
The Court has to determine what happened on this occasion on the basis of probabilities. There is a conflict of evidence as to whether the reason why the plaintiff fell to the ground was because one or even two men jumped on his back while in hot pursuit of him, or whether he simply fell as he ran away from Mr Hetherington in the depot so as to avoid contact with the gardai. The plaintiff is an unreliable historian, as is sometimes referred to. Because of his drug addiction and his other serious health problems his recall of events is not good, and I am certain that he has been inclined to recall exactly what happened in a way which minimises his own culpability in these events, and maximises the involvement of others.
The plaintiff was a sick man even in May 2003. He was a weak man through his abuse of drugs and it is beyond doubt that he was under the influence of alcohol on this date to add to his difficulties. There can never have been any prospect of his escaping from the gardai for any length of time. I am sure they would have been well able to locate him quickly after he got off the bus, especially because they were so near the depot when the bus arrived. Nevertheless, Mr Hetherington decided to pursue him rather then run the risk that he might get away before the gardai arrived. He need not have done that. He is a bus driver, and while I fully accept that he acted in the public interest and so that the gardai would be able to interview him arising out of the behaviour on the bus, it must be remembered that the incident on the bus was relatively minor. Nobody was hurt. I am not for one moment condoning the plaintiff’s behaviour on the bus. I am sure that it was a most unpleasant and threatening experience for Mr Hetherington who was driving the bus and was responsible for the safety of all his passengers. But there was no obligation upon him to pursue the plaintiff into the depot, especially since the gardai were almost at the depot themselves. I doubt if it is part of his terms of employment that he should act in that way, or that he has any training in that regard.
One issue to be determined on the basis of a probability is whether the plaintiff was jumped on in the manner he states, either by one man or two. He says that he was, whereas Mr Hetherington says that he was not. Nobody else witnessed the events once the two men got inside the first set of double doors. Mr Begley says that he saw the plaintiff running towards the depot with the driver running behind him, but he never stated that he saw the driver jump onto the plaintiff’s back. The plaintiff on the other hand says that as soon as he got off the bus, the driver jumped onto his back and that he carried the man into the depot in this way. I regard that as improbable. First of all Mr Hetherington says that this did not happen at all, and Mr Begley has stated definitely that he saw Mr Hetherington running towards the plaintiff into the depot. He did not see the plaintiff carrying Mr Hetherington on his back. Secondly, the plaintiff was not in good health at this time. He was about to commence recovery from an addiction to heroine, had Hepatitis C and liver damage, but had also been drinking before and while on the bus. It is improbable in my view that he would have made it as far as beyond the second set of swinging doors in the depot with one man on his back, let alone two. That just seems unlikely to me.
However, an important feature of this case is that the plaintiff sustained a very serious and heavy impact to his right knee when he hit the ground. He either stumbled and fell, or he was driven to the ground with some force. That could have happened by Mr Hetherington catching up with the plaintiff and bringing him to the ground, but without him being actually on the plaintiff’s back at the time. Mr Hetherington on the other hand says that the plaintiff simply fell himself as he ran away. That is also possible. The report of Mr Reidy, Orthopaedic Surgeon states there was “significant crushing damage to the articular surface of the patella”. This is certainly capable of being consistent with what the plaintiff says happened, but might be accounted for by some weakening of the plaintiff’s bones generally, caused by his drug habit and associated conditions.
I have not had the benefit of any live evidence from an orthopaedic surgeon who might have been able to express a view on what degree of force would be required to sustain the type of injury suffered by this plaintiff to his right knee-cap. That evidence might have suggested that a simple trip and fall while running would be unlikely to cause a fall of such severity that a knee cap would fracture, particularly a light man such as the plaintiff. Such a doctor may have been able to say that as a matter of probability the injury is consistent with a man being upon the plaintiff’s back when he fell to the ground, the extra weight causing the force necessary for such an injury to occur. Such a doctor may have been able to say as a matter of probability that even without the added weight of a man on his back, this plaintiff’s medical condition and his history of drug abuse rendered his bones more prone to fracture, making it possible for the fracture to happen when he fell. As I say, either party might have called such evidence to assist in establishing what they each say happened, but have not. The Court is left unaided in that regard.
The Court cannot resolve the conflict of evidence as to whether Mr Hetherington was on the plaintiff’s back or not. But whether he was or not, he was undoubtedly in hot pursuit of the plaintiff when he need not have been. I do not overlook also the fact that the plaintiff was essentially fleeing not from Mr Hetherington but from the gardai who he had every reason to believe would be upon him very quickly. So, to that extent he may have tripped and fallen in any event, even if Mr Hetherington was not in pursuit. But he was and need not have been in such pursuit, and in my view ought not to have been. I am prepared to find that this needless pursuit contributed significantly to the fall of the plaintiff, even though it is likely in my view that the plaintiff is inaccurate in his recollection of the events or may even be exaggerating what occurred. I prefer to rely on faulty recollection, combined with some imaginative reconstruction of the events in his mind over the intervening years. I have not formed the view that he is deliberately telling lies to the Court. I am bearing in mind his poor state of health also.
I therefore find that the defendant, its servant or agent was negligent on this occasion, even if from a public spirit point of view he can be commended for unnecessarily pursuing the plaintiff so that he would be available to the arriving gardai. He exposed even himself to some risks in these events.
However, It is necessary also to find that the plaintiff has placed himself in the position he found himself in when he alighted from the bus. I have no doubt that his behaviour on the bus was far worse than the rather benign account which he has given himself. I am also satisfied that when he got off the bus he made a run for it, not waiting for his partner and child before running away into the depot in order to escape the attention of the gardai. While it was unnecessary in my view, it was understandable that Mr Hetherington would give chase. But the defendant must be found to have significantly contributed to his own injury whether or not there was somebody on his back, as he claims. I find him liable to the extent of 50%. This would not have happened at all if he had not been acting aggressively and inappropriately on the bus.
The injury:
The plaintiff suffered a comminuted stellate fracture of his right patella. He was placed in plaster and admitted to hospital. On the following day he was taken to theatre where the fracture was reduced and fixed with tow K wires and a tension band wire. Mr Declan Reidy, Consultant Orthopaedic Surgeon reports that this fracture was “highly comminuted i.e.multi-fragmentary and that there was significant crushing damage to the articular surface of the patella.” Following removal of the cast, physiotherapy was recommended, but the report states that he attended only once for physiotherapy. The plaintiff stated in evidence that he had been told by doctors not to attend for physiotherapy on account of his liver problems. I do not accept that evidence in the absence of corroboration from any doctor who may have said it.
The plaintiff has a 13cm scar on his knee. The fracture has completely healed. He has full extension and full flexion of the knee. There is no swelling remaining and the knee is for all practical purposes the same as his left knee. There is no evidence of arthritis, but according to Mr Reidy’s report there is a “high possibility” (which I equate to a probability) that he will develop degenerative changes in the patellofemural part of his knee joint in the future. I have not been told at what stage in the future this will occur, except that in his latest report in August 2006 Mr Reidy has stated that recent x-rays have shown some irregularity in the articular surface of the knee cap, which he says is indicative of post-traumatic arthritis. Dr Whately for the defendant does not disagree with this arthritis probability.
Other symptoms which the plaintiff complains of are linked to his other medical conditions and not to the injury to his knee.
He has been recommended physiotherapy to improve this prospect but has not attended for this.
Damages:
I assess the sum of €35,000 for past pain and suffering. For future pain and suffering related to arthritic changes into the future which are probable, I assess a sum of €25,000. In that regard I take some account of the fact that the plaintiff is not acting on the advice that he should attend for physiotherapy which might ease the ongoing arthritis situation.
Allowing for the 50% deduction in respect of contributory negligence, I give judgment in the sum of €30,000, in addition to any special damages which may have been agreed between the parties.
Dempsey v Waterford Corporation
[2008] I.E.H.C. 55
Judgment of Mr Justice Michael Peart delivered on the 29th day of February 2008:
The plaintiffs are the owners of an old 17th century building at 1, Dyehouse Lane in the City of Waterford, which they purchased in about 1984 and which in more recent years they have renovated and restored and now use as their home. The first named plaintiff is an architect by profession.
The plaintiffs’ living room has a parquet floor which was not laid until they were absolutely certain that there was no moisture in the surface on which that was to be laid since moisture can cause the floor timbers to swell and buckle.
On the 3rd March 2000, the plaintiffs’ discovered without any warning that the entire parquet floor had buckled. The room had also a noxious smell. Investigations by the first named plaintiff showed him that there had been an inflow of water beneath the floor, and that it was sewage water which had somehow entered his premises underneath this floor area. He carried out his own investigations as did the defendant local authority after the problem was brought to their attention. Mr Chris O’Sullivan, an engineer in the employment of the defendant has stated that when the complaint was received the manholes on Dyehouse Street outside the plaintiffs’ house were
inspected, and no problem was identified there. Following that inspection a test referred to as a dye test was carried out. That test involved running water containing a dye through the pipe in that street in order to see whether in due course any of the dyed water could be found to have entered the plaintiffs’ living room area. None was found to have done so.
The plaintiffs’ arranged to excavate their own floor in order to see if there was anything beneath which could have caused the ingress of water since the examination of the defendant’s drain pipes on the street has revealed no problem which could be linked to the problem within the house. That excavation revealed that there was a very old 17th century drain or culvert beneath the room and which ran out in the direction of the street outside. That culvert or drain has been referred to in the evidence as a French drain. It is not a pipe as such but rather is made of old bricks. The defendant on being informed of the existence of this culvert beneath the plaintiffs’ house carried out some excavations outside the house and discovered that this structure continued out of the house and into an equally old culvert under the pavement and which in turn ran down Dyehouse Street in the direction of Grattan Quay and the river. Further investigations revealed that this old culvert was completely blocked such that a very powerful jet used by the defendant in an attempt to clear it failed completely to do so.
Everybody is agreed that the water penetration beneath the plaintiffs’ living room floor resulted from water entering the premises via this old culvert. The plaintiffs have lived in this house since 1984 and have never had such an incident before, although in evidence it was stated that there had been a previous similar complaint but it is quite clear that that complaint related to an entirely problem in a different area of the house and there is no suggestion that the two incidents are in any way linked.
Of central importance is the fact that around the time of this incident the defendant was carrying out or had recently carried out major sewage renewal works on Grattan Quay. It appears that due to population increase a programme of sewage drain upgrading was undertaken and this involved the re-laying of the main sewer along Grattan Quay, and the reconnection into that new main sewer of all branch pipes or tributaries which connect into that main sewer on Grattan Quay. One of those branch sewers was on Dyehouse Street. That branch sewer on Dyehouse Street was the drain in which the dye-test had been carried out and which revealed no seepage to the plaintiffs’ house. It was clear that there was no defect in that pipework which could have caused the problem in the plaintiffs’ house.
Mr O’Sullivan has stated that the defendant was never aware of the existence of this old French drain beneath the pavement and which in the past must have serviced the plaintiffs’ house. It does not appear on any map or any of the defendant’s records. He is of the view that there are probably a very large number of these old drains beneath the surface of the city which they are completely unaware of. However, since the investigations carried out showed that the water had entered the plaintiffs’ house by way of this old culvert the defendant decided that in order to assist the plaintiffs it would simply divert it into the new sewer pipe which they had laid on Dyehouse Street, and the problem disappeared completely thereafter.
The defendant however does not accept that what happened to the plaintiffs was due to any negligence or fault on the defendant’s part since it was completely unaware of the existence of this old pipework and could not have foreseen that it was there. The plaintiff on the other hand submits that it was incumbent on the defendant when reconnecting all the branch sewers and drains into the new main sewer on Grattan Quay to ensure that all branches were reconnected, including that which caused the problem to the plaintiffs. Mr Bernard Harte, an engineer called on the plaintiffs’ behalf has given it as his opinion also that it was the duty of the defendant to ensure that all such branch drains were properly reconnected into the new main sewer.
Nobody is quite sure why following the work carried out to the main sewer on Grattan Quay, this old pipe, for the first time since the plaintiffs came to live in this house in 1984, filled up so that water backed up the 70/90 metres up Dyehouse Street and escaped into their house. But it seems to be clear that water must have backed up in the old culvert, whereas previously whatever water was within the culvert flowed down Dyehouse Street and either entered the old sewer drain or entered the river adjacent to Grattan Quay successfully. No further investigations have been carried out to see why the old culvert no longer empties as previously, but the plaintiffs ask the Court to infer that whatever works were carried out on the main sewer failed to identify this drain and that it was not connected into the main sewer when it ought to have been, or else whatever works were done caused its exit to the river to be interrupted causing whatever water was in it to back up to the point where the old culvert entered the plaintiffs’ house, and then to enter the house as happened for the first time on the 3rd March 2000. There is no hard evidence. There is speculation in this regard, but the plaintiffs emphasise the coincidence in time between the defendant’s sewage works on Dyehouse Street and below on Grattan Quay, and the ingress of water on the 3rd March 2000, and the fact that it had never happened before. They ask the Court to conclude as a matter of probability that these works, for whatever reason as yet undiscovered, caused the problem.
As I have said the defendant denies liability for the moisture which entered the plaintiffs’ house, and say furthermore that when the plaintiffs carried out their renovation works to their house they ought to have complied with building regulations by putting in a vertical damp proof course (DPC) along the wall which abuts the pavement in Dyehouse Street since the pavement which has a significant gradient is higher that the floor of the living room area described. This vertical DPC would then have joined with a horizontal DPC preventing any dampness or other moisture permeating the wall of the house abutting the pavement. The plaintiffs say that those Regulations apply to the building of new houses and in any event there had been no problems since 1984.
Conclusions:
I am satisfied that the plaintiffs are not to blame for the damage to their living room floor. I think the reference to the Building Regulations is a ‘red herring’ really. I have certainly not been satisfied by any evidence that these regulations apply to the renovation works carried out by the plaintiffs, and neither have the regulations themselves been opened to the Court.
Similarly I am not satisfied by the evidence which I have heard that the application of a vertical damp proof course to the exterior of the plaintiffs’ wall abutting the pavement on Dyehouse Street would have successfully prevented the seepage of water via the old culvert into the plaintiffs’ living room. There is no firm evidence that this would have blocked the culvert which ran from the plaintiffs’ house into the old drain under the pavement. I do not have any evidence to assure me about that as a matter of probability.
It is trite law to state, as I should nevertheless, that the Court must make conclusions of fact based on a balance of probabilities. In my view the timing of the inflow of water on 3rd March 2000 in such close proximity to the carrying out of major sewage replacement works on Grattan Quay, and the reconnection of all branches into that main sewer line is, in some as yet undiscovered way, the probable cause of water backing up in the old culvert and entering the plaintiffs’ house. It can only be speculation, but in my view it reasonable to infer that whatever works were carried out downstream from the plaintiffs’ house were done in such a way as to impede the exit of such water as continued to flow in the old culvert into the river or the drain. It is possible that the old culvert drained into the old sewer on Grattan Street and was not reconnected into the new sewer. Alternatively, and in my view more probably, the old culvert drained directly into the river, and that for some reason, since the culvert was not known to exist, that exit to the river became obstructed or damaged during the carrying out of the works, and this caused whatever water was accustomed to flow in it down Dyehouse Street to simply back up as far as the branch into the plaintiffs’ house. It is significant that as soon as this culvert was diverted into the branch sewer on Dyehouse Street the plaintiffs’ problem disappeared as quickly as it had happened.
As a matter of probability the cause of the damage to the plaintiffs’ house was the failure to connect this old culvert into the new mains or the blocking or damaging of the old culvert during those works. The Court has no evidence from which to conclude which is the precise cause since those investigations have never been carried out, and understandably so, since the problem has been simply solved by the diversion carried out into the branch sewer on Dyehouse Street.
However, the finding that the defendant’s works is the probable cause is not the end of the matter as far as fixing the defendant with the liability to the plaintiffs for the damage thereby caused.
The plaintiff’ case is pleaded in negligence, breach of duty, including statutory duty, trespass, nuisance, and on the basis of the principles in Rylands v. Fletcher.
I am not satisfied that the defendants are in breach of duty, including statutory duty, nor in trespass. The issues to be considered are whether the defendant has been negligent in the legal sense, and/or whether they are liable in nuisance, including by reference to the related Rylands v. Fletcher principles. In opening the case, Mr Maher stated that while the case was brought under a number of headings, negligence was the main issue, but nuisance is also relied upon.
Having heard this case while on circuit in Waterford, I reserved my judgment and indicated that I would give my decision in due course in Dublin. While considering my judgment, and having prepared it in part in relation to conclusions already set forth above, I listed the case for mention and invited submissions in relation to matters not addressed in argument before me, principally the impact of the judgment of Keane CJ in Glencar Exploration Ltd and anor v. Mayo County Council [2002] 1 ILRM 481 in relation to the issue of negligence. Those submissions were in due course made to me, and the Court was provided also with helpful written submissions by both parties.
Negligence:
Prior to Glencar, the law was that in order to recover damages in negligence, a plaintiff was required to first of all establish that a duty of care was owed to the plaintiff; secondly that there was a breach of that duty of care; thirdly that the injury caused either to the person or property resulted from such breach. If the plaintiff succeeded in establishing these matters, then, unless there was some countervailing public policy consideration of sufficient strength, an award of damages would follow – see Ward v. McMaster [1988] IR 337. The question of whether there existed a duty of care involved the issue of the proximity of the parties. The second question regarding a breach of that duty involved the issue of foreseeability of the damage which occurred to the plaintiff. In other words was it reasonably foressseable by the defendant that if they did not take reasonable care in the manner in which it carried out the works on Grattan Quay, that water could back up in this old culvert/French drain and cause damage to the plaintiff’s house?
Only after those matters were established did the question arise as to whether there was any sufficient public policy consideration which ought to exempt the defendant from liability.
In his judgment in Glencar, a case against a local authority, though admittedly a case involving a claim for recovery of pure economic loss, Keane CJ took the opportunity of reformulating the law of negligence in this respect in line with English authority. Having extensively considered the development of that line of authority, he stated:
“There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J at first instance in Ward v. McMaster, by Brennan J in Sutherland Shire Council v. Heyman and by the House of Lords in Caparo Industries plc. v. Dickman. As Brennan J pointed out, there is a significant risk that any other approach will result in what he called a ‘massive extension of a prima facie duty of care restrained only by undefinable considerations…”
Thus an additional test must be applied, even where a duty of care and a breach of it has been established by reference to proximity and foreseeability, namely “whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff”.
Mr Maher for the plaintiff has submitted that since Glencar was a case involving pure economic loss, this passage of the learned Chief Justice’s judgment should be regarded as obiter, and should not be extended to cases where a claim arises from personal injury or injury to property. My view in relation to that submission is that while Mr Maher is correct in identifying that distinction between that case and the present one, it is nevertheless a strong restatement of the law in relation to the duty of care in the context of a claim against a local authority, and I see no reason why it should not equally apply to a case such as the present one. Indeed, I have followed it myself in Gaffey, a minor v. Dundalk Town Council, unreported, High Court, 5th December 2006, a personal injury case.
In his written submissions, Mr Maher has stated that by the time the Court requested submissions to be made, the Court had reached a conclusion, inter alia, that the “Court was satisfied that the question of proximity and foreseeability of damage had been established”. I do not believe that this is correct in so far as foreseeability is concerned. What I have concluded thus far is that “as a matter of probability the cause of the damage to the plaintiffs’ house was the failure to connect this old culvert into the new mains or the blocking or damaging of the old culvert during those works”. I have also concluded that the plaintiffs are not guilty of any contributory negligence. But the issue of foreseeability needs to be examined further, since until this damage to the plaintiffs’ property was in the legal sense foreseeable, the other steps to be taken under Glencar do not come into play at all.
Nevertheless, Mr Maher has submitted that even if he is required to go further than establishing proximity and foreseeability, and establish that it is just and reasonable in all the circumstances that a duty of such scope should be imposed upon the defendant local authority, the Court should be so satisfied, particularly since, he submits, the defendant did not either in cross-examination or in its evidence, put in issue the question of negligence or breach of duty. He submits that the defendant defended the case on four bases, namely that the damage was not caused by an ingress of water but rather by ‘damp’; that the drain in question had become blocked over a number of years; that the ingress of water into the plaintiff’s premises was not due to any activity on the part of the defendant; and that the ingress of water was the plaintiff’s own fault for failing to damp-proof his own premises.
He submits also that the plaintiff’s engineer was not challenged in relation to his evidence that ingress of water was caused by the absence of reasonable care on the part of the local authority in failing to ensure that pipes were not blocked during the course of carrying out the drainage renewal works on Grattan Quay.
In my view it is not correct to say that the defendant conceded in this manner suggested that it was negligent. Mr O’Sullivan of the defendant Council was quite clear that this culvert was something which they never knew existed on Dyehouse Street, that it is not marked on any maps in its possession, and was probably over laid down over three hundred years ago in the 17th century. He also stated that there are probably a great many of these lying under the city of Waterford from those days that nobody knows about. Negligence is denied in the Defence, and it cannot be inferred from the matters referred to by Mr Maher that because the plaintiff’s engineer has given it as his opinion that the damage was caused by the defendant’s negligence, that the Court’s function in determining that issue has been ousted by a failure to challenge that assertion, even if that occurred. My notes do not confirm the situation one way or the other, but my clear impression is that negligence is denied, including on the basis that the Council did not know, and could not reasonably have known, of the existence of this old underground culvert.
Duty of care:
There is no question but that the defendant Council owed a duty to the plaintiffs to take reasonable care not to damage their property. The question of proximity is thus easily determined.
That duty of care is to take all reasonable care in order to ensure that the plaintiffs’ property is not damaged. The question of what amounts to “reasonable care” in the circumstances of this case must be considered, because unless the meaning of that term is in some way confined, this case would stand to be determined on the basis of strict liability, once proximity and loss have been established.
It is too general simply to conclude the matter by saying that the defendant must be taken to be aware that if they did not take reasonable care to ensure that unless they connected all the pipes and drains on Dyehouse Street into the new main sewer drain under construction, that damage to the plaintiffs’ property could ensue. Everybody accepts that all pipes and drains which the defendant was aware of on Dyehouse Street were properly connected into the new drain on Grattan Quay. In my view, the fundamental question to be determined in relation to the extent of the duty of care in this case is:
“Did the duty of care owed by the defendant to the plaintiffs extend to considering that there could be pipes/drains on Dyehouse Street of which it was unaware, and which might require to be connected into the new system or otherwise dealt with, and if necessary, carrying out such investigative works as may be necessary to establish that there were none?”
If it did reasonably extend that far, then there is no doubt that this was not done. Unless it is found to extend that far, the Court does not have to consider whether they were in breach thereof, and neither is it necessary to consider whether it was reasonably foreseeable that a breach of such a duty would result in damage to the plaintiffs’ premises. It is sometimes easy to confuse foreseeability of damage with the consideration of proximity and the existence of a duty of care. But it must be remembered that foreseeability of damage resulting from a breach comes into play only where there has been found to be a particular duty of care and a breach of it. The question of whether it is just and reasonable that a duty of care of a given scope be imposed on the defendant comes into play only if a duty of care, a breach of same, and resultant foreseeable damage have been found.
Mr O’Sullivan, the defendant’s senior drain engineer, has stated that the 17th century culvert located on Dyehouse Street does not appear on any of the maps of Waterford City, and that the Council was not aware of it, or of any other such culverts that may be underground in other locations in the city. While I cannot recall him specifically saying so in his evidence, it is a safe and reasonable inference that the only way in which this culvert could have been discovered was if Dyehouse Street had been dug up in its entirety prior to the completion of the reconnection of pipes and drains into the new system on Grattan Quay, and that this excavation be done on the off-chance that a culvert would be discovered. It must be borne in mind also that there has been no evidence that on any previous occasion the defendant was aware that such culverts existed. In my view in such circumstances, it is not reasonable that the Council’s duty of care extended to an exploratory digging of Dyehouse Street in order to confirm the existence or non-existence of such a culvert that they had no basis for suspecting might exist.
Since I have so concluded, there can be have been no breach of a duty of care, and the further question of the foreseeability of damage to the plaintiffs’ premises does not arise, much less the question of whether it is fair and reasonable that a duty of such a scope be imposed upon the defendant council.
I am grateful to all parties for the helpful submissions which I requested in relation to the judgment in Glencar. But in the end, it is unnecessary to determine the issue of negligence by reference to that decision, and I refrain from discussions its possible implications in this case.
Nuisance:
There remains the claim based on nuisance/Rylands v. Fletcher principles.
Mr Maher has submitted that nuisance should be understood as defined by Shanley J. in Royal Dublin Society v. Yates, unreported, High Court, 31st July 1997, namely:
“Private nuisance consists of any interference without lawful justification with a person’s use and employment of his property.”
He has referred also to MacMahon & Binchy, Law of Torts (Butterworths) at p. 675 where the authors state that such interference must be an “unreasonable interference with another person in the exercise of his or her rights generally associated with the occupation of property”.
In so far as the defendant may have submitted that when this ingress of water into the plaintiffs’ premises occurred, the council was performing a statutory function and that therefore it should not be found to have committed a nuisance, Mr Maher submits that it cannot be said that in this case the ingress of water was an inevitable consequence of works done pursuant to its statutory function, and that the defendant cannot escape liability on that account.
Mark Flynn BL for the defendant submits that the issue of foreseeability has relevance also in relation to whether the claim based on nuisance should succeed in this case, and has submitted that since there was no negligence on the part of the Council it cannot be found guilty of creating a nuisance.
In my view, in this case, the finding that the Council was not negligent because it could not be expected to have foreseen or anticipated that this culvert might exist without digging up the entire street in question – an unreasonable expectation in my view – leads to the inevitable conclusion also that the Council is not liable in nuisance either. I can usefully refer to a passage in Clerk and Lindsell on Torts, Sweet and Maxwell, Eighteenth Edition, para 19-66 where it is stated:
“As the general rule is that no one is liable for nuisance unless he either created it or continued it after knowledge or means of knowledge, it follows that it is a defence to prove ignorance of the facts constituting the nuisance, unless that ignorance is due to the omission to use reasonable care to discover the facts.”
That statement is supported by authorities referred to in that same paragraph, to which it is unnecessary to refer in detail. The clear evidence in this case is that the Council was unaware that this culvert existed, and that it does not appear marked on any maps in the possession of the Council. In my view it had no knowledge of this culvert, and neither had it the reasonable means of being aware of it, since speculative excavation of the entire street on a ‘just in case’ basis is an unreasonable burden to impose on a local authority.
Neither can this claim succeed under the related basis of Rylands v. Fletcher. Even if this ingress of water resulted from an unnatural use of the lands, i.e. from a culvert placed thereunder, and even if the water in question fulfils the requirement that it was likely to do mischief if it escaped, and I refrain from deciding those questions finally, the absence of any knowledge on the part of the Council of the existence of this potential mischief removes the claim from the principles derived from Rylands v. Fletcher, particularly in the circumstances of this case where it cannot with any reality be stated, in the light of that ignorance, that the Council brought the substance onto its lands.
I therefore vacate the order of the learned Circuit court judge and dismiss the plaintiffs’ claim.
M v Commissioner of An Garda Síochána
[2011] IEHC 14
Judgment of Mr. Justice Hedigan delivered the 20th day of January 2011.
1. This action arises from proceedings dated the 1st February, 2010, wherein the President of the High Court ordered that a preliminary issue be tried on the following the questions;
1. Did the defendants owe to the plaintiff a duty of care (howsoever arising including a duty arising pursuant to the provisions of the Constitution and/or a fiduciary duty) as alleged in the statement of claim?
2. If so, is a breach of same actionable at the suit of the plaintiff?
3. Is the plaintiff’s case statute barred pursuant to the provisions of the Statute of Limitations 1957 (as amended)?
2. The plaintiff resides in Ireland. The first named defendant is the person who enjoys general direction and control of An Garda Siochána, the force established pursuant to the provisions of the Police forces Amalgamation Act, 1925 and having his principal offices at Garda Headquarters, Phoenix Park, Dublin 7. The second named defendant is a Minister of the Government and a Corporation Sole and has his principal offices at the Department of Justice, Equality and Law Reform, 72-76 St. Stephen’s Green, Dublin 2. The third named defendant is the person charged with the direction, control and supervision of prosecutions in the State and his office is located at Chapter House, 26-30 Upper Abbey Street, Dublin. The fourth named defendant is the Irish state. The fifth named defendant is the Law Officer of the state designated by the Constitution of Ireland and is charged with representing the public interest in respect of the Constitution. His office is located at Government Buildings, Upper Merrion Street, Dublin 2.
3. On the 4th May, 1990, the plaintiff made a formal complaint of rape. She was 12 years old at the time. A statement was taken in or about 18th May, 1990, from the plaintiff and a short statement was taken from her mother in or about December 1990. The plaintiff’s complaints were validated by St Louise’s Unit at Crumlin Hospital in Dublin. St. Louise’s is a unit where children are assessed and treated following an allegation of sexual abuse. It appears that no further steps were taken by the defendants to advance the investigation until September 1996 when the English Child Protection Agency contacted An Garda Síochána. The child protection agency had been alerted to the complaint by a social worker in Tallaght following contact from the plaintiff’s mother. In or about April 1997, English police interviewed the alleged perpetrator. In February, 1998, eight warrants for his arrest issued and he consented to his extradition back to Ireland. He was returned for trial on or about the 2nd October, 1998. He was convicted of rape, unlawful carnal knowledge, incest and indecent assault and received a nine-year sentence. On the 3rd December, 2001 the Court of Criminal Appeal quashed the conviction and a retrial was directed. Thereafter the accused brought judicial review proceedings to prohibit a retrial by reason of prosecutorial delay and this application was successful before Murphy J. The Judge had regard to the fact, described by him as extraordinary, that records were mislaid and that there was no system to track and date records. The reason offered to explain the delay on behalf of the first and/or second named defendants during the course of the trial was that the papers were lost somewhere in the prosecution service and subsequently located in archives. It was also stated that two officers within the investigating /prosecution services had died between 1990 and 1996. When the case was reopened in 1996 L.M had made a statement to the gardaí she also gave evidence over a two-day period at the trial. L.M was seen on 24th September, 1999, for the purpose of the preparation of a victim impact report, she was described as relaxed, pleasant and good humoured. The plaintiff’s mental condition notably deteriorated with the collapse of the accused’s trial and a diagnosis of post-traumatic stress disorder has been made. Counsel for the plaintiff argues that this deterioration was caused by distress occasioned by the fact that the plaintiff was denied justice due to the failure to properly pursue a prosecution on foot of her complaint. The plaintiff contends that the failure constitutes negligence and breach of duty on the part of the defendants. The plaintiff claims her constitutional right to bodily integrity and privacy have been breached, as have her rights under Articles 2, 3, 6, 8, and 13 of the European Convention of Human Rights. In these proceedings issued on the 21st day of July 2004 the plaintiff seeks damages and various declaratory reliefs. The plaintiff sought discovery from the defendants to establish the full factual circumstances in which the prosecution was not pursued in a more expeditious way. The plaintiff’s discovery motion was issued and served in July 2009, in response the defendants made this application for the trial of a preliminary issue.
4. Submissions of the Defendant’s
4.1 For the purposes of the trial of the preliminary issue, the facts are assumed to be in accordance with the plaintiff’s statement of claim. The primary issue therefore is whether the defendants owed the plaintiff a duty of care. The circumstances in which a duty of care arises were addressed by Lord Atkin in Donoghue v. Stevenson [1932] AC 562.
“You must take reasonable care to avoid acts or omissions, which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”
In the case of Glencar Exploration p.l.c. v. Mayo County Council (No. 2) [2002] 1 IR 84. Keane C.J. stated that in his view not only should the “proximity” and “foreseeability” tests be used but that considerations of public policy together with the test of whether it is just and reasonable to impose a duty of care should be employed. The plaintiff seeks to argue that the Gardaí and Prosecuting Authorities owed her an actionable duty of care in the way they went about their prosecutorial functions. The defendants argue that in circumstances where a body is performing a function that is in the public interest, this may outweigh any duty of care to private individuals. That this is so is clear from the decision in Beatty v. The Rent Tribunal [2006] 2 IR 191. McCracken J. stated as follows:-
“What can be gleaned from the various decisions is that there are circumstances in which, for reasons of public policy, it would not be just and reasonable to impose a duty of care. What is to be considered as just and reasonable is not merely what would be just and reasonable between the parties, but also what would be just and reasonable in the public interest. Where a public body, such as the Appellant in the present case, performs a function which is in the public interest, then in many cases, and I believe this to be one of them, that body ought not to owe a duty of care to the individuals with whom it is dealing. It is in the public interest that it should perform its functions without the fear of threat of action by individuals. The fact that it is performing a function which is in the public interest may outweigh any duty of care to private individuals.”
The defendants maintain that the difficulty faced by the plaintiff, in asserting a duty of care in the circumstances of this case is evident from the ruling in W (HM) v. Ireland, AG and Government of Ireland [1997] 2 IR 141 In that case the plaintiff instituted proceedings claiming that the Attorney General owed her a duty of care and/or a constitutional obligation to consider and speedily process an extradition request, in order to ensure that one Brendan Smith was quickly brought to justice. The plaintiff was a victim of sexual offences committed in Northern Ireland by Smith. She claimed that in breach of that duty of care and / or constitutional obligation the Attorney General wrongfully and without lawful excuse failed, neglected and refused to endorse the said warrants for execution within the State, that a similar statutory duty was imposed on the Attorney General by the provisions of the Extradition Acts 1965 and 1987 and that, as a result of those breaches of duty, breaches of constitutional obligation and breach of statutory duty and as a foreseeable consequence of the wrongful acts and omissions of the Attorney General, she had suffered shock, distress, loss and damage. The court held that there was no duty of care owed by the Attorney General to the plaintiff. Costello P. explained that even if there was sufficient proximity between the plaintiff and the Attorney General and her injuries were foreseeable, public policy would prevent any duty of care being imposed. Costello P. stated:-
“In considering whether the Attorney General should be protected from actions for negligence, the court is balancing the hardship to individuals which such a rule would produce, against the disadvantage to the public interest if no such rule existed… because of the inhibiting effect on proper exercise by the Attorney General and the Director of Public Prosecutions of their prosecutorial functions, it would be contrary to the public interest that a duty of care at common law be imposed on them. So to conclude is not to submit to a “flood gates” argument of doubtful validity, it is to accept the logical consequences, should the duty of care at common law be imposed in the execution by the Attorney General of his functions under the Act of 1965.”
4.2 The defendant argues that English authorities are very much in line with the decision in W (HM) and are of persuasive authority. In Hill v. Chief Constable of West Yorkshire [1998] 2 All E.R., the House of Lords held that there was no general duty of care owed by the police to individual members of the public to identify and apprehend a criminal. Lord Keith of Kinkel observed:-
“In some instances the imposition of liability may lead to the exercise of a function being carried on in a detrimentally defensive frame of mind…A great deal of police time, trouble and expense might be expected to have to be put into the preparation of the defence to the action and the attendance of witnesses at the trial. The result would be a significant diversion of police manpower and attention from their most important function, that of the suppression of crime.”
The approach in Hill was followed by the House of Lords in the case of Brooks v. Metropolitan Police Commissioner and Others [2005] 2 All ER 489. In the Brooks case the House of Lords held that converting the ethical value that police officers should treat victims and witnesses properly, into general legal duties of care on the police towards victims and witnesses would be going too far. The court held that the prime function of the police was the preservation of the Queen’s peace; they had to concentrate on preventing the commission of crime, protecting life and property, and apprehending criminals and preserving evidence.
4.3 The defendants point out that the European Court of Human Rights have accepted that in the substantive domestic law of certain member states there is no duty of care owed by public bodies such as the police and prosecutors. Initially the Court was critical of cases such as Hill on the basis that it appeared to endorse a blanket immunity for the police in their role as investigators of crime. See Osman v. United Kingdom (1998) 29 EHRR 245. The decision in Osman was revised somewhat in Z v. United Kingdom (2002) 34 EHRR 3, which concerned the liability of local authorities for alleged failures in the performance of their functions regarding the taking into care of children feared to be at risk, the court held that there had not been a breach of Article 6 of the Convention. It was explained that: –
“The Court considers that its reasoning in the Osman judgment was based on an understanding of the law of negligence which has to be reviewed in light of the clarifications subsequently made by the domestic courts and notably the House of Lords. The Court is satisfied the law of negligence as developed in the domestic courts since the case of Caparo and as recently analysed in the case of Baret v. Enfield include fair, just and reasonable criterion as an intrinsic element of the duty of care and that the ruling of law concerning that element in this case does not disclose the operation of an immunity. In the present case, the Court is led to the conclusion that the inability of the applicants to sue the local authority flowed not from immunity but from the applicable principles governing the substantive right of action in domestic law.”
4.4 The defendant’s further submit that the provisions of the European Convention on Human Rights Act 2003 do not have retrospective effect (Dublin City Council v. Fennell [2005] 1 IR 604), and in relation to her claim under the constitution, the breaches alleged do not impose a constitutional duty of care on the defendants to the plaintiff.
4.5 The defendants further submit that the plaintiff’s case is statute barred pursuant to the Statute of Limitations 1957 as amended. The alleged breaches of duty by the Gardaí long predate the issue of the Plenary Summons on the 21st July, 2004, arising from events in 1990. The plaintiff appears to argue that the claim only accrued with the vindication by the High Court of the Constitutional Rights of the alleged perpetrator on 2nd April, 2004, or perhaps, when the DPP decided not to appeal the decision of Murphy J. to the Supreme Court. They submit that it is very difficult to see how such a decision could have this effect. In reality it would be yet again contrary to public policy if such a consequence were to follow. Short of in some way implicating or involving the High Court decision or the decision not to appeal in the cause of action, any claim in negligence or breach of duty is long since out of time.
4.6 Finally the defendants submit that the plaintiff impermissibly seeks to convert alleged failures to fulfil duties owed to the public at large into actionable private wrongs. It is submitted that it would not be just and reasonable to recognise or impose a duty of care on the defendants to the plaintiff. The Gardaí and the D.P.P.’s role in investigating crime and prosecuting cases is for the benefit of the public at large. It is imperative that the investigating members of the Garda Síochána and the D.P.P, retain their freedom of action at all times. If a duty of care were held to exist as between them and victims of crime their ability to act on issues and deal with investigations would be severely hampered. This would have an inhibiting effect on the proper exercise of their investigatory and prosecutorial functions and this would be contrary to the public interest.
5. Submissions of the Plaintiff
5.1 The plaintiff contends that the failure to properly investigate and pursue a prosecution on foot of her complaint constitutes negligence and breach of duty on the part of the defendants. The plaintiff acknowledges that the Irish Courts have applied public interest immunity to acts or omissions of prosecuting authorities. However the plaintiff maintains that the public policy immunity sought to be invoked does not properly have the effect of excluding all liability on the part of the state arising from the negligent investigation and prosecution of crime. The plaintiff argues that there are circumstances in which the negligent investigation and prosecution of crime can give rise to a liability on the part of the State authority. There is a growing body of support from international jurisprudence that there is no longer available a blanket exclusion for all negligent acts or omissions of the prosecuting authorities to victims of crime.
The leading authority in Irish law limiting the duty of care to victims of crime is the case W (HM) v. Ireland, AG and Government of Ireland [1997] 2 IR 141. In that case the court held that there was no duty of care owed by the Attorney General to the plaintiff. Costello P. explained that even if there was sufficient proximity between the plaintiff and the Attorney General and her injuries were foreseeable, public policy would prevent any duty of care being imposed. It is argued on behalf of the plaintiff that the W (HM) case is of limited application. That case dealt with the Extradition Act 1965. Counsel argues that it is possible that under alternative legislation it might be possible to sue the Attorney General. This argument is based on the proposition that if the W (HM) case applies generally, as suggested by counsel for the defendant, then this would fly in the face of the Supreme Court decision in Byrne v. Ireland [1972] I.R. 241, which held that there is no general state immunity because the people are sovereign and the state is an agent of the people and can be sued. It follows that if the state can be sued, an organ of the state could not have an absolute immunity from suit. In Byrne case Walsh J. held: –
“Where the People by the Constitution create rights against the State or impose duties upon the State, a remedy to enforce those must be deemed to be also available…It is not the case that these are justiciable only when some law is being passed which directly infringes those rights or when some law is passed to implement them. They are justiciable when there has been a failure of the state to discharge the obligations”
Counsel for the plaintiff states that in light of Byrne v. Ireland, the W (HM) case cannot be interpreted as authority for a general absence of a duty of care, however even if counsel is wrong on this point it is submitted that in particular circumstances there are ‘islands of duty’. In the W (HM) case itself Mr. Justice Costello referred to the case of Nelles v. Ontario [1989] 2 SCR 170 in which the Canadian Supreme Court had held that immunity from an action for malicious prosecution should not be granted to the Attorney General and Crown Attorneys. Mr. Justice Lamer held that granting an absolute immunity to prosecutors would be “akin to granting a license to subvert individual rights”. Counsel for the plaintiff submits that the circumstances of this case are such as to warrant a duty being imposed. The Gardaí interacted with the girl as a 12 year old, a garda was present when the complaint was validated and a statement was made. It is argued that, in circumstances where a 12 year old girl is left in limbo for six years after a complaint of rape, it is foreseeable that this would cause her damage. Furthermore it is argued that even if W (HM) does apply, the immunity given to the Attorney General would be different than that given to Gardaí.
The plaintiff in this case is also asserting that her constitutional rights have been infringed. The Byrne case established the principle that where there is a wrong there should be a remedy. This principle was echoed in McFarlane v. Ireland (No. 31333/06, 10 September 2010). In McFarlane the State argued before the European Court of Human Rights that it was “highly probable” that an accused could sue successfully for damages for breach of his right to trial with reasonable expedition. The opinion of the Irish expert was described as having “demonstrated…that the constitution and its remedies were flexible and adaptable, and that the domestic courts had no hesitation in granting, and no difficulty in calculating, damages for a breach of a constitutional right notwithstanding that damages had never been calculated or awarded for a similar breach.” The logic of the State’s argument in McFarlane is to the effect that the plaintiff in this case must have a cause of action and a remedy in damages for breach of her rights arising from failure to pursue the prosecution of the complaint she made in a timely manner. It is argued that the same defendants as in McFarlane are arguing for a different proposition in this case in seeking to maintain the plaintiff has no cause of action where she sues for breach of her constitutional right to bodily integrity for a remedy in damages.
5.2 In W (HM) v. Ireland, AG and Government of Ireland, Costello J. referred to the leading English authority in this area, namely Elguzuoli -Daf v. Commissioner of Police of the Metropolis [1995] All E.R. 883. Costello J. noted that:-
“Of particular relevance to the issues in this case, it has been held in England that on the grounds of public policy, the Crown Prosecuting Service cannot be sued in negligence.”
In Elguzuoli -Daf, Lord Steyn held that whilst the recognition of individualized justice to private individuals aggrieved by careless decisions of CPS lawyers militated in favour of the recognition of a duty of care, there were compelling considerations rooted in the welfare of the whole community which outweighed the dictates of individualized justice.
Counsel for the plaintiff submits that the facts in this case are very different to those in the Elguzuoli -Daf case and that it is difficult to see in what way a liability for failure to proceed expeditiously could be said to have negative effects on the efficiency of the criminal justice system. In any event the Elguzuoli –Daf decision can no longer be considered to represent a correct statement of the law in the UK. In Brooks v. Metropolitan Police Commissioners [2005] 1 WLR 1495, it was recognized that damages can be a remedy in cases of police negligence. Whilst the House of Lords re-affirmed that as a matter of public policy the police generally owed no duty of care to victims in respect of their activities when investigating suspected crimes, a shift from the position in Hill was however apparent. Lord Steyn stated, “with hindsight not every observation in Hill’s case can now be supported.” Brooks was followed by the joined cases of Van Colle v. Chief Constable of Hertfordshire Police and Smith v. Chief Constable of Sussex Police [2008] 3 All ER 977. In Smith the police failed to take proper measures in respect of a victim’s complaint. The victim was subsequently attacked and sued the police for negligence. The majority in the House of Lords followed the precedents of Hill and Brooks, Lord Bingham dissented stating as follows:-
“If, as some of the cases suggest, it is necessary to find a special relationship for a duty of care to arise, this relationship was in my view special as a result of Mr. Smiths approach to the police and their response to it… Public policy points strongly towards imposition of a duty of care: Mr. Smith approached a professional force having a special skill in the assessment of criminal risk and the assessment of crime, a professional force whose main public function is to maintain the Queen’s peace, prevent crime and apprehend criminals. He was entitled to look to the police for protection and they, in my opinion, owed him a duty to take reasonable steps to assess the threat to him and, if appropriate, take reasonable steps to prevent it”
A recent review of the English authorities was conducted in the case of Desmond v. Chief Constable of Nottinghamshire Police [2009] EWHC 2362 Mr. Justice Wyn Williams stated as follows:-
“It seems to me that the following principles can be distilled from the authorities cited above. First, the police are immune from an action in negligence at the suit of an individual if the damage complained of was caused by an act or omission in furtherance of the investigation or suppression of crime (the core principle in Hill). Second, if the core principle is not engaged a duty of care may be imposed upon the police upon “ordinary principles” if the police are directly involved in causing actionable damage to an individual. Third, the police can be held liable in negligence for damages (including pure economic loss) if they have assumed a responsibility to the individual in question to act with reasonable care”
It appears from the foregoing that even in the UK where there is no constitutional tradition, the principle in W (HM) is no longer considered proper law. It is contended on behalf of the plaintiff that in her case a duty of care may be imposed on ordinary principles and that the gardaí should be held liable in negligence for damage having assumed a responsibility to the plaintiff to act with reasonable care in advancing the prosecution of the accused in a timely manner.
5.3 Counsel argues that the plaintiff was entitled to fair procedures which she did not get due to the culpable delay of the state. The proposition that the right to fair procedures is for the benefit of all citizens not just accused persons was established in Szilvia Gulyas and Brenda Borchardt v. The Minister for Justice, Equality and Law Reform, Ireland and The Attorney General [2001] 3 IR 216. Carroll J. held the decision to refuse the first plaintiff entry into Ireland had been based on a mistake of fact and could not be viewed as a valid decision. That meant that there was also a lack of fair procedures. The first plaintiff was entitled to damages for the disappointment and stress caused by the constitutional tort of lack of fair procedures, the second plaintiffs constitutional rights were breached, in that she was not treated fairly, she was entitled to damages for constitutional tort. Counsel for the plaintiff argues that Gulyas is authority for the proposition that fair procedures are not just for the benefit of an accused. L.M was entitled to fair procedure, which she did not get due to the culpable delay of the state.
5.4 Council argues that as the complainant of a sexual offence the plaintiff was entitled to be treated as one who is in a particularly vulnerable position. The state recognises that those who complain of serious sexual assault are a particularly vulnerable section of society. This fact is clear from certain legislative provisions that make special provision for complainants of sexual offences, for example s. 26 (3) (b) of the Civil Legal Aid Act 1995 which provides that a complainant in a prosecution for the rape, aggravated sexual assault, unlawful carnal knowledge, or of incest shall qualify for legal advice free of any contribution. Counsel for the plaintiff argues that this provision amounts to an acknowledgement by the state of the particular vulnerability of persons who complain of sexual offences, such as L.M.
5.5 The courts have already recognized the duty of care which gardaí owe to accused persons and to third parties. The duty of care owed to accused persons is evident in the Criminal Justice Act, 1984 (Treatment of Persons in Custody in Garda Síochána Stations) Regulations, 1987, persons held in garda custody are entitled to certain rights. Counsel highlighted by way of example the fact that under s. 21 of the 1984 act injured or intoxicated persons in custody may be entitled to medical treatment.
The duty of care to third parties is evident from the case of Gray v. Minister for Justice [2007] 2 IR 654. This case concerned the negligent disclosure of sensitive and confidential information by gardaí to journalists. It was held that this could give rise to a cause of action for damages for negligence if the disclosure resulted in reasonably foreseeable loss, damage or injury to a person affected by the disclosure. Counsel argues that because the courts have recognized the duty of care which gardaí owe to accused persons and to third parties, there is no reason in principle why victims of crime should not find equal protection under the law.
5.6 The plaintiff submits that her cause of action only accrued when the further prosecution of the accused was prohibited by order of Murphy J. on the 2nd day April of 2004 due to prosecutorial delay. The plenary summons herein issued in July, 2004. The relevant statutory limitation period for breach of constitutional rights is six years and for negligence is three years. Proceedings issued within months of the accrual of the cause of action and are therefore, it is submitted are not statute barred. She relies on the case of Hegarty v. O’Loughran [1990] 1 IR 148 where Griffin J. in the Supreme Court stated that:-
“…when the wrong is not actionable without actual damage, as in the case of negligence, the cause of action is not complete and the period of limitation cannot begin to run until damage happens or occurs”.
Counsel for the plaintiff argues that it was not until 2004 that the damage occurred. When the re-trial was prohibited it became clear to L. M. that the trauma she endured in giving evidence at the trial was for nothing.
6. Decision of the Court
6.1 The starting point in relation to a claim of negligence is to examine whether each element required to establish a duty of care is present. The necessary elements are proximity, foreseeability, considerations of public policy and also the test of whether it is just and reasonable to impose a duty of care. It is argued on behalf of the plaintiff that a prima facie duty of care arises from the relationship between the plaintiff and the gardaí following the making of a complaint by the plaintiff. It seems to me that there is a relationship of proximity in this case. The gardaí interacted with the plaintiff as a 12 year old girl, a garda was present when she made a statement and it was validated. The next hurdle for the plaintiff is to show her injuries were foreseeable. Again it seems to me that due to the relationship of proximity between the plaintiff and the gardaí it would have been in the reasonable contemplation of the gardaí that carelessness on their part would be likely to cause her injury. The plaintiff was just 12 years old when she complained of rape, it was foreseeable that leaving her in limbo for six years would cause her damage.
6.2 The key issue in this case however, is whether it would be contrary to public policy to impose a duty of care on the Gardaí. The most relevant Irish decision in this area is that of W (HM) v. Ireland, AG and Government of Ireland [1997] 2 IR 141. The plaintiff was a victim of sexual offences committed in Northern Ireland by one Brendan Smith. She claimed that in breach of his duty of care the Attorney General wrongfully neglected to endorse the extradition warrants for Brendan Smith and that a statutory duty was imposed on the Attorney General by the provisions of the Extradition Acts 1965 and 1987 and that, as a result of this neglect the plaintiff had suffered damage. The court held that there was no duty of care owed by the Attorney General to the plaintiff. Costello P. explained that even if there was sufficient proximity between the Plaintiff and the Attorney General and that her injuries were foreseeable public policy would prevent any duty of care being imposed.
“The principles in Ward v. McMaster (and indeed in the pre-Ward law of torts) recognize that, on grounds of public policy, the law may not recognize the existence of a duty of care. Of course, only in exceptional cases will the court deny a right of action to a person who has suffered loss on the ground that it would not be in the public interest to allow it. In considering whether the Attorney General should be protected from actions for negligence, the court is balancing the hardship to individuals which such a rule would produce, against the disadvantage to the public interest if no such rule existed.”
Costello P went on to explain that:-
“There are further compelling reasons why, in the public interest the duty claimed by the plaintiff in this action should not be allowed. If a duty under the Act of 1965 exists it must logically follow (a) that the Attorney General would be under a similar duty in respect of any prosecutorial functions conferred on him by s. 5 of the Prosecution of Offences Act, 1974 and (b) that in exercising his prosecutorial functions under that Act, the Director of Public Prosecutions would owe a like duty to all victims of crimes in the cases in which he is considering the institution of prosecution. Because of the inhibiting effect on proper exercise by the Attorney General and the Director of Public Prosecutions of their prosecutorial functions, it would be contrary to the public interest that a duty of care at common law be imposed on them. So to conclude is not to submit to a “flood gates” argument of doubtful validity, it is to accept the logical consequences, should the duty of care at common law be imposed in the execution by the Attorney General of his functions under the Act of 1965.”
6.3 In Beatty v. Rent Tribunal [2005] 2 I.R 191, the applicants had claimed that a rent review had been carried out by the respondents in a manner contrary to natural justice, at page 219 McCracken J. held:-
“While it is often expressed that the question should be asked whether it is just and reasonable that there should be liability imposed for certain actions, it seems to me that the more correct approach is to ask whether it is just and reasonable that there should be a duty of care, which, as Fennelly J. points out in the passage just quoted, is one of the basic elements of the tort of negligence. What can be gleaned from the various decisions is that there are circumstances in which, for reasons of public policy, it would not be just and reasonable to impose a duty of care. What is to be considered as just and reasonable is not merely what would be just and reasonable as between the parties, but also what would be just and reasonable in the public interest. Where a public body such as the respondent, performs a function which is in the public interest then in many cases and I believe this to be one of them, that body ought not to owe a duty of care to the individuals with whom it is dealing. It is in the public interest that it should perform its functions without fear or threat of action by individuals. The fact that it is performing a function which is in the public interest may outweigh any duty of care to private individuals. Whether it does or not, of course, is a matter for decision based on consideration of the position of any particular public body.”
6.4 In Hill v. Chief Constable of West Yorkshire [1998] 2 All E.R., the issue was whether a claim against the police for negligent failure to apprehend a violent criminal was sustainable. The House of Lords held that there was no general duty of care owed by the police to individual members of the public to identify and apprehend a criminal. But the House of Lords further held, as a second and separate ground of decision, that as a matter of public policy the police were immune from actions of negligence in respect of their activities in the investigation and suppression of crime. Lord Keith of Kinkel observed:-
“In some instances the imposition of liability may lead to the exercise of a function being carried on in a detrimentally defensive frame of mind. The possibility of this happening in relation to the investigative operations of the police cannot be excluded…. A great deal of police time, trouble and expense might be expected to have to be put into the preparation of the defence to the action and the attendance of witnesses at the trial. The result would be a significant diversion of police manpower and attention from their most important function, that of the suppression of crime. Closed investigations would require to be reopened and re traversed, not with the object of bringing any criminal to justice but to ascertain whether or not they had been competently conducted.”
In Elguzuoli -Daf v. Commissioner of Police of the Metropolis [1995] All E.R. 883, it was held that whilst the recognition of individualized justice to private individuals aggrieved by careless decisions of CPS lawyers militated in favour of the recognition of a duty of care, there were compelling considerations rooted in the welfare of the whole community which outweighed the dictates of individualized justice.
Lord Steyn stated as follows:-
“While it is always tempting to yield to an argument based on the protection of civil liberties, I have come to the conclusion that the interests of the community are better served by not imposing a duty of care on the CPS. In my view, such a duty of care would tend to have an inhibiting effect on the discharge by the CPS of its central function of prosecuting crime. It would in some cases lead to a defensive approach by prosecutors to their multifarious duties. It would introduce a risk that prosecutors would act so as to protect themselves from claims of negligence.”
In Brooks v. Metropolitan Police Commissioner and Others [2005] 2 All ER 489, the House of Lords held that the prime function of the police was the preservation of the Queen’s peace; they had to concentrate on preventing the commission of crime, protecting life and property, and apprehending criminals and preserving evidence. The cases of Hill, Elguzuoli –Daf, and Brooks illustrate the detrimental effect that the imposition of a duty of care could have on the way the police carry out their duties.
6.5 The decision of the European Court of Human Rights in the Osman v. United Kingdom (1998) 29 EHRR 245 was reviewed and that decision somewhat changed with the decision in Z v. United Kingdom (2002) 34 EHRR 3. The Court at paragraph 100 explained that: –
“The Court considers that its reasoning in the Osman judgment was based on an understanding of the law of negligence which has to be reviewed in light of the clarifications subsequently made by the domestic courts and notably the House of Lords. The Court is satisfied the law of negligence as developed in the domestic courts since the case of Caparo and as recently analysed in the case of Baret v. Enfield include fair, just and reasonable criterion as an intrinsic element of the duty of care and that the ruling of law concerning that element in this case does not disclose the operation of an immunity. In the present case, the Court is led to the conclusion that the inability of the applicants to sue the local authority flowed not from immunity but from the applicable principles governing the substantive right of action in domestic law.”
In the Z case the European Court of Human Rights reviewed the jurisprudence of the House of Lords on actions for police negligence. The court held that in light of developments in the domestic courts, it was clear what was involved in such cases was not a blanket immunity from suit which the police enjoyed, but rather that under substantive domestic law there existed no duty of care owed by the police in their investigatory and prosecutorial functions. This it is was held was in accordance with the convention.
The plaintiff also makes reference to the recent case of McFarlane v. Ireland held before the European Court of Human Rights on 10th September 2010. McFarlane argued that criminal proceedings brought against him were unreasonably long and that he was denied an effective domestic remedy for a breach of this right. The State argued that it was “highly probable” that an accused could sue successfully for damages for breach of his right to trial with reasonable expedition. They submitted that the domestic courts had no hesitation in granting damages for a breach of a constitutional right notwithstanding that damages had never been calculated or awarded for a similar breach. Based on the state’s argument in McFarlane, a plaintiff has a remedy in damages for breach of their rights arising from failure to pursue a prosecution in a timely manner. Counsel for the plaintiff argues that in this case the state is seeking to maintain the plaintiff has no cause of action where she sues for breach of her constitutional rights for a remedy in damages. These two positions it is argued, are contradictory and the state is ‘trying to ride two horses’. McFarlane can however be distinguished from the present case where the complainant is in a different category to an accused person. Gardaí may well have a duty towards an accused in respect of a delay in prosecuting a case against him. However the state did not argue before the Strasbourg Court nor has it ever been established in Ireland that gardaí owe a duty to a victim for failure to carry out their investigatory or prosecutorial functions with reasonable expedition.
6.6 The courts have also recognized the duty of care that gardaí owe third parties. The case of Gray v. Minister for Justice [2007] 2 IR 654, concerned the negligent disclosure of sensitive and confidential information by gardaí to journalists. It was held that this could give rise to a cause of action for damages for negligence if the disclosure resulted in reasonably foreseeable loss, damage or injury to a person affected by the disclosure. Counsel for the plaintiff argues that because the courts have recognized the duty of care which gardaí owe to accused persons and to third parties, there is no reason in principle why victims of crime should not find equal protection under the law. However there is no precedent which the plaintiff can rely on which indicates that gardaí or prosecuting authorities owe a duty of care to a victim in the investigation or prosecution of a case. There are compelling reasons why this is so. Public policy concerns outweigh the needs of individualized justice. The imposition of a duty of care in these circumstances could inhibit the prosecution of crime by introducing a risk that police and prosecutors would act so as to protect themselves from claims of negligence.
6.7 Subsequent to the hearing of the present case, Kearns P. delivered a judgment on the 10th day of December, 2010, in the case of B L v. Ireland, the Attorney General and the Commissioner of An Garda Síochána, which provides a very helpful summation of the law in this area. The plaintiff was the complainant in a prosecution for rape. It transpired that the accused had been arrested pursuant to a power of arrest which had been abolished. The evidence obtained during the course of his detention was held to be inadmissible and as a result the prosecution case collapsed. The plaintiff claimed damages arising from the alleged negligence and breach of duty of the defendants. Kearns P. held:-
“I am satisfied to conclude that no duty of care arises in respect of bona fide actions and decisions carried out by An Garda Síochána in the course of a criminal investigation and/or prosecution. Any other view would have quite alarming consequences. One might begin by enquiring where the duty of care would begin or end. Would the victim of a crime, such as that perpetrated on the plaintiff in the present case, be the only person with an entitlement to sue, or would any such entitlement extend to immediate members of her family or perhaps to some person who might have been a witness in the trial or a witness to the event itself? By the same token, the inhibiting nature of any such duty would effectively cripple the capacity of An Garda Síochána, or any other police force for that matter, to carry out its duties effectively and with expedition. It would be unacceptable that those charged with responsibility for the investigation and prosecution of crime should have to take legal advice at every hand’s turn in respect of every step in the criminal process. Any such approach would simply render the present system, struggling as it is with the multiple obligations imposed on the Garda Síochána in respect of those suspected of crime, to constraints of unimaginable proportions.”
I gratefully adopt this as a statement of the law in Ireland regarding the non existence of a duty of care on the gardaí and prosecuting authorities in carrying out their functions in the investigation and prosecution of crime.
Conclusion
6.8 The starting point in relation to a claim of negligence is to examine whether each element that is required to establish a duty of care is present. The necessary elements are proximity, foreseeability, considerations of public policy and also the test of whether it is just and reasonable to impose a duty of care. The key issue in this case is whether it would be contrary to public policy to impose a duty of care on the Gardaí. It seems to me that the cases cited above establish that no duty of care exists in Irish law upon the defendants in respect of their investigatory or prosecutorial functions. This is because it would be contrary to the public interest that such a duty be imposed by reason of the inhibiting effect this would have on the proper exercise of those investigatory and prosecutorial functions. It is in the public interest that those bodies should perform their functions without the fear or threat of action against them by individuals. The imposition of liability might lead to the investigative operations of the police being exercised in a defensive frame of mind. A great deal of police time, trouble and expense might have to be put into the preparation of the defence to the action and the attendance of witnesses at the trial. The result would be a significant diversion of police manpower and attention from their most important function, that of the suppression of crime. While the recognition of individualized justice may militate in favour of the recognition of a duty of care, there are compelling considerations rooted in the welfare of the whole community, which outweigh the dictates of individualized justice. This view of the law is entirely consistent with the jurisprudence of the European Court of Human Rights as set out in Z v. United Kingdom (2002) 34 EHRR 3.
The fact that the defendants are carrying out functions which are in the public interest outweighs any duty of care to private individuals. This is not to say that such bodies are immune from actions for damages arising from ordinary principles of negligence. The absence of duty relates only to their actions arising from their prosecutorial or investigatory functions. For all the above mentioned reasons the Court finds that the defendants did not owe a duty of care to the plaintiff. That being so the question of whether the case is statute barred is moot.
G v Minister for Justice, Equality and Law Reform
[2011] IEHC65, Hedigan J.
Judgment Title: G. -v- MJELR & Ors
Neutral Citation: [2011] IEHC 65
Judgment by: Hedigan J.
Status of Judgment: Approved
Neutral Citation Number: [2011] IEHC 65
THE HIGH COURT
2001 15809 P
BETWEEN
A.G.
PLAINTIFF
V
J .K. AND
THE MINISTER FOR JUSTICE EQUALITY AND LAW REFORM, IRELAND AND THE ATTORNEY GENERAL
DEFENDANTS
Judgment of Mr. Justice Hedigan delivered the 25th day of February 2011.
1. The plaintiff claims damages against the first named defendant for assault and trespass and as against the second, third and fourth defendants for negligence, breach of duty, breach of statutory duty and or breach of the plaintiff’s constitutional rights. No defence was entered by the first named defendant and judgment has been given against him, with damages to be assessed by the court.
2. The plaintiff resides in County Dublin. The first named defendant was serving a prison sentence at Arbour Hill Prison, Dublin 7 at the time these proceedings were instituted but has since been released. The second named defendant is a Minister of the Government and a Corporation Sole and has his principal offices at the Department of Justice, Equality and Law Reform, 72-76 St. Stephen’s Green, Dublin 2. The third named defendant is the Irish State. The fourth named defendant is sued as legal representative of the second and third named defendants.
3.1 The plaintiff Mrs. A.G. is a separated woman. Her marriage broke up in 1993. At the time of the events complained of in 1999, she lived alone in Blanchardstown. She has suffered from depression since the break up of her marriage and was on medication at all relevant times as a result. She frequently attended unit nine, the psychiatric unit at James Connolly Hospital in Blanchardstown. The plaintiff also had problems with alcohol abuse. These difficulties were exacerbated by events which occurred in 1996 when she was stalked by a neighbour who was subsequently convicted of assaulting the plaintiff. He received a two year sentence.
Whilst attending unit nine, the plaintiff met a woman by the name of B. C. The two women became good friends and visited each other frequently. Both women had similar problems with depression and alcohol dependence. In 1996 B. C. met the first named defendant, J. K. and in November 1998 the couple got married. At the end of January, 1999, B. C. and J. K. moved in with the plaintiff for a period of approximately three weeks following a fire in their home. The plaintiff saw J. K. again in March, 1999, when he called over alone one night at 12 p.m. J. K had alcohol with him and he made crude suggestions to the plaintiff. The plaintiff went upstairs to bed and J.K. fell asleep in the sitting room. The next morning J. K. attempted to get into bed with the plaintiff who pushed him away and shouted at him to get out. J. K. left the house and did not return alone again. The next time the plaintiff saw J.K. was on the 27th May, 1999.
3.2 At 12.10am on 27th May, 1999, a call was made to Blanchardstown Garda Station to assist Dublin Fire Brigade with an incident at a house in Blanchardstown. As a result of this call Sergeant Brian Crummey, Garda Joseph Quinn and Garda Shane McGee attended the scene. They arrived at the house at 12:20 am and were informed by the ambulance crew that there was a dead body in the house and a man going berserk. The gardai entered the house where they found the body of a woman lying face down in the sitting room. The sitting room was in disarray, furniture was scattered, the television was upside down, and there were vodka bottles and scattered tablets on the floor. Garda Quinn and Sergeant Crummey went upstairs where they found J. K. leaning against a bedroom door sobbing. Garda Quinn spoke to the man who fainted and collapsed to the floor. Garda Quinn and Sergeant Crummey lifted the man onto the bed where he came around again. The Gardai and J. K. then went downstairs. Garda Greally and Garda Ruane arrived at the scene. Garda Ruane spoke to J. K outside the house for 10-15 minutes. Garda Ruane then brought J. K. to Blanchardstown Garda Station. Sergeant Miley, Detective Garda Hannigan and other members of the Detective Unit arrived. Dr. Lionel Williams then arrived, examined the body and pronounced the woman dead. He pointed out a gash in the mouth of the dead woman to Sergeant Miley. Shortly afterwards Inspector Peter Hughes arrived at the scene. The death appeared suspicious to Inspector Hughes so he had the scene preserved for technical examination.
3.3 Some time later that morning, Inspector Hughes went to Blanchardstown station, J.K. was in the public office. Inspector Hughes asked him if he could identify the body. J.K. indicated he would. At 4.25am, Inspector Hughes, Detective Garda Hannigan, Sergeant Miley and J.K. went to the house and identified the dead woman. Inspector Hughes informed J.K. that he would require alternative accommodation as the house was being preserved as a possible crime scene and asked him whether there was anywhere he could go. J.K. indicated that he wanted to go to the home of the plaintiff whom he knew. He and his wife had stayed there some time before. They arrived at the plaintiff’s house at approximately 4:45 am. J.K. was accompanied to the door by Inspector Hughes and Sergeant Miley. There is disagreement between the parties as to the conversation that ensued.
3.4 The plaintiff’s version of the conversation is that Inspector Hughes introduced himself and asked the plaintiff if she knew the man accompanying him (J. K.). The plaintiff responded that she did. The Inspector then asked if they could come in, mentioning that there had been a tragedy. When they came in J. K. sat on the couch and said that B.C. was dead. The plaintiff was shocked and started to cry. J. K. stated that B.C. had been drinking and taking pills. Inspector Hughes asked whether J. K. could stay for a few days. The plaintiff responded that he could stay in her daughter K’s old room. Inspector Hughes asked J. K. to come down to the station the next day.
3.5 A different version of the conversation was put forward by Inspector Hughes. He states that when the plaintiff answered the door J. K said that B.C. is dead. The plaintiff invited them in and asked what had happened. Inspector Hughes told her the circumstances surrounding B. C’s death. He stated that J. K. had been in the house with B.C, that he had left the house to get a take away and on his return he found her dead. J. K and A.G. were upset at this point. A.G. hugged J. K. and said she knew B.C. a long time. Inspector Hughes told A.G that J. K. had indicated to him that he wanted the gardaí to bring him over to her house as he indicated that he could stay there. A.G. said that she would look after J. K. for a couple of days. Inspector Hughes stated that he was working nights and that if they wanted information to go to the station after lunch time when the post-mortem would be carried out.
3.6 After the Gardaí left the house A.G. made J.K. tea, she noticed that his clothes were mucky she ran him a bath and gave him some of her brothers clothes. Later that day A.G. and J.K. visited Sister Peggy Mc Loughlin who was a friend of B.C. and A.G. They asked her to inform B.C’s daughter of her death. They then went down to unit nine, the psychiatric unit at James Connolly Hospital in Blanchardstown. A.G saw Dr. Lynsey Banford who was also B.C’s doctor, she asked her to give J.K something to calm him down. Dr. Banford wrote A.G a prescription for valium which she gave J.K They went to the greyhound pub and had a few drinks. They later went to the police station where A.G and J.K both separately made statements. J.K. was finished making his statement first and A.G. gave him a key to the house.
3.7 After arriving home A.G. cooked egg and chips for the two of them and they had a few cans of beer. A.G. pushed two armchairs together and pulled a duvet over herself. J.K was sitting on the couch, A.G. told him to go up to her daughter K’s old room when ever he wanted to. A.G. had taken medication and was awoken at 3 p.m. the next day by J.K. He was crouched down with a knife in his hand which he waved in front of A.G. saying “do you like that A” He then pulled off the duvet and raped A.G.
3.8 Later that afternoon A.G’s son T.G. arrived at the house. A.G called T.G into the kitchen and they discussed what had happened to B.C, at this time J.K. was asleep in the sitting room. A.G. gave her son a note written by J.K. This note appeared to be a suicide note and suggested J.K. might have killed B.C. T.G. became concerned at this point and A.G asked him to keep his voice down. She asked T.G to go to the garda station and ask them to remove J.K. T.G. told A.G. to lock herself in the bedroom until the gardai arrived. T.G then went to the garda station. There is disagreement between the parties as to the conversation that ensued.
3.9 The plaintiff’s version of the conversation is that on 28th May, 1999, T.G. went to the garda station and gave the gardaí a “piece of his mind” as he was angry that the gardaí would bring a man such as J.K. to the home of a vulnerable woman. T.G. asked the gardaí why they brought J.K. to his mother’s house, he claims that he asked whether J.K. was a suspect. He then asked the Gardaí to remove J.K.
3.10 The defendant’s version of the conversation is that on 28th May, 1999, T.G. went to the garda station because his mother gave him the note. T.G. did not go to the station until five that evening. Instead of T.G. giving the gardaí a “piece of his mind” and demanding the gardaí remove J.K. he went into the interview room and discussed B.C. with the gardaí. T.G. did not go back up to the house. The gardai did not go up to the house until seven that evening. Had T.G expressed urgent concern they state they would have gone straight up to the house.
3.11 At 7pm Detective Garda Hannigan, and Detective Sergeant Michael Doyle went to the plaintiff’s house. The plaintiff admitted them to the house in a distressed state. J .K was present, he appeared to have consumed alcohol and was muttering obscenities. A.G requested Detective Garda Hannigan to remove J.K. from her home. After initial hesitation, J.K. complied with the request. A.G told Detective Garda Hannigan that she had been raped by J.K. that afternoon. The two gardaí brought A.G. to Blanchardstown station and introduced her to Garda’s Geraldine Ennis and Olga O’Brien. A.G. made a statement to Garda Geraldine Ennis and explained how she had been raped by J. K. She was asked to provide her clothes to the gardaí and to attend the Rotunda sexual assault treatment unit. According to the gardaí she refused to do so.
3.12 The following day Saturday 29th May, 1999, A.G. visited Sr. Peggy Mc Loughlin at about 8:30 am. She was distraught and crying and told her that J. K. had held a knife to her throat, had threatened to kill her and that he had raped her. Sr. Peggy’s reaction was to try and get A.G. to go to hospital. She asked could she talk to May Wilder and A.G. agreed. Both women then visited A.G. and convinced her to go to hospital. She was admitted to unit nine and remained there for three weeks. A.G. told the hospital that she had been attacked; she received counselling and was put on medication. A.G. also made a second statement to gardaí on the 29th May, 1999, in which she stated that J.K. had used a knife when the rape took place.
3.13 In the aftermath of the incident A.G. was treated by Dr. Declan Murray. A.G. avoided going out and became hyper-vigilant. Dr Murray treated A.G. for anxiety and post traumatic stress disorder, the latter condition was aggravated by her underlying psychiatric problems. From 1999 until 2004 A.G. was on very high levels of medication. A.G. moved away from Blanchardstown and made efforts to progress her life. She got a job and tried to tolerate the distress. By 2006 A.G. had made a reasonable recovery however she was still living a restricted lifestyle. Dr Murray and Dr Leader, the medical expert for the defendant both conclude that the rape exacerbated A.G.’s underlying condition.
Plaintiff’s Submissions
4.1 At the time Inspector Hughes accompanied the first named defendant to the plaintiff’s house, it was known to him that the death of B. C. was suspicious and that the first named defendant was a leading suspect and that he had behaved in a violent manner towards the ambulance men who came to take his wife’s body away. None of this information was given to the plaintiff at any stage. In May 1999, the plaintiff was living alone. Sometime earlier she had been subject to an attack by one of her neighbours who had subsequently been given a prison sentence of two years. The plaintiff had a drink problem and had been a patient in the Psychiatric Unit in Blanchardstown hospital. It is clear from the evidence of Garda Paul Kelly that these facts were known to gardai in Blanchardstown. It was the plaintiffs understanding when Inspector Hughes left J.K. at her house that B.C had committed suicide by taking an overdose of medication. Unlike the gardai she had no suspicion that B. C. had been killed. On the 27th May, 1999, the plaintiff and the first named defendant visited a number of friends and acquaintances and the plaintiff informed them of what she believed had been a suicide. Later that day the plaintiff was asked to give a lengthy statement to Detective Sergeant Eugene Brennan. It was still not explained to her that the first named defendant was the chief suspect. By 7pm on the 27th May, 1999, it was known to the gardai that B.C. had been killed by strangulation. No attempt was made to apprise the plaintiff of this fact. No attempt was ever made to ensure the plaintiffs safety, which could have been achieved by a garda call. The plaintiff has given evidence that had she known of the facts she would not have taken J.K. into her house.
4.2 In considering whether or not a duty of care exists towards the plaintiff it is submitted that the court must first consider the circumstances under which the incident came to occur. The plaintiff was until the intervention of Inspector Hughes, safe in her own home. The plaintiff’s evidence is that she only admitted J.K. because she was requested to do so by Inspector Hughes and she would not have admitted him had he attended on his own, having regard to her unhappy previous experience with him. It was never intended there would be any form of supervision by An Garda Síochána in respect of the first named defendant nor was the plaintiff advised to take even the most rudimentary step to protect herself such as to ensure that another member of her family came to the house while the first named defendant was there.
It is submitted that it would be unrealistic for the Court not to take into account the fact that An Garda Síochána at that time regarded the first named defendant as the most likely suspect in the death of his wife, a suspicion which was to increase as time went on. It is also clear that the plaintiff in agreeing to provide accommodation for the first named defendant was doing so only on the basis that she understood that B.C. had committed suicide. The plaintiff, on the basis of the information given to her, was receiving the first named defendant not as somebody suspected of having killed his wife, with a history of violence and rape, but rather as a grieving spouse whose wife had just committed suicide. In asking the plaintiff to make a decision as to whether or not she would provide accommodation for the first named defendant, Inspector Hughes was asking the plaintiff to make the decision without her being possessed of all relevant information. The plaintiff argues that An Garda Síochána, when possessed of the appropriate information which they had or ought to have had, should not have requested the plaintiff as a female, who was an extremely vulnerable member of the public, and who was living on her own to provide accommodation for the first named defendant without being aware that there was at the very least a degree of risk to the plaintiff.
No inquiry was made to ascertain whether the plaintiff lived alone. The absence of concern for the plaintiff has to be seen in the context of Detective Hannigan’s evidence that to him at all times J. K’s conduct was “bizarre, unreasonable and not in keeping with that of a grieving husband”. Inspector Hughes accepted under cross examination that if he had been aware of J. K’s background he would not have brought him to the plaintiff’s house. However, this statement has to be read in light of the fact that prior to leaving
J. K. at the plaintiff’s house, absolutely no investigation whatsoever was made of J. K. background. It is hard to believe that assiduous ‘profiling’ would not have ascertained J. K. background. What is beyond argument however, is that no consideration was given to whether or not a person with a significant history of violence should be staying with the plaintiff, as was the case; a violent man, a rapist in a volatile state who had also clearly indulged in heavy drinking.
4.3 Insofar as the existence of a duty of care is concerned, it has long been accepted that while individual members of a police authority may be liable for individual negligent acts, such as a garda driver in the driving of a garda vehicle. It is without doubt that in ordinary circumstances a member of An Garda Síochána does not have a specific duty in the conduct of his official duty towards members of the public generally. In that context therefore while an individual member of An Garda Síochána investigating a crime who fails to follow up an obvious lead may be guilty of negligence in the ordinary sense of the word, this does not give rise to any actionable liability on the part of a member of the public. In Hill v Chief Constable of West Yorkshire [1988] 2 All ER 238, Lord Keith of Kinkel observed as follows at 240:-
“There is no question that a Police Officer, like anyone else, may be liable in tort to a person who is injured as a direct result of his acts or omissions. Though he may be liable in damages for assault, unlawful arrest, wrongful imprisonment and malicious prosecution, and also for negligence…By common law Police Officers owe to the general public a duty to enforce the criminal law…That duty may be enforced by mandamus, at the instance of one having title to sue. But as the case shows, a Chief Officer of Police has a wide discretion as to the manner in which the duty is discharged. It is for him to decide how available resources should be deployed, where the particular lines of inquiry should or should not be followed and even whether or not certain crimes should be prosecuted. It is only if his decisions upon such matters are such as no reasonable Chief Officer of Police would arrive that someone with an interest to do so may be in a position to have recourse to Judicial Review.”
4.4 In the case of Swinney and Another v Chief Constable of West Cumbria Police [1996] 3 All ER 449 it was held that if a special relationship existed between a the police and a member if the public, in that particular case an informant, then a duty of care could arise in respect of which a breach would give rise to liability in negligence and the possibility of damages. Gibson L.J. observed at 466.
“It seems to me arguable that an informant giving in confidence sensitive information to the Police, is in a special relationship to the Police, that relationship being based on an assumption of responsibility towards the informant by the Police, is such that when through the negligence of the Police that information is disclosed to criminals, it can result in a valid claim by the informant in respect of consequent damage to the informant.”
In the case of Cowan v. Chief Constable of Avon and Somerset Constabulary [2001] All E.R. (D) 204. Keane L.J. accepted the decision in the case of Swinney and also the fact that a special relationship could exist between an individual and the police so as to impose a duty of care. In analysing the final decision he said as follows at 212:-
“Once again, as in Swinney, the existence of a duty of care owed by the Police Force to the individual is founded upon the assumption of responsibility by a Police Officer and the consequent close or special relationship between the Police Officer and the Plaintiff. That approach accords with the other authorities already cited.”
4.5 There are circumstances in which a duty of care will be owed by the Police to a member of the public. For such a duty to arise, a special relationship of proximity is required as between the plaintiff and the police. In Swinney the duty arose because the plaintiff was somebody who had furnished information to the police. It is submitted that in the present case a duty of care arises having regard to the special relationship and proximity as between the plaintiff and the police; a relationship and proximity created by the police. The plaintiff is somebody who assisted An Garda Síochána in response to their highly unusual request when she had no obligation to do so. Significantly the very situation which gave rise to the injury to the plaintiff was created by An Garda Síochána’s decision to ask the plaintiff to accommodate the first named defendant. It is submitted that this fact alone created a sufficient measure of proximity so as to create a situation where the duty of care arose.
4.6 It has long been accepted that not only must there be a duty of care but the loss or damage must be foreseeable and the Court should consider it appropriate to impose the duty. If one applies that criteria to the present case, the relationship of proximity was created by the request made by Inspector Hughes that the plaintiff would accommodate the first named defendant. This gave rise to the necessary duty of care. As to forseeability, it would seem eminently foreseeable that somebody like the first named defendant, who had a history of violence and rape, and who was at the very least suspected of having murdered his wife, would commit a crime of violence against the plaintiff, a vulnerable a psychologically frail woman living alone, while being alone with her in her house. It is equally the case that it is appropriate, just and equitable for the court to give relief to the plaintiff, especially having regard to the circumstances of the plaintiff’s background and vulnerability, and the glowing testimony given as to her character by Detective Hannigan. There can be no suggestion that the imposition of liability here is in any way contrary to public policy or would “open the floodgates” to similar claims, based as it is on the particular and distressing circumstances of this perhaps unique case.
4.7 The second, third and fourth named defendants plead that there exists immunity at law against acts by members of the Garda Síochána in undertaking bona fide discharge of their duties. The basis of the immunity is clearly the protection of the public interest.
It is submitted that immunity would only arise in a situation where the relevant member of the police authority was acting in the course of his duty. It is not part of the investigative process, nor is it part of the discharge of the ordinary duty of a member of An Garda Síochána, that he should in fact take somebody who has been questioned by the gardaí to the house of a third party upon that individual being released from questioning and a fortiori where the gardaí involved know absolutely nothing about the person they are taking there. All the more so where they did not endeavour to find out anything about the plaintiff or to inform her of the situation regarding B. C’s death. The plaintiff submits that it is difficult in that context to see how it could be argued that Inspector Hughes in so doing was in fact acting in the discharge of his duty.
Submissions of the second, third and fourth named defendant
5.1 It is submitted that the gardaí had no reason to believe that the first named defendant posed a threat to the plaintiff. The plaintiff voluntarily took the first named defendant in after the incident in which B.C. died. It is submitted that the Garda investigation was at an embryonic stage when the first named defendant was taken to the plaintiff’s house and the overriding concern for the gardaí would have been the preservation of the crime scene. It was at the first named defendant’s behest that he was taken to the plaintiff’s house and the plaintiff welcomed him at that time. It is submitted that the gardai were not nor could not have been aware of the first named defendant’s violent propensity.
5.2 It is submitted that the plaintiff was more favourably placed than the gardai to make a decision as to whether or not to have the first named defendant stay with her. When Detective Inspector Hughes asked the plaintiff could J. K. stay with her she said “Yeah. I felt sorry for him.” The plaintiff spent the next day in J. K’s company. She accepted in cross-examination that she was not hostile to him and was not afraid of him at this time because she believed B.C had overdosed. She accepted she consumed alcohol and pills on the 27th of May, 1999, in the company of J. K. On that date the plaintiff and J. K. attended Blanchardstown Garda Station and both made statements, the plaintiff remained on in the station and gave J. K. the keys to her house, she did not complain to the gardaí about J. K. staying with her. Inspector Hughes gave evidence that if the plaintiff was hostile towards J. K. he would have taken him away.
5.3 The plaintiff accepts that she did not mention that a knife was used in the alleged rape until the 29th of May, 1999. She said this was because of the “booze and pills” that she had consumed. It should be noted however, that the plaintiff’s statement of the 28th May, 1999, is highly detailed and precise in its description of the facts of the alleged rape. A file was sent to the DPP and no prosecution was directed in relation to the claim of rape. The plaintiff blames the gardaí for the alleged rape on her by J. K. because they knew or ought to have known the background and or previous convictions of J. K. The gardaí did not know anything adverse about J. K. at the time they left J. K. at A.G.’s house. While J. K was a suspect in the suspicious death of his wife, there was no evidence before gardaí to suggest in any way that J. K. was a potential risk to anyone else or indeed A. G. There was nothing to suggest that he had a violent propensity. In that regard in her statement to gardaí on the 27th May, 1999, the plaintiff stated that she never saw J. K hit B.C but she did see B.C hit J.K. and he did not retaliate. B.C however told her that J. K hit her on two occasions.
5.4 It is submitted that the plaintiff must establish the rape and she must establish facts or circumstances which would have put the gardaí on notice that she was at risk by taking the first named defendant into her home. It is submitted that there are four elements in the tort of negligence.
i) A duty of care
ii) Failure to conform to the required standard
iii) Actual loss or damage
iv) A sufficiently close causal connection between the conduct complained of and the resulting injury to the plaintiff.
In the circumstances of this case it is submitted that gardai could not be held liable under any duty of care that would require them to allege to a third party such as the plaintiff that a person in the position of the first named defendant on the 27th May, 1999, may have murdered his wife, or to prevent him having contact with other persons until the circumstances of his wife’s death became apparent.
In the case of Hill v. Chief Constable of West Yorkshire [1988] 2 All ER 238, it was held as a matter of public policy that the police were immune from actions for negligence in respect of their activities in the investigation and suppression of crime. In the more recent joined cases of Chief Constable of Hertfordshire v. Van Colle and Smith v. Chief Constable of Sussex Police [2009] 1 A.C. at 225, Lord Carswell concluded at 280:-
“The factor of paramount importance is to give the police sufficient freedom to exercise their judgment in pursuit of the objects of their work in the public interest, without being trammelled by the need to devote excessive time and attention to complaints or being constantly under the shadow of threatened litigation.”
It is submitted that the decision of the House of Lords in these cases affords a forceful basis for asserting that the police in the instant case should not be held under a duty of care of the nature alleged by the plaintiff. Further it is submitted that the plaintiff cannot contend that simply because the first named defendant may have been suspected of having been involved in the murder of his wife, he was for that reason alone a person from whom the police ought to have protected the plaintiff in any specific way.
5.5 In Osman and another v Ferguson and another [1993] 4 All ER 344, it was held that the existence of a general duty on the police to suppress crime did not carry with it liability to individuals for damage caused to them by criminals whom the police had failed to apprehend when it was possible to do so. It would be against public policy to impose such a duty as it would not promote the observance of a higher standard of care by the police and would result in the significant diversion of police resources from the investigation and suppression of crime.
Arising from this case, a complaint was made to the European Court of Human Rights and in Osman v United Kingdom [2000] 29 EHRR 45, the UK was found to be in breach of Article 13 of the Convention, as a result of a perceived immunity for the police arising from the UK judgment. This decision was however, reconsidered in the case of Z and Others v United Kingdom [2001] 29 FLR 612.
In the Z case the House of Lords held that no action lay against the local authority in negligence for breach of statutory duty concerning the discharge of their duties relating to the welfare of children under the Children’s Act 1989 in respect of childcare. It was held at paragraph 100 of the judgment that the law of negligence as developed:-
“includes fair, just and reasonable criterion as an intrinsic element of the duty of care and that the ruling of law concerning that element in this case does not disclose the operation of an immunity. In the present case, the Court is led to the conclusion that the inability of the applicants to sue the local authority flowed not from an immunity but from the applicable principles governing the substantive right of action in domestic law.”
5.6 It is submitted that damages are not an appropriate remedy in a case such as this. In Hill v. Chief Constable of West Yorkshire [1988] All E.R. 238 at 244-245 Lord Templeman said:-
“The question for determination in this appeal is whether an action for damages is an appropriate vehicle for investigating the efficiency of a police force… The threat of litigation against the police force would not make a policeman more efficient. The necessity for defending proceedings, successfully or unsuccessfully, would distract the policeman from his duties. This action is in my opinion misconceived and will do more harm than good.”
In the Hill case the culprit had at the relevant time not yet been identified, which is the case here. The Gardaí at the time of the alleged assault herein were only in the process of investigating the death of B.C. It is submitted that the concept of the “investigation of crime” should be narrowly interpreted in circumstances where the criminal law is predicated on the presumption of innocence. On the 27th May, 1999, when the gardaí brought the first named defendant to the plaintiff’s house in the aftermath of his wife’s death, the gardaí were not aware of the first named defendant’s previous convictions and could not prevent the first named defendant having contact with other persons. Further it is submitted that an accused person has rights just as any potential victim has and both sets of rights must be protected by gardai. It is denied that there was a close degree of proximity amounting to a special relationship between the plaintiff and the gardai. In the absence of this special relationship, it is submitted that there was no duty of care of the kind alleged by the plaintiff in existence.
The Decision of the Court
6.1 The plaintiff’s claim is for damages for personal injury suffered due to the negligence, breach of duty, including statutory duty on the part of the second, third and fourth defendants. The plaintiff claims that the defendants knew or ought to have known that J. K. posed a threat to the plaintiff and they failed to take any steps to ensure her safety while in his company and failed to advise her of the fact that the first named defendant had been questioned in relation to the suspicious death of B.C. She claims they negligently delivered J.K. to her house where the following day he raped her.
6.2 The starting point in relation to a claim of negligence is to establish whether each element that is required to establish a duty of care is present. The necessary elements are proximity, forseeability, considerations of public policy and also the test of whether it is just and reasonable to impose a duty of care. In this case the Gardaí are being sued for negligence. The first consideration therefore is whether there exists a duty of care on the Gardaí in the circumstances herein. It is now clearly established in Irish Law that the Gardaí owe no duty of care in respect of actions taken in the course of their duty to investigate and prosecute crime. The absence of this duty situation arises from considerations of public policy. In W (HM) v. Ireland, AG and the Government of Ireland [1997] 2 IR 141. Costello P. explained at 158:-
“The principles in Ward v Mc Master (and indeed in the pre-Ward law of torts) recognize that, on grounds of public policy, the law may not recognize the existence of a duty of care. Of course, only in exceptional cases will the court deny a right of action to a person who has suffered loss on the ground that it would not be in the public interest to allow it. In considering whether the Attorney General should be protected from actions for negligence, the court is balancing the hardship to individuals which such a rule would produce, against the disadvantage to the public interest if no such rule existed”
Costello P went on to explain at 160:-
“There are further compelling reasons why, in the public interest the duty claimed by the plaintiff in this action should not be allowed. If a duty under the Act of 1965 exists it must logically follow (a) that the Attorney General would be under a similar duty in respect of any prosecutorial functions conferred on him by s. 5 of the Prosecution of Offences Act, 1974 and (b) that in exercising his prosecutorial functions under that Act, the Director of Public Prosecutions would owe a like duty to all victims of crimes in the cases in which he is considering the institution of prosecution. Because of the inhibiting effect on the proper exercise by the Attorney General and the Director of Public Prosecutions of their prosecutorial functions, it would be contrary to the public interest that a duty of care at common law be imposed on them. So to conclude is not to submit to a “flood gates” argument of doubtful validity, it is to accept the logical consequences, should the duty of care at common law be imposed in the execution by the Attorney General of his functions under the Act of 1965.”
6.3 More recently this matter was considered by the President of the High Court in L v. Ireland & Ors, [2010] IEHC 430. The learned President confirmed the non existence of a duty of care on the gardaí and prosecuting authorities in carrying out their functions in the investigation and prosecution of crime:-
“I am satisfied to conclude that no duty of care arises in respect of bona fide actions and decisions carried out by An Garda Síochána in the course of a criminal investigation and/or prosecution. Any other view would have quite alarming consequences. One might begin by enquiring where the duty of care would begin or end. Would the victim of a crime, such as that perpetrated on the plaintiff in the present case, be the only person with an entitlement to sue, or would any such entitlement extend to immediate members of her family or perhaps to some person who might have been a witness in the trial or a witness to the event itself? By the same token, the inhibiting nature of any such duty would effectively cripple the capacity of An Garda Síochána, or any other police force for that matter, to carry out its duties effectively and with expedition. It would be unacceptable that those charged with responsibility for the investigation and prosecution of crime should have to take legal advice at every hand’s turn in respect of every step in the criminal process. Any such approach would simply render the present system, struggling as it is with the multiple obligations imposed on the Garda Síochána in respect of those suspected of crime, to constraints of unimaginable proportions.”
6.4 Even more recently this court has also considered this issue in L.M. v Commissioner of An Garda Siochána and Others [2011] IEHC 14, where it was held at para 6.8:-
“The starting point in relation to a claim of negligence is to examine whether each element that is required to establish a duty of care is present. The necessary elements are proximity, forseeability, considerations of public policy and also the test of whether it is just and reasonable to impose a duty of care. The key issue in this case is whether it would be contrary to public policy to impose a duty of care on the Gardaí. It seems to me that the cases cited above establish that no duty of care exists in Irish law upon the defendants in respect of their investigatory or prosecutorial functions. This is because it would be contrary to the public interest that such a duty be imposed by reason of the inhibiting effect this would have on the proper exercise of those investigatory and prosecutorial functions. It is in the public interest that those bodies should perform their functions without the fear or threat of action against them by individuals. The imposition of liability might lead to the investigative operations of the police being exercised in a defensive frame of mind. A great deal of police time, trouble and expense might have to be put into the preparation of the defence to the action and the attendance of witnesses at the trial. The result would be a significant diversion of police manpower and attention from their most important function, that of the suppression of crime. While the recognition of individualized justice may militate in favour of the recognition of a duty of care, there are compelling considerations rooted in the welfare of the whole community, which outweigh the dictates of individualized justice. This view of the law is entirely consistent with the jurisprudence of the European Court of Human Rights as set out in Z v. United Kingdom (2002) 34 E.H.R.R.3. The fact that the defendants are carrying out functions which are in the public interest outweighs any duty of care to private individuals. This is not to say that such bodies are immune from actions for damages arising from ordinary principles of negligence. The absence of duty relates only to their actions arising from their prosecutorial or investigatory functions.”
There are some differences in the accounts given of this event but I think little hangs thereon. The Gardaí arrived at J.K.’s house at 12:20 am on the 27th May 1999. There they found the body of B.C. lying face down in the sitting room. Vodka bottles and tablets were scattered on the floor. They were told of the presence upstairs of J.K. who was in a state of great distress. He was shortly after brought to Blanchardstown Garda Station. It was decided because of the suspicious nature of the death to preserve the scene. Later on J.K. was brought back to the house for the purpose of identifying the body. He was then advised by Inspector Hughes that he could not stay there as the house was to be preserved for investigation. He was asked if he had anywhere he could stay. He stated that he wished to go to the house of A.G. He said he knew her and had stayed with her before. The Gardaí then drove J.K. to A.G.’s house. When she answered the door A.G. said she did indeed know J.K. She was very sympathetic to his plight and agreed that she would look after him. The Gardaí departed and continued their investigation of the death of B.C. The crucial question is as to whether their action in bringing J.K. to A.G’s house was something done in the course of their investigatory functions that night. I do not think it is possible to hold it was not. It was an action that was humanitarian but also very practical. He had to go somewhere. The Gardaí would have been heavily criticised had they left him to walk the streets. There were no grounds at that time to arrest and detain him. From their point of view, the Gardaí needed to preserve the scene and that involved removing J.K. therefrom. It was inextricably a part of their investigatory functions that night. This I think disposes of the case. On the basis of the now well established law as outlined above no duty of care arises from the circumstances herein.
6.5 Having heard the case over a number of days I think I should express a view on the evidence. I find the following;
At the time they delivered J.K. to A.G.’s house, the Gardaí did not know and could not have known that J.K. had a conviction for rape and assault in the United Kingdom. He did have a minor conviction in Ireland as a youth. It apparently dated to 1971. Not even that was known to the Gardaí that night. A.G. readily opened her house to J.K. and it was reasonable for the Gardaí to accept, as was the case, that she knew him and his deceased wife and would look after him. The Gardaí could not possibly have foreseen that this man would so violently abuse the hospitality he received that night. To all intents and purposes J.K. appeared to have been safely deposited in a welcoming home. Until they were told by A.G. that she wanted him out, the Gardaí had no reason to fear for A.G. When she did ask for his removal, the gardaí promptly ejected him.
In the result, even were a duty to exist, I would have been constrained to find on the evidence that what happened was not reasonably foreseeable.
6.6 The above disposes of the case in relation to the second, third and fourth named defendants. Judgment has already been obtained against the first named defendant and I am required now to assess damages on the basis of the evidence which I have heard and the medical evidence which is contained in the written reports submitted to me by the solicitors for the plaintiff. These are four medical reports from Dr. Declan Murray dated 21st March, 2001, 25th March, 2002, the 26th February, 2003, and the 12th March, 2009.
6.7 The plaintiff is a woman with a date of birth of the 8th May, 1955. The facts of the case are already well set out above. Following the assault and rape she was admitted to the psychiatric unit at James Connolly Memorial Hospital and remained there for approximately three weeks. She was treated with antidepressants and night sedation. She improved whilst in hospital. During admission she attended a funeral home to see the remains of her friend B.C. The plaintiff has a long sad history of psychiatric disorder. This involved alcohol dependence and depression. She also had a previous history of post-traumatic stress disorder following a serious assault by a neighbour in 1996. It is clear that at the time of the assault and rape involved in this case, the plaintiff was a very vulnerable individual. The events involved in this rape case greatly exacerbated her existing psychiatric symptoms and added a new episode of post- traumatic stress disorder. It also made a major contribution to prolonging her psychiatric symptoms at an increased degree of severity. On review in March, 2001, she still had persistent symptoms following that assault. It was expected that she would need continuing psychiatric treatment for years to come.
6.8 On further review on the 25th March, 2002, the plaintiff was found to have a fluctuating course of difficulty. At times she had symptomatic improvement, at other times anxiety with feelings of panic and feeling sick. She was anxious going out to hospital appointments and appointments with her solicitor. She was hypervigilant and excessively fearful of danger. She was afraid to open her door and became startled when somebody knocked on it. She only let her immediate family into her house due to this anxiety. She was still depressed and prone occasionally to excessive alcohol consumption. She was at this stage on medication which she would require in the long term. On later review in February, 2003, she was found to have made some improvements but continued to have intermittent depression and anxiety symptoms. In the final report dated 12th March, 2009, which was prepared for the purposes of these proceedings it was noted she had been discharged from the psychiatric clinic in May, 2006. Since that time she had been keeping reasonably well and had been working in the Community Employment Scheme. On review she looked well and gave a clear account of her history. Her speech was normal and she did not report any current psychiatric symptoms. Her mood was good, her sleep was good also and energy levels, appetites and concentration were normal. She did not appear to have any major symptoms of anxiety. It was noted that she had experienced in May of 2008 a period of anxiety, hypervigilance and nervousness for a few weeks when she learned that the first named defendant, her assailant herein, had been released from prison having served nine years. This anxiety abated gradually. She remains on long term treatment to help prevent symptoms of post traumatic stress disorder and depression recurring. Overall her psychiatric condition was considered to have been resolved. She will need to continue her medication indefinitely and is likely to have symptoms at times of stress in the future.
6.9 The plaintiff presented in this case in the evidence that she gave to the Court as a very honest and frank witness. I accept in full all the evidence she gave in relation to the assault upon her. It is quite clear that she suffered a violent and most distressing attack. It is particularly noteworthy that this attack was a gross violation of the hospitality and comfort which she offered to her assailant on the evening in question when she thought he had just lost his wife in tragic circumstances. This dreadful violation of her trust and hospitality must go towards exacerbating the grave psychological problems that she encountered on top of the assault and rape itself. It goes without saying that mere money cannot reflect the suffering inflicted upon her in this assault. However it is the only currency which is available to the Court. It seems to me that the plaintiff has fortunately, through her own strength of character and the devoted attention of her medical advisers, succeeded in overcoming much of the psychiatric problems that were caused by this assault. Nonetheless there is some continuing difficulty which is likely to remain on a permanent basis. I therefore measure general damages for pain and suffering to date in the amount of €150,000 and for pain and suffering into the future in the amount of €50,000. I will hear counsel in respect of any updated particulars of special damage.
Flanagan v Houlihan
[2011] IEHC 105
udgment of Mr. Justice Feeney delivered on the 4th day of March, 2011.
1. The background to the third party issue which is the subject matter of this judgment arises out of an appalling and fatal traffic accident which occurred on the 31st March, 2005. On that day Mary Flanagan was driving her car on the main Sligo to Bundoran road near Bunduff Bridge, Tullaghan, when she was involved in a collision with another motor vehicle. She was travelling in the direction of Bundoran and was accompanied by her daughter, Anne MacSorley. The collision took place at approximately 4pm on a straight stretch of road adjacent to a shop known as “All Cash Stores”. The road at the point of impact was wide with each carriageway being over twelve feet, six inches in width and there was a hard shoulder on each side. The total road width was over 43 feet. Mary Flanagan’s car collided with a car driven by the late John (also known as Jonnie) Connolly which was heading in the direction of Sligo. The cause of the collision was that John Connolly’s car crossed on to the incorrect side of the road and collided with Mary Flanagan’s oncoming car some four feet and eight inches over the centre line. The collision resulted in two fatalities, one being John Connolly, the driver of the car which crossed on to the incorrect side, the other being Anne MacSorley, who was a front seat passenger in her mother’s car.
1.2 There is no dispute but that the accident was caused by the driving of the late John Connolly in that he drove on to the incorrect side of the road without warning and collided with an oncoming car. Not only were John Connolly and Anne MacSorley killed as a result of the accident but Mary Flanagan sustained serious personal injuries. She commenced a claim in relation to the personal injuries and damages that she sustained in the accident. Proceedings were brought against the nominated representative of John Connolly (deceased), namely, Mary Houlihan, the defendant. In March 2007 the defendant brought an application seeking to join Concepta Kelly and Seamus Kelly as third parties to the proceedings. An order joining them as third parties was made by this Court on the 5th March, 2007. The claim against the third parties was that they or their servants or agents were negligent and in breach of duty in serving alcohol to the late John Connolly prior to the collision and it was claimed that alcohol had been served to him in circumstances where the third parties knew or ought to have known that, following the consumption of the alcohol, John Connolly would drive a motor vehicle on the public roadway and would thereby constitute a danger to himself and other road users.
1.3 The defendant served a third party statement of claim wherein it was pleaded that it had been admitted on behalf of the defendant that there was negligence on the part of John Connolly (deceased) in and about the driving of his motor vehicle at the material time and it was further pleaded that that negligence was caused or contributed to by the deceased being under the influence of alcohol. The defendant also pleaded that the collision the subject matter of the proceedings and the personal injuries and loss arising therefrom as suffered by the plaintiff were caused or contributed to by the negligence and breach of duty on the part of the third parties. The third parties were identified as being at all material times the owners and occupiers of a public house known as the Diamond Bar, Tullaghan, County Leitrim. The defendant pleaded that the third parties or their servants or agents served and continued to serve alcohol to John Connolly immediately prior to him being involved in the collision and that they knew, as was his custom that he intended driving a motor vehicle having consumed alcohol. The particulars of negligence and breach of duty alleged against the third parties as set out in the third party statement of claim served by the defendant were that the third parties, one or both of them, their servants or agents, were negligent and in breach of duty in:
(a) Selling and serving alcohol to John Connolly (deceased) when they knew or ought to have known that he intended driving a motor vehicle.
(b) Serving an excessive quantity of alcohol to John Connolly (deceased) when they knew or ought to have known that he intended driving a motor vehicle.
(c) Failing to take any or any adequate steps to prevent John Connolly (deceased) driving his motor vehicle when they knew or ought to have known that he was intoxicated.
(d) Continuing to serve alcohol to John Connolly (deceased) when they knew or ought to have known that he had consumed an excessive quantity of alcohol and was unfit to drive.
(e) The defendant reserves the right to adduce further particulars.
Relying on those particulars the defendant claimed an indemnity or in the alternative a contribution in respect of the plaintiff’s claim and costs.
1.4 Particulars were raised by the solicitors on behalf of the third parties and in replies to particulars it was claimed that John Connolly (deceased) had consumed a minimum of five to six pints of Guinness shortly prior to driving his car and that he was observed driving on the incorrect side of the road. It was further stated that the collision the subject matter of the proceedings occurred on John Connolly’s incorrect side of the road. It was also claimed that a toxicology report following post mortem established that John Connolly had an ethanol reading of 242mg% which was claimed to equate to roughly an alcohol reading three times the statutory limit. It was also claimed that immediately prior to the collision John Connolly had been observed driving on the incorrect side of the road for a distance of some fifty yards and that the collision occurred on a straight stretch of road and on the deceased’s incorrect side of the road. The defendant claimed that the third parties knew or ought to have known that the deceased always arrived and departed from the third parties’ premises by car and it was claimed that the third parties or their servants or agents could have requested John Connolly not to drive, or threaten to report him to An Garda Síochána, or reported him to An Garda Síochána, or asked him for the keys of his vehicle.
1.5 The third parties delivered a defence to the third party statement of claim which claimed that the accident had been solely caused by the negligence of John Connolly and that the defendant was not entitled to any relief against the third parties. It was also denied that the defendant was entitled to an indemnity or contribution. The third parties gave particulars of negligence alleged against John Connolly (deceased) and included within the particulars a claim that he had consumed an excessive amount of alcohol and that he had driven his motor car when he knew that he had consumed a large amount of alcohol and had exposed himself to a risk of injury of which he knew or ought to have known. The third parties denied all the particulars pleaded by the defendant.
1.6 The issue heard by this Court was whether or not the third parties or either of them or their servants or agents should indemnify the defendant or alternatively contribute to the defendant in respect of the plaintiff’s claim and costs. By agreement between the parties the Court was informed that the plaintiff’s action against the defendant had been settled by the discharge of damages and costs without any deduction for contributory negligence and that the parties agreed that the issue for decision by the Court was whether or not on the facts of the case the defendant was entitled to an indemnity or a contribution.
2. A number of matters were effectively agreed or were established in evidence without dispute. Those matters included the following:
• John Connolly was an elderly man of 79 years of age at his death.
• The impact between the two vehicles was “a very heavy impact and both vehicles had momentum at the time of the collision”.
• Prior to the collision on the road leading from the Diamond Bar to the place where the collision occurred, John Connolly’s car was observed being driven in an erratic manner to the extent that it was crossing over on to the incorrect side of the road.
• John Connolly was entirely responsible for the collision and there was no contributory negligence on the part of Mary Flanagan.
• Prior to the accident John Connolly had been drinking in the third parties’ licensed premises known as the Diamond Bar. The precise time that he left the premises and the quantity of alcohol he consumed was to some extent in issue and will be dealt with later in this judgment.
• There are two other public houses in Tullaghan and one was open on the day of the accident.
• During the period that John Connolly was in the Diamond Bar he purchased some five to six pints of Guinness and drank all of the Guinness except for approximately a half pint.
• The accident happened in or about 4pm in the afternoon.
• When John Connolly was involved in the accident he had an ethanol or alcohol level of 242mg% which was measured in a laboratory analysis of a blood sample taken as part of the post mortem process.
• The ethanol reading in the blood sample taken from the late John Connolly recorded a blood alcohol level which was approximately three times the statutory limit permitted under the Road Traffic Acts.
• John Connolly was negligent in driving his motor car and going on to the road having consumed an excessive amount of alcohol.
• The Diamond Bar is some one and a half to two miles from the scene of the accident.
• The scene of the accident is on the direct route from the Diamond Bar to John Connolly’s home.
• The distance from the scene of the accident to John Connolly’s home is a further two miles. The total distance from the Diamond Bar to John Connolly’s home is approximately four miles.
• The Diamond Bar is a small local public house with a bar and a lounge area situated on the old Bundoran road.
• There is a parking area utilised by the public just across the road from the Diamond Bar.
• Seamus Kelly and Concepta Kelly are a married couple who own and operate the Diamond Bar.
• Concepta Kelly made a statement to An Garda Síochána on the 1st April, 2005, the day following the accident. Her husband, Seamus Kelly, made a statement on the 8th April, 2005.
• John Connolly was a regular customer of the Diamond Bar.
• John Connolly’s usual means of transport to the Diamond Bar was to use his own motor car.
• It was his regular but not invariable practice to use his motor car to depart from the area where the Diamond Bar is located.
• On occasions John Connolly left his motor car adjacent to the Diamond Bar and returned home by other means.
• There are a number of taxis operating in the locality, particularly in the Bundoran area with a lesser number operating out of Kinlough.
• A list of the taxi drivers’ names and their mobile telephone numbers was on display in the Diamond Bar.
• There were so few buses operating in the area that the capacity for John Connolly to use a bus was limited.
• On occasions John Connolly arranged to get a lift home from the Diamond Bar or took a taxi.
2.1 A number of matters were established to the satisfaction of the Court. This occurred as a result of the Court accepting the evidence given in respect of such matters as being credible and also ensued from evidence given to the Court which was not disputed in cross-examination and which was accepted by the Court. Those matters included the following:
• The evidence established that it was probable that the deceased, John Connolly, was at “a wake” some distance from his home on the night before the accident.
• On that night John Connolly left his car parked adjacent to the Diamond Bar.
• The Court accepts the evidence that John Connolly was not in the Diamond Bar on the day or night previous to the accident.
• In the light of the evidence which the Court heard concerning the habits and personality of John Connolly, the Court is satisfied that on the balance of probability the reason that John Connolly left his car parked adjacent to the Diamond Bar on the night before the accident was that he had consumed alcohol and had decided not to drive home.
• The Court accepts the evidence that John Connolly got a lift to the area of the Diamond Bar on the morning of the accident from a neighbour, Paul Rooney.
• Paul Rooney had on a number of previous occasions given John Connolly a lift to collect his car which had been parked outside the public house overnight.
• John Connolly was left in the area of the Diamond Bar shortly after 9.30am.
• The Diamond Bar did not open until 10.30am on the morning of the accident and John Connolly did not come into the premises until approximately 11.30am.
• Concepta Kelly was working in the Diamond Bar when John Connolly arrived and during the time that she remained in the bar she served him with four to five pints of Guinness.
• Concepta Kelly provided John Connolly with two bowls of soup and some sandwiches during the time that he was in the bar.
• At approximately 2pm or some short time thereafter Seamus Kelly took over from his wife who departed from the bar.
• At the time that Seamus Kelly took over from his wife, John Connolly was in the bar with one other customer. That customer was deceased by the date the Court heard evidence in this case.
• At the time Concepta Kelly handed over control of the bar to her husband she made no comment or observation concerning John Connolly.
• After Seamus Kelly took over in the bar John Connolly purchased one pint of Guinness.
• While John Connolly was drinking that pint of Guinness, Seamus Kelly left the public bar area where John Connolly was drinking and went upstairs in the premises to carry out some clerical work.
• When Seamus Kelly returned to the public bar after approximately five minutes, around 3.15pm., John Connolly had left the bar leaving approximately a half pint of Guinness in his glass. Neither Seamus Kelly nor Concepta Kelly were in the public bar when John Connolly decided to leave nor was any other bar person and the bar was effectively unattended at that time.
• The evidence establishes that it is probable that John Connolly drank four and a half to five and a half pints of Guinness in the Diamond Bar between 11.30am and 3.15pm on the day of the accident.
• Neither Concepta Kelly or Seamus Kelly noticed anything unusual about the condition of John Connolly and neither of them came to the conclusion that he had had too much to drink or was drunk.
• Both Seamus Kelly and Concepta Kelly were aware that it was the normal practice of John Connolly to drive to and from his home to their public house.
• On occasions when John Connolly had driven to the public house and he formed the opinion that he had drunk too much to drive home, he arranged for a taxi to be sent to the public house or to get a lift to his home. When he did that it was more common for him to use a taxi rather than get a lift.
• On a number of occasions John Connolly had left his car outside the public house and had gone home without driving his car.
• The evidence from Seamus Kelly and Concepta Kelly, which the Court accepts, is that John Connolly was a man who respected himself and that if he came to the view that he was not able to drive would leave his car behind and find an alternative way home.
• The evidence was that on the occasion when John Connolly decided not to drive, this decision had been taken by him and there was no evidence that such decision was taken as a result of any request from the publican, his wife or any other member of staff.
• Seamus Kelly gave evidence that if a customer appeared to be unsteady on his feet or intoxicated he would advise that customer not to drive. Concepta Kelly gave evidence that she would not allow a customer to stagger out the door but would advise that customer to take a taxi.
• Both Seamus Kelly and Concepta Kelly gave evidence that they never had to advise John Connolly not to drive as he made his own decision in relation to that matter.
• The Court accepts the evidence of Seamus Kelly and Concepta Kelly that they dealt with John Connolly on the basis that he was the sort of customer who would decide of his own accord whether or not he was unfit to drive and, if he decided that he was unfit to drive, he would arrange a lift or have either the bar staff or a friend call for a taxi. The evidence established that John Connolly had left his car on a number of occasions but that it was not a frequent occurrence.
• The evidence established that John Connolly left the public house at 3.15pm or shortly thereafter and was not involved in the accident until approximately 4pm. As the scene of the accident was some five minutes by car away from the public house, the Court was left in the position that there was no evidence as to what John Connolly did for most of the period of approximately thirty to forty minutes immediately prior to the time of the accident.
• During the time that John Connolly was in the bar and was observed by both Concepta Kelly and Seamus Kelly, neither of them observed John Connolly to be in an intoxicated condition or to be drunk. The Court accepts that evidence.
• The expert evidence of Robert McQuillan, a consultant in emergency medicine, was that the blood alcohol level which was present in a sample of John Connolly’s blood taken after his death of 242mgs% would approximate with the consumption of approximately nine pints of Guinness over a period of three hours.
• That estimation was an approximation which was dependent upon a number of circumstances and was based upon averages. Any equation between the blood alcohol level found in a person’s blood and the amount of alcohol consumed would be affected by matters such as the size of the person consuming the alcohol, his food intake and whether or not there was any alcohol in his blood at the time that he commenced to drink. The calculation of nine pints of Guinness over a three hour period leadings to a 242mgs% blood alcohol level was based upon averages and upon the assumption that there was no alcohol present at the time that the first pint of Guinness was drunk.
• The evidence was that a blood alcohol level in excess of 80mgs% would be above the legal limit for the driving of a motor vehicle under the Road Traffic Acts.
• The expert evidence of Mr. McQuillan was that it is very difficult to ascertain blood alcohol levels from observation as there are so many variables.
• The Court accepts Mr. McQuillan’s expert evidence that with a blood alcohol level of 200mgs% being present in a person it would be difficult not to detect that that person was drunk and that that person would “manifest significant intoxication”. Such detection would require you to speak to or to observe such person.
• Mr. McQuillan’s evidence that even for a person who was a regular consumer of alcohol with a blood alcohol level of 240mgs% it would be hard for that person not to significantly manifest intoxication.
• There is a potential conflict in evidence between the observations of Seamus and Concepta Kelly and the expert evidence of Mr. McQuillan. Based upon Mr. McQuillan’s evidence on the amount of alcohol which was present in the blood sample taken from John Connolly after his death, he should have manifested the appearance of being intoxicated or drunk whilst the evidence of Seamus and Concepta Kelly is that they did not observe John Connolly to be drunk or intoxicated.
• A possible explanation for the failure of Seamus or Concepta Kelly to notice or observe that John Connolly was intoxicated is that there is evidence to suggest that he had consumed a considerable amount of alcohol on the previous evening and that therefore there could have been alcohol present in his blood from the previous evening or from the earlier consumption of alcohol between 9.30am and 11.30am, that is, the period of time up to his arrival in the Diamond Bar. There is also a period of some thirty to forty minutes from the time John Connolly left the Diamond Bar up to the time of the accident which is unexplained. The matter is further complicated by the fact that neither Seamus Kelly or Concepta Kelly were present when John Connolly left the public house and therefore were not in a position to observe him at that time. Notwithstanding Mr. McQuillan’s expert evidence as to what would be likely to be observed of a person who had a blood alcohol level of 242mgs%, the Court is satisfied that Seamus Kelly and Concepta Kelly gave truthful evidence as to their observations. The evidence that they gave observed nothing untoward about John Connolly’s condition during the time that he was in their public house is accepted by the Court as being accurate.
• The Court accepts the expert evidence to the Court given by Clive Kilgallen, a Consultant Pathologist in Sligo General Hospital, that a blood alcohol level identified in a blood sample taken at an autopsy on a day following death would give a reasonable representation of a sample that would have been taken in life and there would be no significant difference between the alcohol level present in the blood at the time of the accident and present in the sample taken at the post-mortem carried out on the following day.
• The evidence to the Court from Seamus Kelly and Concepta Kelly established that John Connolly was served five to six pints of Guinness over a period of approximately four hours and that he drank all but half a pint. That evidence was unchallenged and the Court accepts the evidence given on this point, not only because it was unchallenged and was set out in statements made by Seamus Kelly and Concepta Kelly in the days immediately following the accident, but also on the basis of the manner in which Seamus Kelly and Concepta Kelly gave their evidence.
• There is no evidence in relation to where John Connolly spent parts of the day leading up to the time of the accident. The relevant parts are the period 9.30am to 11.30am and the thirty to forty minute period from the time that he left the public house up to the time of the accident. Given the volume of alcohol in his blood at the time of the accident it is probable that John Connolly consumed more alcohol on the day of the accident than he consumed in the third parties’ public house.
• The Court also accepts the evidence of Jacqueline Gray who gave evidence to the effect that she had on a number of occasions drank in the Diamond Bar in the months prior to the accident and that she had never seen John Connolly to be intoxicated.
• The balance of the evidence satisfied the Court that John Connolly regularly drank a number of pints of Guinness but did not do so in such a manner as to appear to be intoxicated. The evidence also established that on a number of occasions John Connolly determined of his own violation that he had drunk too much to drive safely and left his car at the public house and returned home by alternative means. The Court also accepts the evidence of the third parties that at no time did they have to intervene to request John Connolly not to drive home as they had no occasion to make such request.
2.2 Based upon the above admitted facts and on the findings and conclusions which the Court has made from the evidence, as set out above, the Court must consider the claims made by the defendant against the third parties.
3. In these proceedings the defendant seeks to impose liability on the third parties as proprietors of a licensed premises. It is common case that there is no definitive decision in this jurisdiction which imposes an affirmative duty upon proprietors of licensed premises relying on facts and circumstances similar to this case. The parties have opened extensive case law from other jurisdictions concerning the approach that those jurisdictions have taken to the liability of the proprietors of licensed premises in respect of the intoxicated. Before considering the position in those jurisdictions it is necessary to identify, in brief, the statutory position in this jurisdiction in relation to the conduct and control of licensed premises. The Intoxicating Liquor Act 2003 amended and extended the existing Licensing Acts of 1833 to 2003. Part 2 of the Intoxicating Liquor Act 2003 deals with the conduct of licensed premises and s. 4 deals with drunken persons. A holder of a license commits an offence in supplying drunken persons with intoxicating liquor or supplying any person with intoxicating liquor for consumption by a drunken person. The legislation also prohibits a licensee from permitting drunkenness to take place in the licensed premises or in admitting any drunken person to the premises. Those offences are set out in s. 4 of the Intoxicating Liquor Act 2003 and a breach by the licensee is an offence under s. 4(2). Breaches of the terms of a licence by supplying drunken persons with intoxicating liquor or permitting drunken or disorderly conduct on the premises not only may constitute an offence resulting in fines but may in some instances result in an order for the temporary closure of the premises under s. 9 of the Intoxicating Liquor Act 2003. A licensee commits an offence in supplying “a drunken person” with intoxicating liquor. A drunken person is defined in s. 2 of the 2003 Act in the following terms, namely:
“‘drunken person’ means a person who is intoxicated to such an extent as would give rise to a reasonable apprehension that the person might endanger himself or herself or any other person.”
The legislation which has been enacted recognises that a licence is a privilege and places on licence holders the obligation to regulate the conduct of customers by ensuring that they will not be served alcohol if they are drunk and in ensuring that drunkenness does not take place in the licensed premises or that drunken persons are not admitted to the licensed premises. It also places an obligation on the license holder to ensure that he does not permit disorderly conduct to take place on the premises. The definition of a drunken person identifies such a person as being one who is intoxicated to such an extent as will give rise to a reasonable apprehension that the person might endanger himself or herself. Under the Road Traffic Acts there is a prohibition on persons driving a motor vehicle with a blood alcohol level in excess of a designated amount. The approach under the Road Traffic Act as to what would be commonly called a drunk driver is entirely different from what is identified as a drunken person under the Intoxicating Liquor Acts. A drunk driver is a person with alcohol in his blood above a designated level whether or not that person is a danger to himself or any other person. The definition of a drunken person in the Intoxicating Liquor Act 2003 identifies what must be established to prove that a person is a drunken person and those matters are not dependent upon any particular blood alcohol level but rather on the effect that alcohol has on the conduct and capacity of a person. In the light of the evidence which this Court heard from Mr. McQuillan there is no doubt but that a person who would be marginally in excess of the permitted blood alcohol level to drive a motor car would not be a person who would be within the definition of a drunken person under the Intoxicating Liquor Acts. For a person to be a drunken person under those Acts that person would have to be so intoxicated as to give rise to a reasonable apprehension that the person might endanger himself or any other person and that would mean that the conduct, appearance or behaviour of such a person would manifest a degree of intoxication that such apprehension was reasonable. It is important, therefore, in considering the facts of this case and the arguments made on behalf of the defendant, to acknowledge the differences between the legal definition of a drunk driver and a drunken person under the different legislation.
4. There is no doubt that alcohol impairs driving skills. Alcohol consumption is a voluntary act and is a human factor in many road accidents. Estimates have indicated that alcohol is a significant factor in almost one third of fatal road accidents. This has led to State intervention in a number of ways. This intervention has taken a number of forms including widespread public awareness campaigns to discourage motorists from driving after drinking alcohol. The State has also addressed the issue by the imposition of a more exacting approach to drink driving in the criminal law together with provisions providing enhanced powers relating to enforcement including mandatory alcohol testing. The Gardaí have been provided with the power to breathalyse any driver stopped at a mandatory alcohol checkpoint. The continued calls for a more stringent approach to drink driving with the resulting benefit in reducing alcohol related crash deaths and injuries resulted in the enactment of the Road Traffic Act 2010 (the Act of 2010) in July of that year. That Act lowered the drink driving limit from 80mg to 50mg as well as introducing a lower 20mg limit for learner and professional drivers. Those lower levels have yet to come into force but are provided for in the Act of 2010. The core of the approach to alcohol and driving has been based upon personal responsibility in the form of campaigns emphasising the responsibility of the driver parallel with more stringent provisions in the criminal law including the enactment of lower drink driving limits. That approach has sought to deter persons from drinking and driving and to place the personal responsibility on a driver.
4.1 Society’s attitude to drink driving was considered in a recent judgment in the Supreme Court dealing with proceedings arising out of a road traffic accident and the issue as to how contributory negligence was to be assessed in relation to a person who elected to travel as a passenger in a motor vehicle when the driver had consumed alcohol. That case was Hussey v. Twomey & Ors. [2009] IESC 1 and in his judgment Kearns J. stated (at para. 23):
“I think it fair to say that the society’s understanding of the role of alcohol in driving cases had undergone radical change in the space of the last forty years. … (at 15). There has been undoubtedly an enormous sea change in society’s attitude to drink driving since then, influenced no doubt by the extent of carnage on our roads and the effectiveness of multiple campaigns which inform the public of the hazards of driving whilst under the influence of even small quantities of alcohol. It is thus now commonplace, if not yet a universal practice, for groups of people on a night out to appoint one of the group as a designated driver who will drink no alcohol or alternatively to make arrangements whereby no member of the party will be driving under any circumstances. Thus, I think it can fairly be said that any measure of tolerance towards intoxicated drivers and their passengers, if indeed it formerly existed to any appreciable degree, is very much a thing of the past.” (para. 24)
Hussey v. Twomey illustrates society’s change of attitude to drink driving. The change in attitude is to some extent testimony to the effectiveness of the multiple campaigns which inform the public of the hazards of driving whilst under the influence of even small quantities of alcohol. The approach adopted in this jurisdiction has been very much centred on the personal responsibility of the driver and to some extent on passengers’ responsibility when they knowingly accept transport from a driver who they know to be intoxicated.
4.2 Central to the issue in this case and to the defendant’s claim against the third parties is whether or not there is a duty of care on the third parties as suppliers of alcohol to protect a customer from risk resulting from self-induced intoxication and if there is such a duty that it is foreseeable that if breached the customer may cause harm to others when driving a motor vehicle. The defendant claims that the third parties were in breach of their duty of care towards a customer, namely, John Connolly and the public at large who were at risk of coming into contact with John Connolly after he left the third parties’ pub in a state of intoxication. The defendant claims that the third parties were in breach of their duty of care towards John Connolly and the plaintiff on the day when the accident occurred by knowingly serving John Connolly an amount of alcohol in excess of the levels permitted by law while operating a mechanically propelled vehicle and knowing that John Connolly was likely to drive his car and in circumstances where it was foreseeable that members of the public who might be using the road might suffer injury as a result of John Connolly’s driving. The third parties contend that there was no such duty of care and that for this Court to hold that there was such a duty would impose into the common law a new duty of care or cause of action where none has existed to date.
4.3 Within the last one hundred years the common law has developed the tort of negligence. The necessary elements to be present to establish the tort of negligence include; first, a duty of care; secondly, a failure to conform with the appropriate standard of care; thirdly, that loss or damage was caused to the plaintiff; and, fourthly, that there is a causal connection between the conduct complained of and the resulting loss and damage to the plaintiff. Notwithstanding the development of the tort of negligence and its increased scope, the common law continues to apply an individualistic position in relation to the question of affirmative duties. The courts have consistently recognised and enforced an approach that there is a difference between doing something and merely letting something happen. This is most clearly demonstrated by the approach adopted that there is no general duty to go to the assistance of another who is in danger. Whilst the courts have recognised that there is no general duty to act, it is also recognised that specific relationships may give rise to a particular affirmative duty. This has included consideration of whether or not there is a duty to protect incapacitated or intoxicated persons and their potential victims from injury.
4.4 The law of tort has evolved in such a manner that its evolution has been used as a device for identifying values, promoting safety and setting minimum standards of acceptable behaviour in society which has resulted in the law bringing about social change as well as being used as a means of delivering compensation. This has resulted in there being an intrinsic issue as to where the line is between individual and collective responsibility for injury and loss. That issue has been considered in many cases in different common law jurisdictions and has been applied by the manner in which the courts have addressed the existence and extent of a duty of care. It is clear from the authorities opened to the Court that different jurisdictions have adopted contrasting approaches and the common law has developed in divergent ways in relation to the so-called alcohol provider liability issue depending upon the history and culture in those countries. The decisions have also been guided by the statutory composition within each country.
4.5 The extensive and multinational authorities and legal commentaries opened to the Court have identified that different common law jurisdictions have adopted and continue to apply fundamentally different approaches to the legal question of whether there is a duty of care to protect intoxicated patrons and their potential victims from injury. I will return later to consideration of some of the individual authorities.
4.6 As indicated above, a defendant can be held liable in the tort of negligence if his or her negligent conduct results in reasonably foreseeable injury to the plaintiff. In considering the potential liability of publicans or alcohol providers, those persons could be held liable, under the law of tort, in respect of a customer who becomes intoxicated in one of two different ways. First, a publican could be held liable for harm caused to the intoxicated person and in that scenario the duty of care which would arise would be one of protection owed to the person who is intoxicated. Secondly, the publican could be held liable for the tortious behaviour of the intoxicated person and in that case the duty of care which would arise would be one owed to third parties. Any liability in the law of tort and duty arising thereby to protect the intoxicated customer and any liability and duty to protect third parties from that customer must be recognised as two entirely separate legal duties which are each governed by different legal rules and principles. The different approaches taken by different common law jurisdictions is illustrated by the approach taken by the Canadian courts as opposed to the approach adopted in the courts of the United Kingdom including Northern Ireland. An examination of the Canadian authorities demonstrates that the Canadian courts base their analysis of alcohol provider liability on the foreseeability of harm. A consideration of the approach of the courts in the United Kingdom demonstrate in relation to alcohol provider liability that the courts have approached that matter based upon the issue of duty of care and have consistently demonstrated a reluctance to impose alcohol server liability even in cases against commercial providers. The courts in the United Kingdom have approached consideration of the matter on the basis that adults are responsible for their own alcoholic consumption. The courts have followed an approach that for liability to arise the court must be able to identify an assumption of liability for the intoxicated customer. (See, for example, judgment of Carswell LCJ in Joy v. Newell (t/a Copper Room) [2000] NI 91 (CA (NI)).
4.7 In Canada the approach to alcohol provider liability has been, by and large, to impose tort liability on those who are in the business of selling and serving alcohol. That approach is embraced in the statutory law in the majority of the provinces and has led to a series of cases where alcohol providers or publicans have been held responsible for drunken customers. The liability of commercial hosts was established in Canada by the 1973 Supreme Court decision in Jordan House v. Menow [1974] S.C.R. 239. Even though the Supreme Court of Canada was divided in its analysis of the duty of care, the Canadian courts have consistently held thereafter that alcohol providers owe a broad duty of care.
5. In considering the common law approach to the issue of alcohol provider liability and the authorities opened to the Court, it is clear that there is a divergence in approach between that adopted in the USA and Canada, on the one hand, and in the United Kingdom and Australia, on the other hand. In considering the various judgments it is apparent that such divergence and the underlying approach and assumptions of the different national courts have a basis or foundation in the different countries’ approach to alcohol and the cultural attitude to alcohol consumption. In the United States the eighteenth amendment to the Constitution resulted in nationwide prohibition being in force from 1920 until 1933. Even after prohibition was repealed, the majority of the individual States in the USA introduced and continue to maintain so-called dram shop laws. These laws hold retail establishments accountable by statute for any harm, death, injury or other damages caused by an intoxicated customer. The laws vary from state to state and some ten of the fifty States have no dram shop law. A number of the states where such laws are in force have liability limitations. In Canada prohibition was widespread in the 1920s even though the approach varied from province to province. It was not until 1930 that most of the provinces voted against prohibition even though Prince Edward Island remained a province where there was total prohibition until 1948. In Canada even after the provinces voted against prohibition the Government continued to be significantly involved in relation to the sale and consumption of alcohol and adopted a paternalistic approach. A majority of the provinces have a higher legal drinking age than in the United Kingdom. In a number of the provinces the government maintain a monopoly over the retail sale of alcohol. In considering authorities from different common law jurisdictions, it is important to have regard to the legislative, regularity and cultural framework that exists in each country as there are significant differences.
5.1 The Court also has regard in considering the divergent approach to the central position of legislation regulating the sale and consumption of alcohol. In particular, this Court has regard to the warning contained in the judgment of Hardiman J. in the Supreme Court case of O’Keeffe v. Hickey and Ors. [2009] 2 IR 302. That was a case with dealt with the issue of the State’s vicarious liability for the tortious acts of the defendants. In dealing with the role of the legislature, Hardiman J. stated (at 341, para. 123):
“I have to say that I find some of the formulations, in the Canadian cases in particular, vague in the extreme and quite unhelpful. Asking ‘whether it is just’ to impose no fault liability is not a constructive or thought out approach, nor one likely to assist the discussion. It begs a huge number of questions. Imposing liability on an individual or entity on the basis of ‘broader policy rationales’ smacks, with great respect, of political or social engineering rather than the administration of commutative justice. And if the law is to change towards the notably vague Canadian formulation, that is so great a change from our present concepts of justice in this area that, in my view, it should be changed by legislation. I say this on the basis of the general separation of powers principles as outlined in my judgments in Sinnott v. Minister for Education [2001] 2 IR 545 and T.D. v. Minister for Education [2001] 4 IR 259, and out of respect for the legislature’s exclusive power to make laws as expressed in Article 15.2 of the Constitution. This approach would also have the separate advantage of committing law reform in this area into the hands of those who will have to provide the wherewithal to fund the exceptionally generous regime of recovery which would be involved in following the Canadian model.”
While that judgment dealt with a different subject matter than this case, it does illustrate the difficulty of applying the decisions of other common law countries’ decisions where those decisions are to some not insignificant extent based upon broader policy rationales or cultural backgrounds or where such decisions are made within the context of long established statutory provisions.
6. In the USA the starting point for consideration of liability in tort is identified in various legal textbooks. The approach identified reflects the thinking that “human beings, drunk or sober are responsible for their own torts” (W. Page Keeton et. al., Prosser and Keeton on The Law of Torts, s. 53, note 27 (5th ed. supp 1988)). It would follow that under common law a plaintiff would generally not have an action arising out of injuries sustained to them as a result of their intoxicated state. This has resulted in two different approaches evolving. First, in the majority of States there are State laws where dram shop acts or civil damage acts have been enacted by state legislatures. Those laws impose civil liability upon sellers of alcohol for injuries caused to third parties by the intoxicated. The majority of the statutes do not allow an intoxicated patron to recover for his own injuries. Those statutes provide for strict liability and therefore the issue of negligence does not arise. The second way in which this matter has been dealt with in certain US states is by using a common law negligence theory premised on violation of statutory duties. This has resulted in a series of decisions which are based upon an analysis that if a state statute only provides criminal penalties for violation, the courts in some instances have been prepared to determine that such statute creates a specific duty of care. This means that a violation of the criminal statute operates to establish both duty and the breach of that duty in a common law civil negligence action. The approach taken within the individual states is far from consistent. In a number of states, contributory negligence or assumption of risk on the part of the injured plaintiff have barred an action, and, other states have barred actions by holding that it is the consumption of alcohol and not the dispensing of it which is the proximate cause of injuries inflicted upon others by an intoxicated person. As a general rule, there is no duty on a person to control the conduct of another to prevent harm to third parties unless there is a special relationship between the two. This approach is illustrated in the Kansas decision McGee v. Chalfont (806 p. 2d 980 [1991] (KAN)). In that case the court held that there was no duty owed to a third party by a person transporting an intoxicated person to his car. However, in the decision in a Colorado court the court held that liability was established where a tavern owner refused to serve an intoxicated patron but allowed his employee to jump start the patron’s car as that constituted an affirmative act which gave the patron mobility which he otherwise would not have had (Leppeke Seguara 632 p. 2d 1057 [1981] (COLO)). Overall where decisions in the US have held alcohol providers liable they have done so either where there is an affirmative act for which the provider is responsible or where the state courts have relied on the statutory framework and imposed liability under common law negligence premised on violation of statutory duties. Where that approach has been adopted, such decisions are of little benefit to this Court in deciding how to apply the law in this jurisdiction. Absent reliance on violation of statutory duties, the authorities indicate that liability under common law in the US requires some form of affirmative act or assumption of liability.
6.1 The liability of an alcohol provider or a commercial host was established in Canada by the Supreme Court of Canada’s decision in Jordan House Ltd. v. Menow. The facts of that case were that Menow was a regular patron of the defendant hotel and had been banned on a previous occasion due to his tendency to become drunk and abusive. The management permitted him to return and the entire hotel staff were instructed not to serve Menow unless he was accompanied by a responsible adult. Menow arrived in the hotel with fellow workers on the night in question and drank alone for some three hours. Eventually he was ejected by the hotel staff after he had become intoxicated and began to irritate other patrons. Whilst attempting to stagger home along the highway he was struck by a negligent driver and Menow sued both the driver and the hotel. The Supreme Court of Canada upheld both claims but was divided three/two in its analysis of duty of care. Laskin J. giving the leading judgment of the Court began with the words “This is a case of first instance”. This meant that the Court was relying on first principles. Laskin J. determined that there was a duty of care on the defendant hotel and that duty arose from the facts of the case which established the hotel’s special knowledge of the plaintiff, Menow, and he cautioned (at 250) that his decision did not impose using the words of the trial judge “a duty on every tavern owner to act as a watchdog for all patrons who enter his place of business and drink to excess”. Laskin J. held that the hotel owners were liable in that they should have known given their knowledge of Menow that serving him the quantity of beer which he consumed might well result in him being incapable of taking care of himself when exposed to the hazards of traffic. That placed on the hotel owners a duty to take reasonable steps to ensure that the customer got home safely, for example by arranging safe transport for him, putting him up for the night in the hotel or calling the police. Ritchie J. in the same case in a one paragraph minority opinion (at 251) proposed a broader duty of care for commercial hosts. As a result of the commercial hosts’ special knowledge of Menow’s susceptibility to alcohol Ritchie J. determined that staff owed a duty not only to protect him when intoxicated, but also to prevent his intoxication in the first place. This wider duty implied that a foreseeable risk is inherent in the over service of alcohol. The decision in Jordan House was subsequently adopted in a number of Canadian cases and the analysis of Ritchie J. was followed (see Canada Trust v. Porter 2 A. C.W.S. (2d) 428 (1980) and Schmidt v. Sharpe [1983] 27 CCLT 1. The Supreme Court of Canada revisited the issue of alcohol provider liability in Stewart v. Pettie [1995] 1 S.C.R. 131. In that case the Supreme Court determined on the basis of the Jordan House decision that a duty of care was owed by commercial providers of alcohol to their patrons and to third parties who might reasonably be expected to come into contact with an intoxicated person, which would include a user of the highway. The facts of the case were that the plaintiff sued her brother-in-law in circumstances where both had attended a dinner theatre with their spouses and the couples were served by the same waitress throughout the evening who kept a running tab of the drinks consumed. Neither of the wives consumed any alcohol whilst Pettie consumed between five and seven double mixed drinks and was legally intoxicated by the time he left the dinner theatre. The party of four discussed Pettie’s driving capacity prior to departing from the theatre and none of them expressed any concern about him driving. On the way home, driving on a slippery road, the car lost control and struck a pole. The plaintiff was thrown from the car and was rendered quadriplegic. She sued not only Pettie, the driver, but also the owners of the dinner theatre. Major J. in writing for the court concluded on the basis of the principles identified in the Jordan House case that commercial establishments owed a duty of care to patrons who become intoxicated and he went on to reason that it was a logical step that such a duty was also owed to third parties who might reasonably be expected to come into contact with the patron. The Court concluded that in relation to the standard of care, it considered that positive steps need only be taken by a publican if there was a reasonably foreseeable risk that a patron would drive and the fact that the patron in issue on the facts of this case was accompanied by two sober adults negated that such a risk was foreseeable. On that basis a claim against the alcohol provider was dismissed. Consideration of the judgment indicates that the claim would in any event have failed due to a lack of causation because the court concluded that even if the defendant had intervened, the claimants would still have allowed the intoxicated patron to drive. The Canadian case law has developed to the extent where it can be said with some degree of confidence that the law imposes a duty on an alcohol provider and that that provider may be liable if there is a foreseeable risk that a patron will drive after having been served alcohol.
6.2 In the UK there have been a limited number of cases decided by the courts involving the potential liability attaching to others in respect of the intoxicated. In those cases the courts have adopted a relatively consistent approach in that they have been reluctant to impose any liability absent a clear assumption of responsibility. A recurring feature of the approach of the courts is the use of contributory negligence as a limiting factor. Consideration of a number of the leading authorities in the UK results in this Court being able to identify certain principles which have been followed in those cases. In Barrett v. Ministry of Defence [1995] 1 WLR 1217, Beldam L.J. delivered the main judgment for the Court of Appeal. That case arose in circumstances where the plaintiff was the widow and executrix of a deceased naval airman who had died after becoming so drunk one night at a naval base where he was serving that he passed out into a coma, became asphyxiated on his own vomit and died. The plaintiff alleged that the defendant as employer owed her husband a duty of care whilst he was under their control and a duty to prevent him becoming so drunk that he caused himself injury or death. The trial Judge found that the deceased had been a heavy drinker and that that fact was widely known. It was therefore foreseeable in the particular environment of the naval base, with unlimited quantities of cheap alcohol and a lax attitude to drinking, that the deceased would become heavily intoxicated and that in those exceptional circumstances it was just and reasonable to impose a duty of care on the defendant to protect a person of full age and capacity such as the deceased, from his own weakness. The trial Judge made a finding of contributory negligence against the deceased and reduced the damages by twenty five per cent. In the judgment of the Court of Appeal it was stated that to impose a duty on the defendant to control the actions of the deceased in order to prevent him from injuring himself would undermine the principle of individual responsibility. Beldam L.J. held (at 1224):
“I can see no reason why it should not be fair, just and reasonable for the law to leave a reasonable adult to assume responsibility for his own actions in consuming alcoholic drink. No one is better placed to judge the amount that he can safely consume or to exercise control in his own interest as well as in the interests of others. To dilute self responsibility and to blame one adult for another’s lack of self control is neither just nor reasonable and in the development of the law of negligence an increment too far.”
In that case Beldam L.J. also considered the decision of the Supreme Court of Canada in Jordan House together with another Canadian authority and identified that in each of those cases the Court founded the imposition of a duty on factors additional to the mere provision of alcohol and the failure to strictly enforce provisions against drunkenness. Beldam L.J. went on to hold (at 1225):
“In the present case I would reverse the Judge’s finding that the appellant was under a duty to take reasonable care to prevent the deceased from abusing alcohol to the extent he did. Until he collapsed I would hold that the deceased was in law alone responsible for his condition. Thereafter, when the defendant assumed responsibility for him, it accepts that the measures taken fell short of the standard reasonably to be expected. It did not summon medical assistance and its supervision of him was inadequate.”
The crucial element in any finding of liability was therefore the assumption of responsibility by the defendant in putting the deceased into his bunk after he collapsed and thereby assuming responsibility for him. It was because of that assumption of responsibility that the Court of Appeal held that the defendant had a continuing duty to exercise reasonable care and the steps taken were inadequate. The Lord Justice reviewed the Lower Court’s finding in respect of contributory negligence where the deceased had been held twenty five per cent responsible and Beldam J. came to the conclusion that individuals should be made to take primary responsibility for their own actions and increased the deceased’s level of contributory negligence from one quarter to two-thirds.
6.3 In Jebson v. Ministry for Defence [2000] 1 WLR 2055, the Court of Appeal adopted a similar approach as identified in the earlier decision in Barrett v. Ministry for Defence and Potter L.J. held that ordinarily an adult could not rely on his drunkenness so as to impose a duty on others to exercise special care. However, Potter L.J. went on to state (at 2066):
“… In the ordinary way and in most situations, an adult (and these young men were adults) is not entitled to pray in aid his own drunkenness as giving rise to a duty or responsibility in others to exercise special care. However, that is not an invariable rule; nor is it one which is fair and just and reasonable to apply in circumstances where an obligation of care is assumed or impliedly undertaken in respect of a person who it is appreciated is likely to be drunk.”
In that case the facts were that the plaintiff was a soldier who had fallen from the back of an army lorry when intoxicated after he had been on a night out with a group of soldiers. The night was organised by the Company Commander and the accident occurred when the soldiers were being transported back to their barracks. Potter L.J. in his judgment held that the fact that the Ministry of Defence had provided the transport for the soldiers, knowing that they were likely to become inebriated, was critical evidence which enabled the Judge to come to the conclusion that the defendants had impliedly assumed a duty of care towards the claimant and that it was foreseeable that if men were not supervised an injury could occur. It was on those facts and in those circumstances that a duty was imposed and the Court of Appeal upheld the finding that the claimant was seventy five per cent responsible for contributory negligence once more emphasising the Court’s approach that individuals are primarily responsible for their own actions and that the plaintiff was “largely the author of his own misfortune”. In both the cases considered by the Court of Appeal the defendant was the Ministry of Defence and to some extent the decision of the Court in each case to impose a liability was in part based to a degree on the nature of the relationship between the soldier and his employer. The judgments in both cases came to the conclusion that there was not an obligation to prevent another person becoming inebriated but that the common law did create a duty of care not to expose the plaintiff to further harm after having provided him with alcohol.
6.4 In the case of Griffiths v. Brown [1998] The Times, October 23 (QBD) the plaintiff had been injured crossing a road when he had been dropped by a taxi driver (the defendant) on the far side of the road. As he was crossing the road the plaintiff who was significantly intoxicated was struck by a car and injured. The plaintiff claimed that the taxi driver was under a duty of care not to drop him off at a place where it was foreseeable that because of his intoxication he would be at a greater risk of injury than a sober person. Jones J. held that the only duty on the defendant was a duty to take reasonable care to carry the plaintiff passenger safely during his journey and to set him down at a place where he could safely alight. In the judgment Jones J. expressed the view that there would be a duty of care if a passenger had reached such a stage of intoxication as to be plainly incapable of taking care of his own safety. That was identified as the only circumstance where a duty of care might arise and be breached. In the facts of that case the plaintiff had consumed twelve to thirteen pints and was clearly intoxicated but the fact that he was able to walk without staggering and give instructions to the defendant was accepted by the Judge as being evidence that he possessed enough control over himself for liability not to be imposed. In the Northern Ireland case of Joy v. Newell (t/a Copper Room) [2000] NI 91 (CA (NI)), Carswell L.C.J. dealt with the issue of the liability of a publican in circumstances where the plaintiff in that case had entered the defendant’s licensed premises is an already intoxicated state, sat on a bar stool and ordered a drink and shortly thereafter fell off the stool and suffered quadriplegia. The publican was sued and it was argued on behalf of the plaintiff that the publican or alcohol provider had an affirmative or positive duty to protect him whilst on the premises. Carswell L.C.J. dealt with the claims in terms of liability for pure omissions and rejected the claim based upon occupiers’ liability on the ground that the bar stool was not unsafe. Carswell L.C.J. stressed that an affirmative duty could only arise where the defendant had assumed responsibility for the plaintiff’s safety, and that the unlawful service of an intoxicated customer did not amount to an assumption of responsibility. In that case Carswell L.C.J. considered and rejected the Canadian authorities starting with Jordan House on commercial host liability and did so on the basis that he was of the view that they imposed “an unreasonable burden on licensees”.
6.5 In the UK cases including the Northern Ireland case identified above there is no doubt but that each case is fact dependent. The authorities demonstrate a clear reluctance to impose liability unless there has been a clear assumption of responsibility and insofar as there is an exception to that approach it would appear to arise only in circumstances where a person is so intoxicated that they cannot look after their own safety or where they are plainly incapable of taking care of themselves.
6.6 Having considered the authorities from Australia which have been opened to the Court it is apparent that the Australian Courts have adopted a similar approach to the approach that the UK Courts have taken. The Australian Courts are consistent in their judgments in declining to impose alcohol provider liability. The common approach to be gleaned from the Australian cases, the legislation in that country, and in the individual states is that people are responsible for their own actions and that to drink or not to drink is a matter of choice for each individual. The High Court of Australia has adopted a uniform approach which has been identified as an individualistic approach to injury and duty in the context of intoxication. The approach of the High Court is mirrored in Australian legislation where different states have, within the last ten years, enacted statutes to limit liability in civil cases for inebriated plaintiffs who suffer personal injury.
6.7 In 2004 the High Court of Australia in considering an appeal from the Supreme Court of New South Wales addressed the issue of alcohol server liability. That case was Cole v. South Tweed Heads Rugby League Football Club Ltd. and Anor. [2004] HCA 29. The facts of Cole was that the plaintiff, Cole, had been run over in a motor accident and seriously injured whilst walking along the roadway after dark in a seriously inebriated condition. The Court heard evidence that the plaintiff had spent some nine hours on the defendant’s premises drinking heavily and following the accident she sued both the car driver and the club. She was awarded significant damages in the New South Wales Supreme Court with liability apportioned thirty per cent each to the car driver and club and forty per cent to the plaintiff. The New South Wales Court of Appeal held the plaintiff entirely responsible and the majority of the High Court of Australia agreed. The plaintiff alleged that the club breached its duty of care to her by supplying her with alcohol when a reasonable person would have known that she was intoxicated and by allowing her to leave the premises in an unsafe condition without proper assistance. In his judgment Gleeson C.J. held (at para. 14):
“A duty to take care to protect an ordinary adult person who requests supply from risks associated with alcohol consumption is not easy to reconcile with a general rule that people are entitled to do as they please, even if it involves a risk of injury to themselves. The particular circumstances of the individual cases, or classes of case, might give rise to such a duty, but we are not here concerned with a case that is out of the ordinary.
Again, as a general rule a person has no legal duty to rescue another. How is this to be reconciled with a proposition that the respondent had a duty to protect the appellant from the consequence of her decision to drink excessively? There are many forms of excessive eating and drinking that involve health risks but, as a rule, we leave it to individuals to decide for themselves how much they eat and drink. There are sound reasons for that, associated with values of autonomy and privacy.” (at para. 15).
Gleeson C.J. went on to consider an argument put forward on behalf of the plaintiff/appellant based upon the fact that it is an offence to supply liquor to an intoxicated person and even though on the facts the Court of Appeal had found that there was no breach of that statutory provision, Gleeson C.J. identified that the provision did not assist the appellant’s argument and did so on the following basis (at para. 16):
“A person may be at risk of physical injury following the consumption of alcohol even if the person is well short of the state of intoxication contemplated in the provision. As has been noted, the most obvious example of such a risk is that involved in driving a motor vehicle, and the risk becomes real and significant well before a person has reached a state at which a supplier is legally obliged to refuse service. If the argument for the appellant is correct the legal responsibility for the supplier is more onerous than that imposed by s. 44A.”
Gleeson C.J. went on to hold (at para. 17):
“It is possible that there may some circumstances in which a supplier of alcohol comes under a duty to take reasonable care to protect a particular person from the risk of physical injury resulting from self-induced intoxication. However, the appellant cannot succeed in this case unless there is a general duty upon a supplier of alcohol, at least in a commercial setting, to take such care. I do not accept that there is such a general duty. I would add that, if there were, it is difficult to see a basis in legal principle, as distinct from legislative edict, by which it could be confined to commercial supply. When supply of alcohol takes place in a social context, there may be a much greater opportunity for appreciating the risks of injury, for monitoring the condition of the consumer, and for influencing the consumer’s behaviour. In a social, as in a commercial, context, the risk of injury associated with the consumption of alcohol is not limited to cases where there is an advanced state of intoxication. Depending upon the circumstances, a guest who has had a few drinks and intends to drive home may be at greater risk than a guest who is highly intoxicated but intends to walk home. If there is a duty of the kind for which the appellant contends, it would be the degree of risk associated with the consumption of alcohol, rather than the degree of intoxication, that would be significant. In many cases the two would go together, but in some cases they would not.
The consequences of the appellant’s argument as to duty of care involve both an unacceptable burden upon ordinary social and commercial behaviour, and an unacceptable shifting of responsibility for individual choice. The argument should be rejected.” (para. 18).
Gleeson C.J. recognised the particular circumstances of individual cases or classes of case might give rise to a duty to take care to protect an inebriated customer but identified that the case under consideration was not a case which was out of the ordinary. In that case Callinan J. whilst expressing the view that a drinker was exercising autonomy for which that person should carry personal responsibility at law went on to deal with situations which might be described as exceptional. Callinan J. held (at para. 131):
“I am also of the opinion that in general – there may be some exceptional cases – vendors of products containing alcohol will not be liable in tort for the consequence of the voluntary excessive consumption of those products by the persons to whom the former have sold them. The risk begins when the first drink is taken and progressively increases with each further one. Everyone knows at the outset that if the consumption continues, a stage will be reached at which judgment and capacity to care for oneself will be impaired, and even ultimately destroyed entirely for at least a period.”
In arriving at the conclusion that there was no responsibility on the defendant in that case, Callinan J. expressly disagreed with any propositions to the contrary deducible from the Canadian cases referred to in argument, namely, Stewart v. Pettie and the Jordan House case (at para. 132). Earlier in his judgment Callinan J. had identified a number of factors pointing decisively against the recognition of a duty of care owed by publicans not to serve customers whom they know will become or have become intoxicated in order to prevent the customers causing injury to themselves. Callinan J. held as follows (at para. 130):
“One is that if the duty existed it might call for constant surveillance and investigation by publicans of the condition of customers. That process of surveillance and investigation might require publicans to direct occasional oral inquiries to customers. Inquiries of this kind would ordinarily be regarded as impertinent and invasive of privacy. Quite apart from the inflammatory effect of these activities on publican-customer relations and on good order in the hotel or club, the impact of these activities on the efficient operation of the businesses of publicans would ‘contravene their freedom of action in a gross manner’.
The other significant matter is that if a customer reached a state of intoxication requiring that no further alcohol be served and the customer decided to depart, recognition of the duty of care in question might oblige publicans to restrain customers from departing until some guarantee of their safety after departure existed. … How are customers to be lawfully restrained? If customers are restrained by a threat of force, prima facie the torts of false imprisonment and of the assault will have been committed. If actual force is used to restrain customers, prima facie the tort of battery will have been committed as well as the tort of false imprisonment.”
Callinan J. went on to consider the legislation in Australia and identified that such legislation made it lawful for the secretary or an employee of a registered club to use whatever reasonable force is necessary to turn out of the club intoxicated persons and then went on to hold (at para. 130):
“But the legislation says nothing about using reasonable force to keep intoxicated persons in pending the appearance of some guarantee for their safety after departure. In short, if the tort of negligence were extended as far as the [appellant] submitted, it would ‘subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms’.”
6.8 The High Court of Australia revisited the same legal issues in the later case of C.A.L. No. 14 Pty Ltd. t/a Tandara Motor Inn and Ors. v. Motor Accidents Insurance Board [2009] HCA 47. The facts of that case were that the deceased had agreed with the defendant hotel to leave his motorcycle in the hotel storeroom, giving them his keys, while the deceased’s wife would drive him home. He consumed a lot of alcohol and refused to give the hotel his wife’s details, subsequently driving his bike and being involved in an accident which resulted in his death. His wife claimed that the hotel had a duty to phone her to collect him and the High Court rejected that claim. The Court concluded that the agreement with the hotel as regards the motor bike was terminable at will, for the benefit of the deceased, and did not mean that the defendants had assumed responsibility for the deceased. A duty to protect the deceased would interfere with his freedom to consume alcohol and accept responsibility for his own actions. The Court reasoned that trying to stop the deceased from driving his motorcycle would cause other torts and involve the criminal law. The Court held in that case that licensees owed no general common law duty to monitor or minimise their customer’s alcohol consumption or to protect them from the consequences of their excess. In the judgment of the Court (at para. 52) the Court held:
“There is in general no duty. The conclusion in this Court that the Full Court majority decision must be reversed as a practical matter overcomes these problems. However, even though the arguments in this Court proceeded in a much narrower way, being closely tied to the specific facts of this case, it is desirable to avoid repetition in future of what happened in this case by explicitly stating the fundamental reason why the Full Court majority decision on duty of care is wrong. The reason is that outside exceptional cases, which this case is not, persons in the position of the Proprietor and the Licensee, while bound by important statutory duties in relation to the service of alcohol and the conduct of the premises in which it is served, owe no general duty of care at common law to customers which requires them to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they choose to consume. That conclusion is correct because the opposite view would create enormous difficulties, apart from those discussed above [57], relating to customer autonomy and coherence with legal norms. The difficulties can be summarised as follows.”
The judgement also went on to identify that expressions like intoxication, inebriation and drunkenness are difficult both to define and apply and the fact that legislation compels publicans not to serve customers who are apparently drunk does not make the introduction of a civil duty of care defined by reference to those expressions any more workable or attractive. The judgment went on to conclude (at para. 55):
“A duty to take reasonable care to ensure that persons whose capacity to care for themselves is impaired are safeguarded also encounters the problems of customer autonomy[63] and legal coherence[64] discussed above. A further problem of legal coherence arises where legislation compels a publican to eject a drunken customer but the tort of negligence requires the person’s safety to be safeguarded by not permitting the person to drive or to walk along busy roads, and hence requires the person to be detained by some means. Even if the customer wants to leave, the publican is caught between the dilemma of committing the torts of false imprisonment or battery and committing the tort of negligence.”
The High Court went on in its judgment to consider the duty of care of publicans to persons other than customers (at para. 57) and stated:
“The conclusion that, save in exceptional circumstances, publicans owe no duty of care to their customers in relation to how much alcohol is served and the consequences of serving it says nothing about whether publicans owe a duty to third parties who may be damaged by reason of the intoxication of those customers. Defendants owe duties of care not to the world, but to particular plaintiffs. Some of the arguments against imposing a duty of care on publicans to their customers may have less application where the plaintiff is a third party injured by the customer. The Supreme Court of Canada has recognised, in statements not necessary to the decision, that there is a duty of care to a third party[71]. The Supreme Court regarded this as a logical step from the conclusion that there is a duty to the customer[72]. In this country, since there is generally no duty to the customer, the step cannot be taken on that ground.”
The Australian courts do recognise that publicans or licensees have a duty to ensure that their premises are physically safe and that duty extends to protecting customers from the violent, quarrelsome or disorderly conduct of others on the premises (see Adeels Palace Pty. Ltd. v. Moubarak [2009] HCA 42).
7. Both parties acknowledge that there is no direct judicial decision or precedent in this jurisdiction concerning the duty of care of a publican in a case such as this. A number of cases were referred to by the parties relating to the issues which impinge or impact upon the issues which require to be considered by this Court in addressing the question as to whether or not there is a duty on a publican to protect incapacitated persons, including their potential victims, from injury and if such duty exists the nature and extent of such duty. Personal injury claims arising out of assaults in licensed premises have frequently been litigated in this jurisdiction. In those cases, injured parties who were customers have sued the proprietors of public houses. In Hall v. Kennedy and Rudledge t/a The White House (Unreported, High Court, 20th December, 1993), Morris J. held that the proprietors of a public house were not guilty of negligence in failing to prevent an assault on the plaintiff who was a customer by another customer. The factual basis of that finding was that the violent customer had shown none of the signs or manifestations of drink such as should have alerted a reasonable publican or his staff to the prospect that he might assault another customer. Morris J. (at p. 5 of his judgment) identified the publican’s duty in the following terms:
“The obligation of the [publican] at law is to take all reasonable care for the safety of the [customer] while on the premises. This would include in this case ensuring that [another] customer in the premises did not assault him. The necessary steps would include, in an appropriate case, removing such a customer from the premises, refusing to serve him drink [and] staffing the bar with sufficient barmen or security staff so as to ensure the safety of the [customer]”.
In that case, it was a lack of any specific knowledge on the part of the bar staff which was central to the Court determining that there was no liability. The judgment also identified certain steps available, within the law, which a publican could take when dealing with drunk and violent customers. Those steps included the ability to refuse to serve such a customer drink and to seek to remove the customer from the premises. Intrinsic in the approach to liability identified by Morris J. was the acceptance of an obligation to take reasonable care for the safety of a customer whilst on the premises. In the Circuit Court case of Bridie Murphy v. Phyllis O’Brien (1987) 6 1LT (ns) 75 (cc), Sheridan J. had to consider a case where a plaintiff who had “plenty to drink” was allowed into the defendant’s public house and then three drinks were served to the group who she accompanied. It was uncertain as to whether the plaintiff herself had consumed any alcohol. Whilst descending the stairs to the toilets, the plaintiff fell, as the handrail did not go all the way down to the foot of the stairs. The evidence was that if a sober person had been using the stairs, the banister would have been adequate, but the plaintiff succeeded in her action, in part, due to her inebriated condition. In all the circumstances of the case, there was a two-thirds finding of contributory negligence made against the plaintiff. Sheridan J. imposed liability, not under the principle of occupiers’ liability, but on the basis of Donoghue v. Stevenson, as the plaintiff was a prospective customer. In Walsh v. Ryan (Unreported, Lavan J., 12th February, 1993) the High Court had to consider a claim by a customer who had been assaulted by another customer who had arrived on the premises in an intoxicated condition. Lavan J. reached a conclusion similar to that of Morris J. in the Bridie Murphy case, and held that the plaintiff was entitled to succeed on the basis of occupiers’ liability, but during the course of the judgment, also quoted the “neighbour principle” of Lord Atkin and referred to Murphy v. O’Brien. In the Walsh case, unlike the position in the Hall case, the publican knew of the customer’s tendency towards violence and so was held liable to the plaintiff who was assaulted by that customer.
7.1 In an unreported judgment of Morris J. in Murphy v. Ballyclough Co-Operative Creamery Ltd. and Ors. (Unreported, High Court, 27th February, 1988), the Court dealt with an application to have the plaintiff’s claim against the first and second named defendants struck out. The facts of that case were that the plaintiff, Denis Murphy, had gone to a meeting at a creamery in Mallow, County Cork where free alcohol had been provided. Following the meeting, the plaintiff went to the Roundabout Tavern where he consumed a considerable amount of drink and became inebriated. He was then driven by Kay Napier, another of the defendants, to his van, which had been parked some one mile distance from the Roundabout Tavern. Kay Napier stated that Mr. Murphy was sober at that stage, as he had only consumed four pints in her pub. On retrieving his car, the plaintiff drove to another hotel where, it was claimed, he was served one drink. The owners of that hotel denied that the plaintiff had been served any alcohol on their premises. After he left the hotel, he attempted to drive home and crashed his vehicle into a wall and was badly injured, rendering himself a paraplegic. The plaintiff brought proceedings, not only against the creamery, where he had received complimentary drinks, but against all the publicans and hoteliers who operated premises where he had drunk, thereafter claiming that each of those parties owed him a duty of care, and breached such duty by allowing him to drive his vehicle when he was drunk. On application by the first two defendants, that is, the defendants who were responsible for the creamery, the proceedings were struck out. Morris J. held that any negligence on the part of the first two defendants in providing alcohol to the plaintiff would have been overwhelmed by the alleged negligence of the remaining defendants, if established. Given the narrow range of focus in the judgment of Morris J. where he was dealing with a preliminary application to strike out a defence and where no evidence was heard, such authority is of no real assistance to this Court in addressing the issues herein.
7.2 The defendant seeks to rely, by analogy, on the decision of the Supreme Court in Breslin v. Corcoran [2003] 2 IR 203. It is contended that if a person can be liable for carelessly leaving the keys in a car, resulting in another person stealing that car and causing injury to another, it should follow that a publican can be liable, when, in breach of the criminal law, he serves a customer with so much alcohol that such customer is transformed from being a safe driver into being a dangerous driver, and then releases that person on to the highway. There are a number of difficulties with that line of reasoning. There is no doubt that if one leaves one’s keys in a motorcar on a busy public highway, it is reasonably foreseeable that the car will be stolen. However, a separate and distinct question has to be asked as to whether it is foreseeable, as a reasonable probability, that if the car is stolen, it will be driven so carelessly as to cause injury to another. The facts in Breslin v. Corcoran case were that the first named defendant left his car outside a café in central Dublin, unlocked, with the keys in the ignition, so that he could go in to buy a sandwich, and when he came out, a thief had driven off in the car at speed. The car then turned in to another road, where it crashed into the plaintiff who was crossing the road. The plaintiff brought an action against the first named defendant alleging negligence in leaving the car unattended with the keys in the ignition. The Supreme Court declined to find the first defendant liable due to the fact that the forseeability of the car being stolen, which was acknowledged, did not extend to the car being driven in a negligent manner. Fennelly J. held (at 215):
“There is nothing in the present case to suggest that the first named defendant should have anticipated, as a reasonable probability, that the car if stolen, would be driven so carelessly as to cause injury to another user of the road such as the plaintiff.”
In this case, the defendant claims that the third parties were negligent and in breach of duty in serving excessive quantities of alcohol to John Connolly, and/or in failing to persuade him from leaving the public house, and/or in failing to attempt to restrain or otherwise prevent him from driving. They also seek to rely on a claim that the third parties were in breach of the criminal law and that they participated in transforming John Connolly from a safe driver into a dangerous driver and then released him on to the highway. In considering those claims, it is important to consider which breach of the criminal law is being suggested. The defendant seeks to rely on the criminal law relating to drunk driving, which applies to drivers. The criminal law applicable to publicans is set down in the Intoxicating Liquor Acts. On the facts of this case, the Court is satisfied that it has not been established that the third parties were in breach of the criminal law under the Intoxicating Liquor Acts in supplying intoxicating liquor to a drunken person or in permitting a drunken person to consume intoxicating liquor or in permitting drunkenness to take place in the third parties’ public house. The Court is satisfied that the evidence does not establish that John Connolly was a drunken person within the definition contained in the Intoxicating Liquor Act of 2003. A difficulty with the defendant’s argument, based upon a claim that it was the third parties who released John Connolly on to the highway, is that it was John Connolly himself who decided to leave the third parties’ public house, and it cannot be said that the third parties released him. He was entitled to leave the public house and indeed on the facts of this case did so without the knowledge of the third parties or any of their servants or agents. Insofar as it could be claimed that the third parties should have restrained John Connolly, the Court does not consider that that argument is well founded, as there is no legal basis for such restraint, and insofar as it is suggested that advice should have been tendered in relation to the risk of driving when drunk, the Court is satisfied that the risk attached to drunken driving is so well publicised and appreciated within the community, that such advice would be futile, as the import of such advice would have been well known.
7.3 It was argued by the defendant, that after John Connolly had been served two pints he should not have been served any further alcohol, given that he was likely to depart by car, if he indicated, in response to questioning, that he would not drive. That argument is impractical and would place an impossible burden on publicans. First, it would lead to a situation where publicans would have to question customers as to their future conduct on a recurring basis, making the management of the premises difficult, if not impossible. Secondly, there is no legal basis to permit of such questioning, and it would place the publican in a situation where customers could claim that the question raised by the publican had indicated that such customer was about to commit a crime. Thirdly, the publican would be faced with a situation that if he was informed by the customer that the customer was not intending to drive, that the publican would either have to serve the customer, provided he was not drunk under the Intoxicating Liquor Act 2003, or proceed on the basis that he did not believe the customer and refuse to serve him. The Court is in effect being requested to place a burden on publicans without the publican being provided with the legal safeguards to deal with such obligation.
7.4 In the light of the basis upon which the Supreme Court, in the Breslin case, declined to attribute liability to the car owner who left his car unattended with the keys in the ignition and held that to establish liability, it was a necessary requirement to look beyond the fact that it was foreseeable that the car would be stolen, and to consider whether the car owner should have anticipated as a reasonable probability that the car, if stolen, would be driven so carelessly as to cause injury to another, this Court is satisfied, on the basis of the facts of this case, that Breslin v. Corcoran is of no assistance to the defendant. This Court accepts the evidence which establishes that John Connolly had demonstrated a willingness to exercise his own judgment as to his capacity to drive, and on the day in question he had the capacity to exercise such judgment. The Court is satisfied that it cannot be contended, on the facts of this case, that the third parties knew that it was probable that John Connolly would drive his car, and would do so in such a manner as to cause injuries to other users of the road.
8. Earlier in this judgment, the claims made by the defendant against the third parties are set out; together with the particulars relied on. During the course of argument, it was submitted on behalf of the defendant that the third parties have a duty of care, as proprietors of a licensed premises, that when they have knowledge that a customer they are serving is likely to drive, and when that customer has consumed an amount of alcohol that would put him in excess of the blood alcohol level permitted under the Road Traffic Acts, that the third parties, as publicans, are under a duty not to serve such a customer any more alcohol. The defendant also argued that when the third parties, as publicans, had knowledge that a customer, such as John Connolly, was likely to drive, they had an obligation and a duty “not to serve such an amount of alcohol as would put him over the limit”. The defendant also contended that when the third parties, as publicans, had knowledge that John Connolly was likely to drive having consumed an amount of alcohol that would put him over the legal limit permitted under the Road Traffic Acts, they must take reasonable steps to prevent him from driving. The defendant claims that such duty arises as a result of the special relationship between the third parties and the deceased, in that, he was a customer or patron of the third parties’ pub and, also, that the duty arose by way of the neighbour principle and, further, that the duty arose through the third parties’ knowledge of John Connolly. The defendant claims that the third parties breached their duty to John Connolly and to innocent road users by serving or continuing to serve alcohol to him, to a point well beyond the legal limit for driving a motorcar, while having knowledge of the fact that it was more likely than not that John Connolly would drive after he had consumed that alcohol.
9. In the light of those claims, and in the light of the authorities identified above, and recognising the absence of any authority within this jurisdiction, the Court must determine whether or not the third parties had the duty of care which it is claimed that they owed to John Connolly and to the plaintiff as a potential victim of his driving.
9.1 The third parties, as licensees and publicans, have certain, well-established duties towards their customers. The third parties owed various duties to John Connolly, including the obligation to take reasonable care to ensure that the third parties’ premises, including its contents, were reasonably safe, and to ensure that the premises were conducted in an orderly manner and to conduct the sale of alcohol in such a manner so as to not permit the supply of alcohol to a drunken person, or to permit a drunken person to consume alcohol or to permit drunkenness to take place in the licensed premises. However, the duty contended for by the defendant extends beyond those well-established duties. The defendant’s formulation of the duty of care seeks to place an obligation on a publican or licensee, where a customer regularly drives to the pub in question, to stop serving that customer if he has drunk an amount of alcohol that would place him at or over the legal limit for driving and to proceed on the basis that the publican must presume that the customer will drive his vehicle from the licensed premises. The defendant also seeks to impose a duty that if a customer, whom the publican reasonably expects to drive a motorcar, has consumed an amount of alcohol in excess of the legal limit for driving a motor vehicle, that they must, if necessary, not only advise that customer not to drive, but restrain by force such customer from driving and, if necessary, take by force the keys of the customer’s car. The fact that the Oireachtas has identified particular strict limits in relation to the blood alcohol level permitted in a driver does not and cannot, of itself, impose a liability on a publican to desist from serving a customer an amount of alcohol which would place such customer over that legal limit. Indeed, to impose such a duty, would place an impractical obligation on a publican and would be so vague and indefinite as to be incapable of compliance. Insofar as the defendant’s formulation of the duty of care places an obligation of restraint or the taking by force of the keys of a customer, that obligation would be in direct conflict with the third parties’ duty not to commit torts such as assault or false imprisonment. None of the recognised defences to those torts would be available to the third parties. If such a duty, as claimed, is to arise, such could only realistically be imposed by statute, and cannot arise from an expansion of the scope of the duty of care in negligence, where such expansion, were it to take place, would place publicans or licensees in a position where they had a potential obligation to commit a tort or a crime without any legal defence. This Court agrees with the analysis of the High Court of Australia in relation to this matter as set out in the C.A.L. No. 14 Pty. Ltd. case, where it was held that to impose the suggested duty to restrain, assault or falsely imprison a customer would subvert other principles of law and statutory provisions. As stated by the High Court of Australia in that case (at para. 130):
“In short, if the tort of negligence were extended as far as the [appellant] submitted, it would ‘subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms.”
It is for the Oireachtas to impose such a duty by law where any necessary powers to comply with such duty are expressly provided so that the imposition of such duty can be dealt with by a publican acting within the law and can be considered both practical and feasible.
It is for legislation to strike such a balance and not for a court to impose such a duty, regardless of any balance of rights or obligations.
10. The defendant contends that if the Oireachtas has determined a maximum blood alcohol level for driving, and that such level represents the threshold for the commission of the crime of drunk driving, it follows that it is difficult to contend that civil liability should adopt a more lenient standard. This Court is satisfied that that such contention is without merit. It is not for a publican to supervise or enforce the provisions of the Road Traffic Acts. The obligation identified by the Oireachtas is placed upon the driver of a motor vehicle. It is the obligation of a driver of a motor vehicle to refrain from driving under influence and that obligation is individual to the driver and does not extend to other parties. This Court is not prepared to extend the common law duty of care imposed on publicans premised on violation of statutory duties which are placed on others and not on publicans. Any statutory violation by a publican of any statutory obligation placed on publicans has nothing to do with driving or the Road Traffic Acts. Where the courts have held passengers of drunken drivers guilty of contributory negligence for travelling in a car driven by an intoxicated person, those findings have been predicated on the passengers knowingly getting into a car to be driven by such a driver. It is the passengers’ act in choosing to travel in such a car which grounds the finding of contributory negligence.
11. For completeness sake, it is appropriate for the Court to deal with the complaint made by the defendant that the third parties did not have a policy to monitor, observe and advise customers in relation to the quantity of drink and the danger of drunken driving. This Court is satisfied that such obligation does not arise other than to ensure compliance with the Intoxicating Liquor Acts and, in any event, on the facts of this case, the Court is satisfied that the evidence establishes that John Connolly was a courteous and civil man who was an experienced drinker and who had demonstrated an ability to take care of himself and behave in a sensible and responsible manner. On the day in question, the Court is satisfied that there is no evidence that John Connolly was so incapacitated as to be helpless or in jeopardy by a reduction in his capacity to make sensible decisions or judgments. The facts of the case also establish that on the day in question, neither Concepta Kelly nor Seamus Kelly were present when John Connolly left, and when they were with John Connolly, neither of them observed any of the expected or customary signs of drunkenness. The Court accepts that evidence. In those circumstances, the third parties could proceed on the basis that John Connolly was capable of looking after himself and of exercising his own judgment as to how he would go home. Insofar as the defendant contends that there was an obligation to advise John Connolly as they served him the third, fourth or fifth pint as to the dangers of drunken driving, even if there was such an obligation, the Court is satisfied that it could only arise in circumstances where the third parties were aware that John Connolly could not exercise his own judgment, and was so helpless or in jeopardy that he did not have the capacity to make sensible decisions or judgments. The Court is satisfied, on the evidence, that neither of the third parties observed or were aware of John Connolly being in such a condition.
12. The Court has considered the facts of this case, and in the light of the findings set out earlier in this judgment, and having considered the various authorities opened to it, the Court finds that the following determinations and conclusions can be identified. The third parties did not owe the duty of care claimed to John Connolly. In arriving at that conclusion, the Court has taken into consideration the fact that there has been no identified case within this jurisdiction to support the existence of such duty. In considering the different approaches adopted in other jurisdictions to such a duty, this Court is satisfied that the approach identified in the United Kingdom and Australian case law is to be preferred over the approach adopted by the Canadian courts as set out in Stewart v. Pettie. This Court is satisfied that Gleeson C.J., in the Cole v. South Tweed Heads Rugby League Football Club Ltd. case, correctly identified the lack of a duty of care on a publican and, in particular, this Court concurs with the statement in his judgment, as made at paragraph 14 and as quoted earlier in this judgment. The duty of care sought to be imposed by the defendant would, in the words of Gleeson C.J. (at para. 17):
“. . . involve both an unacceptable burden upon ordinary social and commercial behaviour, and an unacceptable shifting of responsibility for individual choice.”
In preferring the approach identified in the United Kingdom and Australian cases, the Court has had regard to the different statutory framework and legislative approach in Canada, which has resulted in the duty of care placed upon publicans in that country being based upon the legal obligations placed by legislation on those publicans. It was on the basis of the legal duty of care owed to patrons that the Canadian courts have concluded that it was a logical step that such a duty was also owed to third parties who might reasonably be expected to come into contact with a patron. The courts in the United Kingdom, in considering the obligation attaching to others in respect of the intoxicated, have adopted the relatively consistent approach that the law does not impose any liability, absent a clear assumption of responsibility. On the facts of this case, there is no assumption of liability by the third parties. The statement of Carswell L.C.J. in the Joy v. Newell case that an affirmative duty on the part of a publican could only arise where the publican had assumed responsibility for the plaintiff’s safety is a statement with which this Court concurs. The third parties did not assume responsibility for John Connolly’s safety and no duty of care arose. In both the Australian and United Kingdom cases, it has been recognised that there could be situations where responsibility or a duty of care could arise in exceptional circumstances. The courts have recognised that such responsibility or duty could occur in circumstances where a customer was so intoxicated that he could not look after his or her own safety and was plainly incapable of taking care of himself or herself. This Court adopts that approach, and in determining that the third parties owed no duty of care to John Connolly, it does so, in part, based upon its finding that he was not a person who was so intoxicated that he could not look after his own safety or was plainly incapable of taking care of himself.
12.1 The duty of care sought to be imposed by the defendant on the third parties includes in part an obligation on publicans to resort to commit acts which would result in the publican committing a tort or a criminal offence. To place such an obligation and to provide the legislative balance enabling such obligation to be carried out is for the legislature, not the courts. If there was such a duty on publicans or licensees, the law would require to be altered to provide the licensees with the necessary powers and privileges to carry out and enforce the steps necessary to comply with such duty.
12.2 This Court is satisfied that in applying and adopting the approach identified in the High Court of Australia in the C.A.L. No. 14 Pty Ltd. case, and in the Court of Appeal in England in Jebson v. The Ministry for Defence, there is generally no duty of care owed to the intoxicated, absent an assumption of responsibility or exceptional circumstances. In Canada, the duty of care owed to the intoxicated has been identified as the logical basis for the expansion of the duty of care to the third party victims of the intoxicated. This Court is satisfied that there is generally no duty of care to a customer, such as John Connolly, and therefore, a duty of care cannot be extended to third party victims on the basis of such duty. The defendant has failed to identify or establish in evidence any other ground to support there being a duty of care owed to third party victims. The duty of care relied upon by the defendant is based upon the duty of care which it is claimed is owed to the customer, that is, to John Connolly. The claim that there was a breach of that duty in serving, or desisting from serving, John Connolly, is rejected on the basis that there is no such duty. The claim by the defendant that there was a breach of duty by the third parties to the plaintiff flows directly from the alleged breach of duty owed to John Connolly. The defendant has not identified any separate or distinct breach other than the ones claimed to be owed to John Connolly. Absent a duty of care owed to John Connolly, a separate duty of care owed to the plaintiff could only arise if the defendant identified and established a separate and distinct breach. The defendant has not done so and there was no breach by the third parties of any duty owed to the defendant.
13. This Court is satisfied that there is no legal basis for the imposition of the duty of care contended for by the defendant and it follows that the defendant’s claim against the third parties should be dismissed.
Carr v Olas
[2012] IEHC 59, JUDGMENT of Mr. Justice Hogan delivered on the 15th March, 2012
1. A split second decision made in the heat of the moment shortly after mid-day on Tuesday, 22nd January, 2008, has resulted in tragic consequences for the plaintiff, Mr. David Carr, which will profoundly affect him for the rest of his life. At the time of the accident, Mr. Carr was an experienced motor cyclist who had previously worked as a musician, but who was now working in the courier business.
2. On that particular day, the weather in the Sandyford/Leopardstown area of South Dublin was bright and sunny. There had been some rain earlier, but driving conditions were all but perfect. The traffic was steady and relatively free flowing. Shortly after mid-day, Mr. Carr travelled down the Leopardstown Road on his Honda CVR600 motorcycle before coming to a major roundabout. The roundabout has four exits: one of these lies due north and leads on to Brewery road. The other exit lies due east and it is at this point that the Leopardstown Road continues and leads on to join up with the N11 dual carriageway.
3. Mr. Carr entered the roundabout at the south-westerly entrance. Shortly afterwards, Mr. Carr had a chance encounter with the first defendant, Joao Olas, who on that day happened to be driving his father’s Peugeot 306 motor vehicle. Mr. Olas is a Portuguese citizen who has been living here since 2003. He is a truck driver with Kerry Foods and he had just finished work following a 4 am start. Mr. Olas had exited the M50 motorway at junction 14 and he was in the course of travelling home to Foxrock when the incident occurred. There is some dispute as to how exactly the parties came to meet on the roundabout or whether as Mr. Carr claimed and Mr. Olas denied, the former was required to take evasive action as a result of the driving of the latter. What is not in issue is that some form of incident took place – the rights and wrongs of which have been superseded by subsequent by more serious events – which prompted Mr. Carr to make a rude gesticulating signal to Mr. Olas and Mr. Olas responded in kind.
4. Mr. Carr then indicated that he wished to move off the roundabout and move on to Brewery Road. Mr. Olas travelled from a point equivalent to 8 o’clock on the roundabout until he took the 3 o’clock exit back onto the next stretch of Leopardstown Road. Mr. Olas was now heading due east, heading home to Foxrock. While this section of the road is a three lane carriageway, Mr. Olas was travelling on a single lane as he headed in the direction of the N11 and there were two on-coming lanes on the opposite side of the road. There was free flowing traffic in both directions. The single lane is a relatively narrow road, with a width of 3.2m at the point of the accident. Perhaps reflecting this fact, the relevant speed limit is 50kph. Mr. Cathal Maguire, the well known consulting civil engineer gave evidence that lanes of this kind normally are 3.65m wide.
5. In the meantime, Mr. Carr had made a fateful decision. Having exited off the roundabout on to Brewery Road, he then decided to double back and to seek out the driver of the car with whom he just had an altercation. After progressing about 50m down Brewery Road, Mr. Carr turned his vehicle at a traffic island when there was gap in the traffic and went back in the direction of the roundabout to seek out the driver of the vehicle. While Mr. Carr may well have crossed a continuous white line in the course of this reversal of direction, this was probably not in itself significant, save that it is at least some evidence that Mr. Carr was agitated and cross by reason of the conduct of Mr. Olas.
6. In the meantime, Mr. Olas had proceeded down the Leopardstown Road. It is common case that there were vehicles both ahead of him and behind him and the traffic was moving at a speed of approximately 40kph. It is not in dispute but that Mr. Carr overtook traffic and caught up with Mr. Olas’s car at a point approximately 190m from the exit point on the roundabout on to this section of Leopardstown Road. It is also common case that Mr. Carr came alongside Mr. Olas’s vehicle and, keeping his right hand on the steering wheel of the bicycle, gesticulated with his left hand and – according to some witnesses, albeit disputed by Mr. Carr – then banged on the wing mirror and the driver’s window.
7. It is not disputed but that at this point the vehicle swerved to the right and then back again. Nor is it seriously disputed but that the swerve was the proximate cause of the accident, so that either the motorcyclist was himself forced to swerve and lost control as a result or (as I rather think) the front right hand wheel of the car clipped the front wheel motorcycle, so that the latter spun out of control. At all events, the motorcycle banked sharply at about a 45 degree angle and the motorcyclist and his machine both careered into the passenger side of a motor vehicle, a red Mazda MX5 sports car, driven by the second defendant, Ms. Jennifer Doran which was travelling on the opposite side of the road in the direction of the roundabout. Mr. Carr was thrown into the air and landed head first in the centre of a boxed junction beside the entrance to Tudor Lawns, an access road which leads to a group of houses off the Leopardstown Road. Mr. Carr was knocked unconscious as a result and his body thus lay just inside the outside lane of the two-lane carriageway which was heading in the opposite direction towards the Leopardstown Road.
8. The Gardaí and the emergency services were called. The investigating member, Garda Michael Murphy, arrived at 12.36pm and confirmed in evidence that he found Mr. Carr laying unconscious on the junction box, clad in ordinary motorcyclist’s apparel, together with a helmet and visor. The Mazda was damaged by extensive scraping beside the driver’s door. Minimal damage had been done to the motorcycle, which he described as being medium-sized. Little damage had been done to the Peugeot either, but Garda Murphy noticed scratch marks on the right hand side, which suggested a possible point of impact. He did notice that the wing mirror of this vehicle had been retracted backwards.
9. Mr. Carr was very seriously injured as a result of this grave accident. He was hospitalised and required extensive treatment. The entire joint of his shoulder, wrist, one of his ribs and lungs all suffered extensive injuries. There was damage to his bronchial nerve, with the result that he cannot move his shoulder and, as a consequence, he has lost the effective use of one arm. There was also damage to his frenic nerve, with the result that he has a partially frozen right lung. This leads to breathlessness and affects his ability to sing. Mr. Carr also has extensive and disfiguring scarring over his torso. These extensive injuries and disabilities in turn has lead to psychological problems such as depression and, quite obviously, Mr. Carr’s quality of life has been gravely affected by this accident
10. Mr. Carr has sought to combat the adverse effects of this accident and has set about a rehabilitation regime. While it is greatly to his credit that he has made such sterling efforts to rehabilitate his life, the personal and financial consequences for him of this most serious accident are nevertheless very considerable indeed. To state only the most obvious, he is presently surviving on disability benefit and it is unlikely that he will ever hold down gainful employment again.
11. Returning now to the accident itself, Ms. Doran was driving on the outside lane at about 40kph in the direction of the Leopardstown roundabout when she saw Mr. Carr’s motorcycle approach alongside the driver’s door and window of Mr. Olas’ vehicle. At this point she was about 15m.-20m away from the boxed junction. Although the accident itself happened in the course of two to three seconds, she herself swerved into the inside lane (i.e., the lane running alongside the entrance to Tudor Lawns) in an effort to avoid the banking motorcycle. Despite her best efforts, the motorcycle and its driver careered at an angle into the driver’s side of her car just above the wheel and this impact took place a few metres from the boxed junction. It may be significant that the Mazda MX5 is a low body sports car and but for this fact and the fact that Ms. Doran managed successfully to swerve into her inside lane, the consequences for Mr. Carr might have been ever graver than they actually were.
How did the accident happen?
12. There is no doubt but that the altercation at the roundabout put in train a series of events which led to the accident. There are, however, a number of individual factors – speed, travelling over the continuous white line, whether Mr. Carr kept a proper look-out, whether Mr. Carr banged on the driver’s window and wing mirror, whether Mr. Olas’s car swerved to the right, thus catching Mr. Carr’s motorcycle and, if so, whether this action was deliberate and the role of Ms. Doran – which require to be separately examined in order to determine the cause of the accident. We may now consider these in turn.
i. Speed
13. If, as appears to be common case, Mr.Olas was travelling at about 40kph, then it follows that Mr. Carr must have been travelling at a greater speed in order to catch up with him, albeit that just in the few seconds before the accident both parties must have been travelling at more or less the same speed given that the motorcyclist was riding along aside the driver. This is especially so given that Mr. Carr had already travelled a little distance in the opposite direction down Brewery Road, waited for a gap in the traffic and then turned back in the direction of the roundabout, before catching up with Mr. Olas after a distance of about 190m.
ii. Whether Mr. Carr travelled over the continuous white line
14. It must be recalled that the single lane is merely 3.2m in width and it is thus a relatively narrow lane for a carriageway of this general quality. It is accepted that Mr. Olas was travelling in the centre of his lane. If one accordingly allows for a margin of perhaps 0.6 metre gap between the car and the kerb, then the distance between the car and the continuous white line must have been in the order of a similar margin. All of this suggests that, at best, the wheels of the motorcycle must have been just within or actually on the continuous white line. In fact, I think it more likely that the wheels of Mr. Carr’s motorcycle was probably just over the white line.
iii. Whether Mr. Carr kept a proper look-out
15. All the relevant witnesses are agreed that Mr. Carr did not keep a proper look-out. Mr. Carr himself does not dispute this and, indeed, given that it is accepted that he was (at least) gesticulating and remonstrating with Mr. Olas at the time of the accident, it was all but impossible for him to have a kept proper look-out in such circumstances.
iv. Whether Mr. Carr banged on the driver’s window and wing mirrors
16. We next come to the crucial question of whether Mr. Carr endeavoured to attack or break Mr. Olas’ wing mirror and whether he also banged on the window adjacent to the driver’s seat. Here it is necessary to review and evaluate the evidence of all five witnesses to the accident, three of whom claim to have witnessed such conduct.
17. Mr. Carr maintains that all that he did was to gesticulate and remonstrate with Mr. Olas as he came up along side him. But I fear that I cannot fully accept this account, since it is contradicted by the preponderance of the evidence. I also have regard to the fact that, as Mr. Carr himself acknowledged, his memory of the events has been (understandably) impacted by the gravity of the injuries he suffered.
18. Another witness, Shea O’Brien, was the passenger in an Isuzu truck, but there were some three to four vehicles between this truck and Mr. Olas’s car. Mr. O’Brien was certainly sitting in an elevated position in the truck, but the truck was also several vehicles behind Dr. Staunton’s car. Mr. O’Brien seems to have noticed the motorcycle only when it was adjacent to driver’s side and as the car then swerved to its right. However, if the banging on the window occurred, it occurred immediately before this point and since Mr. O’Brien’s attention was only called to the motorcycle just before the swerve, this would explain why this banging simply did not register with him.
19. Dr. Pauline Staunton was in the car immediately behind that of Mr. Olas and, along with Ms. Jennifer Doran, she probably had the best view of any witness. She described how the motorcyclist overtook her car on her driver’s side as she approached the entrance to Tudor Lawns. She was then taken aback to see the motorcyclist “thumping” the car around the driver’s window, immediately before the car swerved to the right.
20. Similar evidence was given by the second defendant, Jennifer Doran who was coming in the opposite direction. Ms. Doran saw the motorcyclist draw up beside the driver’s window and bang on the window. While she saw only one bang on the window and could not recall seeing any interference with the wing mirror, she described Mr. Carr’s actions as amounting to very dangerous driving. It may be noted that Ms. Doran was the only person who had the opportunity of seeing Mr. Olas’s face immediately before the accident, yet she did not see any aggression on his part.
21. Finally, similar evidence was also given by Mr. Olas who described Mr. Carr endeavouring to push back the wing mirror and bang several times on the window. A photograph of the car taken after the accident shows that the wing mirror had been retracted and pushed back. It will also be recalled that Garda Murphy confirmed that he had found that the wing mirror had been retracted backwards, albeit that it was not broken.
22. In these circumstances, I am coerced to conclude that Mr. Carr did bang on the window, probably on two or three occasions and I further find that he attempted to wrench back the wing mirror on the driver’s side of Mr. Olas’s car.
v. Whether Mr. Olas’s car then swerved to the right
23. All the witnesses are agreed (and I so find) that, in the split second or so after the banging on the window, Mr. Olas’ car swerved to the right towards the middle of the road. This appears to have been the proximate cause of the accident in that the right hand wheel of the car appears to have touched the front wheel of the motorcycle, causing it to bank and to spin out of control.
vi. Whether Mr. Olas swerved deliberately
24. This brings us to the most critical question of all. Did Mr. Olas intentionally swerve the car into the path of Mr. Carr by way of response to the banging on the window and the earlier incident at the roundabout? Counsel for Mr. Olas, Mr. Mohan SC, does not flinch from accepting that, were I to make such a finding, I must then find in favour of the plaintiff on liability – subject, of course, to a high proportion of contributory negligence – as this would have amounted to an assault.
25. In approaching this question, I should perhaps first say that I found Mr. Olas to be a most impressive witness. He gave his evidence fairly, fluently and without any evasion whatsoever in the teeth of (an equally impressive) cross-examination conducted by Ms. Dillon S.C. on behalf of the plaintiff. He was emphatic that he did not intend to injure Mr. Carr by swerving, but rather that the swerve was caused by his own instinctive reactions to the banging on the window.
26. Mr. Olas explained that he had been variously distracted, confused and, indeed, scared by this sudden sequence of events. He gave a graphic depiction in the witness box of how he recoiled with his body backwards and moved slightly to his left away from the perceived direction of the blow and how in the course of this the car swerved slightly to the right, even though he had both hands on the steering wheel of the motorcycle. This analysis was supported by Mr. Maguire, who noted that Mr. Carr must have been banging with his left hand, with his right hand on the steering wheel. Given that Mr. Carr was adjacent to the driver’s window, this blow would have been perceived by the driver of the car as a backhand blow coming from the front. Mr. Maguire insisted that in such circumstances the driver would instinctively recoil away from the direction of the blow. By moving back and to his left in this fashion, he was more likely to move the car to the right.
27. This conclusion is supported by one further item of evidence. While Mr. Carr suggested that he could see that Mr. Olas was very angry as he moved along side him, I think it more likely that what he really saw was a driver who was bewildered and even momentarily frightened. Significantly, perhaps, Ms. Doran insisted that she saw no evidence of aggression on the part of Mr. Olas immediately before the accident.
28. These factors all point to one, admittedly critical, conclusion, namely, that the swerve was the result of an instinctive reaction on the part of Mr. Olas as his body recoiled in an instant to avoid what appeared to be a blow from the back of Mr. Carr’s hand coming in his direction as the latter banged on the window. This instinctive movement caused the sudden lurch to the right, which in turn caused the right hand wheel of the car to touch the front wheel of the motorcycle, which in its turn caused the motorcycle to bank and spin out of control. It is for these reasons that I reject the argument that Mr.Olas intentionally turned his vehicle into the path of Mr. Carr.
29. Mr. Olas was pressed in the course of cross-examination as to whether he had recognised Mr. Carr as the driver of the motorcycle with whom he just had an altercation. The suggestion was to the effect that he had done so and that he had elected intentionally to injure Mr. Carr as a result. But it must be recalled that Mr. Olas was confronted with a sudden emergency and his thought process must have struggled to assimilate a quantity of different questions – what is happening?, why is this happening?, who is this attacker? – in the small number of seconds during which this incident occurred. Even if his mind could have swiftly assimilate and process this information, I doubt that he could have done in so in the course of the small number of seconds during which this incident took place so as to form an intention to injure Mr. Carr. Even if I am wrong in this – and one would perhaps have had required the evidence of a psychologist for this purpose – I nonetheless fully accept Mr. Olas’s account of what happened and that the swerve was the product of an instinctive reaction which was not deliberate.
30. Mr. Olas was also pressed about alleged inconsistencies in prior statements he had made with regard to these events. Thus, for example, he said in evidence that he thought that Mr.Carr had hit the wing mirror twice, whereas it was suggested to him that on one construction of his statement to Garda Murphy on 31st March 2008 (“…the motorbike beside me hit my wing mirror with his hand…”), he had acknowledged that this had occurred only once. While one could debate endlessly the linguistic nuances of statements of this kind, the photograph of the retracted wing mirror tells its own story. For my part, I accept that Mr. Olas has at all material times given consistent and coherent evidence regarding these incidents and the events leading up to the accident.
vii. Whether Ms. Doran was responsible for the accident
31. All the witnesses were agreed that Ms. Doran was completely blameless in respect of the accident. I accept completely her evidence to the effect that she was driving on the outside lane of the (two lane) carriageway heading in the direction of the roundabout, coming from the N11. She was travelling at about 40kph as she approached the yellow junction box outside the entrance to Tudor Lawns she saw Mr. Carr bang on the window. Just as the Peugeot swerved to the right, causing the motorcycle to bank, she then took evasive action by swerving into the inside lane. She could not, however, stop the motorcycle and rider careering into the side of her car. The very fact that Ms. Doran’s car was impacted at her right hand side is itself ample testimony to her quick-minded endeavours to avoid a collision. Indeed, but for her commendably prompt actions, this serious incident might well have led to a fatality.
32. It follows, therefore, that as Ms. Doran was totally blameless, she has no liability to the plaintiff, whether in negligence or otherwise.
Could Mr. Olas be liable in negligence?
33. I turn now to the question of whether Mr. Olas could be liable to the plaintiff in negligence, quite independently of the question of assault. In effect, the argument here is that, irrespective of the conduct of Mr. Carr, Mr. Olas still owed him a duty of care as a fellow road user. Mr. Mohan SC ripostes by saying that whether by reference to the principles of ex turpi causa or otherwise, the imposition of a duty of care would be incongruous.
34. So far as the ex turpi causa doctrine is concerned, s. 57(1) of the Civil Liability Act 1961 provides that:-
“It shall not be a defence in an action of tort merely to show that the plaintiff is in breach of the civil or criminal law.”
35. As Finnegan P. noted in Anderson v. Cooke [2005] IEHC 221, [2005] 2 IR 607 at 613, “the effect of s. 57(1) is to modify, but not to abolish, the defence of ex turpi causa”. In other words, the mere fact that the plaintiff is in breach of either the civil law or criminal law does not mean that the law of torts will not supply him with a remedy if he were otherwise entitled to such. If that were not the law, then the fact that the plaintiff might be guilty of some infraction (whether technical or serious) of the Road Traffic Acts – such as, for example, that he or she was driving in a bus lane or was driving marginally in excess of the speed limit or (to take an example at least close to the present case) driving marginally over a continuous white line would have the consequence that a defendant who negligently injured that plaintiff in the course of a road traffic accident would have no liability.
36. In The People v. Barnes [2006] IECCA 165, [2007] 3 I.R. 170 the Court of Criminal Appeal held insofar as the common law had permitted the householder to kill a burglar merely because he was such, this rule has not survived the enactment of the Constitution in view of the State’s obligation under Article 40.3.2 to protect the life of all citizens. By the same token, insofar as the common law’s ex turpi causa rules permitted a defendant to avoid tortious liability merely (and I stress the word “merely”) because the victim happened in some respect to have also committed an illegal act, such rules would not be compatible with the State’s duty contained in Article 40.3.2 to vindicate the person. While the law of torts may be regarded as the primary mechanism whereby the State’s constitutional duty to vindicate the life and person is achieved (cf. the comments to this effect of Henchy J. in Hanrahan v. Merck, Sharpe & Dohme Ltd. [1988] ILRM 629 and those of Hardiman J. in Grant v. Roche Products Ltd. [2008] IESC 35, [2008] 4 IR 679), the common law must, where necessary, be remoulded and re-fashioned in order to reflect and to accommodate itself to these basic constitutional values: see generally Professor Binchy’s masterly analysis of this topic, “Meskell, the Constitution and the Law of Torts” (2011) Dublin University Law Journal 339.
37. It is against this context and in the light of these constitutional obligations that s. 57 of the Act of 1961 falls to be interpreted. Just as the decision in Barnes made it clear that burglars cannot be regarded as some form of modern day outlaws who have forfeited any entitlement to constitutional protection by reason of their wrong-doing, so by analogy, the same is broadly true even in the case of those road users who have clearly committed serious breaches of the Road Traffic Acts. Indeed, the modern ex turpi case-law focuses on those cases where the tortfeasors and the victim have both engaged in a joint illegal enterprise which is of necessity mala in se rather merely mala prohibita. Thus, as Peart J. put it in Hackett v. Calla Associates Ltd. [2004] IEHC336, the modern day ex turpi causa principle is confined to those cases where the conduct of the plaintiff has been “so egregious that he ought not to be allowed recover damages for an injury sustained which results from that behaviour.”
38. Another contemporary example is supplied by Wasson v. Chief Constable, Royal Ulster Constabulary [1987] N.I. 420, a case where the plaintiff was entitled to recover damages for assault where he was struck in the head by a baton round fired by a police officer in circumstances where the defendant had failed to prove that it had been discharged in self defence. Hutton J. found for the plaintiff even though he had been convicted of riotous assembly. It may possibly be relevant that the plaintiff here sued for assault and trespass. Would the result have been different if, for example, the plaintiff had sought to make good his escape from the scene of the riot by travelling as a passenger in the car belonging to and driven by a fellow rioter and had then endeavoured to sue the driver of the car for negligence when it crashed as the occupants sought to evade police detection?
39. Nevertheless, in circumstances where the participants are jointly engaged in serious criminal activity – the textbook examples of which are cases arising from injuries sustained in the course of robbery or (as in the decision of the Australian High Court in Gala v. Preston (1991) 172 C.L.R. 243) car theft – the courts lean against recovery in tort for reasons associated with public policy and maintaining the integrity of the administration of justice. As MacLachlin J. said in her judgment in Hall v. Herbert [1993] 2 SCR 159:-
“My own view is that courts should be allowed to bar recovery in tort on the ground of the plaintiff’s immoral or illegal conduct only in very limited circumstances. The basis of this power, as I see it, lies in duty of the courts to preserve the integrity of the legal system, and is exercisable only where this concern is in issue. This concern is in issue where a damage award in a civil suit would, in effect, allow a person to profit from illegal or wrongful conduct, or would permit an evasion or rebate of a penalty prescribed by the criminal law. The idea common to these instances is that the law refuses to give by its right hand what it takes away by its left hand. It follows from this that, as a general rule, the ex turpi causa principle will not operate in tort to deny damages for personal injury, since tort suits will generally be based on a claim for compensation, and will not seek damages as profit for illegal or immoral acts. As to the form the power should take, I see little utility and considerable difficulty in saying that the issue must be dealt with as part of the duty of care. Finally, I see no harm in using the traditional label of ex turpi causa non oritur actio, so long as the conditions that govern its use are made clear.
40. To this may be added a category of cases where the court cannot, in effect, calibrate or evaluate a duty of care by reason of the rank illegality of the actions of the participants (cf. the comments of Mason C.J. in Gala v. Preston). This is illustrated by Anderson v. Cooke itself. Here the plaintiff had been a passenger in a motor vehicle had had been adapted for motor sport purposes. He had agreed with two others to have the car driven at the maximum possible speed with a view to taking photographs of the speedometer for submission to an internet website. The plaintiff suffered injuries when the car crashed at a speed in excess of 190kph.
41. Finnegan P. held that in those circumstances it was impossible to determine what the duty of care ought to have been ([2005] 2 IR 607 at 616):-
“If the joint enterprise was that the car should be driven at 70 m.p.h. where speed was limited by regulation to 60 m.p.h., the Court might well be in a position to establish the standard of care owed by the driver to the passenger: each case must turn upon its own circumstances. In the present case I cannot establish the duty of care, if any, which was owned by the defendant to the plaintiff in order to determine if there was a breach of the same. Insofar as there is authority for the proposition that the Courts in a case in which the plaintiff and defendant were joint participants in illegal conduct the Court will not hear evidence to enable it to establish whether and if so what duty of care is owed by the defendant to the plaintiff by reason of s. 57(1) of the Civil Liability Act 1961, that is no longer the law. The denial of relief is related not to the illegal character of the activity, but rather to the character and incidents of the enterprise upon which the plaintiff and the defendant are engaged and to the hazards which are necessarily inherent in its execution. In the circumstances of this case, as I am unable to determine the duty, if any, which was owed by the defendant to the plaintiff and accordingly to determine whether or not there was a breach of the same the plaintiff fails.”
42. While the facts of the present case are decidedly unusual, the principles enunciated by the Supreme Court in McComiskey v. McDermott [1974] I.R. 75, are nonetheless of considerable assistance. In that case the plaintiff and the defendant were both university students who were participating in a motor car rally in County Wicklow. The aim of the competition was that competitors were to maintain a steady speed of about 50kph as they traversed the course. They were expected to arrive at a series of checkpoints at pre-determined times. If they arrived late they incurred penalty points and should they arrive early, they were penalised even more. Each car was manned by a driver and navigator and navigational skills was of the essence of this particular competition.
43. The plaintiff was the navigator and the defendant was the driver of the motor vehicle which participated in the rally. The competition itself was held on a wet autumn night on secondary roads in County Wicklow. In the course of the rally the defendant’s car turned sharp left to negotiate a left hand bend. As this happened the driver was confronted with two cars blocking the road some 45m away. One of the cars was that of an official who was manning the checkpoint and the other car was that of a competitor. The driver felt that in these wet and muddy conditions he could not brake effectively and he essentially turned the car into the ditch at the right hand side of the road to avoid the two obstructing cars. The car overturned and the plaintiff was injured.
44. The jury entered a verdict for the defendant, whose verdict of no negligence was upheld by a majority of the Supreme Court. For the majority, Henchy J., posed the following question ([1974] I.R. 75 at 88):-
“Was that conduct negligence on his part? Counsel for the plaintiff says that it was; they say that he should have been driving at a speed which would have enabled him to cope with an emergency such as this, and the duty owed to the plaintiff was no more nor less than the duty to show care that a motorist owes to other users of the road. I think it is important to bear in mind that, while the general duty owed by a motorist to other users of the road is the objective one of showing due and reasonable care, the duty becomes particularised and personalised by the circumstances of the case. For example, it might be negligence to drive at 50mph at a group of boisterous people coming from school, yet it may not be negligence to drive at that speed past a group of adults. Therefore, it is necessary in each case to consider who is the person claiming to be owed the duty of care, who is the person it is claimed against, and what are the circumstances.”
45. Henchy J. continued thus ([1974] I.R. 75 at 88-89):-
“The essential feature of the relationship between the plaintiff and the defendant in this case is that they were bound together as a team engaged in a joint competitive venture. Each undertook to use his skills towards the common end of scoring as well as possible in the competition. To achieve this the plaintiff, as navigator, acted as a map reader and time keeper and to convey the necessary information to the defendant, as driver; and then it was for the defendant to use his driving skill and the best advantage in the light of that information. All this had to be done in the context of the prevailing climatic and other conditions, the fact that to keep up with the time schedule laid down for the event an average speed of 35mph had to be maintained, and the fact that a team that started out one minute before them and another team one minute after them. The law of negligence lays down that the standard of care which is to be expected from a reasonably careful man in the circumstances …I consider that the duty of care owed by the defendant to the plaintiff was to drive as carefully as a reasonably careful, competitive rally driver would be expected to drive in the prevailing circumstances.”
46. If one applies the McComiskey principle here, it follows that the duty owed by Mr. Olas to Mr. Carr was to drive as carefully as a reasonably competent driver would have driven in the circumstances of an emergency which was not of his creation, making all due allowances for the sudden and unexpected nature of that emergency and the fact that Mr. Olas was required to react in a matter of split seconds. In this respect, the present case is different from that of Anderson in that, unlike that case, it is in fact feasible for the court to prescribe appropriate standards of care, albeit that the duty of care in question is an attenuated one having regard to the special – if not, indeed, extraordinary – circumstances of the case. Nor can it be said that the present case presents a form of criminal enterprise such that permitting recovery by way of compensation would strike at the integrity of the administration of justice or would undermine a key objective of public policy enshrined in civil or criminal legislation enacted by the Oireachtas.
47. Judged, therefore, by the application of the McComiskey principles, I cannot say that Mr. Olas was negligent. There is no suggestion that he was driving at an excessive speed or that he was not keeping a proper look-out. It is true that Mr. Carr maintains that Mr. Olas was agitated and that he had an aggressive demeanour – which suggestion, if true, might have affected his driving – but this is contradicted by the evidence of Ms. Doran who probably had the best view of Mr. Olas’ countenance. Moreover, insofar as Mr. Olas was agitated, it was probably the result of surprise, bewilderment and momentary fear rather than anything else.
48. All that can be said against Mr. Olas is that he swerved suddenly. Yet, as I have already endeavoured to demonstrate, this swerve was the product of an instinctive reaction, prompted by a natural recoil from the banging on the window. If, as Henchy J. pointed out in McComiskey, the standard of reasonable care “becomes particularized and personalized by the circumstances of the case”, it was asking too much of Mr. Olas to require that he should not have reacted instinctively, not least when he was presented with a completely unforeseeable set of circumstances with which he was instantly required to deal.
The Rules of the Road
49. In addition to arguments based on purely common law negligence principles, Ms. Dillon S.C also emphasised the following passage from the Rules of the Road, the latest version of which was published in March, 2007. The Rules are not a legal instrument, but are rather an administrative document which in places endeavours to summarise in non-legal language the requirements of the Road Traffic Acts while also giving practical advice and exhortation to drivers as how best to drive safely. The opening introduction recognises this in the following passage:-
“It uses must and must not to draw attention to behaviour the law clearly demands and forbids. It uses terms such as should and should not to tell you how best to act in a situation where no legal rule is in place.”
50. Section 13 of the Rules provides:-
“Road Rage and Aggressive Driving
If you display road rage as a driver, it means you have uncontrolled anger that results in intimidation or violence against another driver.
Aggressive driving is inconsiderate, stupid driving. It involves speeding, tailgating (driving too close behind another vehicle), failing to use an indicator for lane changes, recklessly weaving in and out of traffic and overuse of a horn or flashing headlights. If another driver is attempting to provoke you, don’t react. Don’t be tempted to speed, brake or swerve suddenly. This could cause a crash or make other drivers think you were confronting them. Instead, stay calm and remain focused on your driving to complete your journey safely. Always remember that safety is your number one concern.”
51. As it happens, the distinction drawn by the Rules between must and should is not observed in this passage. Moreover, despite the use of the imperative mood (“…stay calm and remain focused on your driving…”), this passage would be regarded by readers as containing wise advice, but as being largely exhortatory in nature. The passage cannot accordingly in itself be regarded as reflecting a mandatory legal rule akin, for example, to the duty to observe a speed limit or the obligation to wear a seatbelt.
52. At all events, Ms. Dillon S.C. emphasised that the Rules urged (or, if you will, oblige) drivers not to react by, inter alia, swerving. The whole context, however, of this passage pre-supposes that the driver will be in a position to make a conscious decision (“…Don’t be tempted to speed, brake or swerve suddenly..”) by way of response to the aggressive or inconsiderate driving of another. Those who prepared the Rules of the Road certainly did not envisage the type of scenario at issue here, nor were they endeavouring to prescribe a course of conduct to deal with a situation where the driver reacted immediately and in an instinctive fashion to a sudden perceived threat.
53. It is for these reasons that Mr. Carr cannot succeed in negligence against Mr. Olas.
Conclusions
54. It gives me no pleasure at all to reach these conclusions which are adverse to Mr. Carr. It is clear that he was (and is) a diligent and up-standing member of society. The tragic accident and its sad consequences for Mr. Carr came about as a result of a momentary (and doubtless quite uncharacteristic) loss of temper which set in train these most unfortunate events. It is perhaps easy to criticise Mr. Carr for his conduct, but I would rather reserve this task in the first instance to those who can truthfully say that they have never reacted angrily and in a headstrong fashion to some passing slight.
55. Nevertheless, if one looks beyond this and endeavours objectively to evaluate what happened, I am driven to the conclusion that the accident was the product of an instinctive recoiling of Mr. Olas to the sudden (and inherently dangerous) actions of Mr. Carr. For the reasons I have attempted to set out, I must conclude on the evidence that the swerve was instinctive and not deliberate. Over and above this, there was no evidence of negligence on the part of either Mr. Olas or Ms. Doran.
56. In these circumstances, I find myself obliged to dismiss the plaintiff’s claim.
Rodgers v J.A.C.K.S. Taverns Ltd
[2012] IEHC 314,Judgment of Mr Justice Michael Peart delivered on the 18th day of July 2012:
1. The defendant owns a licensed premises known as The Balally Inn, of which at the relevant time the plaintiff was a regular patron, including on the 28th October 2006.
2. The plaintiff’s niece is Kerry Ann Pegman. Ms. Pegman, then aged 16, had despite her age worked as a part-time worker at this pub for a couple of years up to August 2006. She says that on this particular night, while she was attending a fancy dress night at the pub with her friends, the manager had asked to if she would help out and work the night in question as the pub was extremely busy, and that she reluctantly agreed. The manager in question denies that he asked her to work that evening, and denies that she was working.
3. Leaving aside that issue for the moment, it is Ms. Pegman’s evidence that close to midnight on Saturday 28th October 2006 she told the bar manager that she wanted a cigarette break. Her manager seems to have told her that she could, provided that she smoked outside. She went out the side door of the pub where other smokers were gathered, and lit a cigarette. As she was talking to a couple of ‘locals’ outside, a man approached her and asked for a light. She obliged by giving him her own cigarette for that purpose. No sooner had she done so than this man’s wife emerged from the pub, smashed his head off the door of the premises, then grabbed Ms. Pegman by the hair, forced her to the ground, picked her up again and threw her against the door of a car which was parked adjacent to pathway outside the door in question. At that point another girl arrived on the scene and held Ms. Pegman by the arm, followed by two more. Ms. Pegman fell to the ground once more, whereupon she was kicked and beaten by these women, all the time holding her own hands up to her head in order to gain what protection she could against her assailants. Ms. Pegman says that these women were members of a traveller family living locally, members of which had to her knowledge been previously barred from this licensed premises on more than one occasion but had apparently been allowed back by the management.
4. The plaintiff happened to be exiting the pub by the main door (not that outside which this incident occurred) while this incident was in progress, and says that having looked down to his right towards the side door, he saw that his niece was under attack there. He went down to where the melee was taking place, pushed the several women away as best he could, and threw himself on top of his niece to protect her. He then heard glass breaking, whereupon a man stuck a broken bottle into his face. The plaintiff got up from the ground, a scuffle broke out whereby the plaintiff tried to grab the broken bottle, and he was struck in the face again by the same man with the broken bottle and close to his right eye. More people apparently emerged from the pub at this stage and the fight seems to have enlarged. Nevertheless, and in spite of his injuries, the plaintiff succeeded in pinning his assailant down on the bonnet of a nearby car. However, this man again struck the plaintiff with the broken bottle, this time pushing it into his mouth area, cutting his lip and gums. While these injuries were being inflicted, other persons, male and female, set about assaulting him also, including a girl with another broken bottle who struck him with it in the left side of his neck. Needless to say he was gravely wounded by these assaults and was bleeding profusely. The fighting appears to have expanded beyond its original participants, and some idea of the scale of it can be gleaned from the evidence of D/Garda Barron who was first on the scene, and who radioed for assistance when he saw what was going on. He stated that in total some 32 members of An Garda Siochana were mobilised to the scene in order to deal with the situation.
5. At some point this fight abated and the plaintiff was taken away to the safety of a nearby doorway. He was provided with a T-shirt to stem the bleeding while the Gardai and ambulances arrived. The plaintiff and others were attended to at the scene in relation to injuries. The plaintiff refused to go to hospital in an ambulance, as it would be bringing him to the same hospital to which members of the opposing group were also being brought by ambulance. Instead, he was given a lift by a relative to a different hospital.
6. The plaintiff sues the defendant for damages for negligence in respect of his injuries. His complaint of negligence against the defendant, as articulated by him in his evidence, is that the management of the pub who knew or ought to have known that this particular group were known to cause trouble and who had been previously been barred and allowed to return, should have employed security men on the door of the pub on this busy Halloween fancy dress night in order to ensure that this sort of incident did not occur. The defendant on the other hand makes the point, firstly, that the fight did not take place in the pub, but outside on the pavement, and secondly, that in any event there had been no warning throughout the afternoon and evening of any trouble, that the incident happened suddenly, spontaneously and without any prior warning, and that in those circumstances the pub could not be reasonably expected to have anticipated it. Accordingly, the defendant pleads that it was not in breach of its duty of care to the plaintiff, who, in any event, was not the person first assaulted by patrons, since the assault upon him occurred only when he decided to intervene by going to the rescue of his niece.
7. The plaintiff’s case depends upon his evidence, and that of Ms. Pegman who had worked in the pub on a part-time basis over the previous two years, that the persons who assaulted Ms. Pegman and the plaintiff who came to her rescue were known troublemakers, had been barred previously, and allowed back again. This is the basis on which the plaintiff contends that the management of the pub ought to have anticipated that on this night there might be trouble and have taken the precaution, in the interests of its patrons’ safety, of engaging security staff. It is contended that had they done so, the injuries to the plaintiff would not been sustained. It is not clear to me whether the plaintiffs contention is that the employment of such security would have served to prevent that group of persons generally or certain particular members of it from entering the pub in the first place, or whether the presence of security men outside the main door of the pub would simply have prevented this fracas breaking out at the side door where this incident took place. Neither is it clear whether it is being contended that security men should have been placed outside both doors, and/or perhaps inside the premises as well. There was no expert evidence called as to what would have been an appropriate level of security on this night to have prevented the assault on Ms. Pegman, and, by extension, the plaintiff.
8. This pub was the plaintiffs ‘local’ for about ten years by the date of this accident. It was where at that time he would regularly go for a drink and he knew the premises well and the staff who worked there. It appears that he would go there about twice a week, though the defendants say he was there seven days a week. This particular night was a Saturday night on the Halloween weekend, and there was some sort of fancy dress event being organised there. The plaintiff decided to go along to the event as some of his friends would be there. He says he got there somewhere between 9.30pm and 10pm. He says also that he was not drinking alcohol at that time. The defendants do not accept that evidence. They say he was in the premises from the afternoon, when he was watching football on the television. They say that he was not drinking orange juice as he has stated, but was drinking lager. They also say that he had left the pub about 40 minutes before this incident took place. One of the barmen stated that in fact the plaintiff, when exiting the premises about 40 minutes before the incident, had said ‘goodnight’ to him.
9. The plaintiff did not know the members of this traveller family group personally, but knew who they were. He also stated that he knew that they had been barred from the pub in the past. It is not clear whether by this he means that particular members of that family had been barred or whether the entire family group had been barred. But he could not understand how they were allowed back into the pub and were being served alcohol that evening. He said that there were frequent such incidents at this premises. The only specific incident he related was one where somebody is said to have ridden a motor bike through the premises. He agreed during cross-examination, that he had never raised any concerns himself to any of the bar staff. He also agreed that if he had serious concerns about safety at the pub he need not have frequented it. In answer he stated that he went there that night because some friends were going. But it has to be said nevertheless that he was a regular visitor to the premises at that time and for many years prior to it. He must have known the pub, the type of clientele, and the staff there very well indeed.
10. Ms. Pegman as I have said worked at this pub on a part-time basis for a couple of years. She says that her mother did not like her working there at such a young age, but she did so nevertheless as she wanted to earn some money. She had stopped working there by the time of this incident, but says that on this particular night she had gone as a patron because some of her friends were involved in the fancy dress event. But she says that during the evening she was asked by the manager to help out because they were so busy, and that reluctantly she agreed to do so. The bar manager denies that she was asked to work that night at all. Nothing in particular turns on that, though it is a curious controversy. She has stated that she knew the pub well from her time working there. She knew the clientele who frequented there, and she knew the staff. She stated that this was not a quiet pub, and that it lost many customers as a result. She described it as an unruly pub. She stated that there were frequent arguments and not many rules. She stated that there were frequent fights also, which usually resolved themselves. She described a few incidents which she recalled. She stated also that the Gardai had been called on a number of occasions when there was trouble which the management could not deal with themselves. However, there has been evidence also from D/Garda Barron from Blackrock Garda Station. He has stated that he had never been personally involved in any other incident at this premises during the 5 years he had been stationed at Blackrock. As far as he is concerned, the premises did not have a bad reputation with An Garda Siochana.
11. She has stated also that the particular family group involved in the attack upon her and the plaintiff that night had been barred previously. She stated that the barring had at some point been lifted, and had also again been re-imposed. She seemed to recall that the last barring of this group had happened after trouble broke out at the premises when the group were there after a funeral “the previous September”. As she had not been working at the pub since August 2008, I am unclear whether she means September 2007, or whether she had just heard that the family had been barred in September 2008. The evidence does not clarify that. But she could not give any detail as to the dates upon which this had happened. She stated also that during the times she had been working at the premises she had never previously been hurt in any way or attacked.
12. When describing the incident in which she was attacked, she stated that within a few seconds of her giving the man a light his wife had attacked him and that “instantaneously” this woman had grabbed Ms. Pegman by the hair. She said that she did not expect or anticipate this occurrence and indeed admitted that she could not see how anybody else could have anticipated this occurrence either.
13. James Kavanagh, the assistant manager at the Balally Inn has given evidence. He is an experienced barman having spent over 20 years in the trade. He has worked at the Balally Inn for twelve years, and says that he would not be working at these premises if they were as rough and prone to trouble as the plaintiff is asserting. He denies that the pub has a reputation as an unruly premises or has any sort of rough reputation. He disputes that the plaintiff arrived at the pub only at 9.30-10pm, and says that the plaintiff was there during the afternoon. There is clearly a conflict of evidence in that regard which I cannot resolve conclusively. Neither can I resolve the conflict of evidence as to whether the plaintiff was drinking orange juice that evening or lager, as contended for by Mr Kavanagh. Neither can I resolve the conflict of evidence as to whether Ms. Pegman was or was not asked to work that evening. However, I do not believe that any of those particular issues are crucial for my determination of the plaintiffs claim
14. Mr Kavanagh remembers the night in question well. He had no concerns that there might be trouble that evening. He states that he knows all the regular customers very well having worked there for so long. His evidence is that late into the evening while he was working in the premises he noticed five or six persons making their way to the front door of the premises. His attention was drawn to this immediately, since it was unusual for five or six persons to suddenly get up and leave their drinks on the table. Mr Kavanagh says that he then went to the main door himself and he saw a row between two females. He tried to break it up, but in the end he closed all the doors and windows and called the Gardai, who appear to have arrived quite quickly. He stated that he had no way of anticipating that this sort of incident would occur.
15. There was some controversy surrounding the existence of an Incident Book at these premises. Mr Kavanagh stated that there was such a book kept, and that he would enter details of any incident where the Gardai were called to the premises. He was certain that this particular incident was recorded in the book. However, he did not have the Incident Book for 2006 in Court. He was asked to make arrangements for somebody to bring it to Court. He attempted to do so, but apparently whoever was asked to locate it and get it to Court in the afternoon could not locate it. While I was not at all happy with the evidence of effort made to find the Incident Book and bring it court, at the end of the day that matter is not determinative. Although it prevents the Court from knowing what details are in the book, and prevents the plaintiff from seeing if there is any reference to the group in question being known trouble-makers, or whether it describes other incidents involving this group which might be considered to have placed an obligation on the owners of the pub to employ security personnel or take any other precautions for the safety of patrons, its absence cannot in my view to be so sinister as to attract an adverse inference for the veracity of Mr Kavanagh’s evidence.
16. The absence of the Incident Book was argued by the plaintiff to be relevant to a plea at paragraph 7 in the defendant’s Defence that the plaintiff himself in fact had instigated this incident. Mr Kavanagh does not know from where that allegation emanated. It was not he who swore the Defendant’s affidavit of verification, but his employer, Mr Foran. While Mr Foran was in Court, he was not called to give any evidence. He had not been present at the premises on the date of this incident. No evidence was led by the defendant to support that plea. In my view it ought not to have been made, and it is right that it was not pursued in cross-examination. Had it been, and if the plaintiff was to succeed in obtaining an award, it could have been argued that such a plea should attract an element of aggravated damages as a result of the manner in which the case was defended.
17. Mr Kavanagh was asked about what policy existed in relation to barring a person or persons from the premises. He stated that there was such a policy. But it seems to be an unwritten policy, without any specific criteria as to what behaviour would result in a barring. He indicated that if a person was fighting in the premises he/she would not be served. He explained also that simply because a person was involved in an argument in the premises would not necessarily result in that person being barred. Even the use of abusive language would not automatically result in a barring. It seems that in the main a person will be barred from the premises if he or she was fighting in the premises. He stated that if a person was barred, it meant that the person would not be readmitted and served again. In his own words “if you are barred you are barred”. That conflicts with the evidence of the plaintiff and of Ms. Pegman both of whom stated that they were aware that the group involved in the incident this night had been barred on a couple of occasions and allowed back in again. It would appear that there is no written book or other record as such of who is barred at any particular time. That information seems to be only within the actual knowledge of whichever member of staff told a person he/she was barred. In such circumstances it is unclear to me how any staff besides the person who had actually barred the person would know that a particular person could or could not be served if they entered the premises. It seems to be an informal system.
18. Mr Kavanagh stated that he did not consider the Balally Inn to be a rough pub or one with any sort of bad reputation. In support of that belief he stated that this case was the first occasion on which he had had to come to a court. He also stated that there had never been any objection to the renewal of the intoxicating licence, by the Gardai or by others. There was also evidence given by Garda Barron that he was not personally aware of any other incident in these premises prior to the date of this incident or in the three years subsequent to it. He stated that these premises did not have “a reputation”. I take this to mean that it was not known to be a pub where there was likely to be trouble or where there were frequent incidents to which the Gardai were called.
19. John O’Reilly, a barman at the premises, also gave evidence. He denied that this was an unruly premises, and stated that if it was, he would not be working there. In relation to patrons who might cause trouble he stated that they would be spoken to and asked to leave, and given a warning. But such persons could be allowed back to the premises after two weeks. On the other hand if there was a punch thrown or other fighting, such persons would be barred permanently. Again, there was no evidence of how such action was recorded for the benefit of other staff who may not have been at the premises when the barring occurred, or indeed for the benefit of new staff who may become employed at some later date and who, for obvious reasons, would not be aware of who was barred. There is quite clearly some looseness in the whole area of rules relating to barring, and the recording of such incidents.
20. Mr O’Reilly stated that as far as he was aware the particular family group referred to by the plaintiff and Ms. Pegman had never been barred from these premises.
21. Mr O’Reilly did not see the incident in which the plaintiff was injured outside the premises, though he had observed the five or six people who had suddenly gone outside leaving their drinks behind them. At that point he made to go out himself to see what was happening, but he was told by Mr Kavanagh to stay behind the bar. He says that about a minute later Mr Kavanagh told him to telephone the Gardai, and he did that.
22. There are many conflicts of evidence in this case. There is disagreement as to whether the plaintiff had been in the pub during the afternoon, or whether he went there only at 9.30pm. There is disagreement as to whether or not he left the pub 40 minutes or so before the incident occurred, and had returned. There is disagreement as to whether he was drinking orange as he states, or lager as the barman says. None of this matters really, and in particular in relation to the last point, nobody has said that the plaintiff was intoxicated or drunk. There is disagreement as to whether or not Ms. Pegman was asked, while she was there as a patron, to work that evening as she says because the pub was so busy. Again that does not seem to matter.
23. There is disagreement as to whether particular members of the traveller family alleged to have been involved in this incident, or the entire family group, had or had not been barred from the pub. There is disagreement as to whether or not the pub is an unruly pub with frequent incidents of rowdiness, rows and fighting. The only evidence that certain persons may have been barred and re admitted from time to time is the evidence of Ms. Pegman. I am quite satisfied that her evidence is honestly given, and that she may believe that from time to time certain people were barred, and maybe even certain members of this particular family group. But there has been no evidence that the entire family group was barred, and no evidence that the particular members who attacked the plaintiff and Ms. Pegman were persons who had been barred. Also, I would have thought that if this pub was one which attracted a rough crowd, and where there were constant incidents of this kind, or even incidents of lesser seriousness, An Garda Siochana would be aware of it. The evidence has been that this pub is not one in relation to which the Gardai have concerns, or have been called in relation to incidents.
24. I cannot be satisfied on the balance of probabilities that this is a pub where frequent incidents occur such that the owners and management ought to have considered that particular security measures should be taken for the protection of patrons. I imagine like any other pub in a small residential area there are incidents occasionally which the staff have to deal with. Unfortunately, it seems to be normal for people to drink to excess, and there is an inevitability that occasionally this will lead to rows and disagreements of one kind or another and may lead to some violence breaking out either in the pub or outside it. But the nature of these premises is different to a pub or hotel which also has a disco, and from which a great many people will emerge at about the same time i.e. when the disco ends. That was the kind of situation which was addressed in the judgment of Herbert J, in Meagher v. Shamrock Public Houses Limited trading as The Ambassador Hotel, unreported, High Court, 16th February 2005. That was a case where a disco was run by a hotel at its premises and which had a permitted capacity of 850 persons. It was a premises where according to the evidence assaults and public order offences occurred every two or three weeks. The plaintiff in that case was assaulted in the car park after the disco had ended at about 3.30am and while he and his wife were awaiting a taxi to take them home. A great number of patrons had exited into the car park area at the conclusion of the disco. The plaintiff was assaulted out side the main hotel entrance, and while there was some security presence at the door of the disco, those personnel could not see the main door of the hotel itself. It was suggested by the plaintiff in that case that the presence of clearly identifiable security staff at the hotel entrance should have been employed by the defendant. It is the case also that in that case the incident in which the plaintiff was injured was over in less than a minute, and that there had been nothing that would have caused the defendants to consider that such an assault would take place. There was expert security evidence given on the plaintiffs behalf which supported the submission that security at the main hotel door could have prevented this assault occurring. Herbert J. on the evidence in that case found that the defendant was aware of the danger of rowdiness and of assaults on its premises during and after functions at the disco. Accordingly he was of the opinion that it was foreseeable by the defendant that unless reasonable care was taken by it to prevent such behaviour, visitors such as the plaintiff might be assaulted and thereby suffer injury. He stated that the defendant’s duty was to take reasonable care to protect patrons, and that the duty could not be such that the defendant was not in the position of an insurer.
25. The present case there was no reliable evidence of previous incidents of a kind that should have alerted the defendant to the danger to patrons. There is, I appreciate, the recollection by Ms. Pegman that this family was barred previously. But it is not evidence which I can rely on given its lack of certainty, and also the fact that it is unclear who exactly had been barred. We do not know if it was particular members of this family or the entire clan, for example.
26. This case is different also because it is not a late night disco where many hundreds of young patrons congregate until the early hours of the morning and then spill out en masse into a car park to await their transport home. The defendant’s pub is in a relatively quiet residential area. The clientele are for the most part regulars and from the immediate catchment area of the pub. The plaintiff knows the pub well, and the barmen know most of the patrons. It is a very typical suburban pub, which has not come to the attention of An Garda Siochana in any adverse way. That has been the evidence from Garda Barron in this regard, and I have no reason to doubt his evidence. Given that lack of a relevant history of violent incidents, there is no basis in my view for a conclusion that the defendant ought to have considered that on this evening there was a likelihood or even a reasonable risk that there would be violence or behaviour which warranted, on an exceptional basis, the employment of security personnel.
27. The assault on the plaintiff in this case, when he went to the rescue of his niece, and he is to be highly commended in that regard, is an assault upon him, and her for that matter, which happened “out of the blue”. I accept that there had been no warning throughout the day, and particularly the evening that such an incident might take place. In my view the duty of care owed by the defendant to its patrons is to take all reasonable steps to safeguard patrons on their premises. I would extend that to a duty to safeguard patrons immediately outside the premises also. But the duty is to guard against risks and dangers that are foreseeable. I do not consider that it was reasonably foreseeable, or indeed foreseeable at all, that somebody such as the plaintiff would be assaulted in the manner he was when he went to the rescue of his niece who in turn had been assaulted by a member or members of a particular family, after one of them had asked his niece for a light. The fact that the people concerned were in the pub, and presumably drinking there, does not automatically make such an assault foreseeable. To hold that it did would mean that every public house in a quiet suburban area would need to have security personnel both inside and outside its premises just in case an incident of assault might occur, even where there was no history of such occurrences. I do not believe that there was any reason for the defendant to foresee that there could be trouble on this particular evening, notwithstanding that it was a Hallowe’en weekend. What occurred was a spontaneous eruption of violence which the defendant could not reasonably be expected to have anticipated and to have tried to prevent in advance by the hiring of security personnel. There has been no professional evidence of what type or quantity of security personnel might be required to have prevented this assault, or where they might have been located.
28. The plaintiff showed great courage when he went to his niece’s rescue on this occasion. The behaviour of those involved in these assaults was criminal, and is utterly reprehensible, and to be condemned by every right thinking person. But the fact that such is the case does not mean that the owner of the premises has been negligent or in any way responsible for what happened. I admire the plaintiff’s courage, but I am afraid that my admiration is an insufficient basis for a finding of negligence against the defendant, and I must dismiss the plaintiff’s claim.
Doody v Clarke
[2013] IEHC 505
JUDGMENT of Mr. Justice Kevin Cross delivered on the 13th day of November, 2013
1. The plaintiff is a midwife, nurse and housewife who was born on 8th June, 1967 and resides with her husband and three children in Loughlinstown, Co. Dublin.
2. On 26th March, 2008, the plaintiff was taking an evening walk with two friends down the old Bray Road walking from north to south on the pavement, on her right side of the road, between her two companions. As she walked, suddenly without any warning, she felt a pain in her eye which caused her to fall towards the ground. The eye was bleeding. It transpired that the plaintiff had been struck in the eye by an egg which had been thrown by D.M. who was a backseat passenger in a motorcar owned by and being driven at the time by the defendant.
3. The plaintiff was taken to the Eye and Ear Hospital where she lost the sight of her eye and despite surgical repair, the eye had to be removed later and an artificial eye inserted. The plaintiff suffered and continues to suffer, pain and significant psychological trauma and physical disability.
Background
4. The defendant was, at the time of the incident, aged 17 and had just recently obtained ownership of the vehicle. On the afternoon/evening of 26th March, the plaintiff met up with his girlfriend (S.D.) together with three male pals (C.C., D.M. and P.S.). The defendant’s male friends sat in the rear of the defendant’s vehicle which was a Fiat.
5. The defendant and his companions talked of going to a party that evening and there was speculation among them as to whether they would be admitted to the house and someone of the group mentioned purchasing eggs. I accept and conclude that all the group including the defendant agreed and colluded in the purchase of eggs which they intended to utilise in the activity of “egging”. “Egging” is a form of antisocial behaviour in which the participants throw eggs at intended targets in the manner of snowballs.
6. The defendant drove to the Lidl supermarket at Greystones and the defendant purchased a soft drink and the three male passengers purchased three packets of ten eggs and all the friends congregated around the checkout. The group then exited the supermarket and the defendant asked his friends to put the eggs into the boot so they would not “mess” with them. By this, I conclude that the defendant was concerned about any eggs being spilt in his new car.
7. The defendant drove back towards Dublin City to the Statoil filling station at Little Bray where they met a number of other friends of the defendant. I accept that the defendant left the car in the forecourt to go into the garage shop to purchase another soft drink and indeed a number of the passengers in the Fiat got out from time to time and engaged in conversations with their other friends.
8. It is not clear from the statements and the evidence that I have heard whether all three of the egg packages were initially left in the boot or whether just two of them were left in the boot. What is clear that by the time the Fiat left the Statoil forecourt, at least one of the packages of eggs was in the backseat area. There was different testimony suggesting that that package may have been in the back all the time or that someone opened the boot to place the extra egg carton in the car or that somebody pulled the backseat down and fetched the egg carton from the back.
9. There is a degree of self serving in the statements and evidence of the various passengers in the car and no one knows how the third package ended up in the car. Given the evidence of the plaintiff’s engineer as to the difficulty of lowering the backseat with anyone situate in the rear, I hold that at least one of the witnesses would have been able to recall the backseat being lowered with greater precision than was their evidence and I doubt that in fact this method was used.
10. I think it is probable that one of the packages of eggs never made the boot in the first place, but I do not see when or how the package got into the back seat as being at all relevant to my consideration.
11. The fact of the matter is that the defendant’s girlfriend, S.D. was varnishing or colouring one egg in her hand in the front seat for some time and I find that the defendant would have known and did know of this fact. In addition to S.D., there were two other eggs being handled in the rear seat, one of which was in the possession of C.C. and the other of D.M. C.C. states that at some stage he placed the egg back into the box and I must accept that evidence.
12. I hold that the defendant knew or ought to have known that a number of eggs were being passed around and being “played with” by his passengers.
13. When the car was in the forecourt of the filling station, the rear passenger side window had been lowered at least to a degree to facilitate conversation from the car to the friends of the defendant outside. I find as a fact that the defendant would have been aware of this.
14. The defendant’s car headed north from the filling station and his other friends following them in their car. The defendant in his statement to the gardaí which was the only evidence that he gave in the case said “I told the lads not to mess with eggs in the car just in case they had them”. I find that in fact at this stage, the defendant was aware that eggs were in the car and that the lads were potentially going to “mess with them”. It is not clear whether the defendant’s concern at this stage was primarily with eggs being broken in the backseat and messing his car or some activity of egging.
15. What followed is nothing short of a tragedy in that as they approached the plaintiff and her two friends, D.M. bent over and possibly lowered the window further and threw an egg in the direction of the plaintiff which hit her in the eye causing the catastrophic injury. Just before he did this, one or both of the backseat passengers say that they said “don’t throw the eggs out the window at these ladies”. I am not sure whether that was said by either or both of the other backseat passengers and certainly the defendant in his statement does not mention it, however, I do not think that issue is relevant to my consideration.
16. Subsequent to the accident, I accept that none of the young people in the car was aware of the serious harm that had occurred. They then went on in what can only be described as a rampage of “egging” as they were excluded from the party. At various stages through the night they “egged” the house and various guests, some of whom they knew, some of whom they did not know who were going to the party and then indulged in a general melee among themselves and their friends.
17. The post accident actions of the defendant and his friends may indeed be relevant to show their intended target in “egging” was not restricted to the house at which the party was taking place. Indeed, it is the case that it would have been quite possible for further similar injuries to have been caused by anyone of the later episodes of “egging”.
The Plaintiff’s Case
18. The plaintiff contends that the defendant is liable in respect of this incident. The case is made that the defendant is vicariously liable for the actions of his passenger, though this case was not seriously contended. The stronger case is maintained is that the defendant is directly liable for the incident due to his failure to properly drive, car and control his motor vehicle as he is obliged to do so under the Road Traffic Act and at law and in particular he failed to properly control the activities of his passengers.
19. It is contended by the plaintiff that the defendant knew that there were eggs in the car which were being played with by his passengers that he knew or ought to have know that the D.M. and C.C. were handling or playing with eggs in the backseat as well as S.D. painting the egg in the front seat. Further, I find that the defendant knew or ought to have known that the back passenger window was down and that with this knowledge he gave a warning to his backseat passengers not to be “messing” with the eggs in the car but that such a warning did not prove sufficient to prevent the throwing.
Rather, Mr. Nolan, S.C., urged the defendant could have and should have:-
(a) ordered the passengers to put the eggs away,
(b) ordered that the window be put up,
(c) stopped his car, or
(d) put the passengers out of the car.
The Defendant’s Case
(a) The tragic incident which the defendant through his counsel expressed regret and his sorrow was caused by the wrongful acts of D.M. in an assault for which the defendant is not liable.
(b) That the accident happened very quickly, the defendant having told his passengers not to be “messing” and that it was not foreseeable that eggs would be thrown and that the plaintiff is seeking to create an onerous standard for the defendant.
Evidence
20. I heard the sworn evidence of the plaintiff and her two walking companions together with Detective Garda D.J. Though the plaintiff and her companions did not know what had happened to them the gardaí were able to trace the defendant and his passengers as a result of complaints made by the owner of the house which was subsequently “egged” by them and using excellent detective work, Garda D.J. obtained the number of the defendant’s car and interviewed the defendant and his passengers, all of whom made statements. The detective garda then obtained the CCTV footage of the defendant and his friends purchasing the eggs which I have seen.
21. Also, I heard the evidence from C.C. and S.D, passengers in the defendant’s car who were called on behalf of the plaintiff. The defendant’s statement to the gardaí was put into evidence and by agreement of the parties constituted the only evidence for the defendant.
22. I also was furnished by the sensible agreement between the parties with the plaintiff’s medical reports which were clearly not in contention.
23. Unusually in a personal injury case I was advised without demur not just that the defendant had issued third party proceedings against D.M. which had not been proceeded with but that the defendant’s insurers had repudiated liability and the defendant was defending the matter on his own.
24. By way of a comment, it does seem to me strange that the defendant’s insurance company chose to “repudiate” liability to the defendant. Clearly, the defendant can only be liable to the plaintiff if the court finds that the defendant was negligent in the driving, care, maintenance and control of his motor vehicle. In other words, if the plaintiff succeeds against the defendant, the plaintiff must also succeed under the Road Traffic Act in an action against the insurance company and Mr. McParland of counsel was clearly doing the indemnifiers work for them when he defended the action.
The Law
25. Whereas the owner of a mechanically propelled vehicle is vicariously liable for the actions of a driver under s. 118 of the Road Traffic Act 1961, I do not find that the owner or driver of the vehicle can as such be vicariously liable for the actions of his passengers.
26. In Curley v. Mannion [1965] I.R. 543, the defendant who was the owner and driver of a motor vehicle which was parked on its correct side of the road was held liable to a cyclist pedestrian who suddenly without warning was hit by the passenger door being opened by a passenger child of the defendant who did not look to see the coast was clear.
27. In that judgment, Ó Dálaigh C.J. stated (at p. 546):-
“…a person in charge of a motor car must take precautions for the safety of others, and this will include the duty to take reasonable care to prevent conduct on the part of passengers which is negligent. In the present case that duty is, it seems to me, reinforced by the relationship of parent and child; and a parent, while not liable for the torts of his child, may be liable if negligent in failing to exercise his control to prevent his child injuring others.”
28. In the same case, Walsh J. stated (at p. 549):-
“In my view the defendant, as the owner and driver of the motor car in question, owed a duty to other persons using the highway not merely not to use or drive the car negligently but to take reasonable precautions to ensure that the car, while under his control and supervision, was not used in a negligent fashion. It would indeed be a startling proposition that a person in charge of a motor vehicle on a public highway should not owe any duty to third parties save in respect of his own negligent act in the use of the vehicle, or in respect of omissions relating to his own use of the vehicle, and that he should not be liable in negligence for failing to take reasonable steps to prevent the negligent use of a motor car by a passenger therein while it is under his control and supervision when such negligent use is actually known to or ought to be foreseen by him.”
29. It is clear from the above that the passenger in Curley was a child of the defendant and clearly ought to have been amenable to more direct control than an adult but that the duty is not to be confined to children. Neither is the duty of care as outline in Curley (above) limited to the children of the driver/owner.
30. It is also clear that the danger that the defendant should guard against is not the precise incident that actually occurred (of hitting the plaintiff in the eye with an egg thrown from the car) but rather, what must guarded against in this case is a passenger throwing an egg from the window so as to constitute an assault on the pedestrian. The standard of care is, of course, a reasonable one.
31. I have considered this matter in great detail from many points of view. Clearly, the plaintiff was doing absolutely nothing wrong and has had an appalling injury. However, I have come to the conclusion that the propositions of Mr. Nolan – put the eggs the away – order the windows to be put up – stopping the car – put the passengers out of the car if necessary are too extreme and ultimately not reasonable.
32. I accept that the defendant and his friends were all on a common purpose to commit unlawful acts of “egging”. I accept that whereas their initial target may have been intended to be the house of the party but that their actions established they had more general malice in mind.
33. I also accept that the defendant knew or ought to have known that there were in fact eggs in the backseat of the car and that what was occurring may have been potentially volatile. I accept that the defendant knew or ought to have known that the passenger window was at least partially open.
34. None of the passengers gave evidence as to any conversation about “egging” anybody on the road. This may well be selective amnesia but there is no evidence that the driver was warned or ought to have known that this was a likelihood. I am of the view that it would be unreasonable to import upon him the knowledge that an egg was going to be thrown or might be thrown in the direction of the plaintiff from his car. I am also of the view that in the circumstances to expect the defendant to take any of the actions which Mr. Nolan suggests would be to impose upon the defendant too high and too onerous a standard of care.
35. Had there been any evidence of a discussion of “egging” pedestrians then I would have accepted the submissions of Mr. Nolan on behalf of the plaintiff with alacrity.
36. I do not believe that the evidence establishes that the defendant was in breach of the duty of care he undoubtedly did owe to the plaintiff, the fellow road user, on the day.
37. Therefore, I with regret I must dismiss this action.
Hu v Duleek Formwork Ltd
[2013] IEHC 50Judgment of Mr Justice Michael Peart delivered on the 5th day of February 2013:
1. The plaintiff is a carpenter, and while working for his employer at a building site in Spencer Dock in Dublin on the 17th August 2009, he sustained an injury to his thumb. He believes that this injury was sustained as a result of negligence on the part of his employer the first named defendant. He commenced these proceedings with a view to obtaining compensation for these injuries, and of course believed that his employer had the benefit of a contract of insurance in respect of any claim successfully brought against him on the basis of negligence. He has since learned that while his employer had a contract of insurance which was intended to cover employer’s negligence, the first named defendant breached one of the conditions precedent to liability, namely the payment of an excess of €1000.
2. The first named defendant has gone into liquidation, and the plaintiff has obtained judgment in default of appearance against that defendant by order of the High Court obtained on the 28th September 2011. Damages have yet to be assessed.
3. These proceedings, when first issued, named only the plaintiff’s employer as a defendant. However, when the plaintiff discovered in due course that the defendant’s insurer “Aviva” was repudiating liability for this claim, he sought to have Aviva added as a defendant. That order was granted on the 7th March 2012, and the Personal Injury Summons was amended accordingly on the 9th May 2012 and was served immediately thereafter.
4. Having entered an appearance, Aviva issued a Notice of Motion dated 22nd June 2012 seeking an order to strike out these proceedings pursuant to Order 19,rule 28 RSC on the grounds that they disclose no reasonable cause of action against Aviva. Alternatively, Aviva seek to have the proceedings struck out under the inherent jurisdiction of the Court on that ground and/or on the basis that they are bound to fail.
5. The relief sought against Aviva is set forth as being:
“ A declaration that any sum awarded by this Honourable Court at the trial of this action and any costs awarded to the plaintiff as a result of his injuries constitutes an award for a wrong and the second named defendant is obliged, under the terms of the policy of insurance entered into with the first named defendant herein, to pay the required monies to the plaintiff and to discharge any sum awarded for damages and costs pursuant to the provisions of the policy of insurance”.
The affidavit sworn by Sandra Murphy of Aviva on the 22nd June 2012 reveals that Aviva first received a notification of the plaintiff’s accident on the 3rd September 2009, being just over two weeks after it had occurred. It appointed a firm of loss adjusters to investigate. It reveals also that following the application by the plaintiff to the Personal Injuries Assessment Board, the first named defendant failed to pay its contribution to PIAB’s fees despite being requested to do so. By the time the present proceedings were first issued the first named defendant was in liquidation.
6. It appears also that the excess payment of €1000 under the insurance policy, a condition precedent to liability to the insured, had not been paid by the insured by the time these proceedings were issued and served on the first named defendant. The loss adjusters wrote to the liquidator informing him that unless that excess was paid, cover under the policy would be declined. Not having received this payment by the 25th March 2011, the loss adjusters wrote again on that date to state that cover was declined.
7. The plaintiff was unaware of these events at that time. In a replying affidavit sworn on the plaintiff’s behalf, Ivan Williams, solicitor, states that if the plaintiff had been made aware that the excess payment of €1000 had not been paid by the insured or the liquidator, it is likely that some form of pressure could have been brought to bear on the first named defendant or the liquidator to ensure that the payment was made, including by possible court order. Alternatively, it is stated, the plaintiff would have endeavoured to discharge that payment himself in order to ensure that his claim would be met under the policy. Mr Williams had been informed by letter dated 25th March 2010 that Aviva had declined cover, but no reason was provided in that letter. The plaintiff did not become aware of the reason until he received Aviva’s affidavit grounding this application.
8. Mr Williams goes on to state that the plaintiff is still even at this late stage prepared to himself make the excess payment to Aviva. He complains also about the difficulties which he encountered in finding out the reason for the refusal of cover. He makes the point that it took 14 months to get that information. He makes the point in his affidavit that depriving the plaintiff of an opportunity to make that payment to Aviva himself has wrought an injustice on the plaintiff by him effectively being unable to recover compensation for the injury which he suffered simply because the insured failed to make the excess payment required under the policy of insurance taken out in order to cover claims such as that if the plaintiff.
9. David Barniville SC for Aviva submits that there is no privity of contract between the plaintiff and Aviva, and that the only party entitled under law to challenge the decision to decline cover for this accident to the plaintiff is the first named defendant, and point to the fact that no such challenge has been made. Mr Barniville has referred to well-known authority on the law relating to privity of contract and there is no need to set forth those references in this judgment. The law in that regard is not in dispute between the parties.
10. It would appear that the plaintiff is seeking first of all to rely upon the provisions of Section 62 of the Civil Liability Act, 1961 as amended in order to maintain its claim against Aviva. That section provides:
“62. — Where a person (hereinafter referred to as the insured) who has effected a policy of insurance in respect of liability for a wrong, if an individual, becomes a bankrupt … or, if a corporate body, is wound up … moneys payable to the insured under the policy shall be applicable only to discharging in full all valid claims against the insured in respect of which those monies are payable, and no part of those moneys shall be assets of the insured or applicable to the payment of the debts (other than those claims) of the insured in the bankruptcy … or in the winding up or dissolution, and no such claim shall be provable in the bankruptcy … winding-up or dissolution.” (emphasis added)
Aviva on the other hand submits that in the present case, no moneys are payable to the insured under the policy, as the policy has been repudiated. It submits that the purpose of this section is not to provide to a plaintiff a remedy against the insurance company in circumstances where otherwise there is no privity of contract, but rather to ensure that when an insurance company is liable to pay money to an insured under a policy, and the insured person goes bankrupt or, in the case of a company, goes into liquidation, the insurance monies are ‘ring-fenced’ to meet the claim made on the policy, and does not disappear into the general fund for the benefit of other creditors.
11. Mr Barniville submits that this meaning is clear from the literal meaning to be given to the words in the section, and that the intention of the Oireachtas is unambiguous, and that if the Oireachtas had intended that by enacting this section it should provide a remedy for persons such as the plaintiff in the circumstances of this case it would have made that clear by the use of different language, whereas the section has been worded in a way that makes it clear that it is only where monies under a policy are payable by the insurance company that they are ring-fenced so as to preserve the fund from the grasp of creditors. In this way, it is submitted that the section clearly cannot avail the present plaintiff, because his circumstances are not contemplated by this particular section.
12. Mr Barniville has referred also to the distinction between the provisions of Section 62 of the Act of 1961, and the provisions of Section 76 (1) of the Road Traffic Act 1961, and in that regard has referred the Court to a passage from the judgment of Laffoy J. in Power v. Guardian PMPA Insurance Limited [2007] IEHC 105 in support of his submission that it is clear that it is only when monies are actually payable under a policy of insurance that a claimant can benefit from the provisions of Section 62 of the Civil Liability Act, 1961. At page 9 thereof the learned judge states:
“The reality is that the invocation of s. 62 gets the plaintiff nowhere. The nub of the defendant’s defence of these proceedings is that the insurance Mr Wheeler had with the defendant on 6th October 1991 did not cover any liability he incurred to the plaintiff as a result of the accident on that day and, therefore, no monies are payable to Mr Wheeler under this policy with the defendant in respect of that liability. For the protection to come into play monies must have become payable to the insured under the policy of insurance.”
13. Finally, I should mention that Mr Barniville has referred this Court to the judgment of Kearns P. in McCarron v. Modern Timber Homes Ltd (in liquidation) & ors, unreported, High Court, 3rd December 2012 which strongly supports the arguments put forward by Aviva on this application.
14. Gareth Kinsella BL for the plaintiff has, on the other hand, tried to draw support from a judgment of Finlay CJ in Dunne v. P.J. White Construction Co. Ltd (in liquidation) [1989] ILRM 803. In that case the plaintiff was in a very similar position to the present plaintiff in as much as he had been injured at work, and his employer had gone into liquidation. As here, judgment was obtained against the employer in default of appearance and the plaintiff sought to recover compensation from the insurer directly. However, as here, the insurer repudiated liability under the policy on the basis that the general policy conditions had been breached by the insured. In the High Court the plaintiff had lost on the basis that the learned judge (Murphy J.) found that the plaintiff had not discharged the onus of proving a negative, namely that the insurance was not entitled to repudiate the contract of insurance. An appeal was taken to the Supreme Court on the question of whether the onus rested on the plaintiff in that regard, or whether it fell to the insurer to prove that grounds existed which entitled it to repudiate. In the event the Supreme Court concluded that the in accordance with the ordinary rule that he who alleges must prove, the onus in the case rested with the insurance company, and the appeal was allowed. In the event, the case thereafter settled, and the issue as to whether or not that insurer had been entitled to repudiate did not return to the High Court for consideration.
15. The case is clearly not directly on point as far as the present plaintiff is concerned. Of significance in the present case is the fact that the plaintiff does not dispute that the first named defendant failed to pay the excess and that therefore that condition of the policy of insurance was breached. The issue of where the onus lies in relation to the entitlement to repudiate does not therefore arise in the present case. If the question of whether or not Aviva was entitled to repudiate liability was a live issue between the parties, then obviously the Dunne case, and indeed another case relied upon by the plaintiff, namely McKenna v. Best Travel Ltd & ors [1995] 1 IR.577, would be of assistance to him. But in so far as the plaintiff seeks support for his cause of action against the insurer by reference to the remarks of Finlay C.J in Dunne relation to the meaning to be attached to Section 62, He does so by misconstruing or ignoring the reference in the passage relied upon on page 805 of the judgment to “monies payable on a policy of insurance to an insured …”.
15. I am satisfied in this case that the plaintiff has no privity of contract with Aviva. That is very clear. He cannot seek to enforce the contract of insurance as between the first named defendant and Aviva, especially in circumstances where he does not dispute that the excess payment was a condition precedent to liability under the policy, and does not dispute that the excess payment was requested to be paid and was not paid. Monies are therefore not payable to the insured under the policy. If there was some arguable doubt still existing as to whether or not Aviva was entitled to repudiate liability, then the judgment of the Supreme Court in Dunne v. P.J.White & Co. Ltd [supra] could be of assistance, given the remarks of Finlay C.J, albeit obiter in his judgment, that the onus fell upon the insurer to prove what it was alleging, namely that it was entitled to repudiate liability. But that issue is not live in the present case on the evidence which has been adduced. In my view, s. 62 of the Act of 1961 does not provide the plaintiff with a remedy in this case against Aviva.
16. It follows that by reference to the claim against Aviva as appearing in the Amended Personal Injury Summons, there is no reasonable cause of action against Aviva disclosed, and that these proceedings should be struck out either under the provisions of O. 19, r. 28 RSC, or under the inherent jurisdiction of the Court as disclosing no reasonable cause of action, or disclosing a cause of action that was bound to fail.
17. However, before making any such order, I should say that of course the Court’s jurisdiction to strike out proceedings on these bases should be exercised sparingly and only in a clear case, otherwise the Court risks depriving a plaintiff of the benefit of a case which might just have a chance of succeeding. That would be manifestly unfair and unjust. The Court should be satisfied not only that the pleadings disclose no reasonable cause of action and/or that the claim is bound to fail, but also that there is no amendment possible to the claim which might save it. In that regard, Mr Kinsella has very ably urged that on the facts of this case the plaintiff could amend the proceedings in order to mount a claim in negligence against Aviva in negligence. In that regard he has submitted that there was gross delay and a failure on the part of Aviva to inform the plaintiff that a pre-condition to Aviva’s liability, namely the excess payment, had been breached. Mr Kinsella urges upon this Court that Aviva owed a duty of care to the plaintiff as a person whom it was aware was seeking to recover damages from the insured party, and who would be clearly adversely affected by that breach. It is submitted that Aviva owed it to the plaintiff to so inform him so that the plaintiff would have an opportunity of either taking steps through the courts to enforce the payment of the excess, or at least that the plaintiff himself would have the opportunity to make the payment to Aviva himself.
18. It is at first glance an attractive argument, not least because the Court will naturally have some sympathy for this plaintiff who no doubt sustained a serious injury to his hand, and even though the injury was covered by insurance taken out by his employer, nevertheless through no fault of his own, has found that the cover has been declined because of the non-payment of a relatively small amount of money. Sometimes a policy of insurance is repudiated because the accident was not reported to the insurance company in a timely manner as required, and it is understandable that in such circumstances the insurer may be prejudiced in relation to the efficacy of any investigation it could carry out at a late stage. In other circumstances, liability is repudiated because the policy has lapsed by non-payment of a premium, so that there was not on the day of a particular accident any policy of insurance in existence. However, the present case is very different. There was insurance in place, but the policy was worded in such a way that where a claim is made on the policy the insured person is required when requested to do so to make an upfront excess payment of €1000, even before liability for the accident has been established. It would be fairer in my view if the excess payment, if unpaid by the insured, was to be deducted from any payment that may be made to a third party claimant. It seems to be a manifest unfairness that in such circumstances the entire contract is repudiated and where the injured third party is the one who loses out completely.
19. However, sympathy is an insufficient basis for determining whether or not negligence would provide a reasonable cause of action against Aviva. In order to plead negligence there would have in the first instance to be a duty of care owed to the plaintiff of the kind argued for, and then a breach of that duty of care causing loss and damage to the plaintiff. I cannot see that Aviva are under a duty of care to this plaintiff to ensure that he is provided with information as to whether or not the insured has complied with the conditions of his insurance policy with Aviva. The contract is with the insured person, and rights exist in both directions arising from that contract. But I fail to see any basis for any third party duty of care as asserted by Mr Kinsella. If such a duty of care was owed to this plaintiff, the question arises as to whether the same duty is owed to other potential claimants under the policy of whose existence Aviva may not even be aware if proceedings have not been issued. How would such a duty of care be fulfilled? But I do not believe that Aviva is in a position of proximity with potential claimants as to be liable for a duty of care to them. The class of persons to whom such proximity would exist is too vague and uncertain.
20. There have been classes of relationship where a duty of care has been found to be owed on the basis of sufficient proximity. For example, where a solicitor is instructed by a client to prepare a will, he can be liable to a person who, but for the solicitor’s negligence, would have been a beneficiary under the will upon the death of the testator, even though that beneficiary is not the solicitor’s client and is not in any contractual relationship with that solicitor. But I know of no case where the Courts have found a duty of care to exist between an insurance company and a potential claimant against the insured party, and have been referred to none. It would not be right in the present case in such circumstances to extend the law that far, so as to find that the plaintiff might reasonably argue his claim against Aviva under the law of negligence. In those circumstances I am satisfied that the amendment sought in this regard by Mr Kinsella would not save the proceedings, and indeed, if such was permitted, it would I suspect inevitably lead to a further application to strike out the plaintiff’s case as disclosing no reasonable cause of action and/or on the basis that it was a claim that is bound to fail.
21. I must make an order, but with sympathy for the plaintiff and therefore with regret, striking out these proceedings against the second named defendant on the basis that they disclose no reasonable cause of action against the second named defendant, and I do so under the inherent jurisdiction of the Court, and on being satisfied that there is no amendment of the proceedings which could be made to the claim, on the facts of the case, which might save the proceedings for the plaintiff.
Whelan v Allied Irish Banks Plc
[2014] IESC 3
Judgment of Mr Justice O’Donnell delivered the 30th day of January 2014
1 On the 8th of February 2007 in the offices of the firm of A & L Goodbody the solicitors to Allied Irish Banks (hereinafter “AIB” or “the bank” and the first named defendants herein), the first named plaintiff, Judith Whelan, on her own behalf and on behalf of her siblings (the second, fifth and sixth named plaintiffs), her mother (the fourth named plaintiff) and her father (the third named plaintiff, a well known and very successful businessman), entered into a deal together with another then successful businessman, Mr Gerard Conlan, for the joint purchase by them of 86 acres of land at Kilbarry, County Waterford. Crucially for the purposes of these proceedings, the transaction completed that day also involved the execution and acceptance of a facility letter providing for the advance to the plaintiffs and Mr Conlan of the purchase price of €25 million by AIB and the execution of a deed of charge securing the lands in respect of the same borrowings.
2 The transaction was one that appeared very advantageous, and if it had been known at the time, might perhaps only have excited the envy of any onlooker. The land in question was very likely to be rezoned, having been included in a draft development plan for County Waterford, and on rezoning and the securing of planning permission, it would almost inevitably have become worth a significant multiple of its purchase price. Indeed, even as the transaction was being negotiated, the value of the land was increasing. The transaction was estimated as likely to produce a profit to the Lynch side of up to 20 million euro in a relatively short period of time. It was anticipated that it would have been eminently possible to rapidly sell a portion of the lands, discharge the loan, and then consider whether it was more advantageous to sell the remaining lands in parcels, or to seek to develop the land and secure even more profits, or to do some combination of the two. The purchase itself was to be financed entirely by the loan, and there was no requirement on any member of the Lynch family or Mr Conlan to risk any of their own funds.
3 Those who contend that the free market system promotes efficiency and rewards enterprise might find it difficult to explain why such potential profits were being made available to members of the Lynch family who had contributed nothing to the sourcing of the land, to the proposals for its development, or the securing of rezoning or planning permission. They were involved in the transaction because of their family relationship to Philip Lynch, and he in turn was involved in the transaction because of his substantial net worth, and his association with Mr Conlan.
4 Indeed, it is contended by the Lynch family, including Mr Lynch himself, that this transaction was a particularly advantageous one because they argue that the loan itself was a non-recourse loan, meaning that they believed that in the unlikely event of default, the lender would look solely to the security of the land itself and would not seek to recover any shortfall from the individual borrowers. This is one of the central issues in this case. But even assuming for the moment that this was not so, this was still a very attractive transaction for the members of the Lynch family with, it appeared, little if any downside risk. Indeed, that is no doubt why Mr Philip Lynch sought to secure their involvement therein. Before there could be any risk to the individual family members (even on the assumption that the loan was not non-recourse) there would first have to be a dramatic fall in the value of the property bringing it below the price paid (and borrowed). Even if there was some shortfall in this regard, as a matter of practicality it was highly likely that either or both Mr Conlan and Mr Lynch, themselves enormously successful and apparently wealthy individuals, would be in a position to discharge any liability for any shortfall. Accordingly, before there could be a real risk to any of the individuals, there would have to be a total collapse in the property values in Ireland, and a dramatic and total destruction of the wealth of those two individuals. Looked at in 2006 and 2007, it would have been reasonable to assume that such an unlikely combination of events could not occur, could it? We now know better.
5 This transaction, which appeared to promise considerable profit, has become a disaster, not only for the individuals involved but also for the professional advisors whom they seek to blame. Following judgment against the plaintiffs on the 11th January 2012 Peart J. made an order in favour of the bank, against all the plaintiffs, for the sum of €26,194,554.90 with interest accruing at a rate of more than €2,262.59 per day. It appears to be common case that at that time at least, the land itself had a value of less than €5 million. The High Court also dismissed the plaintiffs’ claim in negligence against the two firms of solicitors and the plaintiffs therefore became jointly liable for the costs of the successful defendants in what had been a very hard fought and contentious 27 day hearing in the High Court. The plaintiffs now appeal to this Court.
6 The decision of the High Court is contained in the comprehensive and careful judgment delivered on the 8th December 2011. A very full account of the events giving rise to the execution of the loan and the transfer of the land on the 8th February 2007 is contained in that judgment which should be read together with this decision. In the circumstances, I will seek to limit this recital of the background facts to those incidents which appear critical or which are in controversy in this appeal. Even so, it is a necessarily lengthy account.
7 It should be said at the outset that of the dramatis personae involved in the process, Mr Conlan was not joined as a party to the proceedings and neither he nor his associates, Mr Conor Gunne and Mr Richard Godsil, were called as witnesses by the plaintiffs. While AIB was a defendant in the proceedings, a decision was taken in the course of the case not to call evidence and accordingly Mr Derek O’Shea, the official in the bank involved in the loan and responsible for a significant change to the facility letter on the 7th February 2007 (the day before the loan was executed), was not called, nor indeed did the court hear from Mr Alan Roberts, the solicitor in A & L Goodbody advising AIB and Mr O’Shea, and who had some contact with Matheson Ormsby Prentice, the firm then acting for the purchasers of the land. This account of the events should therefore be read in the light of the fact that although documentation referring to these individuals was admitted in evidence, they did not give evidence to the High Court, which accordingly did not hear from these persons who, it will become clear, were significant participants in the events the subject of these proceedings.
The Transaction
8 Mr Philip Lynch is the central figure in this case. At the time of this transaction he was a very successful and prominent businessman and was it appears, even by the overheated standards of early 21st century Ireland, an extremely wealthy man. He had had business dealings with Mr Conlan and there was, it appears, mutual regard between them. Mr Lynch had, at Mr Conlan’s invitation, joined the board of Mr Conlan’s Harlequin group. It appears that Mr Conlan suggested to Mr Lynch that as a mark of Mr Conlan’s gratitude for his assistance, Mr Lynch might like to become involved in the Waterford transaction.
9 It now transpires that it appears Mr Conlan needed Mr Lynch, or someone like him, if he was going to be able to complete the deal. Although very wealthy, he was over extended with AIB and might not have been in a position to borrow the money for the transaction on his own and he was apparently anxious therefore, for his own reasons, to involve Mr Lynch. Much was sought to be made of this on behalf of Mr Lynch in the course of these proceedings but the trial judge, correctly in my view, was not prepared to draw any sinister inferences from the emergence of this information, particularly in the absence of Mr Conlan. The fact that Mr Conlan may have had his own undisclosed motives for seeking to involve Mr Lynch in the transaction is not inconsistent with a genuine belief on his part that this would be a beneficial deal for Mr Lynch. It is also difficult to believe that Mr Lynch would have been particularly surprised at the time to learn that the transaction was one in which Mr Conlan saw some benefit for himself. The fundamental issue for the Lynch interests was the assessment of the transaction on its merits, and at the time it must have looked very attractive. That fact, rather than any belief as to Mr Conlan’s financial position, is no doubt why Mr Lynch became involved for himself, and thought it would be a suitable vehicle for generating wealth for his family.
10 In mid 2006 matters had progressed to the point where Mr Conlan had executed the contract, a deposit had been paid to the vendors and Mr Lynch had himself contributed €2.5 million as his half of the deposit which was to be, and was, ultimately repaid from the loan. From the evidence he gave to the High Court it appears that Mr Lynch regarded his position at that stage as one which generated only benefits and no obligations. He appears to have considered that he was not obliged to complete the transaction but could do so if he wished. Furthermore, even if he withdrew, he appears to have considered he would still have been entitled to participate in any intervening uplift in the value of the property. It is not necessary to conclude if he was correct in this regard. The fact is that he did complete the transaction.
11 As the contract was executed by Mr Conlan in March 2006 “in trust”, the identity of Mr Conlan’s co-investors was not known to the vendors until shortly before closing on the 8th February 2007. The contract had provided for a closing date of the 31st December 2006. Although that nine month time period provided ample time to seek finance and to structure the deal, very little was in fact done by the Lynch side until almost the last moment. They appear to have been content to allow the Conlan side to make the arrangements. Mr Conlan had a longstanding relationship with Matheson Ormsby Prentice and had negotiated a reduced rate for conveyancing transactions. That firm had been instructed by him in relation to the conveyancing of the Waterford lands. Ultimately Mr Lynch and his family were named as co-owners and paid 50% of that firm’s fees. Mr Conlan also had a relationship with AIB and it was to that institution which he looked for finance. After some desultory consideration of whether a loan might be obtained from another source, the Lynch side accepted that the finance would be provided through AIB. In reality, it appears that Mr Conlan’s side made the running on the transaction in relation to the acquisition of the land and its financing and the Lynch side (originally Mr Lynch alone), was to take a half share of, and half the responsibility for, whatever was negotiated.
12 The central feature of this case is the Lynch family’s contention that they would not have entered the agreement on the 8th February 2007 if they had understood that the loan being advanced was not a non-recourse loan. Here, as elsewhere, Mr Lynch does not distinguish between his own position and that of the other family members. The main factual contention is Mr Lynch’s assertion that if he had understood that the loan was recourse to him, he personally would not have entered the agreement and the transaction would not have occurred. The key evidence relied upon in this respect relates to conversations which took place on the 7th February 2007 on the eve of the closing when Mr Lynch was in transit through Heathrow airport on his way home from a business trip. There is no evidence however, that either at this stage or later Mr Lynch or anyone on his behalf made it clear either to the Conlan side, or still less to AIB, that Mr Lynch wanted, indeed if his evidence is to be accepted, had an absolute requirement for, a non-recourse loan. This is only one of the features of the case which the learned trial judge found difficult to reconcile with Mr Lynch’s evidence that he would not have entered the transaction unless it was a non-recourse loan. Nevertheless Mr Lynch maintained, and the trial judge appears to have accepted, that at least by the eve of the closing of the transaction, he had made a firm decision that he would not complete the transaction if it involved the possibility of recourse to him or his family in the event of default. This finding is central to the plaintiffs’ case and was the focus of much attention on this appeal.
13 During 2006 Mr Lynch gave some consideration to utilising the Waterford transaction as a vehicle for family wealth management, that is, passing wealth on to, or in this case generating wealth for, the members of his immediate family. Accountancy advice was obtained and various investment structures considered. One, if not indeed the sole purpose of the advice was, it appears, to ensure that the transaction could be carried out in a tax efficient way. Although no detail of the advice has been provided, it seems apparent that the thrust of the advice was to seek to avoid either two layers of tax being incurred or an unnecessarily large liability being incurred by the family members in the event that the investment was successful. In very simple terms, if the family members were included as participants in the transaction at the outset, then that would assist in making them liable to pay tax only on the increased value of the investment. From the outset therefore, it was the advice given to the plaintiffs, and their clear objective, that all the Lynch family members were to be borrowers of the monies advanced. However, it is noteworthy that this tax strategy meant the family members would have to become participants in their own right in the transaction, and crucially, in the loans.
14 It is worth observing at this stage that what appeared initially to be a relatively straightforward transaction for the acquisition of land was becoming more complex. First, it was of course necessary to ensure that the land could be securely transferred to the acquiring parties. Furthermore, it was necessary that there should be an ownership agreement regulating the relationship between Mr Conlan and Mr Lynch (and later the Lynch family) to deal with the situations which might arise if there was disagreement as to the best method by which to exploit the acquisition. In addition, Mr Conlan was seeking a “carry”, that is that either the ownership of the investment, or the distribution of profits, should be apportioned more favourably to Mr Conlan than to the Lynch side because he had found the transaction and brought it to them. All of this was something that required some commercial negotiation and legal assistance in relation to the format of any agreements. In addition, Mr Lynch wanted the transaction to be a vehicle for wealth management within his family, an objective which understandably he wished to achieve while minimising the taxation payable. Furthermore, it is said that he wished that any finance for the transaction should be available on specific terms, and particularly, should not involve any potential liability for him or his family. Finally, there was the possibility that some or more of the participants might seek to structure their investment through some corporate vehicle.
15 While none of these matters may have posed particular difficulties on their own, the combination, particularly when required to be performed under pressure of time, made this quite a complex transaction, although that was not necessarily recognised at the time. The complexity was compounded somewhat because the structure most likely to minimise tax was not necessarily commercially desirable since it involved exposing the members of the family to a joint liability on a very substantial loan. Nevertheless, no step was taken by Mr Lynch or on his behalf to retain separate legal advice during 2006. The third defendants, LK Shields, a firm with which Mr Lynch had a long standing relationship, were retained in the middle of January 2007, two weeks after the original closing date and three weeks before the transaction in fact closed, and given the limited brief of dealing with the co-ownership agreement. Indeed, even at that stage it appears that Mr Lynch had not finally decided to proceed with the transaction.
16 On the 22nd December 2006 AIB issued a document referred to as “Heads of Terms” setting out details of the loans and containing special conditions including requirement of a net worth statement from Mr Lynch and “full joint and several personal recourse”. This, it should be said, is consistent with other internal AIB documentation around this time. The significance of the Heads of Terms document for these proceedings however, is that it was emailed to Mr Robert Burns, the assistant to Mr Lynch, by Richard Godsil who was acting in a similar capacity for Mr Conlan.
17 It appears that Mr Burns did not revert to Mr Godsil. Around that time he was in Spain with Mr Lynch and other members of Mr Lynch’s company, “One 51”. Mr Burns discussed the matter with Mr Lynch and it appears that this discussion generated a handwritten memorandum of the 4th January 2007 containing somewhat enigmatic terms:
“ → Not NR/Joint + Several: Fall Apart
→ What value Now to go? 50 million
→ Talk to Godsil now about going
→ Play to Godsil
→ Impact elsewhere.
→ Divert problem.”
On the handwritten note there is also an arrow joining the line “Not NR/Joint + Several: Fall Apart” to the line “Impact elsewhere”. The plaintiffs place reliance on this document as supporting their contention that they at all times understood the loan to be, or to be required to be, non-recourse. Whatever this discussion involved however, it did not result in Mr Burns or anyone else on behalf of the Lynch interest contacting anyone on the Conlan side, or in AIB, to seek a non-recourse loan and if one was not available through that source, then to seek such a loan elsewhere.
18 At this stage it was thought that the deal was due to close imminently since the closing date on the contract was the 31/12/2006. On the 8th January 2007 Mr Burns emailed Mr Lynch in the following terms:
“Philip
Have you had any further thoughts on Waterford land? Godsil plans to close the contract on Wednesday. I am working with Marion on the equalisation among the family in case you want to proceed with it.”
The reference to Marion is to Marion Bradley in Ernst and Young, which firm was providing taxation advice in relation to the transaction. As the trial judge observed:
“One can see immediately that the question of whether or not the AIB loan was recourse or non recourse or whether it was on the basis of joint and several liability with Gerard Conlan was not mentioned as an issue yet to be resolved. But it is clear that if it was still an issue for Mr Lynch no steps had been taken with AIB or through Mr Conlan or his representatives to address it. It seems to have been left in the air. There is no evidence that any such contact was made around this time in order to address these issues which Mr Lynch has stated were crucial to his decision whether to proceed or not.” (pp. 10-11)
19 On the 9th January Mr Ronan McLoughlin, the partner in Matheson Ormsby Prentice dealing with the conveyancing of the land, wrote to Mr Burns confirming that he received details from Ernst and Young in relation to the shares of the Lynch family to be reflected on the deed of transfer and continued:
“All parties should be listed on the facility letter and you might advise as to the current status of same as we are now coming under increasing pressure to complete the transaction and expect a completion notice to be served on us in the immediate future.”
The requirement that all parties be named in the facility letter was part of the advice given by Ernst and Young, on behalf of the Lynch family, to Matheson Ormsby Prentice. It is significant in at least two respects. First, it shows that what is central to these proceedings – the fact that the individual Lynch family members became borrowers from AIB – was a consequence of the tax strategy being pursued by them. Indeed in early 2006 Mr Burns had noted a conference call with Ernst and Young which emphasised that it was critical that the children were parties to the loan facility. It is also significant that at this stage Matheson Ormsby Prentice were dealing with the Lynch family advisers in relation to the facility letter, which is of course the basis of the bank’s claim against the plaintiffs in these proceedings.
20 AIB prepared a first version of the loan facility letter of the 9th January 2007 in which it named the borrowers as Mr Conlan and Mr Lynch alone and did not limit recourse in any way. However, the evidence was that this version of the facility letter was not seen by the plaintiffs until 2009.
21 On the 16th January 2007 the matter became more urgent. Matheson Ormsby Prentice received a completion notice from the vendors dated the 12th January 2007. That notice required that the sale be completed within 28 days from the date of service thereof, and accordingly, that the sale was to be completed on or before the 13th February 2010. However, Mr McLoughlin, in a letter of the 31st January 2007 to LK Shields (who were by now acting for the Lynch family in relation to the co-ownership agreement), stated that the completion notice had been received and that it was “incumbent upon us to complete this transaction no later than Thursday 8 February”. Mr McLoughlin has explained both in correspondence and in evidence that he gave this date as a precaution “in order to concentrate minds”. On the same day as Matheson Ormsby Prentice received the completion notice, AIB produced a second version of the facility letter in which the borrowers were now named as Gerry Conlan, Philip Lynch and the Lynch children. Again this version was not formally issued to the borrowers. The following day Mr Burns made contact with Mr Emmet Scully of LK Shields in relation to that firm acting for the Lynchs in respect of the co-ownership agreement then being drafted by Ronan McLoughlin of Matheson Ormsby Prentice. It was apparent that Matheson Ormsby Prentice could not act for both sides in the preparation of that agreement.
22 By the 17th January 2007 therefore, LK Shields had been retained to represent the Lynch family on the co-ownership aspect of the transaction. LK Shields had a long standing relationship with Mr Lynch. The initial point of contact within the firm was Emmet Scully who passed the matter to Mr Jim Gollogley, his partner. An internal memo from Mr Scully to Mr Gollogley of that date refers to the most sensitive issue being the “carry”. The memo informed Mr Gollogley that he would need to liaise with Robert Burns closely on that aspect. What is significant about this document, as the trial judge observed, is that there was nothing to indicate that LK Shields were informed by Robert Burns or anybody else on the Lynch side that issues surrounding recourse and joint liability to the AIB loan were yet to be addressed, or were important, or indeed that the transaction might not proceed at all, if that was the Lynch’s position.
23 There was a meeting of the Lynch family on the 26th January 2007. Robert Burns prepared a memorandum in which he said that the balance of the purchase price together with stamp duty and fees was being “financed through a loan with AIB secured on the land itself”. The trial judge found, with ample justification, that there was on the Lynch side, and indeed elsewhere in this transaction, very considerable confusion as to the distinction between the concept of security on the one hand, and the question whether there would be recourse to the individual borrowers on the other. Nevertheless the plaintiffs rely on this reference as reflecting their belief at all times that the loan was to be non-recourse.
24 By the 2nd February 2007 LK Shields had still not received the facility letter. On that date, Robert Burns sent an email to LK Shields clarifying certain matters. Of particular significance was the following aspect:
“Philip will provide a guarantee to the bank regarding the Children’s portion of the loan depending on whether the bank (AIB) require it. The Children need to be reflected in the loan documentation, can you please ensure this is the case.”
As already noted, the need to reflect the children in the loan document appears to reflect the advice given by Ernst and Young. However, the reference to Mr Lynch providing a guarantee is significant since it was arguably only consistent with the children having an individual personal liability to be guaranteed.
25 On the evening of the 2nd February LK Shields emailed Robert Burns to ask if he knew when the facility letter was issued as Matheson Ormsby Prentice (with whom LK Shields were now in contact) had not received it. The following day Robert Burns emailed LK Shields stating that he was under the impression that the bank had reissued the loan facility with the names of the Lynch children included in it. This was indeed the case, although at this time the facility letter did not appear to have made its way formally to the Lynch side. This exchange illustrates the fact that it is likely that a number of the participants were in direct phone contact with each other and may, by that process, have known more about the progress of the transaction than the documentary evidence now available would necessarily record.
26 As it happened, on the 3rd February 2007 Judith Whelan took up an employed position in relation to the family’s business and financial interests. One of the first things that she had to deal with was the Kilbarry land purchase. Robert Burns was due to go to Switzerland, on business with Mr Lynch, and was not due to return until the evening of Wednesday 7th February, the day before the closing date nominated by Mr McLoughlin. He sent an email to Judith Whelan updating her on the current position. It is necessary to set that email out in full since it records Mr Burns’ understanding of the transaction at a key point just before closing, and can be taken to represent Ms Whelan’s understanding at that time:
“Hi Judith,
Only picked up your message, I’m tied up during Monday but if you want to go ahead with Jim [Gollogley of LK Shields] that’s great to move it along.
The key is that Richard Godsill (Jerry Conlons manager) wants to take the 20% profit carry on a per acre basis. This needs to be redrafted with effect that bank debt is cleared first, then expenses, then remaining equity due to investors and finally the carry to be paid.
Richard has approached it this way as he sees a 3 year timeframe to dispose of the land and wants to take profit as he goes. However as the debt is joint and several to everybody it is critical that it gets taken out as quickly as possible.
Marion [Ernst and Young] is upto speed on events to date with the exception that the profit share has now been altered on the Lynch side. The deal was signed in trust by jerry conlon last March so there are no issues as to who goes on the final contract on Thursday.
The bank (AIB) should issue the loan letter with all your names on it as borrowers. If needs be Philip will need to guarantee the Children’s borrowings but to date the bank have not yet requested it.
Give me a call anytime Monday to run through anything on it.”
27 As was observed by the trial judge this email is very difficult if not impossible to reconcile with the assertion on behalf of the Lynch family, and in particular Mr Philip Lynch, that it was essential that the deal be a non-recourse loan. Instead it was apparent that the nature of the loan was accepted to be joint and several with the possibility of Mr Philip Lynch guaranteeing the individual children’s loans. Indeed this information was provided not because it was important in itself, but rather because it reflected on the position the Lynch side had taken on what was seen as a critical issue, namely the manner in which the profit should be paid out. Judith Whelan did not react to this email and in particular the reference to joint and several liability even though the same email indicated that the loan letter would issue with her name as one of the borrowers incurring such liability.
28 There was considerable work to be done by the respective firms of lawyers to be in a position to close the transaction, both in finalising the arrangements and putting them into legal form. While the focus of this case has been on the issue of the extent to which the agreement provided for recourse to the individual borrowers and what was said in relation thereto, that was only one of the issues which arose over this period and by no means the most important at the time. In particular, the parties spent a lot of time on the terms of the “carry” to be allowed to the Conlan side, which was now to be arranged through the vehicle of a limited company, Quinby Limited. That issue had a number of facets because it also involved the question of agreement with the bank as to proportionate repayment of the loan on sale of a portion of the lands.
29 By the 5th February, the Lynch side had not seen any form of the facility letter. No anxiety had been expressed by any of the Lynchs or Mr Burns as to its contents. LK Shields did want to see it in order that the co-ownership agreement could be completed, which was that firm’s focus. Matheson Ormsby Prentice had also emailed A & L Goodbody who were the solicitors advising AIB, seeking copies of the letter and the security documents. None of the firms involved at this stage had any reason to think that the terms of the letter would be anything other than routine. The transaction had been in gestation for more than a year and was now approaching completion without any suggestion that the terms of the letter would be controversial, still less that it could result in the transaction not being completed at all.
30 On the afternoon of the 5th February A & L Goodbody emailed Matheson Ormsby Prentice attaching a copy of the mortgage which appeared to provide that each mortgagor would be jointly and separately liable for the obligations of the other. These terms did not provoke any comment precisely because no one had at that stage any idea that the Lynchs had any desire for non-recourse lending, let alone an absolute requirement for that form of loan. On the same day, Mr Imdaad Sulaiman of LK Shields prepared a memo of a conference call between Mr Gollogley and Mr Burns. Mr Sulaiman was to become the main participant on the part of LK Shields in the events which followed.
31 On the 6th February Mr Sulaiman made a memo of a conference call between Jim Gollogley of LK Shields and Judith Whelan in which he recorded that Jim had confirmed to Judith Whelan that LK Shields’s involvement was just in relation to the co-ownership agreement and that Mr Gollogley, would not be getting “too involved” in what was described as the purchase transaction, and that Judith agreed with this. It should be said that Ms Whelan disputed this in her evidence at the trial. At 18:58 that day AIB emailed A & L Goodbody a version of the facility letter which contained all the Lynchs as parties and as borrowers but provided for “Full Joint and Several Recourse of Gerard Conlan and Philip Lynch for all EUR 25,000,000 debt”. This draft was only exchanged between the bank and its own solicitors and once again was not seen by the borrowers. It is however a troubling feature of this case that at all times it appears that the bank did not have any requirement that the Lynch children and Mrs Lynch be liable for the loan. This of course is consistent with the original structure of the transaction, its commercial underpinning and the development under which the Lynch family became participants in it. If the bank was willing to lend to Mr Conlan and Mr Lynch alone (and understandably so given their net worth), then the addition of the Lynch family for reasons internal to the Lynch side did not in any way increase the risk from the bank’s perspective or create a commercial necessity to make them jointly and severally liable for the loan. It also seems likely that while it may have taken some more time and attention, it would have been possible to draft both the facility and the mortgage letter to reflect the bank’s desire to be able to recover the land in full if there was default on the loan, together with the possibility of further recourse against Mr Lynch and Mr Conlan but without recourse against the other members of the Lynch family. That course was never attempted, no doubt because it was never raised.
32 On the 7th February, Mr Lynch and Mr Burns were on their way back from Zurich and had a number of crucial conversations with other participants in the transaction while at Heathrow Airport and subsequent to landing at Dublin Airport. In the early part of the day the main issue was the arrangement of the Quinby carry and the related issue of securing the bank’s agreement to partial repayment of the loan as parts of the land were sold. At 15:05 A & L Goodbody emailed the bank with a redraft of the facility letter which provided amongst other things for “full joint and several recourse to all the borrowers”. The reason given for this change was that A & L Goodbody took the view that the limited recourse provision in the AIB draft of the previous evening could cause difficulties of enforcement. The relevant witnesses did not give evidence, but I infer, I hope correctly, that this advice took the view that the version then in circulation could pose a difficulty for the enforcement of the mortgage security if the Lynch family members were owners of the land and parties to the mortgage but had no obligation in relation to the debt. This, it should be observed, was a technical and legal issue rather than a commercial one.
33 At 15:10 Mr Sulaiman emailed Mr Ronan McLoughlin of Matheson Ormsby Prentice requesting sight of the AIB facility letter when received by that firm. At 15:40, Mr Sulaiman had a direct conversation with Derek O’Shea in AIB. His note records that the purpose of the call was to ascertain that the bank agreed to proportionate repayment. The note also recorded that the latest draft of the facility letter was then literally in the process of being printed. Again, the memorandum of this conversation is notable for the absence of any reference to the recourse or non-recourse nature of the facility letter and is consistent with the view that that issue did not loom large, or at all, at that time.
34 Mr Sulaiman was also in conversation with Mr Burns at Heathrow and it appears that conversation prompted his communication with Mr O’Shea. Mr Sulaiman then had a further conversation with Mr Burns in which he confirmed the Lynchs’ agreement to the question of proportionate repayment of the Quinby carry.
35 At 15:59 Mr O’Shea sent an email containing a facility letter to A & L Goodbody, Matheson Ormsby Prentice, to Mr Gunne directly (representing Mr Conlan) and attempted to include Mr Sulaiman, but it appears an incorrect email address was used. However, that error was corrected when Mr Ronan McLoughlin of Matheson Ormsby Prentice forwarded the email at 16:12 to Mr Sulaiman who in turn forwarded it to both Judith Whelan and Robert Burns at 16:32. This was the first time that the facility letter was seen by the Lynch side or by LK Shields or Matheson Ormsby Prentice.
36 There were a number of changes to the draft consistent with the discussion between the bank and A & L Goodbody. However in respect of what is now the crucial issue of the contents of the clause dealing with recourse, it contained a formula similar to that contained in the AIB draft of the previous day i.e. it provided for “Full Joint and Several Recourse of Gerard Conlan and Philip Lynch for all of the EUR 25,000,000 loan plus interest, costs and charges”. Thus, by this stage, at 4pm on the eve of the closing date, it was clear that the Lynchs had been apprised of these terms, particularly the possibility of full recourse against Mr Lynch. Matheson Ormsby Prentice for their part were aware that all the Lynchs were now parties to the transaction and that the draft, on its face at least, did not provide for recourse to those family members other than Philip Lynch. LK Shields for their part were also now aware of the fact that the terms proposed required full recovery against Mr Lynch and did not, at least specifically, address the position of the other family members.
37 On the plaintiffs’ evidence, by this stage Mr Lynch, while at Heathrow Airport, had coincidentally just made it clear to Robert Burns, to Judith Whelan and, the High Court judge found, possibly to Mr Conlan, that he, Philip Lynch, would not complete the transaction unless the loan was non-recourse to all the borrowers. It is not clear, even on the plaintiffs’ case as I understand it, what gave rise to this declaration, but Ms Whelan in her evidence said that she was aware of her father’s position when she received the 16:32 email. If this is the case, one might have thought that this would have meant that she would both be alert to the terms as to recourse, and, would also have reacted immediately when it became apparent that it provided for recourse albeit against Mr Lynch himself. However, she accepted in her evidence that she saw the clause but did not react to it.
38 At 16:40 Mr Roberts of A & L Goodbody replied to Mr O’Shea’s email and once again addressed the format of the recourse clause. He had recently advised his client on the format of the facility letter, and some of that advice was reflected in this draft. However, although Mr Roberts had drafted a clause providing expressly for the recourse against all the borrowers, a different provision had been included in the draft letter which issued, providing for the recourse against Mr Conlan and Mr Lynch. It is unsurprising therefore that he returned to the issue again and repeated his advice. He stated:
“While I accept that commercially the intention of the bank is to have full recourse on a joint and several basis to Mr Conlan and Mr Lynch only, the letter of sanction should state that the Bank’s recourse is to all borrowers for the full amount of the loan plus interest etc. The only other option would be to have specific limited recourse language in both the letter of sanction and the mortgage for Mr Lynch’s family.”
As already indicated this suggests that the issue was a technical and drafting issue rather than one of principle, and that the desire of the bank and its advisors was merely to avoid imperilling the enforcement of the mortgage against the land, rather than a desire to obtain the further comfort of personal recourse against members of the Lynch family. Apart from anything else, that was a commercial matter and not something upon which Mr Roberts was likely to advise.
39 It is important at this stage to recall that neither Mr Roberts nor Mr O’Shea gave evidence at the trial. There is no doubt however, that Mr O’Shea did effect a further crucial change to this clause. Mr O’Shea had prepared a witness statement for the trial. The plaintiffs sought and obtained permission from the trial judge to introduce this into evidence. It stated that he had received a phone call from Mr Godsil who observed light heartedly that since the draft in circulation had made express provision for full recourse against Mr Conlan it must follow that all previous loans, which had no such express provision, were non-recourse loans. Mr O’Shea’s statement then records that this prompted him to make what transpired to be a fateful alteration by removing all reference to recourse against Mr Conlan and Mr Lynch, and with the consequence that there was full recourse against all the borrowers. It is important to say that at this point that while the plaintiffs introduced Mr O’Shea’s statement into evidence, this did not mean that they accepted this account of the reason for the change made by Mr O’ Shea. On the contrary they introduced the statement in evidence with a view to inviting the court to disbelieve it and to infer that there was some other undisclosed reason for the change.
40 It appears that Mr Sulaiman prepared a further memorandum for his file which notes that he spoke to Robert Burns at 18:05. That appears to be shortly after Mr Burns had landed in Dublin Airport, although the memorandum itself stated that Mr Burns was in transit between connecting flights. The trial judge considered that this must have been an error since Mr Burns had landed at the time recorded on the memorandum. The memorandum suggests that the call lasted for just over nine minutes. Mr Burns for his part stated that he had no recollection of the telephone conversation, but he did say that a conversation could have taken place, although he disputes the account given by Mr Sulaiman of the contents of the call. The memorandum sets out a number of matters which were discussed and agreed, and then concluded “re possibility of Goodbody’s/bank wanting the joint/several clause to apply to both Gerry, Philip and all the Lynchs, Rob felt this wouldn’t be a problem”. It is noteworthy at this point that a new facility letter had not issued. However, it is true that at this point A & L Goodbody’s advice was (and had been) that the simplest course was to have full recourse against all the borrowers. Given the degree of interaction between the parties and their respective lawyers, it is not at all implausible that Mr Sulaiman should have become aware that it was A & L Goodbody’s advice that the joint and several liability should extend to all borrowers and therefore that such a requirement might be made by the bank. However, as the trial judge noted, the precise manner in which that important information reached Mr Sulaiman is not clear.
41 Mr Burns stated in evidence that he could not have said what he was recorded in the memorandum to have said about full recourse not being a problem, since that itself was inconsistent with everything else. “Everything else”, in this regard, for Mr Burns, appears to mean the conversations held at Heathrow Airport in which it was said Mr Lynch made clear his position that unless the loans were full recourse, the transaction would not proceed. On the other hand, it might be observed that the statement that Rob felt that full recourse “wouldn’t be a problem” is itself consistent with his email of the 2nd February 2007 to LK Shields suggesting that Mr Lynch was prepared to provide a guarantee for his children’s liabilities and his email to Judith Whelan of the 3rd February 2007 recording that the debt was joint and several and that if need be, Philip Lynch would be prepared to guarantee the children’s borrowings. There was however a sharp conflict about this issue at the trial.
42 At 18.56 Mr Sulaiman emailed Mr Jim Gollogley stating that:
“Ronan [of Matheson Ormsby Prentice] just left a message after speaking to Derek at AIB. Apparently the joint and several recourse condition in the facility letter is to be taken out in its entirety – confirmation of this to follow.”
Mr Gollogley who was at that stage at a wedding in the country was in contact with Mr Sulaiman. He replied;
“Is the recourse limited to the property then. MOP [Matheson Ormsby Prentice] need to clarify.”
It appears that there was a phone call between Mr Sulaiman and Mr McLoughlin and at 19:04 he replied to Mr Gollogley stating:
“Just off the phone with Ronan – he confirmed that it is to be limited to the security being the property – the confirmation of this will be evidenced by the revised facility letter which will have no mention of the joint and several recourse against the individual borrowers.”
43 Mr Sulaiman’s 18:56 email was possibly ambiguous. It is true that the clause providing explicitly for joint and several recourse on a limited basis was being taken out but it did not follow that the legal effect was that joint and several recourse was no longer a consequence of the agreement. In the second email however, the matter becomes clearer. In this email it was suggested that recourse was to be limited to the security of the property and this would be confirmed by the fact that the clause providing for joint and several recourse against any of the borrowers would no longer be contained in the agreement. Again, there was sharp disagreement about the conversation between Mr McLoughlin and Mr Sulaiman recorded in this email. Mr Sulaiman said that his email simply repeated what Mr McLoughlin had told him, and if there was an error it originated with Mr McLoughlin. Mr McLoughlin for his part agreed that he had spoken to Mr Sulaiman and maintained that he had merely passed on to Mr Sulaiman what he had been told by Mr O’Shea of AIB, including that the reason for the change was because of enforcement difficulties.
44 Shortly afterwards, at 19:17, Mr Gollogley emailed Robert Burns in the following terms:
“I was concerned about that the suggestion that rather than AIB relying on a Philip Lynch and G Conlan full recourse commitment and that they want to tie in each of the children as well. I don’t think this makes sense for either AIB or the children. I now understand it may well be recourse to property only, which is a great help.”
This email was copied to Mr Sulaiman. Shortly after 10 pm that night Mr McLoughlin sent emails to Mr Godsil and Mr Burns enclosing draw down requests to permit the loan to be made available the following day on the closing.
8th February 2007
45 The 8th February was the critical day on which the transaction closed and on which the principal communications upon which the plaintiffs rely in these proceedings were made. Shortly after 8 o’clock Mr Robert Burns emailed Mr Sulaiman and asked “Is the loan now recourse to land only?”. As the trial judge found, the reference to “now” suggests perhaps that up until then Mr Burns had not believed that the loan was not limited to recourse to land, and rather was one of full joint and several recourse. Gillian Burdon, an assistant to Mr Burns, then contacted Mr Sulaiman on Mr Burns’s instructions and asked him to draft a draw down request for the sum. Ms Burdon also requested a copy of the final facility letter. It is worth noting here that both the Lynch side and LK Shields were now engaged in dealing with matters outside the strict terms of the co-ownership agreement. At 9:33, Mr Sulaiman sent a draft of the draw down request to Ms Burdon and stated:
“Further to our telephone conversation earlier this morning, I now attach the latest version of the AIB facility letter. Please note that a further version should be following later this morning. This is to reflect the fact that the bank now only require legal recourse against the property being their security for the loan – they no longer require any legal recourses against Philip, Gerry or the Lynch children.”
This was an unequivocal statement. It was also, regrettably, wrong.
46 At 10:36 Mr O‘Shea emailed a final version of the facility letter to Mr McLoughlin of Matheson Ormsby Prentice. This was not however copied to LK Shields or the Lynchs. Mr O’Shea asked Mr McLoughlin to confirm when he heard from “the Lynch’s solr that the Letter of Sanction is ok”. Mr McLoughlin emailed Mr Godsil and Mr Gunne in the following terms: “Richard/Conor, See below. The reference to Gerry and Philip only as being joint and several has been deleted as it may have caused issues on enforcement for AIB.” This email is important because it seems to show that at this stage, Mr McLoughlin for his part did not consider that the loan had been changed to one with non-recourse as far as his clients were concerned. At 12:03 Mr McLoughlin sent an email to Mr Sulaiman attaching without comment the amended facility letter. At 12:16 Mr Sulaiman forwarded it to Robert Burns and Gillian Burdon stating “you will note that the special condition regarding any recourse as against Philip and Gerry has been now been removed”. This email was also copied to Ms Whelan, who was at that stage travelling around Dublin collecting powers of attorney from her siblings. In her direct evidence she said that she had met Mr Burns in his office at Thomas Street earlier that morning and that he had informed her of the 9:33 email. She also stated that she had gone back to Thomas Street and had reread her emails and so saw the 12:16 email. However in cross-examination she accepted that she had no recollection of being told by Mr Burns about the 9:33 email, and accepted that there was no mention in her witness statement of returning to Thomas Street. In the event the evidence of personal knowledge on the part of Ms Whelan of the critical emails, still less reliance on them, was as limited as the evidence of Mr Lynch imposing a requirement of non-recourse the previous day. The heart of the plaintiffs’ case against LK Shields was therefore the fact that the trio of emails recorded above were sent by LK Shields to Mr Burns and Ms Burdon.
47 The closing of the transaction had now been put back to 3 o’clock. Mr McLoughlin had still not heard whether the Lynchs were happy with the final facility letter. At 14:05 Mr McLoughlin emailed Mr O’Shea to find out if he for his part had heard anything in this regard and at 15:46 Mr O’Shea replied stating that he had heard nothing except that a drawn down request from the Lynchs had been received. At 3 o’clock the transaction was completed at the offices of A & L Goodbody, the solicitors for AIB. Mr McLoughlin was there as the purchaser’s solicitor. Judith Whelan attended and executed all relevant documents on her own behalf and on behalf of the other Lynch family members including the final facility letter. Mr Conlan for his part was not there but had executed all necessary documents in advance. There was no discussion about the nature of the loan.
48 Two years later the loan was due for renewal. By that stage the market had of course deteriorated. It is perhaps of some significance that AIB re-issued the facility letter but in the format originally favoured by Mr O’Shea, i.e. providing for full recourse against Gerry Conlan and Philip Lynch only. It is not clear if an advertent decision was made to resile from the terms of the facility letter actually executed, although that appears unlikely. Nevertheless, this was perhaps indicative of a continuing attitude of the bank to the commercial reality of the loan. Had that facility letter been accepted, it seems likely that the other members of the Lynch family would have no liability, or at a minimum would certainly have been in a stronger position than they were when proceedings were commenced by the bank. However, the family took a very firm stance that they had been advised that the facility letter was non-recourse against everybody and would not execute an agreement on any other terms. Accordingly, the loan became due, and AIB commenced summary proceedings against all the members of the Lynch family and Mr Conlan. These proceedings were commenced and the summary proceedings stayed pending the determination of these proceedings in which the Lynch family sought, as against AIB, a declaration that the loan was not due. The proceedings also claimed that the loan had been procured by a misrepresentation that it was a non-recourse loan. In the event that the loan was however found due, the plaintiffs claimed an indemnity from both firms of solicitors.
The Judgment of the High Court
49 The trial judge had to seek to reconcile much conflicting evidence. While it is apparent that the amount of email correspondence provided contemporaneous evidence to assist in this task, the fact remains that a number of the key players did not give evidence, and some of the most important communications were oral. As between Mr McLoughlin and Mr Sulaiman, the trial judge concluded that on the balance of probability Mr McLoughlin had not informed Mr Sulaiman on the 7th February 2007 that the loan was now non-recourse, and that Mr Sulaiman had probably misunderstood whatever it was Mr McLoughlin had told him. There was no real question but that Mr Sulaiman’s conclusion (shared, it appears, to some extent by Mr Gollogley) was, regrettably, simply wrong. The removal of the provision in relation to limits or recourse had the effect that the loan reverted to the default position i.e., it was a loan advanced to joint borrowers who therefore had a joint and several liability to repay.
50 The trial judge also had to deal with the central claim made by the Lynch family that in a series of phone calls to Mr Conor Gunne and Ms Judith Whelan, and in personal conversations with Mr Burns, all while at Heathrow Airport on the 7th February 2007, Mr Philip Lynch had made it clear that he would not complete the agreement unless the loan advanced was non-recourse, not just to his family members but also to him (and consequently, presumably, Mr Conlon). This position was asserted to have been expressed on the 7th February, but was said to represent Mr Lynch’s firm view in general, and the common understanding of the family members, including Mr Lynch (shared by Mr Burns) in relation to the loan at all times.
51 The findings of the trial judge in relation to Mr Lynch’s assertion are important and accordingly worth quoting in full. At pp. 14-15 of the judgment ([2011] IEHC 544) he said:
“I must say I find it incomprehensible that a successful and experienced business such as Mr Lynch who, over a long business career in which he has enjoyed enormous success, has borrowed many millions of Euro in the course of that career, would be as confused as he appeared to be about what was meant by a recourse or non-recourse loan, the concept of security, and the differences between them. One view of his evidence in this regard would be that he was deliberately obfuscating, and by his answers trying to make sure that his knowledge of such concepts was at best uncertain. A reading of the transcript of his cross-examinations in this regard makes for very difficult reading. But nonetheless I was able to observe him in the witness box when he gave his answers, and I remain satisfied that, unbelievable as it may seem to others, his understanding of the precise distinctions between these concepts, and his understanding of these matters generally is vague and uncertain. Perhaps that is a consequence of being the sort of man who having made a decision to pursue a particular course of action, leaves the detail and the fulfilment of his plans to his trusted lieutenants. The evidence has been that this is his habit. A man who is as totally occupied with business interests as Mr Lynch appears to have been at these times, and who has many ventures and investments ongoing at any particular time, not just in this jurisdiction but abroad, perhaps must delegate details to others. But risks run alongside that modus operandi, as it presupposes that the lieutenants know exactly what is to be done, and fully understand which matters he regards as being of particular importance to the ultimate decision to proceed. They must be kept fully informed and up to date at all stages, otherwise some matters of crucial importance to the decision maker may not be fully appreciated, and may not be communicated to others who need to know.”
52 Later in the judgment at p. 32 the trial judge went further and described Mr Lynch’s evidence of the events of the 7th February, and in particular his conversations at Heathrow Airport, as “hopelessly unreliable”. Having expressed the view that Mr Lynch, Mr Burns and Ms Whelan were trying as best they could to recollect what may have been said he continued:
“I have read and re-read Mr Lynch’s cross-examination by [counsel for LK Shields] about these telephone calls. While Mr Lynch attempts to hold the line on the fact that he spoke to Judith Whelan and told her he would not be proceeding if the loan was other than non-recourse, and called Mr Donnelly because he could not reach either Mr Conlon or Mr Gunne, and asked Mr Donnelly to get either of them to call him, and that he spoke to Mr Gunne to tell him that he would not proceed unless the loan was non-recourse, his recollection is hopelessly confused and unreliable.”
These are severe findings in relation to a prominent businessman who must have been engaged in numerous transactions and dealings for sums far in excess of the very significant amounts involved here, but they appear, regrettably, to be amply justified, and if anything understated.
53 In relation to Ms Whelan, the trial judge observed that if her evidence was correct and she was aware of her father’s view that the entire deal could not proceed unless the loan was non-recourse to everybody, it was remarkable that she took no step to alert anybody that there was a problem about recourse. He continued:
“She could have made contact with AIB directly if she had wanted to. She could have contacted MOP and/or LK Shields to tell them that recourse was a problem. She did none of these things on the basis that she knew her father’s views and that they would not sign up to recourse. I find it extraordinary that she did nothing, if as she and Mr Lynch say, a decision had been taken that day that if the loan was to be recourse they would not be proceeding. There must also be doubt about the accuracy of their recollections about these phone calls given Mr Sulaiman’s note of his conversation [with Mr Burns] after he had landed at Dublin Airport at 18.05hrs on the 7th February 2007 in which the latter confirmed that joint and several to everybody would not be a problem”. (p. 44-45)
54 Nevertheless, the learned trial judge seemed to accept that a decision was made at Heathrow Airport on the 7th February by Mr Lynch not to complete the transaction unless the loan was non-recourse and accordingly that the decision to enter the loan was made in reliance on Mr Sulaiman’s erroneous advice that the loan was indeed non-recourse. At p. 55 of the judgment the judge said:
“Mr Lynch appears to have become convinced by the 7th February 2007 that he would [not] involve his family in any risk on this transaction. On balance I accept that this is so. He certainly left it very late in the day to arrive at such a decision, but on the evidence which I have heard this seems to be the way in which he conducts himself in relation to business decisions. He seems to keep all his options open until the very last minute before making a final decision. He is entitled to operate in that way, even though it may speak to the question of contributory negligence and/or foreseeability particularly where he keeps his relevant advisers in the dark”.
55 Accordingly the judge came to the following conclusions in relation to the cases advanced by the Lynchs against the respective defendants. As against AIB, he dismissed the claim for a declaration that the loan was non-recourse. He also dismissed the claim that Mr O’Shea’s alterations to the facility letter amounted to a misrepresentation. He concluded that the Lynchs had no defence to the bank’s claim and permitted the bank to prove the amount of the debt by affidavit evidence and, as already set out, he entered judgment in the bank’s favour against each of the Lynchs.
56 In relation to the claim against Matheson Ormsby Prentice, the judge’s decision followed largely from his conclusion of fact that Mr Sulaiman had misunderstood what Mr McLoughlin had told him on the 7th February in relation to the changes being made to the facility letter in respect of the non-recourse clause. The trial judge accepted that Matheson Ormsby Prentice could have a duty of care extending beyond the strict terms of their retainer and which might arise by virtue of the nature of the transaction and the way in which it developed. He observed:
“I have no difficulty in accepting that a solicitor’s duty of care to his/her client may in some circumstances extend beyond the specific terms of the initial retainer in certain circumstances. If, for example, it was established in the present case that Mr O’Shea had informed Mr McLoughlin that this recourse clause was being removed in order to change the facility from a non-recourse loan to a full recourse loan, and if Mr McLoughlin was aware, or ought to have known, that this was a matter of importance to the Lynch side, he would be negligent if he failed to communicate that information to the Lynchs, either through LKS [LK Shields] or to the Lynchs directly, or at least at latest at the closing of the transaction itself, even though MOP’s specific retainer did not extend that far. It might be negligent also if Mr McLoughlin had known or believed that until this change was made the facility was a non-recourse loan, and even in the absence of being specifically told by Mr O’Shea of the purpose of the change to the facility letter, he nevertheless believed that as a matter of law the change was altering the nature of the loan to recourse, and he failed to communicate that view to his clients even where he had not been retained in relation to giving advices in relation to financing aspects of the transaction, since it would be reasonable for him to appreciate that his clients needed to know”. (p. 48)
However, the trial judge considered that in the present case, the facility was at all times a recourse loan. The changes effected to the facility letter did not alter this as a matter of law, and nobody on the Lynch side had told Matheson Ormsby Prentice that only a non-recourse loan would suffice. Fundamentally, he considered that Mr Sulaiman was probably mistaken as to what Mr McLoughlin had said. The trial judge concluded:
“I believe that Mr Sulaiman misinterpreted what he was told in this regard. He has shown a degree of confusion in his understanding of the different concepts of security and recourse, and appears at times to have conflated the two”. (p. 50)
Accordingly, what Mr McLoughlin communicated was not mistaken, and it followed that he was not negligent in that regard. In relation to the question of communicating information to LK Shields, the judgment concluded that Mr McLoughlin was entitled to do as he did as he knew LK Shields were acting for the Lynch side and he had in fact never met the Lynchs or been in contact with them. The trial judge stated:
“He was of course duty-bound to pass on information so that the Lynchs were made aware of the change to the facility letter as communicated to him by AIB, but it was perfectly reasonable that he could do so by means of LKS, rather than directly to the Lynch side with whom he had had no previous contact.” (p. 51)
Accordingly, that was a sufficient discharge of Matheson Ormsby Prentice’s duty in this regard. Finally, he concluded that Mr McLoughlin had not been negligent in specifying the 8th February as the deadline in order to concentrate minds since there was no reason to believe, and he had not been informed, that further time was required. (p. 52)
57 Finally, the trial judge considered the case against LK Shields. This was in many ways the most difficult of the cases, particularly in relation to the findings made by the trial judge in respect of the conversation between Mr McLoughlin and Mr Sulaiman, and Mr Sulaiman’s and Mr Gollogley’s communications with the Lynchs. He concluded that the involvement of LK Shields had moved into matters beyond simply the co-ownership agreement and that a relationship of proximity undoubtedly existed between the parties. However, referring to and relying on the judgment of Keane C.J. in Glencar Exploration p.l.c. v. Mayo County Council (No.2) [2002] 1 IR 84 (hereinafter “Glencar”) and adopting the observations of Brennan J. of the High Court of Australia in Council of the Shire of Sutherland v. Heyman [1985] 157 C.L.R. 424 (hereinafter “Shire of Sutherland”), and those of Lord Bridge in Caparo Industries p.l.c. v. Dickman [1990] 2 AC 605 (hereinafter “Caparo”), the trial judge considered that notwithstanding the existence of proximity and foreseeability, there remained a question as to whether it was just and reasonable that the duty of care owed by LK Shields to the plaintiffs on foot of their retainer should extend as far as the information and advice given in relation to the nature of the facility letter. He concluded that it was not just and reasonable to impose a duty of care upon LK Shields in the particular circumstances in this case. It was not reasonable to expect that Mr Sulaiman ought to have known that the advice which he gave was critical to make a decision to proceed or not and that in particular if the loan was a recourse loan the Lynchs would not proceed. Furthermore, he held that for the very same reason, it was not reasonably foreseeable that by acting upon the answer given, the plaintiffs would sign up to a facility the nature of which they were unwilling to accept, since LK Shields were kept in ignorance in that regard. Accordingly, the judge also dismissed the claim against LK Shields.
The Appeal
58 The plaintiffs appealed to this Court against the dismissal of their claims. The issues have been fully argued on this appeal by all the parties. In addition to resisting the plaintiffs’ appeal, LK Shields have also sought to challenge the conclusion that Mr Lynch had made a decision on the 7th February (and furthermore communicated such a conclusion) that he would not complete the transaction unless the loan was non-recourse not only to members of his family whom he had introduced into the transaction, but also to himself. The issues between the Lynchs and LK Shields are at the heart of this appeal and accordingly I propose to deal with them first and thereafter to consider the appeal against the dismissal of the claim against Matheson Ormsby Prentice, and finally to deal with the issues in relation to AIB.
59 The conviction of a trial judge who has had the opportunity of hearing and assessing the witnesses involved and the consequent argument over a 27 day period that in some general way it is not fair and reasonable that the firm of solicitors in this case should incur a liability potentially in the region €25 million and continuing interest, is something which is by no means irrelevant to the fair resolution of this case. The circumstances which appear to have influenced him were that the solicitors were introduced very late in the day on one small and specific aspect of the transaction (and their fees agreed on that limited basis) and that the particular question arose on the eve of the closing in circumstances where the clients’ instructions gave no possible hint that the answer was critical to the family’s involvement in the transaction. However, the trial judge’s conclusion here that as a matter of law, a solicitor acting for a client in relation to a transaction owes no duty of care in giving advice about the legal nature of a document then in draft form and intended to be part of the transaction, is more challenging.
60 In my opinion the trial judge was quite right to conclude that even though the relevant advice had been given on an occasion, and in relation to a matter outside the original retainer, there was sufficient proximity between the Lynchs and LK Shields to give rise to a duty of care, if all other requirements were satisfied. Similarly, it cannot seriously be doubted that if a duty of care arose, then the firm was in breach of that duty and negligent in advising that the alterations effected on the 7th February meant that the loan was non-recourse to all the borrowers. It is clear, therefore, that the plaintiffs’ claim against LK Shields failed because the trial judge considered that it was necessary to take at least one further step and establish that in addition to proximity and the lack of care, it would also be fair and reasonable to impose liability on the defendants. The finding that the damage was not foreseeable was based on essentially the same considerations.
61 I regret that I cannot agree with the trial judge’s approach to the issue of the existence of a duty of care in this case. The cases of Ward v. McMaster [1988] I.R. 337 and Glencar, particularly when set against the background, in other common law jurisdictions, of cases such as Donoghue v. Stevenson [1931] A.C. 562, Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465 (hereinafter “Hedley Byrne”), Home Office v. Dorset Yacht Co. Ltd. [1970] AC 1004, Anns v. Merton London Borough Council [1978] AC 728, the decision of the High Court of Australia in Shire of Sutherland and the later decision of the House of Lords in Caparo, are probably by now well known to every student of tort, indeed law students more generally, since the emergence of the neighbour principle in Donoghue v. Stevenson and its subsequent development and application is a favourite topic in introductory classes on legal systems and methods. Lord Atkin’s elegant and memorable speech in Donoghue v. Stevenson had the effect of suggesting that there was a single unifying principle which explained why liability arose not just in that famous case, but in other individual cases in which liability had been established in negligence. Thereafter, the question increasingly became whether those areas, where it had hitherto been thought no liability and no duty of care arose or which had not yet been the subject of any decided case, would also succumb to Lord Atkin’s unifying principle. Those were areas such as liability for statements rather than actions (Hedley Byrne), liability for public law actions of public authorities (East Suffolk Rivers Catchment Board v. Kent [1941] AC 74 and Anns v. Merton London Borough Council), liability for auditors of companies to third party investors (Caparo), pure economic loss cases (Caparo and Glencar), liability for nervous shock, and liability of builders and/or subcontractors to subsequent purchasers of buildings with whom they had no contractual relationship (Junior Books Ltd. v. Veitchi Co. Ltd. [1983] 1 AC 520), together with other favourite classroom examples such as the potential liability of rescuers.
62 In Anns v. Merton London Borough Council in the United Kingdom and Ward v. McMaster in this jurisdiction, the position appeared to have been reached where it was said that liability in negligence in such novel areas could be determined by the application of a two stage test. First, whether, if there was foreseeability of damage owing to the careless act there was sufficient proximity to the parties to establish a duty of care, and second, whether there were any possible policy considerations which should limit or negative the existence of the duty of care, albeit, as McCarthy J. observed in Ward v. McMaster, it would require powerful considerations of policy to deprive a plaintiff, who had suffered foreseeable damage as a result of the careless act of a sufficiently proximate wrongdoer, of the damages to which he or she would otherwise be entitled.
63 In later cases however, and put again perhaps too simply, there emerged a concern that this approach would give rise to a considerable extension of liability, and consequently cost, and make the tort of negligence the dominant vehicle for recovery in any civil action, which would threaten, if not obliterate, the other torts and even recovery in contract and quasi contract. The High Court of Australia in Shire of Sutherland pointed out that this approach gave rise to a significant risk of an approach which would result in a massive extension of a prima facie duty of care restrained only by some indefinable considerations of policy. This was important because a decision that a duty of care arose in any novel situation controlled not only the instant case, and all similar cases, but also influenced all those cases in which such a situation or some plausible analogy could be advanced, giving rise to a risk of liability which might have to be settled. Parties would have to seek insurance against such potential liability, and furthermore seek to recover that additional cost from their clients and customers, or risk claims and additional costs. In Shire of Sutherland, an alternative approach was mooted which was subsequently adopted both in the United Kingdom in Caparo and in this jurisdiction in the judgments in Glencar. That was where injury or damage was reasonably foreseeable, and there was sufficient proximity between the parties, a duty of care would nevertheless not arise in any such novel area unless the court considered that in all the circumstances it was just and reasonable that the law should impose a duty of care on the defendant.
64 In the landmark case of Glencar this court, through the medium of two comprehensive judgments by Keane C.J. and Fennelly J., with which the other members of the court agreed, reviewed and provided clear guidance in relation to some of the most troublesome areas of the modern law of torts. Thus, the judgments considered the law on the existence of a duty of care, the negligence liability of local authorities for failure to use discretionary powers, the tort of misfeasance of public office, the limits of the tort of breach of statutory duty, and the doctrine of legitimate expectations. In his judgment, Keane C.J. reviewed the development of the law on the existence of a duty of care starting with the famous speech of Lord Atkin in Donoghue v. Stevenson and that judgment’s treatment of the earlier decision of Lord Esher in Le Lievre v. Gould [1893] 1 Q.B. 491. The judgment then traces the development of the law of negligence in England and Ireland and concludes that the oft cited portion of the judgment of McCarthy J. in Ward v. McMaster, which appeared to endorse the approach taken by Lord Wilberforce in Anns v. Merton London Borough Council, could not be taken to be part of the ratio of the decision in Glencar and accordingly, could not be considered to foreclose further consideration of the underlying jurisprudence. Thereafter, in what has become the foundation stone of modern jurisprudence on the tort of negligence, Keane C.J. stated:
“There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and illusive test of “proximity” or “neighbourhood” can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J. at first instance in Ward v. McMaster [1985] IR 29, by Brennan J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 and by the House of Lords in Caparo plc. V. Dickman [1990] 2 AC 605. As Brennan J. pointed out, there is a significant risk that any other approach will result in what he called a ’massive extension of a prima facie duty of care restrained only by undefinable considerations …’” (p. 139)
65 To the casual observer it might appear that there is little difference between an approach which imposes liability where there is prima facie a duty of care unless considerations of policy negative the existence of such a duty, and one which imposes a duty of care only when there is sufficient proximity and considerations of policy make it just and reasonable that such a duty should exist. One approach might seem to be merely the negative image of another and to the mathematically minded, five minus two is exactly the same as one plus two. However, there is and has been in practice a very significant difference between the two which might be illustrated by this case. The formulation in Anns v. Merton London Borough Council and Ward v. McMaster of prima facie liability only negatived by considerations of policy loads the balance heavily in favour of finding liability. Furthermore, it tends to ensure that the general issue as to the existence of a duty of care in such circumstances will be addressed in the particular circumstances of the case and the question becomes, almost imperceptibly, whether a plaintiff who has now been found to have been injured by the carelessness of a person whose acts could foreseeably cause damage to the plaintiff, should nevertheless be deprived of damages.
66 Viewed in this way it is, I think, apparent that the judge’s conclusion that the firm of LK Shields owed no duty of care to Mr Lynch when advising as to the nature of the facility agreement because to impose a duty of care in such circumstances would not be just and reasonable cannot be maintained. First, this was not a novel area where liability was being asserted for the first time. The essential components of the plaintiffs’ claim were well established. It has been beyond controversy for more than half a century that an advisor may owe a duty of care when making statements which may be relied upon even if there is no contract or retainer covering the advice. It is also well established that a solicitor may owe a duty of care independent of contract, and indeed, owe a duty of care in respect of areas outside the original retainer. None of this is or was in controversy. Second, the just and reasonable test in Glencar is also essentially a policy consideration and it has been determined long ago that it is just and reasonable that a solicitor, or indeed any other professional advisor, should owe a duty of care in such circumstances. It is also important that the question must be approached at that level of abstraction. As Lord Browne-Wilkinson observed in Barrett v. Enfield London Borough Council [2001] 2 AC 550 (pp. 559-560);
“… the decision as to whether it is fair, just and reasonable to impose liability in negligence on a particular class of would-be defendants depends on weighing in the balance the total detriment to the public interest in all cases from holding such class liable in negligence as against the total loss to all would-be plaintiffs if they are not to have a cause of action in respect of the loss they have individually suffered. … Questions of public policy and the question whether it is fair and reasonable to impose liability in negligence are decided as questions of law. Once the decision is taken that, say, company auditors though liable to shareholders for negligent auditing are not liable to those proposing to invest in the company … that decision will apply to all future cases of the same kind. The decision does not depend on weighing the balance between the extent of the damage to the plaintiff and the damage to the public in each particular case.”
The test does not mandate or permit a consideration of each individual case and whether the imposition of a duty of care, and therefore liability, meets some undefined concept of fairness in the particular case. If that were so, then the law would be no more than the application of individual discretion in different facts or circumstances which might well be decided differently from court to court. In such circumstances, the law of negligence would be little more than the wilderness of single instances criticised by Tennyson.
67 If indeed it is necessary to consider afresh the question of policy then at the appropriate level of abstraction at which that issue must be addressed, it seems clear that the law has consistently and correctly held that an advisor such as a solicitor will owe a duty of care when giving advice to a client on an area within his or her expertise and where the request for the advice, and provision of it, is neither in casual circumstances nor entirely separate from the business then being transacted. It is not necessary that a client make very clear that the advice is critical to any decision which he or she might make, or that it be the sole or decisive factor. The obligation of a professional person is to give advice some of which may be unwelcome. Clients may be slow to appreciate advice, which they are paying for, but which warns them against a course of action which they wish to follow. The practice of law and other professions have developed considerably, and in many cases for the better, but there can be strong pressures on lawyers and other advisors to take a “commercial” view of matters, and to bring only the good news to a client. It remains very important that advisors give independent advice which, in an appropriate case, may counsel caution. The obligation to give independent and professional advice which is important not just to clients but to society more generally, is reinforced if solicitors and other advisors understand that they have a duty to be careful in the content of the advice which they give to clients. Looked at in reverse, it would be a strange and surely undesirable outcome if it were to be determined that when in the course of a transaction a bank, having been itself advised by its own solicitor, makes changes to a facility letter which may expose individual members of a family to a liability of €25 million, those clients who are paying two firms of solicitors to represent them in the transaction, are not owed any duty of care by either firm in respect of that change. Furthermore if owed no duty of care it would follow that even if advice is given to them by their own solicitors, they cannot complain when it transpires that such advice is clearly incorrect, even if they rely on that advice to their detriment and suffer substantial, even ruinous, loss.
68 As the trial judge recognised, his analysis of foreseeability relies entirely on the same factors which led to his conclusion on the question of the fairness and reasonableness of the existence of a duty of care. It is, in my view, subject to the same frailties. The question of foreseeability must be addressed at a general level. Is it foreseeable that when advice is given in the context of a transaction and is incorrect, a person to whom that advice is given will suffer damage? Put in this way the question answers itself. The purpose of legal advice when it is sought and given is so that a client can factor that advice into decisions which he or she may take. If that advice is incorrect, it is plainly foreseeable that the client may suffer damage. The trial judge was clearly influenced by the limited retainer which the firm had, and the fact that they were involved late in the day, and perhaps most particularly, the fact that the Lynch family gave no hint as to the overwhelming significance which they now claim to have attached to the question of the recourse of the loans. These are important factors in the case more generally, but they are not decisive on the question of foreseeability. If, for example, there were no issue of the scope of the retainer, and LK Shields had plainly been retained to negotiate and advise upon the facility letter and had given incorrect advice that the loan was now non-recourse, it could scarcely be argued that damage was not foreseeable. Accordingly, the conclusion that the firm owed no duty of care to the Lynch family and Mr Lynch when giving advice as to the nature of the facility letter cannot stand and must be set aside.
69 The setting aside of the finding that the firm owed no duty of care to the plaintiffs in respect of the advice does not mean that the trial judge’s strong conviction that it would be unfair to impose liability in full or in part upon the firm in the context of this transaction is by any means irrelevant to the proper resolution of the case. On the contrary, the conclusion of an experienced trial judge who had the merit of observing the parties over an extended period of time in the setting of a trial, are of considerable value. But they may be more relevant to the question of reliance in fact, and therefore causation, and contributory negligence, as indeed the judge himself observed, than the legal issue of the duty of care.
The Cross Appeal by LK Shields
70 These matters are also of some relevance to the related question of the cross-appeal by LK Shields against the judge’s finding, at p. 59, that Mr Lynch made a last minute decision while at Heathrow Airport on the 7th February not to proceed with the transaction unless the loan was non-recourse to everybody. This finding is essential to any conclusion that the Lynch family relied on the incorrect statements as to the nature of the loan.
71 In this regard LK Shields submit that the court’s determination is inconsistent with the primary fact as found by the courts. In so contending, it is emphasised that in this regard the court is not being asked to revisit, in the words of Henchy J. in Northern Bank Finance v. Charlton [1979] I.R. 149 (hereinafter “Northern Bank”) a “choice of alternatives arising out of divergent oral testimony” (p. 192). Instead it is suggested that the conclusion is one of secondary fact arrived at by consideration of the primary facts found. In the alternative, LK Shields also submit that if the finding was treated as one of primary fact there was no credible evidence to support it.
72 At the outset it should be observed that the relevant conclusion was arrived at in a context in which the court had held that LK Shields owed no duty of care in this regard to the plaintiffs, and accordingly the finding as to Mr Lynch’s decision had no direct legal consequences. Now however, it becomes particularly important to scrutinise this conclusion with considerable care.
73 By every known standard for the testing of oral evidence, the assertion that Philip Lynch made this last minute decision at Heathrow must rank as highly implausible and therefore one which would require careful analysis and justification before it should be accepted by this Court. The only people to whom this decision appears to have been communicated, and who gave evidence supporting its existence, were Mr Lynch’s daughter, Judith Whelan (herself a plaintiff in these proceedings) and his close associate, Mr Robert Burns. It is suggested that the decision was communicated by Mr Lynch to Mr Conor Gunne, Mr Conlan’s associate, but neither he nor anyone on the Conlon side was called to give evidence. Even on this account it is not asserted that there is a single document recording the existence of this decision. Indeed, documentary support for the suggestion that the Lynch family always believed the loan to be non-recourse is itself extremely sparse.
74 Even if there was no contradictory evidence, the assertion in oral testimony of the existence of this last minute decision would have to be tested against the known factual background and context. It should be remembered that what it is argued Mr Lynch decided was not merely to reject a loan advanced to him upon terms he found unacceptable. Instead, the decision alleged to have been made was not to proceed with the entire transaction including the purchase of the lands which was something that could have had very significant legal and commercial consequences. As far as Mr Lynch, Ms Whelan and Mr Burns knew, Mr Lynch not only agreed to buy the lands, but had advanced €2.5 million as his share of the deposit. The transaction was one in which the vendors had served a notice to complete which the Lynch party believed would expire on the following day. Much argument has been addressed, both in the High Court and this Court, to the question of whether, as a matter of law, Mr Lynch was legally bound to complete the transaction. But this is perhaps beside the point. What is relevant is what the Lynch party knew and understood on the 7th February and the central feature of this case is that they did not seek or obtain elaborate legal advice on any aspect of this transaction. They had no advice that they were free to withdraw from the transaction. Thus as far as the three relevant actors, Mr Lynch, Ms Whelan and Mr Burns were concerned, Mr Lynch’s last minute decision put him, and his family, at risk not only of failing to secure a transaction which they considered highly advantageous, but also, of the loss of the deposit of €2.5 million and the possible exposure to further litigation. Even if the legal consequences were not considered by Mr Lynch, the decision could have had significant commercial and personal consequences since it threatened to scupper a transaction into which Mr Lynch had entered with Mr Conlan, a businessman held in high regard by Mr Lynch and with whom he had a good relationship. As we now know, and indeed as the Lynch plaintiffs emphasise, Mr Conlan was overextended with AIB and therefore unlikely to be able to finance the transaction on his own. It is particularly unlikely therefore that the Conlan side would have received news of Mr Lynch’s last minute decision with equanimity if communicated, as alleged. LK Shields argue that it is very unlikely in the context that Mr Lynch would have made the decision which he alleges, but that if he did, and it was communicated, it is difficult to accept that such a decision would not have created shockwaves reverberating through the different offices engaged in the transaction and leaving clear evidence of its existence.
75 It is also argued that the action, and relative inaction, of the relevant parties is incompatible with the alleged decision. Given the background just discussed, it seems inconceivable that Mr Lynch’s last minute decision, if it was made and communicated, would not have provoked a flurry of activity on all sides. Not only did this not occur, but when Ms Whelan actually received a copy of the penultimate draft of the facility letter providing for full recourse against Philip Lynch, she did nothing. The trial judge observed that he found it “extraordinary that she did nothing, if, as she and Mr Lynch say, a decision had been taken that day that if the loan was to be recourse they would not be proceeding.” In addition to this eloquent lack of activity there is of course the conversation recorded by Mr Sulaiman with Mr Burns at 18:05 on the 7th February after the flight from Heathrow. The trial judge accepted the accuracy of Mr Sulaiman’s note which contained the passage: “re possibility of Goodbody’s/bank wanting the joint/several clause to apply to both Gerry, Philip and all the Lynchs, Rob felt this wouldn’t be a problem”. It might also be observed that this note was broadly consistent with the prior correspondence from Mr Burns, itself inconsistent with any fixed position or indeed belief on the part of the Lynch side that the loans were to be non-recourse. Mr Burns’s position in the transaction is particularly important because whatever might be said about a very successful businessman who did not trouble himself with detail (which the judge considered Mr Lynch to be), or a family member only recently taking up a position (in the case of Ms Whelan), Mr Burns’s function was precisely to attend to all those details with which Mr Lynch did not concern himself. It was the essence of his position to be aware of the nature and detail of the transaction and the position of the Lynchs in relation to it.
76 By the same token it is difficult to accept that if the last minute decision had been made and communicated by Mr Lynch, the apparent compliance with that condition communicated by LK Shields on the 7th and 8th would not have received greater notice and attention than it did. On the Lynchs’ case, the entire deal was in jeopardy once Mr Lynch made his decision at Heathrow. But there is no evidence of the type of reaction which might be expected. Instead everything proceeded as normal towards closing. Draw down of the loan was requested and Ms Whelan spent the morning on a lengthy circuit of Dublin and surrounding counties picking up powers of attorney from her mother and siblings to allow the transaction to be closed. When Mr Sulaiman sent his email, it was not greeted with relief and celebration. Indeed as already observed there is scant evidence that it was communicated to Ms Whelan, or Mr Lynch, and none that it was discussed with the other members of the family.
77 LK Shields are entitled to point to all of these matters as very significant and indeed powerful. But the most obvious and telling feature militating against the conclusion that Mr Lynch did in fact make a last minute decision on the 7th February is the trial judge’s conclusion at p. 32, itself amply justified by the evidence, that Mr Lynch’s own recollection of exactly what he said on that afternoon was “hopelessly unreliable”. Again, in relation to the alleged phone call with Mr Gunne to tell him that he would not proceed unless the loan was non-recourse, the judge considered that Mr Lynch’s recollection was “hopelessly confused and unreliable”. The finding on p. 59 that, on balance, a decision was made on the 7th February is accordingly unsupported by any independent evidence, contrary to all the objective evidence and the factual context, and relies upon the evidence of a witness which in that specific context is regarded as hopelessly unreliable. In the circumstances of this case, it would be an injustice if LK Shields were bound by the finding made at p. 59.
78 This unusual case falls therefore within that category of case contemplated by Henchy J. in Northern Bank, pp. 191-192, as follows:
“The court of appeal will only set aside a finding of fact based on one version of the evidence when, on taking a conspectus of the evidence as a whole, oral and otherwise, it appears to the court that, notwithstanding the advantages which the tribunal of fact in seeing and hearing the witnesses, the version of the evidence which was acted on could not reasonably be correct. For example, if the question of fact was whether a defendant was driving on his correct side of the road at the time of the collision and, out of a welter of conflicting oral testimony on the point, the judge (or the jury, as the case may be) expressly or by implication accept the defendant’s version to the effect that his vehicle was on its correct side of the road at the time of the collision, then in that event a court of appeal will normally hold itself to be debarred from rejecting that finding of fact on the ground that its fact-finding capacity in relation to conflicting oral testimony cannot be equated with that of the trial judge (or jury) who heard and saw the witnesses. If, however, on a review of all the evidence, it appears from uncontroverted evidence as to tyre marks or glass or mud or the road that the defendant’s evidence (that his vehicle was on its correct side of the road) could not be correct, the court of appeal will feel free to reject the finding of fact to that effect.”
Here, if anything, the position is stronger. While the state of a man’s mind is a matter of fact to be proved like any other, proof of a state of mind is always inferential. It is deduced from something else, such as the statement of the person and his or her actions. This is not a question of a conflict of oral evidence of perception as to whether certain matters occurred. In this case it is more a matter of evaluation and deduction from the evidence as to the state of Mr Lynch’s mind and in particular whether he had made a decision not to enter the transaction unless the loan was non recourse. While the trial judge made reference to observing Mr Lynch while giving evidence, that cannot overcome the contrary objective evidence. As Lord Atkin observed in Société d’Avances Commerciales (Société Anonyme Egyptienne) v. Merchants’ Marine Insurance Co. [1924] 20 Lloyd’s Rep. 140 (p. 152) “an ounce of intrinsic merit or demerit in the evidence, … is worth pounds of demeanour”. To adapt the example given by Henchy J. in Northern Bank, not only was all the objective evidence to be found on one side of the line, but the contrary oral testimony was found to be hopelessly unreliable. In the circumstances, this finding cannot be sustained and must be set aside. This means that notwithstanding the conclusion that the solicitors owed a duty of care to the Lynch family in relation to the facility letter, and were negligent, the claim based as it was squarely on the decision to enter the loan must fail since there was no reliance on the advice, and therefore any damage suffered was not caused by the error of the solicitors.
79 For completeness I should say that I do not lose sight of the point made in argument on this appeal that there are a number of alternative theories and scenarios under which LK Shields might be liable to the Lynchs even if it were not accepted that a decision had been made on the 7th February or communicated through the relevant parties. For example, it might have been suggested that the concern of Mr Lynch, and of the Lynch family generally, was that the loan should be non-recourse only to those family members who were being introduced simply for the purposes of benefiting from the investment. Furthermore, it was suggested that even if the Lynchs did not rely in any serious way upon Mr Sulaiman’s characterisation of the loan when they entered it, they may have done so thereafter and in particular when in 2009 they decided not to accept a renewal of the loan on terms that there would be recourse to Mr Lynch. However, the issue of the conviction of Mr Lynch (and by extension Ms Whelan and the other members of his family) that they would not enter any loan agreement which provided for any recourse against anyone and furthermore only entered this agreement on the faith of Mr Sulaiman’s assurance that the loan was non-recourse, is central to this case, and not least, to the credibility of the relevant parties. This was in fact the only case pleaded. It was the case made with considerable force and skill in the hearing in the High Court. The observations of this Court in Vesey v. Bus Éireann [2001] 4 I.R. 192 and Shelley-Morris v. Bus Átha Cliath [2002] IESC 74 and [2003] IESC 2 to the effect that it is not for the court to disentangle a case made by a party or to hypothesise the best case the plaintiffs might have made, and furthermore, that a loss of credibility on one issue may make it difficult or impossible to accept the parties account on other issues, are as relevant in this context as in the field of less complex personal injuries actions. The outcome of this case is that LK Shields did owe a duty of care to the plaintiffs when interpreting the facility letter, and were in breach of that duty when Mr Sulaiman was wrong in informing Ms Burdon that the bank no longer required recourse against the Lynch family, Mr Lynch or Mr Conlan, but no reliance was placed on that error in entering the agreement and accordingly it was not the cause of damage to the Lynchs. Their loss was caused if anything by a combination of the collapse in the property market and by the fact that while it was their constant advice for almost a year that to minimise tax the individual members of the Lynch family should be borrowers, little or no attention was paid to the terms on which that borrowing was to be provided.
The Case Against Matheson Ormsby Prentice
80 The plaintiffs made a number of cases against Matheson Ormsby Prentice. First, they contended that in so much as Mr McLoughlin gave inaccurate and incorrect information to Mr Sulaiman on the evening of the 7th February 2007, Matheson Ormsby Prentice were liable for negligent statements. That argument failed with the trial judge’s finding that Mr McLoughlin had not misrepresented anything to Mr Sulaiman and that on balance it was probable that Mr Sulaiman misunderstood what was communicated to him, and it was not pursued on this appeal.
81 The complaint made by the plaintiffs that Matheson Ormsby Prentice are liable to them by virtue of the fact that Mr McLoughlin misrepresented the closing date can also be disposed reasonably easily. It is perhaps understandable why Mr McLoughlin might take this course. This was a multi-party transaction which involved the agreement of Mr Conlan, Mr Lynch, the extended Lynch family, and also the securing and agreement of finance. There was an absolute deadline created by the service of the notice to complete. Deadlines such as one created by a notice phrased in terms of a number of days from the date of the notice are notoriously difficult and create a real possibility of either a miscalculation, or worse, terminal procrastination on the part of one party to the transaction leading to collapse of the transaction for everyone, and recrimination if not litigation. There are perhaps circumstances therefore in which a competent solicitor might seek to protect the clients and parties from themselves by setting an earlier deadline. That is not to say that in doing so he may not take a risk. In this case however the trial judge found that there was no suggestion in the evidence that given more time any greater attention would have been paid to the question of the facility letter or to Mr Lynch’s decision. The problem was not the closing date, but rather the brinkmanship involved in a last minute decision.
82 Of rather greater substance is the plaintiffs’ contention that since they were clients of Matheson Ormsby Prentice (and ultimately paid half of Matheson Ormsby Prentice’s bill) that firm owed to them a duty of care, so that when the terms of the facility letter changed late on the 7th February, and that change communicated to Matheson Ormsby Prentice, that firm should have apprised its clients of the fact of that change and its legal consequences. This argument, it should be said, can only truly apply in the case of the members of the extended Lynch family. As far as Matheson Ormsby Prentice were concerned the terms of the facility letter always provided for recourse to Mr Lynch (and Mr Conlan). In the case of the extended Lynch family however, they had become parties to the transaction (and therefore clients of Matheson Ormsby Prentice at least as far as the conveyancing was concerned) and shortly thereafter the terms of the facility letter were changed for reasons explained to Mr McLoughlin, and in circumstances where the new facility letter was sent to him for onward transmission to his clients. In those circumstances it is said that he had a duty to alert the Lynchs either directly or through their agent, LK Shields, to the change of the facility letter and its consequences.
83 The trial judge dealt with this issue at pp. 48-49 of the judgment as follows:
“It is submitted also by the plaintiffs that by not communicating directly with the Lynchs on the evening of the 7th February 2007 about the fact that Mr O’Shea had removed the recourse clause completely, and instead contacted LKS in that regard, MOP acted negligently in breach of their duty of care which is submitted to have extended to ensuring that the Lynch side fully understood that by the removal of that clause all the Lynch family members were becoming liable for the amount of the loan. That submission was made by [counsel for the plaintiff] even though he acknowledged at the time that Judith Whelan has stated that they regarded LKS as their solicitors for the purpose of advice in relation to the financial aspects of the transaction.
I have no difficulty in accepting that a solicitor’s duty of care to his/her client may in some circumstances extend beyond the specific terms of the initial retainer in certain circumstances. If, for example, it was established in the present case that Mr O’Shea had informed Mr McLoughlin that this recourse clause was being removed in order to change the facility from a non-recourse loan to a full recourse loan, and if Mr McLoughlin was aware, or ought to have known, that this was a matter of importance to the Lynch side, he would be negligent if he failed to communicate that information to the Lynchs, either through LKS or to the Lynchs directly, or at least at latest at the closing of the transaction itself, even though MOP’s specific retainer did not extend that far.
It might be negligent also if Mr McLoughlin had known or believed that until this change was made the facility was a non-recourse loan, and even in the absence of being specifically told by Mr O’Shea of the purpose of the change to the facility letter, he nevertheless believed that as a matter of law the change was altering the nature of the loan to recourse, and he failed to communicate that view to his clients even where he had not been retained in relation to giving advices in relation to financing aspects of the transaction, since it would be reasonable for him to appreciate that his clients needed to know.
But in the present case the facility was at all times a recourse loan. The change effected to the facility letter did not alter this as a matter of law, and nobody on the Lynch side had told MOP that only a non-recourse loan would suffice.”
84 The first paragraph quoted above with the omission of the clause “if Mr McLoughlin was aware, or ought to have known, that this was a matter of importance to the Lynch side” accurately states the duty of a solicitor in such circumstances. In my view however the subclause is not a requirement of the law of negligence. It is not necessary for a duty of care to arise that the solicitor must have been aware that this was a matter of importance to the Lynch side in the circumstances of this case. On one view, and indeed the assumption on which the case is conducted, the change was one which meant that there would now be recourse to the members of the extended Lynch family where previously that had not been intended or provided. This was self-evidently a matter both of commercial and legal significance, and therefore something which it was a solicitor’s duty to communicate, whether or not there had been any prior communication indicating that it was a matter of particular importance to the Lynch side. Furthermore, it does not appear to me that the case can be resolved as simply as suggested by this passage in the High Court judgment. It does not appear correct to say, at least as regards the members of the Lynch family who had been added to the transaction, that the facility was at all times a recourse loan. The assumption upon which the case and this appeal proceeded was that until the facility letter was changed the format then in use gave rise, at the very least, to a strong argument that the loan was non-recourse against the Lynch family members. Thus even on this view, the change to the facility letter did alter its nature as a matter of law from being one where it was at least arguable that it was non-recourse, to one where that was unarguable. I would observe further that all the relevant parties at the time acted on the assumption that the effect of the change was indeed to alter the legal status of the agreement. That is, after all, why Mr Roberts of A & L Goodbody twice gave advice to Mr O’Shea. Accordingly if, therefore, the change made to the facility letter affected somebody who was unambiguously Mr McLoughlin’s client (for example Mr Conlan) then there can be no doubt in my view that as his solicitor he would have been under a duty to bring the matter to his attention.
85 However, the circumstances here are somewhat different. While two firms of solicitors were involved and acting on the Lynchs’ behalf, the fact is that there was nobody who had overall responsibility to advise the Lynchs as to the nature of the transaction. That was as a result of the deliberate decision of Mr Lynch (and through him, his extended family) to share the cost of retaining Matheson Ormsby Prentice for conveyancing and to retain LK Shields for the limited purpose (and cost) of advising on the co-ownership agreement. Even so there is no doubt that as a transaction proceeds and develops, a solicitor may incur a duty of care that extends beyond the strict terms of his or her retainer. It has already been held that this is what happened here in the case of LK Shields but it becomes important, and indeed critical, to consider whether Matheson Ormsby Prentice incurred a duty of care to the Lynchs in this specific respect.
86 A duty of care arises because of the proximity to the parties. That proximity is created in part by the existing legal and factual relationship of the parties. Here, when the facility letter was introduced into the transaction, and with it the possible extension of the duty of care, there were however two firms of solicitors involved. LK Shields were understood by the Lynchs, and indeed referred to by the other parties, as representing the Lynchs’ interests in the transaction. The possibility of involvement of the Lynch family members had only arisen as far as Matheson Ormsby Prentice were concerned, at a very late stage in the transaction. It seems to me that when changes arose in relation to those individuals, Matheson Ormsby Prentice were entitled as a matter of law to do what they, and everyone else, did as a matter of fact, which was to treat LK Shields as acting for the Lynchs in respect of those additional matters. Thus, by passing on the information to LK Shields, Matheson Ormsby Prentice satisfied any duty which lay upon them. I do not think it can be plausibly said that they had a duty to bring the change to the attention of the Lynchs either directly or indirectly through LK Shields, so long as the basic information was provided which would allow LK Shields to give information and advice. That was done, and the problem here arises because the advice then given was wrong. Of course, it is quite possible that Mr McLoughlin, in informing Mr Sulaiman of the changes being made and the reasons for them, might have observed that this would make the extended Lynch family liable for the loan. If he had done so, it is possible that Mr Sulaiman or Mr Gollogley might have scrutinised the matter more carefully and therefore not have given the fateful assurance to the Lynch family. The fact that this could have happened is however only one of the regrettable twists and turns of this unfortunate case, but does not mean that Matheson Ormsby Prentice were under a duty to make it happen.
The Case Against Allied Irish Bank
87 The case challenging the judgment granted in favour of AIB against all plaintiffs depends largely on some procedural skirmishing which occurred at the close of the plaintiffs’ case. Looked at realistically, the plaintiffs’ claim against AIB was always one with remote prospects of success. Once it was determined that the loan and facility letter, whether on their own or together with the mortgage entered into by all the plaintiffs, did indeed create a joint and several liability on the borrowers to repay, it would follow almost as of course that since the borrowers had not repaid the loan, it would be due, together with all accrued interest. The real claim of the plaintiffs if their evidence was accepted, was then against those who had either failed to advise them, or advised them wrongly, as to the nature of the loan, and it would have been an understandable strategy to seek to forestall any judgment in favour of AIB until such time as they might succeed in obtaining either full or partial indemnity from their professional advisors.
88 At the close of the plaintiffs’ case, counsel for AIB announced that the bank would not be going into evidence, but would seek to rely on other evidence adduced on behalf of the other defendants in their defence. This had the consequence that Mr O’Shea who had made the critical alterations to the facility letter, and in doing so had not followed the format proposed by the solicitors to AIB, would not give evidence. He could not be cross-examined by the plaintiffs either to seek to explore matters which might give rise to some defence against the AIB claim, or perhaps simply to strengthen the plaintiffs’ claim against the other defendants.
89 There are obviously consequences when a decision is made not to call any witnesses. In the first place it was open to the plaintiffs to introduce the witness statement and/or any affidavit sworn on behalf of AIB and comment upon the matters contained therein. Second, it was open to the plaintiffs to invite the court to draw inferences from the absence of the particular witness. However, the plaintiff understandably preferred to have the opportunity of cross-examining a witness and their counter-move was impressive, at least at the practical level at which the forensic struggle was taking place. Counsel for the plaintiffs responded to the AIB move by then contending that since the bank was not going to go into evidence it was not in a position to prove its counter-claim for €25 million together with interest, which accordingly should be dismissed. There was some debate then as to whether the plaintiffs had acknowledged the amount due in their evidence and the trial judge, correctly in my view, held that the relevant exchanges did not amount to any sufficient acknowledgement. However he also ruled that the structure of the case was one which had commenced by way of summary proceedings brought by AIB in respect of the debt, which proceedings had been stayed pending the outcome of the claim which represented the plaintiffs’ only defence, such as it was, to the AIB claim. Accordingly, if the plaintiffs’ claim against the bank failed then the bank would be entitled to adduce formal proof of the debt.
90 On this appeal the plaintiffs made two points. First, it was said that a party’s failure to call an available witness could in an appropriate circumstance permit the court to draw inferences from that failure against the party so deciding. This at least in general terms was common case, and had been established relatively recently and authoritatively in the High Court judgment of Laffoy J. in Fyffes p.l.c. v. DCC p.l.c. [2009] 2 IR 417 (p. 507) (hereinafter “Fyffes”).
91 At the outset I should say that I deprecate the fashion of referring to the “drawing of an inference” in the abstract as if it was an end in itself, akin to the deduction or addition of points which might or might not alter the result of a game. The drawing of an inference in this context, as indeed in any other, is an exercise in logic: when one party asserts a given set of affairs, which the identified witnesses available to the other party could be expected to rebut if untrue, then, if the second party does not call those witnesses to give evidence, the court may draw the inference in support of the case made by the first party, that those witnesses were not called to give such evidence because they would not in fact rebut the case made by the first party. Each case therefore, involves a consideration of the specific inference which the court is invited to draw. The position is well put in two authorities relied on by the bank in this regard. In McQueen v. Great Western Railway Company (1874 – 75) L.R. 10 Q.B. 569 Cockburn L.J. said:
“If a prima facie case is made out, capable of being displaced, and if the party against whom it is established might by calling particular witnesses and producing particular evidence displace that prima facie case, and he omits to adduce that evidence, then the inference fairly arises, as a matter of inference for the jury and not as a matter of legal presumption, that the absence of that evidence is to be accounted for by the fact that even if it were adduced it would not disprove the prima facie case. But that always presupposes that a prima facie case has been established; and unless we can see our way clearly to the conclusion that a prima facie has been established, the omission to call witnesses who might have been called on the part of the defendants amounts to nothing.” (para. 574)
In Wisniewski v. Central Manchester Health Authority [1998] PIQR P324, Brooke L.J. set out four applicable principles which were adopted in this jurisdiction in Fyffes:
“(1) In certain circumstances a court may be entitled to draw inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.
(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to drawn the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reasons for the witness’s absence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.” (p. 340)
92 In this case, it is important to identify the inference which the plaintiffs invited the High Court, and now this Court, to draw. Having conducted a careful analysis of the sequence of correspondence and phone calls, and particularly the statement of evidence of Mr O’Shea, counsel for the plaintiffs contended that the Conlan side through Mr Gunne, having been alerted by Mr Lynch of his fixed intention not to enter the transaction if the loan was non-recourse, became alarmed and informed the bank. The bank in turn, being overextended to Mr Conlan, and, it is suggested, needing Mr Lynch in the deal, decided in the person of Mr O’Shea to alter the facility letter in such a way as to mislead the Lynchs into believing the loan was indeed a non-recourse loan. In effect the court was asked to disbelieve the account given in Mr O’Shea’s witness statement of responding to Mr Godsil’s light-hearted comments and infer instead, in the words of the plaintiffs’ submissions, “that what, in fact, happened was that the Conlan camp intervened with AIB in a way that led AIB to change the facility letter so that the extent of recourse against the Lynch family (including Philip Lynch) was deliberately and consciously obscured”.
93 There are a number of difficulties with this conspiracy theory. The first, and perhaps most fundamental, is that it amounts to an allegation of deliberate misconduct amounting to fraud which was not pleaded. For well over a century these courts have been astute to require that when any such allegation of deliberate misconduct is made it must be specifically pleaded and fully particularised, and that evidence led should not stray outside that case. To permit a rolling inquiry which changes as a case develops is in itself a form of injustice. While it may be difficult, even with the tools available to the modern litigant, to prove deliberate misconduct, and while cases can change when witnesses give evidence, the requirement that deliberate wrongdoing be properly pleaded and particularised should be adhered to, even if that necessitates applications to amend pleadings in the course of the trial. That is itself an important and fundamental aspect of the just resolution of disputes.
94 Here, that course was not followed and for good reason. No case of such deliberate wrongdoing was pleaded or made. Therefore, applying the test set out in the dicta above, there certainly was no prima facie evidence of the deliberate misconduct which the plaintiffs invited the court to infer from the absence of Mr O’Shea. The only inference that could be properly drawn from the decision not to call Mr O’Shea (or any other evidence) was that the advisors to AIB considered (correctly as it transpired) that the plaintiffs had not established any case, prima facie or otherwise, against it. Accordingly the High Court was correct not to draw the inference suggested on behalf the plaintiffs
95 The second point made by the plaintiffs relates to the fact that the bank was not required to call a witness, and in particular Mr O’Shea, to prove the counter-claim. I would have a little more sympathy with this point if it was directed to ensuring that Mr O’Shea gave evidence in the trial, and was cross-examined as to the plaintiffs’ claims. However, the plaintiffs asserted, and now maintain, that the consequence of the decisions made at the close of the plaintiffs’ case was that no evidence could be adduced on the defendants’ counter-claim which accordingly should be dismissed, that the bank should be at the loss of €25 million plus interest advanced to the Lynchs, and which was, in the absence of some substantive defence, clearly due by them. This would be to bring the school yard, game playing aspect of litigation to new heights. In my view it might perhaps have been helpful if the skirmishing about evidence had the result that Mr O’Shea did indeed give evidence and was cross-examined. The bank was entitled to pursue its own practical best advantage, but from the point of view of the litigation as a whole it might have been preferable, and have avoided the more exotic conspiracy theorising, if as much of the evidence as was available was adduced. But this was a practical rather than a legal issue, and not something which can give rise to any criticism of the trial still less a ground of appeal.
96 In relation to the argument now advanced on behalf of the plaintiffs that the counterclaim should have been dismissed, it is in my view without any substance. The only question was the manner in which the bank should seek to formally prove its debt. As it happened, we are informed that no witness addressed this issue in any witness statement, presumably because the whole posture of the case was one in which the plaintiffs’ case was the substance of any defence or claim to indemnity it may have had in respect of the bank’s claim. It was well within the discretion of the trial judge to direct that the trial would proceed, and that if at the conclusion thereof it was established that the plaintiffs failed, the bank would be permitted to prove its loss. The bank was clearly entitled to choose whatever witness it wished to prove that formal debt and the plaintiffs could not demand that it be proved by Mr O’Shea.
97 One of the many difficulties for the plaintiffs in this regard was that they only raised this point for indirect advantage. They never had any capacity to deny or challenge the quantum of the debt and they only raised the point as a way of attempting to force the bank to call a particular witness. That ploy might have succeeded and they are not to be faulted for trying. Once it failed however there is in my view no substance to the contention that it was wrong to permit the bank to prove its loss. Indeed if the court had dismissed the bank’s claim and notwithstanding the bank’s willingness to call evidence, it would have been plainly wrong. Once it is accepted that the court was right to permit evidence to be given, nothing turns on the format of that evidence. As the bank points out, the plaintiffs had not filed a defence to the counterclaim and technically the bank was entitled to proceed for judgment in default. Furthermore, the plaintiffs did not seek to cross-examine in relation to the evidence of debt, as it would have been entitled, no doubt for the reason that there was never a dispute about the amount. Therefore the fact that the evidence was given by affidavit is of no significance. I would accordingly dismiss this ground of appeal.
98 In my view it follows that Mr Philip Lynch in particular had no basis for seeking to resist the bank’s claim for judgment, and consequently no basis for succeeding against the bank on this appeal. Accordingly I would dismiss his appeal in this regard and affirm the judgment of the High Court against him. I have been troubled however by an aspect of the case which was not to the forefront of the argument either in the High Court, or in this Court, largely because of the fact that the Lynch plaintiffs did not distinguish in any way between the position of Mr Lynch and the broader Lynch family. All of them, it was said, required non-recourse borrowing, and none of them would have entered the transaction otherwise. Apart from the credibility issues that this gives rise to, there is also the fact that there is, and was, a significant difference between the position of Mr Philip Lynch and the position of his wife and children. Mr Lynch was always a party to this transaction and he was the person to whom it was brought. It would not have been possible without his significant wealth and the bank, it appears, was at all times happy to provide funding for the transaction on the basis of Mr Lynch’s substantial net worth. When Mrs Lynch and the Lynch children were introduced into the transaction it was for Mr Lynch’s own, understandable, private wealth management purposes. The bank had no interest in those parties, and their addition to the transaction neither created additional risk for the bank, nor provided any additional security in terms of repayment. Indeed for that reason, all the drafts until the final draft on the 7th February provided for recourse to Mr Conlan and Mr Lynch only, and Mr Roberts’s correspondence with Mr O’Shea establishes that from a commercial point of view, the bank was focussed only on the possibility of recovery from them. There is also the fact that when in 2009 AIB offered further facilities it was once again formulated in terms in which there would be recourse to Mr Lynch alone. The position is that the extended members of the family were introduced into the transaction and indeed the loan, at a very late stage. At the last minute a change was made by the bank which was capable of causing confusion, and did, and which had the effect of exposing these individuals whose net worth may have been, in relative terms, limited, to the possibility which transpired in the High Court, of a potential individual liability in excess of €25 million.
99 It might not be unduly harsh to conclude that persons who stood to gain very significant amounts of wealth for little risk, skill or indeed involvement, do not deserve particular sympathy if the transaction turns unexpectedly sour and the undeserved profit turns into an undeserved liability. Harsher things have been suffered by many individuals in recent years. It must also be recognised that the key feature which gave rise to the potential liability of the Lynch family members was the tax driven requirement that not only should they be parties to the land transaction, but should also be treated as borrowers. It was the failure to address or appreciate the legal consequence of this step in the transaction which exposed the Lynch family members to liability on the loan in the first place. Nevertheless the fact is that these individuals whose net worth may be limited now face a potentially ruinous personal liability of which they were not advised, and which the bank never sought or relied upon at least from a commercial perspective and only obtained in order to facilitate the enforcement against the principal borrowers. In those circumstances there may be a residual question whether in all the very particular circumstances of this case, it would be equitable to permit the bank to enforce its legal claim against the wider members of the Lynch family, or at least to do so without having first pursued execution against the principal borrowers including Mr Lynch. I would accordingly, and to this limited extent, set aside the judgment obtained by the bank against the first, second, fourth, fifth and sixth named plaintiffs. It will be a matter for the parties if there is any merit on either side in pursuing the issue further.
100 In the circumstances I would dismiss the appeals of the appellants save that I would allow the appeal of the first, second, fourth, fifth and sixth plaintiff against the Bank to the extent indicated above.
Walsh v Jones Lang Lasalle Ltd
[2017] IESC 38
Judgment of O’Donnell J. delivered on the 1st June of 2017
1 The evidence in this case in the High Court was brief indeed. Unusually, it was presented to this Court not in a verbatim transcript, but in a comprehensive, agreed note prepared by junior counsel. This may be simply happenstance, or it may be an indication that the parties did not consider the case to be of particular importance, or to have merited the extended consideration which it has received. The note is, however, concise but comprehensive, and allows the legal issues to be placed in context. After a two-day hearing in November, 2006, the High Court delivered judgment in January, 2007 ([2007] IEHC 28), awarding the plaintiff, a property investor, €350,000 in damages in respect of a negligent misstatement in particulars contained in a sales brochure produced by the defendants, a well known firm of estate agents and auctioneers. The defendants have appealed against the finding of liability only. There is no appeal in relation to quantum.
Facts
2 The plaintiff was in the business of management training, and it is said, also invested in property. It is not entirely clear if his property investment interests extended much beyond investing in premises in which he carried on business and renting out any spare space, but it was not contested that he was a person who had significant experience in the property market. In the year 2000, he owned premises at Cumberland Street on the north side of Dublin city, but was considering selling these premises and moving. In the middle of 2000, he saw an advertisement in a newspaper that premises at 77 Upper Gardiner Street, Dublin 1, were for sale. At around the same time, he received a call from an agent in the firm of Palmer McCormack, who knew that he was looking for premises and thought that the premises at 77 Upper Gardiner Street might be suitable. Mr. Walsh went to see the premises with the agent for Palmer McCormack who was, however, not formally acting as his advisor. He was also accompanied by the training manager from his own business, who was to view the premises from the point of view of suitability for the training enterprise. Mr. Walsh’s plan was to perhaps acquire the premises if they were suitable for the business, occupy so much of them as that required, and to rent out the remainder of the premises. It is hardly necessary to recall that this was the year 2000 and the property market was starting to move dramatically. Rents and capital appreciation were likely to be strong, and development was particularly profitable.
3 The plaintiff went back to the premises again on the 14th July, 2000. There, he met a Mr. Woody O’Neill of Jones Lang Lasalle who gave him the brochure in question which has been almost the sole focus of this case. To call this document a brochure is, perhaps, an overstatement. It was two pages stapled together in a format familiar to anyone who has visited estate agents’ premises or viewed property, even casually. It was on what appears to be standard Jones Lang Lasalle Industrial Property headed notepaper and contained the name, address and contact details of Jones Lang Lasalle and a photograph of the premises. Above the photograph, the words “For Sale (By Private Treaty) Excellent Redevelopment Opportunity” appeared in large print. Immediately underneath the photograph was set out the address of the premises and the following details:
“2,142 m2 (23,057 sq ft)
Site Area 0.13 Hectares (0.31 Acres)”.
There were some further details as to location and zoning and the names of persons within Jones Lang Lasalle who could be contacted about the premises. At the bottom of the page in smaller print (although roughly the same size print as the name, address and telephone and email details of Jones Lang Lasalle at the top of the page, and certainly not illegible) was the following disclaimer:
“Whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending puchusers (sic) /lessees should satisfy themselves as to the correctness of the information given.”
The core fact in this case is that the measurement of the premises (23,057 sq ft) was incorrect. The legal issue is whether, in the light of the disclaimer, the estate agents are liable to the plaintiff in respect of that misstatement.
4 It seems likely, to me at least, (and there was no dissent on this at the hearing in this Court) that this was in a standard form, and was produced from a template used for all brochures and flyers produced by Jones Lang Lasalle, and that the details of any individual premises are printed out on note paper containing this heading and this disclaimer. It was, and I think would probably be understood as, a general disclaimer invoked by the agents. Indeed, the reference to intending purchasers/lessees shows that this was a general statement which applied to all cases, whether the premises were for sale or for rent, rather than a statement specifically adapted to any particular case such as this which was clearly only a sale of the premises and directed towards development. There was evidence that all substantial firms active in the property market in Dublin at the time had a similar form of disclaimer, although there was no evidence as to the precise terms of the different disclaimers.
5 Litigation has the capacity to focus with great intensity upon the critical issues in any case. Here, the disclaimer is central to the legal issue which must be determined on this appeal, and it will be necessary to return to that in some detail. However, it is important to place such details in their broader factual and legal context. For that reason, I think it is necessary to set out what was contained on both pages of the brochure.
The Brochure
6 As already set out above, the first page contained a photograph of substantial premises on Upper Gardiner Street. The second page contained a large map of the north city area in Dublin with an indication of the location of this property. The text on the first page above the photograph was, as already set out:
“For Sale (By Private Treaty)
Excellent Redevelopment Opportunity” .
Underneath the photograph in slightly smaller type were the words:
“77 Upper Gardiner Street
Dublin 1
2,142m2 (23,057 sq ft)
Site Area 0.13 Hectares (0.31 Acres)”.
On a further line and in smaller print again were the words:
• “Excellent city centre location close to numerous commercial and institutional occupiers including the Dublin Institute of Technology, Temple Street Children’s Hospital and Discount Electric
• Zoned Z8 “primarily residential and compatible office and institutional uses””.
After a space were the words:
“Contact: Nigel Healy, Woody O’Neill or David Browne”.
And at the bottom of the page in smaller print again was the disclaimer already quoted.
7 On the second page of the brochure, underneath a location map, were the following words:
“Location
• Situated in the heart of Dublin’s north inner city approx. 5 minutes walk from Dublin city centre
• Short distance from Mountjoy Square at the southern end of Upper Gardiner Street
• Nearby occupiers include Dublin Institute of Technology, DID Electrical and Discount Electric
Description
• High profile two storey corner property with extensive frontage to Upper Gardiner Street and Belvedere Court
• Comprises a mixture of retail and showroom, storage and office accommodation over two floors
Accommodation
M2 Sq Ft
Ground Floor 1,170 12,594
First Floor 972 10,463
Total 2,142 23,057
Site Area 0.13 Hectares (0.31 Acres)
Opportunity
• Provides an excellent redevelopment opportunity and, subject to the necessary planning permission, would be ideally suitable for residential, commercial or mixed scheme. Vacant possession will be provided in Autumn 2000
Title
• Freehold/Long leasehold
Price
• On application”
8 It should be observed immediately that the information contained on both pages of the brochure is incorrect. The true area of the first floor was 8,573.5 sq ft making the overall area 21,248 sq ft. This represented a 20% discrepancy on the first floor figure and an overall 8% discrepancy in the total area. The shortfall was just over 1,800 sq ft, which, as observed by one member of the Court, is the size of a reasonably sized suburban home. It is also worth observing at this point that while some of the information contained in the brochure might reasonably be expected to have been obtained from other sources, the figures for area would perhaps be thought more likely to have come from the agents themselves, or at least to be within their field of expertise. In the event, it seems probable that the error was made by the defendant firm. Furthermore, the precision of the figures, 23,057 sq ft and 10,463 sq ft, might suggest a fairly specific measurement exercise. It is also important to be aware that the internal area of a building is important for the rental market, since rents, particularly those of commercial property, may be agreed on a per square foot basis.
9 Mr. Walsh showed interest in the premises, and he may have made an initial offer. He also commissioned a survey of the premises which was carried out by Mr. Val O’Brien. This was a condition survey and did not involve any measurement. He was informed that there was substantial interest in the premises from some 12 to 14 other bidders, and that the agents were seeking the final and best offer by the 28th July, 2000. Mr. Walsh gave evidence that he did a back-of-the-envelope calculation. He allowed a figure of £8 per sq ft for the storage area, and a figure of £20 per sq ft for both the ground floor and first floor area. This, he said, suggested a rental value of £320,000 per annum and therefore a value of £4 million for the premises (on an assumed yield of 8%, presumably). He then had to allow for refurbishment and other costs. He thought that this suggested the premises were worth £2.5 million and decided to bid something less than this. He submitted a bid of £2.342 million which was successful. The sale closed on the 28th September, 2000.
10 Thereafter, Mr. Walsh sought the assistance of Palmer McCormack in letting the property. It transpired that what was then the North Eastern Health Board was very interested in the property and was willing to rent the first floor area at a figure in the region of £20 per sq ft. There were other provisions agreed between the parties including very substantial refurbishment, most of which was paid for by the North Eastern Health Board and which would clearly have an impact on the purchase price and the rental value. In the process of letting, it was, however, necessary to obtain precise figures for the area to be let to the Board. Mr. O’Brien was requested to carry out that exercise, and in the course of doing so, the discrepancy already identified came to light.
11 It is, perhaps, fair also to point out that the calculation carried out by Mr. Walsh was a crude and speculative one. As was pointed out, the figures contained in the brochure did not give any indication as to whether they were internal or external measurements, and perhaps more particularly, whether they were gross or net figures. It is only the net area (that is the gross area less areas such as stairwells, hallways and bathrooms) which can be rented, and therefore the calculations made by Mr. Walsh were very rough indeed. The judge, however, accepted that Mr. Walsh did this exercise, and for that purpose utilised the figures contained in the brochure.
12 There is no direct evidence as to how the particular error was made. The documentation in the appeal book includes a letter from Jones Lang Lasalle to its own client, the vendor, of the 22nd June, 2000, recording a figure as supplied by the vendor of approximately 2,084 sq m or 22,439 sq ft. It appears that this figure, in turn, was derived from a detailed table of measurements of unknown origin which had been faxed to the agents on the same day along with a floor plan. It will be noted that this is a third figure for the area and differs both from the figure contained in the brochure (23,057 sq ft) and the correct figure subsequently measured by Mr. O’Brien (21,248 sq ft). It appears possible that the (erroneous) figure included in the brochure was derived from some calculation carried out on the floor plan since the author of the letter, Mr. Healy, stated that the site area had been derived from the plans supplied. There is, however, no precise evidence on this. It appears likely that the figure of 23,057 sq ft was something which was arrived at by Jones Lang Lasalle because there is a hand written draft of the brochure containing that figure. Incidentally, the same letter of the 22nd June, 2000, indicated Jones Lang Lasalle’s view that the main use likely to be made of the premises was residential redevelopment (in which case the relevant figure would be the site area). Furthermore, Jones Lang Lasalle advised the vendor that on this basis, they considered that a figure of £1 million might be achieved for the premises. Even allowing for some degree of underestimation on the part of the agents, the discrepancy between this figure, some of the bids, and the ultimate price paid by Mr. Walsh is some indication of the buoyancy of the property market at that time. It also illustrates the difficulty of suggesting a precise value for the premises as of the 28th September, 2000.
13 Mr. Walsh said that when he discovered the error in the printed brochure, he was horrified. These proceedings were commenced in 2001 but did not come to trial until 2006. At that stage, it appears that the property was worth a significant multiple of the purchase price. Indeed, it was suggested to Mr. Walsh without demur that it was worth in the region of €7.6 million. The plaintiff claimed, however, that he had suffered a loss of €590,000 based on an estimate of the lost rental value into the future. The trial judge took the view that this was not the appropriate measure of damages, and considered that the correct approach was to calculate the amount by which it could be said that Mr. Walsh had overpaid for the premises in reliance on the mistaken floor area and awarded €350,000 in damages. There is no appeal in relation to the quantum of damages.
14 On the question of liability, and in particular, the significance of the disclaimer, the evidence was limited. Mr. Walsh frankly admitted that he had seen the disclaimer. He said, however, that he considered it dealt with minor matters. It was acknowledged that disclaimers in some form were a common feature in the industry and were used by all firms then operating in the market in Dublin. Mr. Barry Smith, a well known and respected valuer, gave evidence for the plaintiff. He considered that where measurements were provided by a reputable firm of agents, the prospective purchaser did no go to the expense of carrying out their own measurement exercise. He agreed, however, with Peter Rowan of Lambert Smith Hampton, the expert called on behalf of the defendants, that a prudent investor or intending purchaser should carry out a detailed inspection and measure all floor areas before purchasing a property. Mr. Rowan said it would not be normal or prudent and would not be considered acceptable practice to rely solely on the measurements set out in a sales brochure prepared by the vendor’s agent. It was acknowledged on behalf of Jones Lang Lasalle that none of the prospective purchasers had reverted to that firm and queried the measurements or suggested there was any discrepancy in them. This might have suggested that none of those purchasers had carried out a detailed measurement exercise, although there is no evidence as to whether any of them intended to rent the existing premises rather than to develop them.
15 This evidence, while useful background, does not resolve the issue in this case. That ultimately turns on an analysis of the applicable law, the test to be applied, and a consideration of the terms of the disclaimer in the light of the applicable law. Relying in part on the then relatively recent decision of the Supreme Court in Wildgust & anor v. Bank of Ireland & anor [2006] 1 IR 570, the High Court concluded that the defendant was liable and that the disclaimer did not operate to protect the defendant. The reasoning of the learned trial judge is contained in a number of passages commencing at the following paragraph where he addressed the question as follows:
“It seems to me that the question for determination in relation to the ‘waiver’ is, whether its presence within the brochure and its precise terms, are together sufficient to exclude the defendant from liability to the plaintiff in respect of negligence by the defendant in the incorrect measurement of the floor area of the property and negligent misstatement on the part of the defendant in publishing the incorrect measurements of the floor area. On the evidence I do not believe that they are sufficient.”
16 The trial judge elaborated on this and concluded:
` “If the defendant wished to reserve to itself the right (a) to publish within its sales brochure, precise measurements which were in fact grossly inaccurate and (b) to relieve itself of liability to the category of persons to whom the brochure and its contents were directed, then there was an obligation upon the defendant to draw to the attention of the plaintiff and other prospective purchasers the fact that the seemingly precise measurements published were likely to be wholly unreliable and should not be relied upon in any circumstances.
By including within its brochure an enigmatic sentence in small print claiming to have taken particular care in the preparation of all of the particulars within the brochure but advising prospective purchasers to ‘satisfy themselves as to the correctness of the information given’ the defendant failed to discharge that obligation.
On the evidence of the practice adopted by buyers and sellers of commercial property in Dublin at the relevant time the defendant’s ‘disclaimer’ was a quite inadequate means of notifying prospective purchasers that the seemingly precise measurements of the floor areas so prominently published within the sales brochure were wholly unreliable.
It follows that the ‘waiver’ published at the bottom of the front page of the defendant’s brochure was not effective to relieve the defendant of liability in respect of negligence and negligent misstatement of the type contended for on behalf of the plaintiff.” (emphasis added)
17 I appreciate that the way in which the case was approached in the High Court meant that this judgment was not likely to make precise distinctions of law, or to provide elaborate reasons for its conclusion. I think it is fair to summarise the decision in the following way. It appears that the Court concluded, in effect, that there was sufficient proximity between the parties to give rise to a duty of care (and perhaps that it was not necessary to distinguish between negligent acts and negligent statements) and that the disclaimer was not effective to relieve the defendant of liability for negligence in making such a statement.
18 There is an undeniable attraction in taking the approach of treating this case as an individual instance having no broader implications for the law and capable of being decided on its own facts by reference to the well known principles of Hay v. O’Grady [1992] I.R. 210 which sets out the limitations of appellate review. This is indeed the way in which many negligence actions are resolved. Although the vast majority of civil claims depend at bottom upon the law of negligence, almost all of them are resolved without any dispute about, or even reference to, legal principles. Such cases are resolved almost by rules of thumb that mean that most cases are decided on the issue of whether some element which can be described as negligence has been proven in fact. This is not to say that the resolution of such cases is not of considerable importance for the individuals involved and does not require considerable skill; merely that detailed analysis of law is rare. Once some carelessness can be shown, it is assumed that the plaintiff should succeed. There is, indeed, a lot to be said for the pragmatic approach. The settlement of difficult cases may be a form of soft law, but it can be a useful way to achieve some broad justice. Here, indeed, there was much to be said for not having pressed these matters to a determination. On the plaintiff’s side, by the time the case came on, it was certainly artificial to speak of the plaintiff having suffered any losses from an investment that was extremely successful. On the defendant’s side, whatever the legal effect of the waiver, attention would be directed to an error which must surely have been embarrassing for a firm conscious of its reputation for expertise. Many mathematical and measurement errors can indeed be made even though time and care is taken. But once an error is identified, it is hard to dispute that if more care had been taken, it would not have been made.
19 However, this case proceeded to hearing and was determined in favour of the plaintiff. Again, if it were permissible to take a broad brush approach to this case, then the result is certainly not one which is demonstrably unfair. Jones Lang Lasalle did not deny that it was careless in providing inaccurate measurements, something which was well within its expertise. Furthermore, the waiver upon which it now relies stated that “every care” had been taken. Again, therefore, if it were permissible to approach this case as simply one more instance of the “wilderness of single instances” of the law of negligence and raising no broader issue, it would not call for much judicial attention. However, this appeal, whether viewed narrowly or broadly, raises important issues of law which this Court cannot, at least in my view, and should not properly avoid.
20 It is necessary to place this claim in a wider context. Insomuch as it is contended that that there was sufficient proximity, indeed neighbourhood between the parties here, sufficient to justify the imposition of a duty of care on Jones Lang Lasalle in respect of the plaintiff, such proximity, is created by a transaction in this case, the purchase of land which is itself regulated by contract in terms familiar to lawyers, and to members of the public, particularly those who engage in property investment. The plaintiff here entered into a contract to buy the property from the vendor. Jones Lang Lasalle acted as agents for the vendor in marketing the property. The relationship between the vendor and Jones Lang Lasalle was itself, essentially, contractual. Neither of these two contracts were discussed in evidence or in the judgment of the High Court, but they create two sides of a triangular relationship which the plaintiff contends justifies the imposition of a duty of care on Jones Lang Lasalle towards the plaintiff. The absence of any contractual claim against the vendor either for rescission for misrepresentation (admittedly an unlikely and undesirable remedy from the plaintiff’s point of view given the intervening movement of the market) or, more realistically, a claim for damages for breach of warranty suggests that here, the statement or misstatement by Jones Lang Lasalle in relation to the area of the premises did not have contractual significance at least as between the purchaser and the vendor. It does not appear that the area of the premises was a term of the contract between the vendor and purchaser. An important starting point, therefore, is that the misstatement as to the size of the premises does not appear to have had legal consequences as and between the primary parties to the sale, and therefore, and in consequence, between Jones Lang Lasalle and its client who was, after all, paying for Jones Lang Lasalle’s services. It is against this background that the claim that the vendor’s agents owed to the purchaser a duty of care must be approached. This reinforces, in my view, the importance of recalling that the starting point of the analysis in Hedley Byrne v. Heller [1964] AC 465 was that normally a party does not owe a duty in tort to another in respect of statements made by them. This is an important distinction. In the area of actions it can be said the starting point is normally “duty of care unless”, whereas for statements it is a case of “duty of care only if”.
The Broad or Narrow Approach to Liability
21 The narrow version of the plaintiff’s claim depends solely on the interpretation of the waiver for the purposes of the traditional law of negligent misstatement. The question here is whether the relationship between the parties is sufficient to create a duty of care and a disclaimer can be an important piece of evidence in that regard. The plaintiff’s case, on this narrow version, is simply that the terms of the waiver here are not sufficient to mean that a duty of care did not arise. A broader version of the claim, which appears to be discernible at points in the judgment of the High Court and in the submissions made to this Court, would, however, involve a significant development of the law, and a blurring of the distinction between negligent misstatement and the law of negligent acts, if not its removal. In the context of this case, these two approaches have significant differences for the analysis of the waiver clause. On the traditional principles of negligent misstatement, a waiver is relevant when considering whether a duty of care arose at all. A waiver is interpreted fairly broadly in considering whether the defendant can be said to have assumed, as between itself and a plaintiff, the risk of error. However, if the case is approached on the basis that there was an existing duty of care by reason of the proximity of the parties, then the waiver becomes a clause excluding or limiting liability to which courts have traditionally applied a very strict analysis. It is clear, therefore, that the manner in which the case is approached may have significant, indeed decisive, impact on the outcome.
The decision in Hedley Byrne v. Heller
22 The landmark decision in Hedley Byrne v. Heller [1964] AC 465 established the principle that the author of a statement could, in certain circumstances, be liable for financial loss caused by it to a person relying on it. This principle was almost immediately adopted in Ireland in Securities Trust Ltd. v. Hugh Moore & Alexander Ltd. [1964] I.R. 417, and Bank of Ireland v. Smith & Ors. [1966] I.R. 646 and since then it has been accepted that the development of Irish law flows from the analysis originally made in that case. Hedley Byrne contained an important statement that, in principle, liability in negligence could extend beyond negligent acts causing physical damage and consequential loss covered by the principle in Donoghue v. Stevenson [1932] AC 562. The House of Lords made it clear, however, that different principles applied in the case of damages claimed as a result of statements made rather than acts done or omitted to be done. Importantly, the House of Lords also held (indeed it was the ratio decidendi of that case) that any duty of care for negligent misstatement could be negatived by an appropriate disclaimer. For these reasons, Hedley Byrne is particularly relevant to this case.
23 In that well known case, advertising agents who were contemplating acting on behalf of a company and placing advanced advertisements for which the agents would be personally liable sought information as to the prospective clients’ financial stability. They requested their bank to make inquiries from Heller & Partner who were bankers to the client company. Heller replied “in confidence and without responsibility on our part” that the company was believed to be “respectably constituted and considered good for its normal business engagements”. It was also stated that the bank believed “that the company would not undertake any commitments they were unable to fulfil”. This information was passed on to the plaintiff advertising agents by letter stating that it was “for your private use and without responsibility on the part of [the plaintiff’s bankers]”. Some months later, the request was repeated. On that occasion, Heller & Partner sent a letter to the plaintiffs bankers headed “CONFIDENTIAL For your private use and without responsibility on the part of this bank or its officials” the advice given was that the company in question was “a respectably constituted company, considered good for its ordinary business engagements. Your figures are larger than we are accustomed to see”.
24 As is well known, the House of Lords decided that in principle, statements such as this could give rise to a liability, but that in that case, any such duty of care was negatived by the terms of the disclaimer. It is worth, however, considering in rather greater detail the terms of the speeches delivered and, in particular, those of Lords Reid, Devlin and Pearce.
25 At pp. 482-484, Lord Reid stated:
“The appellants’ first argument was based on Donoghue v. Stevenson. That is a very important decision, but I do not think that it has any direct bearing on this case. That decision may encourage us to develop existing lines of authority, but it cannot entitle us to disregard them. Apart altogether from authority, I would think that the law must treat negligent words differently from negligent acts. The law ought so far as possible to reflect the standards of the reasonable man, and that is what Donoghue v. Stevenson sets out to do. The most obvious difference between negligent words and negligent acts is this. Quite careful people often express definite opinions on social or informal occasions even when they see that others are likely to be influenced by them; and they often do that without taking that care which they would take if asked for their opinion professionally or in a business connection. The appellant agrees that there can be no duty of care on such occasions, and we were referred to American and South African authorities where that is recognised, although their law appears to have gone much further than ours has yet done. But it is at least unusual casually to put into circulation negligently made articles which are dangerous. A man might give a friend a negligently-prepared bottle of homemade wine and his friend’s guests might drink it with dire results. But it is by no means clear that those guests would have no action against the negligent manufacturer.
Another obvious difference is that a negligently made article will only cause one accident, and so it is not very difficult to find the necessary degree of proximity or neighbourhood between the negligent manufacturer and the person injured. But words can be broadcast with or without the consent or the foresight of the speaker or writer. It would be one thing to say that the speaker owes a duty to a limited class, but it would be going very far to say that he owes a duty to every ultimate ‘consumer’ who acts on those words to his detriment. It would be no use to say that a speaker or writer owes a duty but can disclaim responsibility if he wants to. He, like the manufacturer, could make it part of a contract that he is not to be liable for his negligence: but that contract would not protect him in a question with a third party, at least if the third party was unaware of it.
So it seems to me that there is good sense behind our present law that in general an innocent but negligent misrepresentation gives no cause of action. There must be something more than the mere misstatement. I therefore turn to the authorities to see what more is required. The most natural requirement would be that expressly or by implication from the circumstances the speaker or writer has undertaken some responsibility, and that appears to me not to conflict with any authority which is binding on this House. Where there is a contract there is no difficulty as regards the contracting parties: the question is whether there is a warranty. The refusal of English law to recognise any jus quaesitum tertii causes some difficulties, but they are not relevant, here. Then there are cases where a person does not merely make a statement but performs a gratuitous service. I do not intend to examine the cases about that, but at least they show that in some cases that person owes a duty of care apart from any contract, and to that extent they pave the way to holding that there can be a duty of care in making a statement of fact or opinion which is independent of contract.” (Emphasis added)
26 I have set out this passage at length because it makes it clear at the very outset that a clear distinction is being made between liability for negligent acts and misstatements. Lord Reid’s reference to contract and those cases where English law refused to recognise rights of a third party to sue on contracts is also instructive since it sets up an important point of comparison by reference to which any claim of the duty of care must be analysed. Again, the emphasis on the undertaking of responsibility for a statement is important. This leads to the portion of the speech containing the decision in principle at p. 486:
“A reasonable man, knowing that he was being trusted or that his skill and judgment were being relied on, would, I think, have three courses open to him. He could keep silent or decline to give the information or advice sought: or he could give an answer with a clear qualification that he accepted no responsibility for it or that it was given without that reflection or inquiry which a careful answer would require: or he could simply answer without any such qualification. If he chooses to adopt the last course he must, I think, be held to have accepted some responsibility for his answer being given carefully, or to have accepted a relationship with the inquirer which requires him to exercise such care as the circumstances require.”
27 This analysis led to the important conclusion that the decision of the Court of Appeal in Candler v. Crane, Christmas & Co. [1951] 2 K.B. 164 was wrongly decided, and that the dissent of Denning L.J. was correct. That case was one where accountants to a company had been asked to complete the preparation of accounts in order that they be shown to a prospective purchaser. The accountants went further and showed the accounts to the purchaser themselves, discussed them with him, and allowed him to take a copy. In those circumstances, Lord Reid considered, a duty of care arose. Again, this is perhaps an important illustration of circumstances in which liability can arise: the defendant accountants have done more than issue general accounts which might be considered by the world at large; they had engaged in a personal interaction with the plaintiff as to the terms of the accounts and did so in the specific context of the likely purchase by the plaintiff of the company.
28 However, having held that a duty of care in respect of statements made could arise in principle, Lord Reid considered that no such duty arose in the particular case because of the terms of the disclaimer. In so doing, he made an important distinction between disclaimers in such circumstances, and an exemption clause purporting to excuse a party from a liability which he or she had undertaken under contract, or which already exists in tort (at p. 492):
“The appellants founded on a number of cases in contract where very clear words were required to exclude the duty of care which would otherwise have flowed from the contract. To that argument there are, I think, two answers. In the case of a contract it is necessary to exclude liability for negligence, but in this case the question is whether an undertaking to assume a duty to take care can be inferred: and that is a very different matter. And, secondly, even in cases of contract general words may be sufficient if there was no other kind of liability to be excluded except liability for negligence: the general rule is that a party is not exempted from liability for negligence ‘unless adequate words are used’ per Scrutton L.J. in Rutter v. Palmer. It being admitted that there was here a duty to give an honest reply, I do not see what further liability there could be to exclude except liability for negligence: there being no contract there was no question of warranty.
I am therefore of opinion that it is clear that the respondents never undertook any duty to exercise care in giving their replies. The appellants cannot succeed unless there was such a duty and therefore in my judgment this appeal must be dismissed.”
29 The speech of Lord Devlin was broadly to the same effect. At pp. 524-525, he observed:
“Now, it is not, in my opinion, a sensible application of what Lord Atkin was saying for a judge to be invited on the facts of any particular case to say whether or not there was “proximity” between the plaintiff and the defendant. That would be a misuse of a general conception and it is not the way in which English law develops. What Lord Atkin did was to use his general conception to open up a category of cases giving rise to a special duty…
The real value of Donoghue v. Stevenson to the argument in this case is that it shows how the law can be developed to solve particular problems. Is the relationship between the parties in this case such that it can be brought within a category giving rise to a special duty?”
30 At pp. 528-529 of the report, Lord Devlin made the important point that the absence of a contract was not dispositive since there may be circumstances where a person or business gets indirect benefit from the provision of information outside of a contractual relationship, and it was therefore entirely reasonable to find that the duty of care arose:
“I think, therefore, that there is ample authority to justify your Lordships in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Lord Ashburton are ‘equivalent to contract,’ that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not. It may often be material to consider whether the adviser is acting purely out of good nature or whether he is getting his reward in some indirect form. The service that a bank performs in giving a reference is not done simply out of a desire to assist commerce. It would discourage the customers of the bank if their deals fell through because the bank had refused to testify to their credit when it was good.”
31 While acknowledging that the categories could be expanded, Lord Devlin approached the case on the basis that “wherever there is a relationship equivalent to contract, there is a duty of care”. As he said at page 532:
“The question is whether the appellants can set up a claim equivalent to contract and rely on an implied undertaking to accept responsibility.”
However, on the facts of the present case, he held that there was no assumption of responsibility and therefore no duty of care. At page 533, he said:
“I agree entirely with the reasoning and conclusion on this point of my noble and learned friend, Lord Reid. A man cannot be said voluntarily to be undertaking a responsibility if at the very moment when he is said to be accepting it he declares that in fact he is not. The problem of reconciling words of exemption with the existence of a duty arises only when a party is claiming exemption from a responsibility which he has already undertaken or which he is contracting to undertake.”
32 Lord Pearce also addressed the argument that the disclaimer in that case was not sufficiently precise to exclude liability for negligence. At page 540, he said:
“Nothing, however, except negligence could, in the facts of this case, create a liability (apart from fraud, to which they cannot have been intended to refer and against which the words would be no protection, since they would be part of the fraud). I do not, therefore, accept that even if the parties were already in contractual or other special relationship the words would give no immunity to a negligent answer. But in any event they clearly prevent a special relationship from arising. They are part of the material from which one deduces whether a duty of care and a liability for negligence was assumed. If both parties say expressly (in a case where neither is deliberately taking advantage of the other) that there shall be no liability, I do not find it possible to say that a liability was assumed.”
33 The decision in Hedley Byrne v. Heller was accepted as representing Irish law in the case of Securities Trust Ltd v. Hugh Moore & Alexander Ltd. [1964] I.R. 417. In Bank of Ireland v. Smith & Ors [1966] I.R. 646, an advertisement of land for sale in court in a mortgage suit stated, erroneously, that a portion of the land was sown with barley and undersown with permanent pasture. The statement was made by auctioneers who were agents for the vendors. Kenny J. held that it would be against conscience that the vendor in a court sale should not be bound by a representation made by the agent in connection to the sale. Accordingly, the purchaser was entitled to cover damages for breach of warranty from the vendor. However, Kenny J. rejected the further claim that the auctioneers were liable in tort for negligent misstatement, and at page 659, he said:
“It was said that an auctioneer acting for a vendor should anticipate that any statements made by him about the property will be relied on by the purchaser and that he, therefore, owes a duty of care to the purchaser and is liable in damages to him if the statement was incorrect and was made carelessly. In my opinion the decision in Hedley Byrne & Co. v. Heller does not give any support to this startling proposition. It decides that if a person seeks information from another in circumstances in which a reasonable man would know that his judgment is being relied on, the person giving the information must use reasonable care to ensure that his answer is correct, and if he does not do so he is liable in damages: but the relationship between the person seeking the information and the person giving it, if not fiduciary or arising out of a contract for consideration, must be, to use the words of Lord Devlin, ‘equivalent to contract before any liability can arise’.”
From these extracts, it is clear that, at least at the outset, the approach to any disclaimer in negligent misstatement was to view it as a piece of evidence relevant to the question of whether a relationship existed sufficient to give rise to a duty of care, and that was not appropriate to approach a disclaimer with the strictness that the courts analyse exemption clauses seeking to exclude liability which already exists.
34 The law has developed in the intervening period and there are some instructive examples of purchasers succeeding in claims against estate agents acting ostensibly on behalf of vendors. In McAnarney v. Hanrahan [1993] 3 I.R. 492, Costello J. upheld a plaintiff’s claim against an auctioneer in respect of statements made in the course of a sale. In that case, the defendant had considerable interaction with the plaintiff, and misrepresented to them that the premises had been withdrawn at auction at a price, and furthermore that the owners of the freehold had indicated a willingness to sell it for approximately £3,000. On those representations, the plaintiff agreed to pay £55,000 for the leasehold interest although they had previously intended to pay no more than £45,000. The purchase proved disastrous for the plaintiff, who sued in respect of the misrepresentation. Costello J. held that the dealings between the parties were such that a special relationship had arisen between them, imposing on the defendant auctioneer a duty of care in giving the information. This is an example of a situation in which an auctioneer or estate agent can owe a duty of care to a person other than his or her client. Here, however, liability arose because of quite extensive dealings with the plaintiff in circumstances where, to borrow the analysis of Lord Devlin, while the plaintiff was not formally a client of the agent/auctioneer, they had a relationship which was of indirect benefit to the estate agent/auctioneer. Accordingly, the plaintiff was entitled to recover, but only the difference between the price paid and the true value of the land. Similarly, in McCullough v. Gunne, (Unreported, High Court, Carroll J., 17th January 1997), the High Court held that where plaintiffs who had never dealt in property before went to a defendant auctioneer/estate agent and “asked him to keep them straight”, the auctioneer owed a duty of care to them as well as to the owners of the premises for whom he was acting, when the plaintiffs bought it. In neither of these cases was a disclaimer relied upon, and the dealings between the parties extended far beyond the provision of standard particulars of sale. Both of these cases are consistent, therefore, in that while a duty of care did not arise generally from the fact that an auctioneer may have been acting on behalf of a vendor, the particular dealing between the parties gave rise to a special relationship on the facts of the individual case. Doran v. Delaney [1998] 2 I.R. 61 is a variation on this theme. In that case, vendor’s solicitors were, unusually, held to owe a duty of care to a purchaser in circumstances where, as provided in the headnote to the judgment, they passed on information to them “while having reason to believe that it was not wholly truthful”.
McCullagh v. Lane Fox and Partners Ltd.
35 Perhaps the case which is closest to the facts of the present matter is an English case referred to in passing in Doran v. Delaney [1998] 2 I.R. 61. In McCullagh v. Lane Fox and Partners Ltd. [1996] PNLR 205, a firm of estate agents had prepared particulars of a substantial private residence in London adjoining the Thames. The house was described as being set on 0.92 acres. In fact, the gardens only measured 0.48 of an acre. The plaintiff bought the property but later sued the agents for negligent misrepresentation. The particulars contained what, in the words of the headnote to the reported judgment, were described as “typical estate agents disclaimers”. It is right to acknowledge that these were more extensive than the disclaimer in the present case. Thus, the disclaimer was set out in five paragraphs:
“1. These particulars do not constitute, nor constitute any part of, an offer or contract.
2. All statements contained in these particulars as to this property are made without responsibility on the part of Lane Fox or the vendors or lessors.
3. None of the statements contained in these particulars as to this property are to be relied on as statements of representations of fact.
4. Any intending purchasers must satisfy themselves by inspection or otherwise as to the correctness of each of the statements contained in these particulars.
5. The vendors do not make or give and neither Lane Fox nor any person in their employment has any authority to make or give any representation or warranty whatever in relation to this property.”
36 The High Court of England and Wales found that the defendant was liable, applying the principle in Donoghue v. Stevenson and holding that the exemption clause was not sufficiently precise to exclude liability in this case. The defendant was a reputable firm of competent surveyors who could be expected to measure the site correctly; the purpose of the provision of the information was to encourage offers by potential purchasers; it was obvious to the defendant that the plaintiff would rely on the information and it was reasonable to do so. There was nothing, in the circumstances, making it unjust to impose liability on the defendant. However, the Court also held that since the true value of the premises was the price paid by the plaintiff, the plaintiff had suffered no loss.
37 The Court of Appeal of England and Wales overturned both conclusions. For present purposes, it is particularly significant that the Court of Appeal held that the disclaimer prevented any assumption of responsibility, and therefore duty of care, from arising. Having quoted Hedley Byrne v. Heller [1964] AC 465, Hobhouse L.J., continued at pages 222-223:
“Thus the relevance of the disclaimer is to negative one of the essential elements for the existence of the duty of care. It negatives the assumption of responsibility for the statement. It implicitly tells the recipient of the representation that if he chooses to rely upon it he must realise that the maker is not accepting responsibility for the accuracy of the representation. The disclaimer is part of the factual situation which the court has to take into account in deciding whether or not the defendant owed a duty of care to the plaintiff. Put another way, the question is whether the plaintiff was entitled to treat the representation as one for which the defendant was accepting responsibility. This is primarily a factual question.”
Subject to the qualification that once the facts are found, the question of whether, on those facts, a duty of care arises becomes an issue of law, I would agree with this analysis. It is an orthodox application of the decision in Hedley Byrne v. Heller.
38 It is of some interest that the Court of Appeal, however, upheld that part of the decision of the High Court (approved of in Doran v. Delaney) which held that, in principle, a duty of care in tort by an agent to a prospective purchaser could coexist with a contractual liability by the vendor to a purchaser. At pages 230-231, Hobhouse L.J. observed:
“In this situation, the obviously just result is that the liability to make good the purchaser’s loss should ultimately be borne by the party who has been unjustly enriched, that is to say, the vendor. But it does not follow that if, for any reason, the vendor is unable to make good the purchaser’s loss the purchaser should not be compensated by the person actually at fault, the solicitor or other agent who made the misrepresentation…
There are bound to be problems where the careless¬ness of the agent causes his principal’s property to be sold at an over-value but they are not avoided by refusing to recognise the tortious liability of the agent for his own fault; and there may be cases where the solicitors’ careless misrepresent¬ation has caused other types of loss to the purchaser which do not carry equivalent benefits to the vendor.”
39 Hobhouse L.J. acknowledged at page 224 that in cases such as Smith v. Bush [1990] 1 AC 831 and Caparo Industries v. Dickman [1992] 2 A.C. 605, there had been some criticism of the importance of the concept of assumption of responsibility, but that it was again recognised as important by Lord Goff of Chieveley in Henderson v. Merrett Syndicates Ltd. [1995] 2 A.C. 14 , in an important passage at page 181 which explained the importance of the concept in the analysis of the law of negligent misstatement:
“In addition, the concept provides its own explanation why there is no problem in cases of this kind about liability for pure economic loss; for if a person assumes responsibility to another in respect of certain services, there is no reason why he should not be liable in damages for that other in respect of economic loss which flows from the negligent performance of those services. It follows that, once the case is identified as falling within the Hedley Byrne principle, there should be no need to embark upon any further enquiry whether it is “fair, just and reasonable” to impose liability for economic loss – a point which is, I consider, of some importance in the present case. The concept indicates too that in some circumstances, for example where the undertaking to furnish the relevant service is given on an informal occasion, there may be no assumption of responsibility and likewise that an assumption of responsibility may be negatived by an appropriate disclaimer.”
This passage reinforces the continuing relevance of the concept of assumption of responsibility, and the significance of the disclaimer in analysing whether such a responsibility has been assumed.
40 Applying this principle to the case of the estate agents providing a statement of acreage, Hobhouse L.J. had regard to the structure of the transaction. Having observed that in many cases the estate agent’s fee may be paid indirectly by the purchase price, and in principle therefore, there was nothing to negative the duty of care, he continued at page 235:
“In a transaction for the sale of land, it will normally be contemplated that there will be pre-contract enquiries which will be used by the prospective purchaser to obtain specific represen¬tations verifying important facts. Similarly parties will very frequently instruct a surveyor to carry out a structural survey before deciding to make an offer or to exchange contracts. Thus, it does not follow that a representation, although intended to influence the representee, will be relied upon in the relevant way without an intermediate check. It is therefore necessary to examine further the significance of the representation in the transaction. This is not something which is peculiar to estate agents nor does it amount to some special principle of qualified liability for estate agents.”
41 In that particular case, Hobhouse L.J. considered that the disclaimer put the case on all fours with the decision in Hedley Byrne. He then addressed the contrary argument at page 237:
“The judge avoided this conclusion by approaching the disclaimer as if it were a contractual exclusion. On such an approach it would need to be strictly construed and the argument was available that it did not as such cover an oral statement. But that is not, in my judgment, the right approach. It is not an exclusion to be construed. The right approach, as is made clear in Hedley Byrne, is to treat the existence of the disclaimer as one of the facts relevant to answering the question whether there had been an assumption of responsibility by the defendants for the relevant statement. This question must be answered objectively by reference to what a reasonable person in the position of Mr McCullagh would have understood at the time that he finally relied upon the representation. In this context, it is obvious that the statement that the acreage of the property is 0.92 was a statement which was taken from the particulars and that the defendants were not assuming responsibility for that statement.”
42 Hobhouse L.J. also observed at page 239 that:
“The normal structure of contracts for the purchase of land is that the intending purchaser, before he exchanges contracts, is able through his own solicitor to interrogate the proposed vendor and is entitled to rely upon the answers to such enquiries as representations which have induced the contract with all the legal consequences that flow from that situation. The use of disclaimers to insulate the estate agent, and the estate agent’s principals, from responsibility for representations made by estate agents is commonplace and is the normal basis upon which house sale transactions are carried out every day across the country.”
43 Accordingly, Hobhouse L.J. considered that the disclaimer was not an unfair contractual term. While that specific issue does not arise in this case because the plaintiff was not, here, dealing as a consumer, it is, in my view, relevant to the overall question as to whether a duty of care arose or was negatived by the terms of this disclaimer. As I have said earlier, the proximity of the parties here is created by the contract between the purchaser and the vendor, and arguably the contract between the vendor and its agents. It is relevant to know how those contracts assigned the risk of error. Finally, it is notable that Nourse L.J., concurring, was prepared to agree with Slade L.J. that even in the absence of a disclaimer no duty of care arose.
44 This is obviously an important case, and if it correctly represents the law of Ireland, it is strong authority against the plaintiffs in this case. . It is important to recognise that it is not possible to distinguish Mc Cullagh on the basis merely that the disclaimer was in more extensive terms than the disclaimer in this case. Recognising perhaps the difficulty posed by the disclaimer, the plaintiff in Mc Cullagh had focused entirely on an oral statement of acreage made to the plaintiff when he was viewing the property and before he had received the printed particulars. This case, therefore, is authority for the continued application of the approach set out in Hedley Byrne v. Heller [1964] AC 465 where the disclaimer is viewed not as an exemption clause, but rather as part of the evidence as to whether a risk had been assumed, and a duty of care arisen.
45 The narrow point made by the plaintiff/respondent does not seek to argue that Irish law is in any respect different to that set out in Hedley Byrne and McCullagh v. Lane Fox and Partners Ltd. Rather, it is simply that the words in the disclaimer here, which are concededly less clear and less elaborate than those in the McCullagh case, for example, are simply not sufficient to exclude or avoid liability. It seems to me, however, for the reasons already addressed, that this is not the correct approach. The disclaimer should not be approached in an attempt to exclude a pre-existing liability whether contractual or tortious, and accordingly strictly construed. Instead, it is to be considered as one, albeit an important, piece of evidence as to whether the agent, retained by the vendor, assumed responsibility in this case to the plaintiff purchaser (without consideration) for the accuracy of the statements contained in the particulars. This must be assessed in the light of all of the facts, and in particular, the structure of the transaction which takes place in a relationship between each of the parties controlled by contract in familiar and well understood terms. It is relevant, in my view, that the special relationship and assumption of liability are alleged to arise from the terms of particulars made available generally rather than from any specific interaction between any employee of Jones Lang Lasalle and the plaintiff. It is also relevant that the general structure of the transaction is one where the agent acts for and owes duties to the vendor. Again, it is not irrelevant that the purchasers did not apparently obtain any provision in the contract, in a warranty or otherwise in relation to the size of the premises. It would be unusual for an agent to undertake a gratuitous responsibility when the principal, who was receiving consideration, had not. Again, it is relevant that even though this was a substantial commercial transaction, which can carry significant fees for the agents, (suggested to be in the region of 1.5%) that the element of that fee which should represent profit to the agent is a tiny fraction of the potential liability here, excluding costs. Again, it would be unusual that an agent would gratuitously assume that risk. Against that background, I cannot see the disclaimer as anything other than an assertion, unsurprising to anyone dealing in the property market, that Jones Lang Lasalle was not responsible for the accuracy of anything contained in the particulars.
46 I think this conclusion can be tested in a number of ways. The plaintiff’s case is undoubtedly strengthened by the fact that the error here is in relation to measurements, which would fall into the area of expertise and responsibility of the agent. But the particulars are not confined to the measurements, on which almost all of the attention was focused in this case. Among a number of other things, details are given in relation to tenure, zoning, development potential and likely vacant possession. It is difficult, if not impossible, to read the particulars including the waiver/disclaimer against the known background of the transaction and its well understood structure as being nevertheless an assumption of responsibility on the part of the agents in respect of these matters. But if this is the case, then it is equally, if not more difficult, to read the particulars as assuming responsibility for errors in measurements alone. No such distinction is discernible in the terms of the disclaimer. By the same token, given the very substantial amounts involved in property transactions, it hardly makes sense to understand Jones Lang Lasalle as precluding any duty of care in respect of minor matters, but assuming responsibility for errors (however large or small in themselves) which could give rise to very extensive liability. There is one further feature which is difficult to accommodate if the plaintiff is correct, which was touched on in the judgment in McCullagh v. Lane Fox and Partners Ltd. On the assumption that a purchaser was induced to pay too much for premises and should now be compensated, then the natural source of that compensation is the vendor who, at least on this hypothesis, has been unjustly enriched in obtaining more than they should have for the premises. In a contractual claim, the plaintiff purchaser will be able to recover that amount from the vendor, and if the agent was responsible for the error, the vendor might be able to obtain indemnity in respect of any consequential costs. But if an independent duty of care arises in tort on the part of the agent, then payment of damages by the agent to the purchaser will leave the vendor with, on this hypothesis, an undeserved gain. This lack of congruence of remedy, if not fatal to the plaintiff’s case, is at least troubling and requires to be addressed.
47 I accept that, adopting a strict approach, it might be possible to argue that the reference to “every care” being taken is itself a form of representation that such care was taken which, it must be assumed, did not occur in this case. However, that is, I think, an unduly legalistic reading of the clause, designed to defeat it rather than to understand it in its context. It is necessary to read the disclaimer fairly and in its entirety. If read as not excluding, but rather positively accepting responsibility for the risk of error due to negligence, it becomes not merely surprising, but superfluous, since arguably such a duty would arise in the absence of a disclaimer. Again, it might be said, adopting the highly strict approach to exemption clauses, that the disclaimer here is apt to exclude a contractual liability for error without fault, but does not exclude liability for negligence. But such an interpretation is highly implausible. Why would a party, in framing a disclaimer, seek to exclude liability under a contract which it does not have, but not to exclude, indeed positively to embrace the only liability which might arise to a party with whom it did not have a contract controlling the terms of the relationship? Again, it might be said (although I do not think this was argued) that the fact that the disclaimer uses the passive voice might mean that it sought to exclude the contractual liability of the agent’s principal, in this case the vendor. Again, this is, however, highly implausible, particularly if it is read as excluding a potential contractual liability, which did not in fact arise, on the part of the vendor, but accepting direct liability on the part of the agent (and for which the agent obtains no payment from any party) for an error attributable to negligence. The provision asserting that every care has been taken cannot be taken out of context or divorced from the structure of the sentence in which it is placed. In my view, the most reasonable interpretation of the disclaimer, and thus the manner in which it would be understood at the time, was that while Jones Lang Lasalle asserted that they took every care in the preparation of the particulars and believed them to be correct, if they did not do so, and/or if the particulars were incorrect, they did not accept responsibility. If the detail of the particulars was important to a prospective purchaser, he or she should verify them independently or, if they did not, they would bear the risk of any inaccuracy.
48 The evidence here that parties did not routinely check measurements (although lenders apparently do require such detail) and that no one in this case came back to the vendors or to Jones Lang Lasalle to suggest that the measurements were wrong (which might suggest that none of the other prospective purchasers measured the premises) does not, in my view, lead to a conclusion that in this market, there was a general assumption that agents accepted responsibility for the accuracy of the particulars. These premises were themselves marketed for a development opportunity which was no doubt the primary factor in setting its value. There is no evidence that any other purchaser considered the premises to be a letting opportunity and still less that the figures were considered to be crucial to the value of the bid. Indeed, in that regard, if the letting value of the property determined its value on the market, it is difficult to understand how Jones Lang Lasalle’s initial advice was so far removed from the price ultimately achieved. All this evidence may provide one further insight in to the progress of the property market even in the early 2000s, but it cannot, in my view, go so far as to establish an assumption of responsibility by Jones Lang Lasalle or other agents of a duty of care in relation to particulars made generally available on the market without more.
A Broader Approach
49 On one reading of the judgment of the High Court, however, it can be said that the High Court took a broader approach which could have important consequences for the law of negligence generally. Rejecting an argument based on Caparo Industries Plc. v. Dickman [1990] 2 AC 605, and relying on the judgment of the Supreme Court in Wildgust & anor v Bank of Ireland & anor [2006] 1 IR 570, the High Court held that “[p]rima facie therefore, the relationship between the plaintiff and the defendant was sufficiently proximate to give rise to a “special relationship” of the kind identified by the Supreme Court (Geoghegan and Kearns JJ.) in Wildgust”. It had been argued on behalf of Jones Lang Lasalle that the disclaimer precluded the existence of a special relationship and was, furthermore, a justification for rejecting the existence of duty of care based on the third element in Caparo (and adopted in Glencar), namely that it was an element making it unfair, unjust and unreasonable to impose a duty of care. The High Court rejected this and, assuming a prima facie duty of care, posed the question:
“It seems to me that the question for determination in relation to the ‘waiver’ is whether its presence within the brochure and its precise terms are together sufficient to exclude the defendant from liability to the plaintiff in respect of negligence by the defendant in the measurement of the floor area of the property and negligent misstatement on the part of the defendant in publishing the incorrect measurements of the floor area. On the evidence I do not believe that they are sufficient.”
50 On this reading, the judgment runs together a claim for a negligent act (of measurement or non-measurement) and negligent misstatement (contained in the particulars). The analysis then proceeds on the assumption that there exists a duty of care, and the question becomes whether the disclaimer is sufficient to exclude that duty of care. This is of course the analysis applicable to an exemption clause which seeks to limit a contractual or tortious liability. It is a short step from that analysis to the conclusion that the waiver clause here is insufficient. At the following paragraph, the High Court judge expressed himself in the following terms:
“If the defendant wished to reserve to itself the right, (a) to publish within its sales brochure, precise measurements which were in fact grossly inaccurate and, (b) to relieve itself of liability to the category of persons to whom the brochure and its contents were directed, then there was an obligation upon the defendant to draw to the attention of the plaintiff and other prospective purchasers the fact that the seemingly precise measurements published were likely to be wholly unreliable and should not be relied upon in any circumstances.
By including within its brochure an enigmatic sentence in small print claiming to have taken particular care in the preparation of all of the particulars within the brochure but advising prospective purchasers to ‘satisfy themselves as to the correctness of the information given’ the defendant failed to discharge that obligation.”
51 It is I think apparent that the judge did not seek to offer any interpretation of the disclaimer, but instead simply found it ineffective to exclude a prima facie duty of care. This, as already observed, is to apply the standard approach to contractual exemption clauses which seek to exclude a liability which otherwise exists, whether in contract or in tort, and therefore, the approach represents a significant (if unacknowledged) movement away from the analysis in Hedley Byrne v. Heller [1964] AC 465, where the disclaimer is considered simply as part of the evidence as to whether a duty of care arose in the first place. The approach in the High Court appears to be based upon a blurring of the distinction between liability for a negligent act and liability for a negligent statement which was identified in Hedley Byrne v. Heller and the succeeding case law, and in doing so, reliance on the decision of the Supreme Court in Wildgust.
52 I do not doubt that the resolution of standard claims for injuries and loss which are disposed of in civil courts on a daily basis, do not call for any careful consideration of legal analysis or precise language or reference to case law. If the function of this Court was simply to make some broad assessment of whether any particular disposition in such a case should be allowed to stand, then I would have no real difficulty with the result in this case. If it were to be reduced, as at times the submissions seem to suggest it should be, to a form of reverse beauty contest between a purchaser/investor making a bid for substantial property on the basis of a back-of-the-envelope calculation in reliance on information which he did not himself commission or pay for, and a professional firm which provided erroneous measurements, it might be a close call but I might favour the individual investor over the corporate firm, albeit without much enthusiasm. But I do not think the function of this Court can be reduced to the resolution of individual cases on a basis that can be plausibly considered fair, or at least not obviously unfair. In truth, if a plausible case could not be made for both sides in a case, the parties involved would rarely engage in costly litigation. If all this Court had to do was to make broad ad hoc conclusions on equally broad judgments made in individual cases in a trial court, then the jurisprudence in this area would quickly become little more than an exercise of unbounded discretion normally stigmatised as the antithesis of justice according to law. The case law in the area would rapidly become little more than that “codeless myriad of precedent, that wilderness of single instances” criticised by Tennyson. This is more than an objection that the law cannot be fitted in to some pleasing intellectual pattern. If the decisions of the appellate courts are only individualised determinations on the grounds of some general conception of fairness, then all cases would, in principle, have to be appealed since it would be impossible to predict in any given case the likely outcome, other than by a process of amateur psychological forecasting some distance removed from legal analysis.
53 But, as I conceive it, the function of this Court is, with the discipline, structure, illumination and focus provided by the individual case, to analyse the law in such a way as may permit issues to be resolved without the considerable cost in time and money involved in litigation and appeals in other cases. The results should not merely be certain and predictable, but also promote rational, efficient and fair behaviour. In my view, it is necessary, therefore, to look more rigorously at the analysis offered here.
54 First, I do not think that the difficulties in this case can be avoided by treating the case as one of a negligent act to which the general principle in Donoghue v. Stevenson applies. In many cases of negligent misstatement, it is possible to identify an antecedent, allegedly negligent act. Thus, the accountant who wrongly certifies a company’s accounts may have either failed to investigate the matter sufficiently, or have wrongly analysed the information available (Caparo Industries v. Dickman [1992] 2 A.C. 605, Candler v. Crane, Christmas & Co. [1951] 2 K.B. 164). The banker who wrongly states that a company is good for such debts as it may incur may have failed adequately to investigate its financial status, or misconstrued the information available. (Hedley Byrne v. Heller [1964] AC 465). It is, as Keane C.J. pointed out in Glencar, wrong to speak of somebody being negligent in the abstract. Negligence in law means a breach of an existing duty of care. Assuming for the moment, however, that the defendants in this case were careless in the way in which they measured (or indeed failed to measure) the premises, they did not owe any duty to prospective purchasers when they did so and did not cause them any loss as a result of that act, or failure to act, without more. Any duty, contractual or tortious, was owed at that point to the client. The question of a potential duty of a prospective purchaser, including the plaintiffs, and the question of any loss being incurred only arose when the product of the measurement exercise was included in the brochure as a statement and provided to prospective purchasers. This conclusion can, indeed, be tested by considering that if the statement had not been made and provided to prospective purchasers (most obviously by being contained in Jones Lang Lasalle’s brochure), it could not be said that any claim could arise on the part of the plaintiff, even if Jones Lang Lasalle had been grossly careless in the act of measurement. The case must be analysed, in my view, as a case of negligent misstatement.
55 I also consider that the argument, attributed in the judgment to the defendant, that the disclaimer was to be considered as addressing the so-called third limb of the test set out in Australia in Sutherland Shire, approved in the United Kingdom in Caparo Industries v. Dickman [1992] 2 A.C. 605 and adopted in this jurisdiction in Glencar Explorations p.l.c. v. Mayo County Council [2002] I.R. 84, i.e. whether it was just and reasonable to impose a duty of care, was unhelpful. Caparo did not involve any disclaimer. Indeed, if the auditor’s statement on the statutory accounts that they provided a true and fair view of the business of the company had contained a disclaimer (assuming that was legally possible), it is probable that the issue in Caparo would not have arisen at all. The question in Caparo was whether the very particular circumstances created in that case by the statutory obligation on a company to employ an auditor, and on that auditor to provide his or her opinion as to whether the accounts provided a true and fair view of the business of the company, could give rise to a duty of care to parties who invested in, or perhaps acquired a company in reliance on the financial picture presented by the accounts. The House of Lords considered that in the circumstances, although there was sufficient proximity, it would not be fair and reasonable to hold that auditors in such cases owed a duty of care to third parties with whom they had no contractual relationship. It may well be that some of the factors that were in the background in that analysis may also be relevant to the issue here. But here the question is whether, in the light, in particular, of the disclaimer, there was, in truth, sufficient proximity to give rise to a duty of care. It was the brochure which created the potential relationship between Jones Lang Lasalle and the plaintiff, and the question was, in the light of the terms of the brochure, whether such a relationship was created as to give rise to a duty of care so that Jones Lang Lasalle would be responsible to the plaintiff for any error in the particulars.
56 It is also fair, I think, to acknowledge that although this case cannot, in my view, be treated as one of liability for a negligent act, that that does not dispose of the argument based upon Wildgust. The plaintiff sought to put the case on a somewhat different basis. It was argued that Wildgust now permitted a court to approach a case of negligent misstatement on the same legal basis as any claim made in reliance on negligent acts, and in consequence, that the traditional issues arising in the area of negligent misstatement such as special relationship, assumption of responsibility, reliance etc. could be dispensed with, and the issue approached simply on the basis that the relationship gave rise to a duty of care, and whether the disclaimer successfully excluded any liability for breach of that duty. That would, of course, be a very large movement away from the law which was thought to have emerged from Hedley Byrne v. Heller [1964] AC 465 and those cases in this jurisdiction which followed it. However, this reading of Wildgust has received some impetus from some of the commentary on the case and it is accordingly necessary to consider that decision in some greater detail.
57 The facts in Wildgust were very complex, unusual and far removed from the situation in this case. Thus, the case might only be relevant here if it is understood as stating some principle (or refinement of principle) of general application. The first named plaintiff, Mr. Wildgust, was the principal of a business (“the company”) which was the second named plaintiff, and which borrowed money from bankers, Hill Samuels (“HS”). Security for that loan was a personal guarantee from both Mr. Wildgust and his wife which was, in turn, supported by life insurance policies taken out with Norwich Union (“the insurers”) at the behest of the bank on the lives of Mr. Wildgust and his wife, and which were mortgaged to the bankers. This is, of course, a common arrangement. Premiums were paid by direct debit by the company’s bank account with Bank of Ireland. There was thus a reasonably complex web of legal relationships between the plaintiff, his wife, the company, the bankers (Bank of Ireland) who made the direct payment to the insurers Norwich Union, and finally the bankers (HS), who had advanced the loan, which was secured by the personal guarantees, the same themselves supported by the insurance polices.
58 It appears that due to a problem on one occasion with the direct debit, the premium was not paid. The insurers notified the bank (HS) (but neither of the plaintiffs nor Mrs. Wildgust) that the premium was unpaid, and if left unpaid that the policy would lapse. This was particularly relevant because Mrs. Wildgust was unfortunately in poor health, having been diagnosed with cancer. A manager in HS contacted Mr. Wildgust, who assured him that the premium had been paid by bank draft. In fact, that draft had been returned (properly it seems) to the second named plaintiff company as an excess payment. Commendably, it appears that HS was still concerned, and the manager in the bank contacted the insurance company and was assured (it appears bona fide but erroneously) that the premium had indeed been paid and the policy was in force. This, indeed, was the same mistake under which Mr. Wildgust was labouring. Accordingly, the bank manager took no further steps, and neither sought to ensure that the premium was paid by Mr. Wildgust or the company, nor to exercise the right that the bank had to make premium payments to preserve the policy. If HS had been informed that the premium was unpaid, they would have paid the premium to keep the policy alive. The information that the policy was believed by the insurers to be in full force was not communicated to Mr. Wildgust. In due course, unfortunately, his wife died, but the insurers refused to pay on the policy, contending that it had lapsed by reason of the non-payment of the premium. Proceedings were commenced by Mr. Wildgust and the company against a number of defendants, but ultimately were reduced to a claim against the insurers. The initial proceedings were somewhat confused, and indeed the claim in negligent misstatement was only added after a successful appeal to the Supreme Court which permitted the amendment of the claim. When that case proceeded in the High Court, the plaintiff’s case against the insurers was dismissed on the grounds that while the insurers had negligently assured HS that the policy was in force and as a result of which HS had neither sought to have a premium paid nor paid it themselves, nevertheless the statement made by the insurers to HS had not been communicated to the plaintiffs, and therefore it could not be said that the plaintiff, Mr. Wildgust, and his company had relied on the negligent statement. On appeal to the Supreme Court, (Denham, Geoghegan and Kearns JJ.) allowed the plaintiff’s appeal. Lengthy and considered judgments were delivered by Geoghegan and Kearns JJ.
59 First, I should say that I have little doubt that the result in Wildgust was correct and just. It is also apparent, however, that the legal analysis was complicated. There may have been many potential routes which would have allowed the plaintiffs to recover against the insurance company, although some of them may have required some degree of novelty. It may be correct to analyse the case as one of negligent misstatement, and it may be that in future years, it will be possible to place this case in its proper place in that jurisprudence, whether as an outlier representing a very specific finding depending on particular and unusual facts, or as an important straw in the wind supporting a new and broader approach, or something in between. But I think it is clear at this stage that Wildgust cannot be taken as itself justifying a single unified approach to all cases of negligence, whether of negligent act or misstatement, and jettisoning traditional considerations such as proximity, and undertaking of responsibility in such a way that this case can be approached as one in which there is a duty of care and the only relevant consideration is whether liability was successfully excluded by the terms of an exemption clause.
60 First, and most obviously, Wildgust was not treated by the Court as representing a substantial revision of the general law of negligence. Indeed, if the case had been considered to call for such an exercise, it would not have been heard by a court of three, and if the Court considered that substantial issues of principle arose, the case could have been adjourned to be heard by a larger court. In fact, as Geoghegan J. observed, “the facts of the case were most unusual and there was no reported case sufficiently analogous to be of assistance”. The case was dependent on those unusual facts and understood by the Court to be, at most, a modest extension of the existing law to take account of the difficulties posed by the almost unique set of circumstances posed in that case. Geoghegan J. did observe that concepts running through the English case law relating to negligent misstatement and representation such as reliance, assumption of risk, special relationship, relationship to contract, or even, as he described it, the “will- o’- the- wisp” concept of “proximity” might not be all that necessary. This observation was immediately followed, however, by the statement that he was prepared to assume for the purposes of the case “that the law of negligent misstatements is a separate code from the law of negligent acts”. Furthermore, both of the judgments carefully analysed and considered the leading cases such as Hedley Byrne v. Heller and certainly do not suggest that the analysis in that case has been entirely discarded.
61 The central issue raised in Wildgust, and the issue for which it is authority, is on the question of reliance. That was the issue upon which the plaintiffs failed in the High Court and succeeded in the Supreme Court. The decision of the Supreme Court was, in effect, that in the particular and unusual circumstances of the case, the plaintiff did not have to prove personal reliance on the assurance given by the insurers to the bank that the premiums had been paid and the policy was in force. Indeed another way of looking at that case is perhaps that given the close relationship between the plaintiffs and the bank in relation to the insurance policy, the plaintiffs had a community of interest with the bank and were entitled to rely upon the representation made to the bank, and the bank’s reliance on it. But however viewed, it is clear that the case is only authority for the proposition that it is not necessary to show individual reliance by the plaintiffs in a particular situation like that of Mr. Wildgust. Indeed, the case is not authority for the proposition that reliance is not necessary. Instead, it established that the plaintiffs in that situation were entitled to rely on the reliance placed by HS on the assurance given. It is not authority for the proposition that cases of negligent misstatement do not require a consideration of whether there has been an assumption of risk on the part of the maker of a statement, or more broadly whether the circumstances are such as to give rise to a duty of care.
62 Even if Wildgust was taken at its broadest as suggesting, perhaps, that by analogy with the decision in that case it might, in any given case, be possible to dispense with a requirement of an assumption of responsibility that, in my judgment, would still not avail the plaintiffs in this case. The logic of Geoghegan J.’s judgment was that those tests were essential control mechanisms necessary to limit the scope of liability in cases where a statement was capable of general dissemination, giving rise to the possibility of indeterminate liability of an indeterminate amount to an indeterminate group, as in Ultramares v. Touche (1931) 255 NY 170. In Wildgust, Geoghegan J. found there was no need for such a control mechanism because the particular circumstances of the case meant that any statement was not generally disseminated. Instead both the individuals affected by the statement (arguably a single individual, the holder of the insurance policy, albeit that the interest was here divided between the individual and the lender to whom the policy was assigned) and the amount of financial exposure if an error made (the amount of the policy) were known (or capable of being known) and limited, at the time it was made. But the same cannot be said here. The statement relied upon by the plaintiff here was made in a brochure which was generally available. There are in truth a number of potential claims arising from this type of error. In addition to a purchaser like Mr. Walsh who buys property and finds it smaller than he claims he expected, it is possible to conceive of claims by a bidder who did not purchase the property because they thought it too big, or the disappointed developer underbidder who would have been successful if Mr Walsh had not paid “too much” for the premises. Both these claimants could claim that they lost a valuable property which increased in value dramatically in the subsequent years, particularly if the test is merely proximity forseeability and damage. It would be difficult to assess loss in such cases. These considerations are similar to those which have hitherto justified the limitations on liability for misstatement and are in sharp contrast to the considerations which influenced the Court in Wildgust. Furthermore, there was, in Wildgust, no disclaimer or waiver of liability, and thus that issue, which is central to this case, did not arise. In those circumstances, I do not think that Wildgust provides justification for adopting an approach to this case, which would involve a dramatic departure from the law of negligent misstatement, which has existed since it was first identified in Hedley Byrne v. Heller and approved in this jurisdiction in Securities Trust v. Moore and Bank of Ireland v. Smith. If that step is to be taken it would require more elaborate consideration (and by a full court) than was involved in this case or, indeed, in Wildgust. Accordingly, since in my view, on the established test, the plaintiff should not have succeeded, I would allow the defendant’s appeal.
63 Finally, and while not in any sense dispositive, it seems to me this is an outcome which provides clarity and promotes efficiency. This case is, ultimately, about the allocation of risk. At first blush, it might appear reasonable that the agent uttering the statement, should bear the risk of damage flowing from error, but when put in context this is less clear. Everyone involved in this transaction is selling or buying something. The provision of information or advice which can be relied on (and sued on if incorrect) has a value, sometimes substantial. Why should one party, be able to acquire this information backed by the resources of a substantial firm, for nothing? If the agent is unable to limit liability (or be confident that it can do so, which if a disclaimer is to be assessed with the severity of an exemption clause, it cannot be), it must seek to price its services at a sufficient price to cover the risk. Given the potential exposure to damages in property transactions and the costs involved in litigation, this is a substantial cost that must be built into the price either directly, or indirectly through insurance. This means that the cost is spread across the agent, its client, and all other purchasers. But those purchasers may have no interest in accuracy of information as to area, and will not be relying on the brochure in other respects, such as title or tenure. To these participants this would be an additional and unnecessary cost. It is only a special purchaser, who has a particular interest in the square footage for whom the information has value, and there is no reason why that purchaser should be able to avoid the cost of being able to rely on that information, and spread it across other market participants. It is reasonable in my view, that if a purchaser has a particular interest in reliance on the information in the brochure, the starting point should be that he should contract for that, either with the vendor, the vendor’s agent, or his own expert, and otherwise bear the risk of reliance in error, unless the agent has, and for whatever reason, clearly assumed the risk. This is, as I understand, the essential approach to claims of negligent misstatement in cases such as this and is consistent with the outcome of those cases, whether the claims succeed or fail. In my view, it cannot be said from the circumstances of this case (which here resolve themselves on the terms of the brochure), that the agent assumed that responsibility to this plaintiff.
Judgment of Ms. Justice Laffoy delivered on the 1st day of June, 2017
Introduction
1. For just over half a century, starting with the decision of the House of Lords in Hedley Byrne & Co. v. Heller & Partners Limited [1964] AC 465 (“Hedley Byrne”), the law on liability in tort for negligent misstatement has been evolving in the United Kingdom. In general, the developments in the United Kingdom have been followed in this jurisdiction. However, a very fundamental question which arises on this appeal, namely, if, in what circumstances and to what extent a disclaimer of responsibility absolves a defendant supplier of information from liability for economic loss incurred by a plaintiff recipient of the information due to what would otherwise be negligent misstatement on the part of the defendant, has not previously been determined by this Court. In considering that question in the factual context of this appeal, this judgment will address:
(a) the essential facts which underlie the issues which have to be determined;
(b) the case as pleaded by the respondent on the appeal (“Mr. Walsh”), who was the plaintiff in the High Court, and the defence put forward by the appellant on the appeal (“JLL”), which was the defendant in the High Court;
(c) the judgment of the High Court delivered by Quirke J. (“the trial judge”) on 24th January, 2007 (which is reported at [2009] 4 IR 401);
(d) some features of the appeal;
(e) analysis of the evolution of the relevant legal principles applicable by reference to the jurisprudence of the United Kingdom and the extent of the recognition and application of that jurisprudence by this Court, leading to the identification of the relevant legal principles in this jurisdiction; and
(f) discussion and conclusions as to the application of the relevant legal principles to the relevant facts.
Factual background in outline
2. JLL acted as estate agent for Tucks Limited (“the Vendor”) in the sale of a commercial property by private treaty in the year 2000. The commercial property, which is hereinafter referred to as “the Property”, was situate at Upper Gardiner Street in the north inner city area of Dublin. Mr. Walsh entered into a contract to purchase the Property from the Vendor on 9th August, 2000 at the price of IR£2,342,000 and the sale was completed by a conveyance dated 28th September, 2000.
3. The evidence of Mr. Walsh at the hearing in the High Court was that he was in the management training and property business and that he had been engaged in the property business for twenty years. At the time, he owned premises in the north inner city area of Dublin, on Cumberland Street, which he was considering selling. He saw the Property advertised in a newspaper and he also received a call from Eamonn Maguire (“Mr. Maguire”) of Palmer McCormack, a firm of chartered surveyors, who was aware that he needed property in the north inner city area. Mr. Walsh, accompanied by Mr. Maguire, whom he testified was not acting as his advisor, went to view the Property on 13th July, 2000. Mr. Walsh was quite interested in the Property and he returned on the 14th July, 2000 to view it again. On that occasion, Woody O’Neill (“Mr. O’Neill”), a representative of JLL gave him a sales brochure, the contents of which will be outlined in detail later. On 21st July, 2000 Mr. Walsh received a telephone call from Mr. O’Neill who stated that there was substantial interest in the Property and that tenders had to be submitted by noon on 28th July, 2000. Mr. Walsh did submit a handwritten tender before noon on 28th July, 2000. However, before so doing he organised that what he described as a “condition survey”, that is to say, a survey as to the condition of the Property, be carried out by a chartered surveyor, Val O’Brien (“Mr. O’Brien”). The Property was surveyed by Mr. O’Brien on 27th July, 2000 and he gave a verbal report, not a written report, to Mr. Walsh.
4. As regards the amount tendered by Mr. Walsh, his evidence to the High Court was that his “calculations were made on the back of an envelope”, which one must interpret metaphorically rather than literally. The component of his calculations which is relevant for present purposes was based on the assumption that there would be available for letting, at rent estimated at IR£20 per square foot, approximately 10,000 square feet on the first floor of the Property. The source of the figure of approximately 10,000 square feet was JLL’s sales brochure.
5. Mr. Walsh’s tender was accepted by the Vendor and, as recorded above, the contract was subsequently executed and the sale was completed in September 2000.
6. As is outlined in the judgment of the High Court (at paras. 25 and 26 in the reported judgment), on Mr. Walsh’s instructions, Palmer McCormack provided a report in relation to the Property for Mr. Walsh’s banker, ACC Bank, which was dated 15th August, 2000 and which stated that the Property “comprises approximately 23,000 square feet gross on a site of almost a 1/3 of an acre”. It was stated in that report that Palmer McCormack had not measured the building and had taken the floor areas from JLL’s sales brochure. The report also stated that the “office accommodation at the first level comprises approximately 10,463 square feet gross . . .”. ACC Bank made no inquiries as to the accuracy of the measurements and did not itself procure a survey in relation to the Property.
7. JLL’s sales brochure was a two-page document. At the top of each page, the Property was described as “Industrial Property”. On the first page, over a colour photograph of the Property, it was stated:
“Excellent Redevelopment Opportunity”.
The address was then given and there followed the following particulars:
“2,142m2 (23,057 sq ft)
Site Area 0.13 Hectares (0.31 Acres)”
The Property was then described as: “Excellent city location close to numerous commercial and institutional occupiers”, with examples being given. It was also stated that it was “Zoned Z8”. At the bottom of the first page in very small print was a disclaimer in the following terms:
“Whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers/lessees should satisfy themselves as to the correctness of the information given.”
8. On the second page there was a map indicating the location of the Property, which was described as a high profile two storey corner property and as comprising “a mixture of retail and showroom, storage and office accommodation over two floors”. Further particulars of the accommodation were then set out as follows:
“Accommodation
M2 Sq Ft
Ground Floor 1,170 12,594
First Floor 972 10,463
Total 2,142 23,057
Site Area 0.13 Hectares (0.31 Acres)”
There followed a further reference to “Opportunity”, which stated that the Property provided “an excellent redevelopment opportunity and, subject to the necessary planning permission, would be ideally suitable for residential, commercial or mixed scheme”. It was stated that vacant possession would be provided in Autumn 2000.
9. After the purchase was completed, in the context of negotiations in relation to letting the first floor of the Property to the Office of the Public Works, Mr. Walsh instructed Mr. O’Brien to measure the floor area of the Property. As is recorded in the judgment of the High Court (at para. 28), by letter dated 20th March, 2001 Mr. O’Brien advised Mr. Walsh that the total floor area of the Property was 21,248 square feet (8,573.5 square feet at first floor level and 12,674.6 square feet at ground floor level). In other words, in the brochure, JLL had overstated the total floor area by 1,809 square feet, equivalent to approximately 8% of the total floor area. The area of the first floor had been overstated by 1,809 square feet, being approximately 18% of the first floor area. While there was some discussion on the hearing of the appeal, by reference to documentation which had been discovered, as to how the mistake in the measurements of the internal areas and the inclusion of the erroneous measurements in the sales brochure had occurred, in reality, aside from reliance on the disclaimer, no case has been made on behalf of JLL that no fault lies with JLL for that mistake or the inclusion of the erroneous measurements in the sales brochure. Having said that, the proven facts merely show that JLL produced the sales brochure, which contained information in relation to the internal floor areas of the Property which was incorrect, and furnished it to Mr. Walsh as a potential purchaser. There is not any other evidence of action or activity on the part of JLL, which Mr. Walsh could assert amounts to negligence, as distinct from negligent misstatement.
10. Mr. Walsh initiated the High Court plenary proceedings the subject of this appeal against the appellant on 11th October, 2001 (High Court Record No. 2001 No. 15154P) claiming damages for negligence and negligent misstatement on the part of JLL. He was successful in the High Court and was awarded damages in the sum of €350,000 against JLL.
The case as pleaded
11. The basis of the claim of Mr. Walsh against JLL is set out succinctly and with clarity in the statement of claim. It is asserted that JLL was under a duty of care to Mr. Walsh in preparing and making available to him information and particulars in relation to the Property, in particular, to ensure that the information and particulars so provided would be accurate and that all reasonable skill and care would be used by JLL in furnishing such information and particulars. It is asserted that JLL knew or ought to have known that Mr. Walsh would rely on the contents of the brochure furnished to him by JLL and that JLL owed to Mr. Walsh a duty of care in respect of the brochure. That JLL expressly represented to Mr. Walsh that it had taken every care in the preparation of the particulars in the brochure and that by reason thereof JLL had assumed responsibility to Mr. Walsh for the contents of the brochure and was under a duty of care to ensure its accuracy and to ensure that every care had been taken in its preparation is pleaded in the statement of claim. Following reference to the errors in the brochure in relation to the floor area, it is asserted that JLL “was guilty of negligence and negligent misstatement”. Particulars of breach of duty and negligence, including negligent misstatement, are itemised, which, in general, assert alleged failure to take reasonable care in relation to the preparation and contents of the brochure. The claim is represented as a claim for “damages for negligence and negligent misstatement”.
12. JLL in its defence traverses all of the matters pleaded in the statement of claim or puts Mr. Walsh on proof thereof. However, it is pleaded by way of defence that the brochure clearly stated that the particulars contained therein were not warranted and that any intending purchasers should satisfy themselves as to the correctness of the information given. Further it is expressly asserted that there was never any duty of care arising as between JLL and Mr. Walsh sufficient to found any cause of action in negligence or in negligent misstatement. That JLL assumed no responsibility for any information upon which Mr. Walsh places reliance is also pleaded, as is that any loss or damage suffered by Mr. Walsh was caused solely, or alternatively contributed to, “by reason of negligence or contributory negligence” on the part of Mr. Walsh in failing to carry out a survey of the Property before entering into the contract to purchase the Property.
13. In the light of what is stated earlier (at the end of para. 9) as to the proven facts and evidence, and having regard to Mr. Walsh’s claim as pleaded as outlined, in my view, the claim for negligence must be regarded as a claim for negligent misstatement. Accordingly, the basis on which I propose to address the issues on this appeal is by reference to the law on negligent misstatement as distinct from general negligence.
The judgment of the High Court
14. Before outlining the relevant findings in the judgment, it is appropriate to record that what is before this Court is counsel’s agreed note of the evidence adduced in the High Court, not a transcript. The provision in small print at the foot of the first page of the brochure is variously described in the agreed note as the “waiver” or the “disclaimer”. In my view, “disclaimer” is a more appropriate description and it is the description I propose to use.
15. The evidence of Mr. Walsh and of two chartered surveyors who testified is mentioned in the judgment, as well as the evidence of Nigel Healy (“Mr. Healy”), being a director of JLL and a chartered surveyor. One of the chartered surveyors, Barry Smith (“Mr. Smith”), who was described in the agreed note as a chartered surveyor and a partner in Messrs. deVere White Smith and as having been in the valuations and property business for over forty years, testified on behalf of Mr. Walsh. The other, Peter Rowan (“Mr. Rowan”), who was described as the CEO of the Dublin office of Lambert Smith Hampton, which specialises in commercial property, testified on behalf of JLL. While the evidence of each of those witnesses was partly directed to quantification of the loss alleged to have been incurred by Mr. Walsh by reason of the actual internal floor area of the Property being less than had been stated in the brochure, their evidence also addressed the issue as to whether JLL had liability to Mr. Walsh for negligent misstatement.
16. In briefly outlining the evidence of Mr. Walsh in the judgment (at para. 30), the trial judge stated:
“He said that purchasers of commercial property believed that ‘waivers’ of the type relied upon by [JLL] were to be found in most auctioneers’ brochures and were intended to safeguard auctioneers from liability in respect of ‘minor’ miscalculations.”
17. It was also recorded in the judgment (at para. 32) that Mr. Smith stated in evidence that it would be most unusual for investors to measure properties before offering to purchase and that he had never encountered circumstances where that had occurred. Mr. Smith said that most auctioneers had some form of disclaimer on their brochures and that these disclaimers comprised “. . . an effort to protect the agent from relatively minor errors”. Mr. Smith also said that he would expect auctioneers’ measurements to be correct and he would expect purchasers to rely on the measurements. As regards Mr. Rowan’s evidence, it was recorded (at para. 33) that he stated that a prudent investor or intending purchaser should carry out a detailed inspection and measure all floor areas before purchasing a property. He said that it would not be normal or prudent and that it would not be considered acceptable to rely solely on the measurements set out in sales brochures prepared by a vendor’s agent. As was pointed out by counsel for JLL, the judgment discloses that contradictory evidence was given by the two chartered surveyors who testified.
18. It was recorded (at para. 34) that Mr. Healy described the disclaimer as a form of advice to a purchaser to carry out inspections and measurements as a form of “due diligence” and, further, that Mr. Healy said that the measurements in the brochure were as a “general guide” to prospective purchasers.
19. The first issue identified by the trial judge in his judgment was whether JLL owed a duty of care to the plaintiff to ensure that the calculation of the floor area of the Property which JLL published in its sales brochure was accurate. In addressing that question, the trial judge referred to a number of authorities which will be considered in detail later, including, inter alia, the following:
(a) Hedley Byrne;
(b) Smith v. Eric S. Bush [1990] 1 AC 831 (“Smith”);
(c) Caparo Industries Plc v. Dickman [1990] 2 AC 605 (“Caparo”);
(d) McCullagh v. Lane Fox & Partners Ltd. [1996] PNLR 205 (“McCullagh”);
(e) Glencar Exploration Plc v. Mayo County Council (No. 2) [2002] 1 IR 84 (“Glencar”); and
(f) Wildgust v. Bank of Ireland [2006] 1 IR 570 (“Wildgust”).
20. The trial judge then set out certain conclusions (at paras. 45 to 49): that the information contained in JLL’s brochure was directed towards a very specific and identifiable category of persons, namely, potential purchasers; that it was to be expected that the potential purchasers would rely upon information contained within the brochure when deciding whether or not to offer to purchase; and that, prima facie, the relationship between Mr. Walsh and JLL was sufficiently proximate to give rise to a “special relationship” of the kind identified in Wildgust.
21. In addressing the effect of the disclaimer published at the foot of the first page of the brochure, the trial judge noted (at para. 50) that it had been argued on behalf of JLL that the disclaimer precluded the existence of the “special relationship” contended for on behalf of Mr. Walsh, it having been argued on behalf of JLL that the existence of the disclaimer introduced into the case the “third element” recognised in Caparo, making it unfair, unjust and unreasonable for the High Court to impose upon JLL a duty of the kind contended for on behalf of Mr. Walsh. The trial judge rejected JLL’s argument, stating (at para. 51):
“The information within the brochure was published by [JLL] for the express purpose of influencing a limited number of identifiable persons. The publication of the ‘disclaimer’ was immaterial to that fact. [Mr. Walsh] was a person to whom the brochure was expressly directed and he was influenced by the information published within the brochure. I am satisfied on the evidence that he relied upon the measurements within the brochure when calculating his precise bid or ‘tender’ for the purchase of the property.”
22. The trial judge then (at para. 52) identified the question for determination in relation to the “waiver” as whether its presence within the brochure and its precise terms are together sufficient to exclude JLL from liability to Mr. Walsh in respect of negligence by JLL in the measurement of the floor area of the Property and negligent misstatement on the part of JLL in publishing incorrect measurements of the floor area. He held that, on the evidence, it was not sufficient. He stated (at para. 53 et seq.) that he accepted the evidence of Mr. Walsh and the chartered surveyors that it is not, and has not in the past been, the practice for prospective purchasers of commercial property in the Dublin area to measure the floor areas of properties before offering to purchase. By his reference to “the chartered surveyors” it is inferred that the trial judge was referring to the chartered surveyors called as witnesses by Mr. Walsh, namely Mr. O’Brien and Mr. Rooney. He stated (at para. 54) that he also accepted the evidence of “the chartered surveyors” that the “waiver” and other similar “waivers” published by reputable auctioneers are, and have in the past been, regarded by potential purchasers as relating “to relatively minor measurement errors”. While he accepted also (at para. 55) the evidence adduced on behalf of JLL, that is to say, the evidence of Mr. Rowan and Mr. Healy, that prudent purchasers should, where possible, measure floor areas and carry out detailed inspections before purchasing properties, he was satisfied, on the evidence, that, where detailed and precise measurements of commercial properties are provided within the brochures of experienced and reputable auctioneers, it is the practice for prospective purchasers to rely on the accuracy of those measurements, subject to potential minor miscalculations.
23. Having commented (at para. 59) that it was difficult to accept that “every care has been taken in the preparation of these particulars”, because the floor area was overstated to a degree which was seriously misleading to prospective purchasers, the trial judge went on to reject the argument made on behalf of JLL that the provision in the disclaimer that the particulars “are not warranted and intending purchasers/lessees should satisfy themselves as to the correctness of the information given” was sufficient to relieve JLL of liability in the circumstances of the case. Having identified the duty of care which Mr. Walsh contended was owed to him by JLL as being to ensure that the information, which it published in the brochure and provided for the alleged benefit of a limited category of persons (including Mr. Walsh), was reasonably accurate in the circumstances, the trial judge went on to say (at para. 63):
“If [JLL] wished to reserve to itself the right (a) to publish within its sales brochure, precise measurements which were in fact grossly inaccurate and (b) to relieve itself of liability to the category of persons to whom the brochure and its contents were directed, then there was an obligation upon [JLL] to draw to the attention of [Mr. Walsh] and other prospective purchasers the fact that the seemingly precise measurements published were likely to be wholly unreliable and should not be relied upon in any circumstances.”
The trial judge concluded (at para. 64) that JLL failed to discharge that obligation by including within the brochure “an enigmatic sentence in small print”.
24. Referring again to the “evidence of the practice adopted by buyers and sellers of commercial property in Dublin at the relevant time”, the trial judge stated (at para. 65) that JLL’s “disclaimer” was a quite inadequate means of notifying prospective purchasers that the seemingly precise measurements of the floor areas so prominently published within the sales brochures were wholly unreliable. It followed, he stated (at para. 66), that the “waiver” was not effective to relieve the appellant in respect of negligence and negligent misstatement of the type contended for on behalf of Mr. Walsh.
25. The trial judge then went on to find on the facts that the loss and damage claimed on behalf of Mr. Walsh was a loss which was reasonably foreseeable by JLL, pointing to a number of facts: that the total rental income recoverable from commercial property will often be the principal factor in the calculation of value; that the floor area of the premises is an important factor in establishing the total rental income from the property; that JLL knew, or ought to have known, that Mr. Walsh would estimate the value of the Property, and, accordingly, the amount which he was prepared to bid for the Property, with particular reference to the rental income recoverable from the Property; that an overstatement of the floor area of the Property would give rise to an inflated estimate of the rental income recoverable from the Property and a corresponding inflation in the estimated value of the Property; and that, if the Property was purchased upon an overestimate of its value and its potential rental income, the loss would be sustained by the successful purchaser.
26. The findings of the trial judge were summarised as follows (at para. 72):
“It follows that loss and damage to [Mr. Walsh] in this case was reasonably foreseeable by [JLL]. Having found, as I have that (a) the relationship between [Mr. Walsh] and [JLL] was sufficiently proximate to give rise to a ‘special relationship’ of the kind identified in Wildgust . . . and (b) that the loss allegedly sustained by [Mr. Walsh] was reasonably foreseeable in the circumstances and (c) that the imposition upon [JLL] of such a duty is, in the circumstances not unfair, unjust or unreasonable, it follows that I am satisfied on the facts of this case that [JLL] owed a duty of care to [Mr. Walsh] to ensure that the calculation of the floor area of the property in (sic) which [JLL] published in its sales brochure was accurate.”
The trial judge then stated that, since it had been conclusively established by way of unchallenged evidence that the area of the first floor of the Property was overstated by more 1,800 square feet, it followed that JLL was in breach of its duty to Mr. Walsh.
27. The issue whether there was contributory negligence on the part of Mr. Walsh in failing to measure the Property was then considered. Once again the trial judge referred to the evidence adduced on behalf of Mr. Walsh that it is not, and has not in the past been, the practice of prospective purchasers of commercial property in Dublin to measure the floor areas of property before offering to purchase and on that basis he did not find that Mr. Walsh was guilty of negligence in failing to carry out a survey prior to his entry into the contract. Further, (at para. 79), on a point with which JLL has specifically taken issue with on the appeal, he stated that “no evidence has been adduced in these proceedings to support the contention that an inspection or survey should have been carried out in order to confirm the precise measurements within the brochure”. On that basis he was not satisfied that any contributory negligence on the part of Mr. Walsh had been established by way of evidence in the proceedings.
28. Finally, the trial judge quantified the damages for which he found JLL liable to Mr. Walsh at €350,000.
29. The order of the Court dated 7th February, 2007 and perfected on 12th February, 2007 reflected the judgment, in that it stated that the Court found that JLL was negligent and that there was no contributory negligence on the part of Mr. Walsh, and that the Court assessed damages in the sum of €350,000.00 and ordered that Mr. Walsh recover that sum from JLL. An order for costs was also made against JLL in favour of Mr. Walsh.
The appeal
30. In broad outline, JLL’s appeal is grounded on assertions that, in making the various determinations outlined in his judgment, which led to the findings that JLL was in breach of its duty of care to Mr. Walsh, but that Mr. Walsh was not guilty of negligence or was not guilty of any contributory negligence, and, on that basis, in awarding damages to Mr. Walsh, the trial judge had erred both in fact and in law. JLL has not raised any ground of appeal in relation to the quantification of the damages awarded by the trial judge to Mr. Walsh, so that this Court is concerned only with the issue of liability. However, on the issue of liability both parties have attached considerable importance to the factual basis of the decision of the trial judge.
31. In their written submissions, counsel for Mr. Walsh place considerable emphasis on the factual matrix. First, they outline certain relevant undisputed facts, one of which is at the heart of the controversy between the parties, namely, that the floor area of the first floor of the Property is incorrectly stated in the particulars in the brochure. Secondly, there are listed no less than a further eighteen findings of fact made by the trial judge in his judgment. Thirdly, issue is taken in relation to what are characterised as erroneous factual assertions made by counsel for JLL in their submissions and no less than thirteen such assertions are itemised. Predictably, counsel for Mr. Walsh emphasise the function of this Court in relation to findings of fact made at first instance, referring to the principles set out in the judgment of McCarthy J. in Hay v. O’Grady [1992] 1 I.R. 210, and, understandably, underlining the second principle to the following effect (at p. 217):-
“If the findings of fact made by the trial judge are supported by credible evidence, this Court is bound by those findings, however voluminous and, apparently, weighty the testimony against them. The truth is not the monopoly of any majority.”
Obviously, this Court’s limited function in relation to findings of fact is a factor of which one is acutely conscious.
32. On the other hand, counsel for JLL have raised issues in their submissions in relation to quite a number of factual matters, including findings of fact made by the trial judge, the correctness of which they challenge, on the basis that some inferences leading to conclusions on matters of fact are incorrect and some of the evidence before the High Court was not sufficiently considered by the trial judge. A few examples will suffice for present purposes. First, the final ground of appeal put forward in the notice of appeal is that the trial judge erred in fact and in law in making the finding (at para. 79) referred to earlier that “no evidence has been adduced in these proceedings to support the contention that such an inspection or survey should have been carried out in order to confirm the precise measurements contained within the brochure”, notwithstanding the earlier statement (at para. 33) to the effect that Mr. Rowan “stated in evidence . . . that a prudent investor or intending purchaser should carry out a detailed inspection and measure all floor areas before purchasing a property”, and that “it would be normal or prudent and would not be considered acceptable practice to rely solely on the measurements set out in the sales brochures prepared by a vendor’s agent”, thereby pointing to the inconsistency between the two statements. Secondly, not only do counsel for JLL raise questions about the findings of fact made by the trial judge, but they also contradict assertions made by counsel for Mr. Walsh in their submissions in relation to the findings. For instance, an assertion by counsel for Mr. Walsh that there was a finding of fact that the Property would have been difficult for prospective purchasers to have measured is contradicted by counsel for JLL, who suggest that there was no such finding, and, in any event, there was contradictory evidence on the point. Finally, by way of example, counsel for JLL submit that the trial judge erred in fact and in law in holding that the disclaimer or similar disclaimers “have in the past been regarded by potential purchasers as relating to relatively minor measurement errors”.
33. Having mentioned some of the factual controversies which have arisen between the parties on the appeal, I now propose considering the relevant legal principles as they have evolved up to the present time with, inter alia, the objective of assessing to what extent those controversies as to the findings of the trial judge are relevant to the determination of the core issue which falls to be determined on the appeal. That issue, in my view, is the effect, if any, of the disclaimer in the sales brochure on JLL’s liability to Mr. Walsh for the errors in the brochure. If they are not relevant, the factual controversies do not have to be considered further.
Analysis of evolution of relevant legal principles and current law on negligent misstatement
34. The structure of the analysis which follows is to use Hedley Byrne as the starting point and thereafter to address in chronological order the various authorities relied on by the parties, ending with Wildgust.
Hedley Byrne
35. As was pointed out by Keane C.J. in Glencar (at p. 134), a major qualification of the principle that no action for negligence lay in respect of purely economic loss was established in Hedley Byrne in the case of pecuniary loss caused by a negligent misstatement. However, for present purposes, the significance of the decision in Hedley Byrne is the manner in which Law Lords addressed an issue that arose in relation to a disclaimer of responsibility. There, the respondent, Heller & Partners Ltd, a merchant bank, received an inquiry by telephone from another bank, which wanted to know in confidence and without responsibility on the part of the respondent the respectability and standing of one of its customers. Some months later the bank wrote to the respondent asking for its opinion in confidence as to the respectability and standing of the customer and whether it considered the customer trustworthy in the way of business to the extent of £100,000.00 per annum. The response of the respondent was headed “CONFIDENTIAL” and was expressed to be “For your private use and without responsibility on the part of the bank or its officials”. The recipient bank communicated the replies to its customer, the appellant, which relied on the statements in the response and as a result lost over £17,000.00 when the customer of the respondent went into liquidation. The appellant’s action for damages for negligent misstatement failed.
36. The five Law Lords took a similar view on the question of liability. Lord Reid, in a passage (at p. 492) relied on by counsel for JLL in this case, identified the question as “whether an undertaking to assume a duty to take care can be inferred”. He found that it was clear that the respondent never undertook any duty to exercise care in giving the replies and the appellant could not succeed unless there was such a duty. Lord Devlin found that there was a “general disclaimer of responsibility” which appeared to him to be conclusive. He agreed with Lord Reid and he stated (at p.533):-
“A man cannot be said voluntarily to be undertaking a responsibility if at the very moment when he is said to be accepting it he declares that in fact he is not. The problem of reconciling words of exemption with the existence of a duty arises only when a party is claiming exemption from a responsibility which he has already undertaken or which he is contracting to undertake.”
37. As is frequently observed and, indeed, as was observed by Geoghegan J. in Wildgust (at para. 10), there were nuanced differences of emphasis in the speeches of the Law Lords in Hedley Byrne but overall the concept of “special relationship” was accepted even though different characterisations were given. Counsel for Mr. Walsh placed particular emphasis on a passage from the speech of Lord Pearce (at p.540). As I believe that reliance on behalf of Mr. Walsh on the passage and, in particular, the portion emphasised, is misconceived, I consider it appropriate to put it into context. Lord Pearce stated (at p. 539) that innocent misrepresentation per se gives no right to damages, but he identified three situations in which it would:
(a) if the misrepresentation was intended by the parties to form a warranty between contracting parties, that is to say, a contractual situation, it gives on that ground a right to damages;
(b) if an innocent misrepresentation is made between the parties in a fiduciary relationship, it may, on that ground, give a right to claim damages for negligence; and
(c) there is also a duty of care created by “special relationships” which, though not fiduciary, give rise to an assumption that care as well as honesty is demanded.
38. The passage relied on by counsel for Mr. Walsh forms part of an analysis by Lord Pearce of what he described (at p. 539) as a “most important circumstance” – “the form of the inquiry and of the answer”. He pointed out that in Hedley Byrne both were plainly stated to be without liability. In addressing an argument made on behalf of the appellant that the words used were not sufficiently precise to exclude liability for negligence, and having stated that he did not accept that, even if the parties were already in contractual or other special relationship, the words would give no immunity to a negligent answer, in the passage relied on by counsel for Mr. Walsh he stated:
“But in any event they clearly prevent a special relationship from arising. They are part of the material from which one deduces whether a duty of care and a liability for negligence was assumed. If both parties say expressly (in a case where neither is deliberately taking advantage of the other) that there shall be no liability, I do not find it possible to say that a liability was assumed.”
39. Emphasis is placed by counsel for Mr. Walsh on the words “[t]hey are part of the material from which one deduces whether a duty of care and a liability for negligence was assumed” in that passage. That, it is suggested, means that the English courts have treated the presence of a disclaimer in negligent misstatement cases as one of the factors to be taken into account in determining whether the maker of the statement has “assumed responsibility” to the recipient, but not as an automatic bar to recovery by the recipient. The principal reason advanced on behalf of Mr. Walsh for the proposition that the disclaimer in the brochure in this case was ineffective to bar recovery by Mr. Walsh was the finding by the trial judge in his judgment (at para. 54), which is referred to earlier (at para. 22), that the disclaimer was of a type which is regarded by potential purchasers as relating “to relatively minor measurement errors”. Obviously, a disclaimer in most cases will only be part of the material from which one deduces whether what is now considered to be assumption of responsibility for the task exists. If it does not, the requirement of “proximity” or “a special relationship” will not be met. The misconception on the part of counsel for Mr. Walsh is in failing to recognise that the significance of a disclaimer and its proper interpretation, as the law has evolved, is in determining whether the giver of the information has assumed responsibility for the task for the benefit of the recipient claimant, as will be explained later.
Smith
40. Chronologically, the next authority of the Courts of the United Kingdom referred to in the judgment of the trial judge is the decision of the House of Lords in Smith. There the Law Lords were dealing with two appeals, but I consider it sufficient to address the appeal in Smith. The facts were that Mrs. Smith applied to a building society for a mortgage to enable her to buy a house. The building society was under a statutory duty to obtain a written valuation report on the house. It instructed the appellants, Eric S. Bush, a firm of surveyors, to inspect the house and carry out a valuation. Mrs. Smith paid the building society an inspection fee. She signed an application form which stated that the building society would provide her with a copy of the report and mortgage valuation obtained by it. The form contained a disclaimer, the text of which counsel for Mr. Walsh put before this Court. The text is to be found in the report (at p. 842), and it was in the following terms:-
“I accept that the society will provide me with a copy of the report and mortgage valuation which the society will obtain in relation to this application. I understand that the society is not the agent of the surveyor or firm of surveyors and that I am making no agreement with the surveyor or firm of surveyors. I understand that neither the society nor the surveyor or firm of surveyors will warrant, represent or give any assurance to me that the statements, conclusions and opinions expressed or implied in the report and mortgage valuation will be accurate or valid and that the surveyor’s report will be supplied without any acceptance of responsibility on their part to me.”
The appellants valued the house at £16,500.00 and the report recorded that no essential repairs were required. Relying on the report and without having obtained an independent survey, Mrs. Smith purchased the house for £18,000.00, having accepted an advance of £3,500.00 from the building society. Eighteen months after Mrs. Smith had purchased the house, bricks from the chimney collapsed and fell through the roof causing considerable damage. She brought an action against the appellants for damages for negligence. She was successful at first instance and was awarded damages. The Court of Appeal affirmed that decision and the House of Lords affirmed the decision of the Court of Appeal. A complicating factor in that case was that the disclaimer made by or on behalf of the surveyor appellants was subject to the statutory provisions of the Unfair Contract Terms Act 1977 (“the Act of 1977”) in force in the United Kingdom, and had to satisfy the requirement of reasonableness stipulated in s. 2(2) of the Act of 1977. It was held that the requirement was not satisfied, so that the disclaimer was not effective to exclude liability for negligence.
41. In the overall context of the evolution of the law in the United Kingdom on negligent misstatement, and, in particular, the concept of assumption of responsibility, the following passage from the speech of Lord Griffiths in Smith, which addresses the issues which arose on that appeal other than the issue of the requirements of the Act of 1977, is quoted with a view to providing some enlightenment as to later comments on it. He stated (at p. 864):-
“I have already given my view that the voluntary assumption of responsibility is unlikely to be a helpful or realistic test in most cases. I therefore return to the question in what circumstances should the law deem those who give advice to have assumed responsibility to the person who acts on the advice or, in other words, in what circumstances should a duty of care be owed by the advisor to those who act on his advice? I would answer[:] only if it is foreseeable that if the advice is negligent the recipient is likely to suffer damage, that there is a sufficiently proximate relationship between the parties and that it is just and reasonable to impose the liability. In the case of a surveyor valuing a small house for a building society or a local authority, the application of these three criteria leads to the conclusion that he owes a duty of care to the purchaser. If the valuation is negligent and is relied on, damage in the form of economic loss to the purchaser is obviously foreseeable. The necessary proximity arises from the surveyor’s knowledge that the overwhelming probability is that the purchaser will rely on his valuation, the evidence was that surveyors knew that approximately 90 per cent of purchasers did so, and the fact that the surveyor only obtains the work because the purchaser is willing to pay his fee. It is just and reasonable that the duty should be imposed for the advice is given in a professional as opposed to a social context and liability for breach of duty will be limited both as to its extent and amount. The extent of the liability is limited to the purchaser of the house. The amount of liability cannot be great because it relates to a modest house.”
That passage was preceded by an analysis by Lord Griffiths of a decision of the Queens Bench Division of the English High Court in Yianni v. Edwin Evans & Sons (A Firm) [1982] Q.B. 438 (“Yianni”). Lord Griffiths stated that he had come to the conclusion that the Yianni case had been correctly decided.
Yianni
42. Although not mentioned in the judgment of the High Court, or in the written submissions filed on behalf of Mr. Walsh, counsel for Mr. Walsh attached some importance to the Yianni decision in the oral submissions in this Court. It was also a case in which the plaintiffs decided to buy a house and to obtain a loan from a building society. The building society instructed the defendants, a well established firm of valuers and surveyors who regularly carried out valuations for the building society, to inspect the house and value it. The instructions from the building society named the plaintiffs as the purchasers, set out the purchase price and the loan required. The defendants reported that the house was adequate security for the loan. The building society accepted the report and notified the plaintiffs that they were willing to lend and they also sent them a copy of the society’s explanatory booklet. However, as is recorded in the judgment (at p. 447), Mr. Yianni did not read it, but if he had done so he would have read on p. 2 the following paragraph under the heading “Valuation”:-
“The Society does not accept responsibility for the construction or condition of the property offered as security, nor does it warrant that the purchase price is reasonable. The valuer’s report is confidential to the Society and is exclusively for the use of the Directors and Officers in determining whether a loan should be made and if so, for what amount. The Society may bring to your notice any defects which the valuer mentions but it should not be assumed that no other defects exist. If you require a survey for your own information and protection, you should instruct a surveyor independently. You are recommended to do this.”
43. On those facts it was held by the Queens Bench Division (Park J.) that the defendants were liable in negligence to the plaintiffs. It was further held that the plaintiffs had not been guilty of contributory negligence. Counsel for Mr. Walsh cited the penultimate paragraph in the judgment (at p. 457) on the issue of contributory negligence, which was in the following terms:-
“Finally [counsel] says that the plaintiffs should be held guilty of contributory negligence because they failed to have an independent survey: made no inquiries with the objective discovering what had been done to the house before they decided to buy it: failed to read the literature provided by the building society and generally took no steps to discover the true condition of the house. It is true that the plaintiffs failed in all of these respects, but that failure was due to the fact that they relied on the defendants to make a competent valuation of the house. I have been given no reason why they were unwise to do so. I have earlier read the paragraph under the heading ‘Valuation’ in the building society’s handbook, which Mr. Yianni did not read. No doubt if the paragraph had been in stronger terms, and had included a warning that it would be dangerous to rely on the valuer’s report, then I think that the plaintiffs might well have been held to be negligent. But, in my judgment, on the evidence the allegation of contributory negligence fails.”
While, as counsel for JLL submitted, the issue of contributory negligence does not arise unless liability for negligent misstatement is found on the part of JLL, I have quoted that passage because the reference to the inclusion of a warning in a disclaimer is resonant of the observations of the trial judge in his judgment (at para. 63) as quoted earlier (at para. 23). A suggestion of the necessity for a warning, I believe, is not to be found in any of the other authorities of the courts of the United Kingdom to which this Court’s attention has been drawn.
44. By way of general observation, I find it difficult to see any real analogy between the Yianni case, or, indeed, the Smith case, on the one hand, and this case, on the other hand. In the former cases each valuation was carried out in the context of a statutory framework which imposed a duty on the building society to make arrangements for the valuation of a property offered as security for an advance, which statutory framework, in the words of Lord Griffiths in Smith, “bites on such disclaimer”. Further, it was the prospective borrower who paid the valuation fee. Apart from that, the views of Lord Griffiths on the concept of assumption of responsibility have not found favour in the jurisprudence of the United Kingdom courts.
Glencar
45. The decision of the House of Lords in Smith pre-dates its decision in Caparo. Before considering the nature of the claim in Caparo and its factual context and, in particular, the specific passage in the speech of Lord Bridge in Caparo relied on by counsel for JLL in this case, it is appropriate to take a broader view of that decision by reference to the observations of this Court in relation to it in Glencar. In his judgment, Keane C.J., having noted that ultimately in Caparo a different approach had been adopted by the House of Lords as to determination whether a duty of care is owed and, if so, what is its scope, quoted the following passage from the speech of Lord Bridge (at p. 617), in which he summed up the approach in England:-
“What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon one party for the benefit of the other.”
Later in addressing the law in this jurisdiction, Keane C.J. stated (at p. 139):-
“There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take a further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff…”
46. It must be borne in mind that of the allegations on which the claim against the defendant in Glencar, Mayo County Council, was based, the allegation of relevance for present purposes was of negligent action in the exercise of its statutory function as planning authority, not an allegation of negligence misstatement. Further, while it must also be borne in mind that the view of Keane C.J. was obiter, within three years, it had been endorsed by this Court in the judgment of Fennelly J. in Breslin v. Corcoran [2003] 2 IR 203, a case also involving a negligent act as distinct from a negligent misstatement. Fennelly J. stated (at p. 208):
“I consider that this passage represents the most authoritative statement of the general approach to be adopted by our courts when ruling on the existence of a duty of care. It seems to me that, in addition to the elements of foreseeability and proximity, it is natural to have regard to considerations of fairness, justice and reasonableness. Almost anything may be foreseeable. What is reasonably foreseeable is closely linked to the concept of proximity as explained in the cases. The judge of fact will naturally also consider whether it is fair and just to impose liability. Put otherwise, it is necessary to have regard to all the relevant circumstances.”
Caparo
47. The decision of the House of Lords in Caparo arose from the trial of a preliminary issue as to whether a firm of accountants, who were the auditors of the accounts of a public limited company for a specific year and were defendants in an action alleging that the auditors had been negligent in auditing the accounts, owed a duty of care to the respondents, who were shareholders in the company and who, after receipt of the audited accounts for the year in question, purchased more shares in the company and later in the year made a successful takeover bid for the company. The passage in the speech of Lord Bridge relied on by counsel for JLL in this case follows an analysis of a number of cases including Hedley Byrne and Smith. Lord Bridge stated (at p.620):-
“The salient feature of all these cases is that the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation. In these circumstances the defendant could clearly be expected, subject always to the effect of any disclaimer of responsibility, specifically to anticipate that the plaintiff would rely on the advice or information given by the defendant for the very purpose for which he did in the event rely on it. So also the plaintiff, subject again to the effect of any disclaimer, would in that situation reasonably suppose that he was entitled to rely on the advice or information communicated to him for the very purpose for which he required it.”
On this appeal counsel for JLL drew attention to the qualifications in that quotation by reference to “the effect of any disclaimer of responsibility”, and argued that the existence and effect of the relevant disclaimer is crucial in any given case. Counsel for Mr. Walsh emphasised that what is of importance is the “effect” of any disclaimer, rather than its mere existence.
48. In Caparo, Lord Bridge noted (at p. 623) that some of the speeches in the Hedley Byrne case derive a duty of care in relation to negligent statements “from a voluntary assumption of responsibility on the part of the maker of the statements”, whereas in Smith Lord Griffiths emphatically rejected the view that such was the true ground of liability. Lord Bridge, however, considered that, in the context of the appeal then before the House of Lords, nothing turned on the difference between the two approaches. The outcome of the appeal in Caparo was that the House of Lords found that the auditors did not owe a duty of care to the respondents, either as shareholders or as potential investors in the company.
49. Before leaving the Caparo decision, it is appropriate to record that, on the facts there, no issue arose as to the existence or effect of any disclaimer of responsibility. While the passage quoted above from the speech of Lord Bridge does acknowledge that the effect of a disclaimer of responsibility may be of significance, it is obvious from the next sentence that what Lord Bridge was endeavouring to do was to distinguish the situations in the decided cases which he had outlined in that passage from the entirely different situation where, in his words, “a statement is put into more or less general circulation and may foreseeably be relied on by strangers to the maker of the statement for any of a variety of different purposes which the maker of the statement has no specific reason to anticipate.” To obviate the unsatisfactory outcome which would result from holding such a maker of a statement to be under a duty of care in respect of the accuracy of the statement “to all and sundry”, Lord Bridge outlined what he would expect to find in the decided cases as follows (at p. 621):
“Hence, looking only at the circumstances of these decided cases where a duty of care in respect of negligent statements has been held to exist, I should expect to find that the ‘limit or control mechanism’ . . . rested in the necessity to prove, in this category of the tort of negligence, as an essential ingredient of the ‘proximity’ between the plaintiff and the defendant, that the defendant knew that his statement would be communicated to the plaintiff, either as an individual or as a member of an identifiable class, specifically in connection with a particular transaction or transactions of a particular kind (e.g. in a prospectus inviting investment) and that the plaintiff would be very likely to rely on it for the purpose of deciding whether or not to enter upon that transaction or upon a transaction of that kind.”
In the light of what Lord Bridge said earlier, an effective disclaimer of responsibility prevents the “proximity” ingredient of the existence of a duty of care being established.
McCullagh
50. McCullagh was decided by the Court of Appeal, after the decision of the House of Lords in Caparo. Of all of the authorities cited on behalf of the parties, it is the authority which factually bears most resemblance to this case. The facts were that the plaintiff went to view a property in Chiswick in London, having seen a magazine advertisement which described the property as having “gardens of nearly 1 acre”. At the viewing, a director of the defendant estate agents involved in the sale of the property, Mr. Scott, orally represented to the plaintiff that the site occupied 0.92 of an acre. At the end of the viewing he handed the plaintiff a copy of the defendant’s particulars of the property, which stated the area as 0.92 acres. In fact, the site area was 0.48 acres. The plaintiff made an offer for the property that evening, and having revisited the property the next day, increased his offer, which was accepted by the vendors, and contracts were exchanged on the following Monday. When the plaintiff discovered that the plot site was only 0.48 acres, he initiated proceedings against the estate agents for damages for negligence. The estate agents, in their defence, relied on the disclaimer in their particulars document. It is appropriate to record the terms of the disclaimer, as set out in the judgment of Hobhouse L.J. (at p.209), because the terms of the disclaimer were expressly brought to the attention of this Court by counsel for Mr. Walsh. Having referred to the particulars, Hobhouse L.J. stated:
“They included in five paragraphs at the end of Lane Fox’s standard disclaimer:
‘1. These particulars do not constitute, nor constitute any part of, an offer or contract.
2. All statements contained in these particulars, as to this property, are made without responsibility on the part of Lane Fox or the vendors or leasers.
3. None of the statements contained in these particulars, as to this property, are to be relied on as statements, or representations of fact.
4. Any intending purchasers must satisfy themselves by inspection, or otherwise, as to the correctness of each of the statements contained in these particulars.
5. The vendors do not make or give, and neither Lane Fox nor any person in their employment, has any authority to make or give any representation or warranty whatsoever in relation to this property.’
This disclaimer was in terms which conformed closely to those commonly used by other estate agents at the time.”
51. It is clear from the judgments of the Court of Appeal in McCullagh, that the factual context, not merely the oral representation made by Mr. Scott, and the manner in which the plaintiff’s case was pleaded and argued, gave rise to complications, which were addressed in the judgments. However, for present purposes, it is only necessary to focus on the findings of the Court of Appeal in relation to the disclaimer.
52. Counsel for JLL relied on a passage from the judgment of Hobhouse L.J., which was preceded by an analysis of the speeches of the Law Lords in Hedley Byrne, and was immediately preceded by the quotation of the passage from the speech of Lord Devlin, quoted earlier (at para. 36), Hobhouse L.J. stated (at p.222):
“Thus the relevance of the disclaimer is to negative one of the essential elements for the existence of the duty of care. It negatives the assumption of responsibility for the statement. It implicitly tells the recipient of the representation that if he chooses to rely upon it he must realise that the maker is not accepting responsibility for the accuracy of the representation. The disclaimer is part of the factual situation which the court has to take into account in deciding whether or not the defendants owed a duty of care to the plaintiff. Put another way, the question is whether the plaintiff was entitled to treat the representation as one for which the defendants were accepting responsibility. This is primarily a factual question.”
Hobhouse L.J., having recognised that there had been some criticism in the speech of Lord Griffiths in Smith and in the speech of Lord Roskill in Caparo of the concept of assumption of responsibility, went on to state that the importance of that concept in cases of negligent misrepresentation was again recognised and emphasised in a subsequent decision of the House of Lords: Henderson v. Merrett Syndicates [1995] 2 AC 145 (“Henderson”). Moreover, in White v. Jones [1995] 2 AC 207 (“White”) Lord Browne-Wilkinson in the House of Lords “also emphasised the importance of the concept, assumption of responsibility”.
53. Later in his judgment, in applying the legal principles to the facts of the case, Hobhouse L.J., in a passage relied on by counsel for JLL, and in part relied on by counsel for Mr. Walsh, stated (at p.237):
“The right approach, as is made clear in Hedley Byrne, is to treat the existence of the disclaimer as one of the facts relevant to answering the question whether there had been an assumption of responsibility by the defendants for the relevant statement. This question must be answered objectively by reference to what a reasonable person in the position of Mr. McCullagh would have understood at the time that he finally relied upon the representation. In this context, it is obvious that the statement that the acreage of the property is 0.92 was a statement that was taken from the particulars, and that the defendants were not assuming responsibility for that statement. The mere fact that Mr. Scott, when showing Mr. McCullagh round the property, gave the same information to Mr. McCullagh, would not lead a reasonable person to conclude that the defendants were thereby choosing to assume responsibility for the statement which they said, in the particulars, they were not assuming responsibility for. The submission that such a conclusion would be reasonable is unreal. It was not supported by any evidence. Mr. McCullagh said (surprisingly) that he had not bothered to read the particulars, but he also said that he knew that they would contain disclaimers of the type which they, in fact, did. The submission was further inconsistent with paragraph 5 of the disclaimer. The essence of the law of negligence is the application of objective standards of reasonableness. By those standards, it is clear that the defendants were not assuming responsibility for the accuracy of the statement about the acreage. The position might be different if the representation had been about something not, or not expected to be, included in the particulars.”
In the written submissions filed on behalf of Mr. Walsh particular emphasis was attached to the first two sentences in that passage from the judgment of Hobhouse L.J., following on from reliance on the passage from the speech of Lord Pearce in Hedley Byrne quoted earlier (at para. 38). However, on the hearing of the appeal, counsel for Mr. Walsh expressly disavowed the proposition embodied in the second sentence, namely, that the effect of the disclaimer must be determined objectively.
54. Sir Christopher Slade agreed with that conclusion of Hobhouse L.J. Citing Henderson he stated (at p.243):
“The assumption of responsibility had been negatived by an appropriate disclaimer.”
Nourse L.J. was of the view that the disclaimer put the matter that there had been no breach of duty by the defendant estate agents, Lane Fox, beyond doubt.
Wildgust
55. The dispute which was the subject of the appeal before this Court in Wildgust was fundamentally different from the dispute on this appeal, and, in particular, no question arose as to the relevance of a disclaimer of responsibility in determining whether there was liability for negligent misstatement. However, the judgments of this Court are of relevance, because, at a general level, they addressed the law on negligent misstatement in the aftermath of Caparo and Glencar. Moreover, because the position of counsel for Mr. Walsh appears to be that the judgment of Geoghegan J. provides the answer to the core issue on this appeal, although I consider that it does not, it is necessary to consider that judgment in detail.
56. The facts in Wildgust were that the first named plaintiff, Harold Wildgust (“Mr. Wildgust”), and his wife entered into personal guarantees with a lender, Hill Samuel Bank Limited (“Hill Samuel”) in relation to the liability of the second named plaintiff, Carrickowen Limited, a company controlled by Mr. Wildgust, for loans it had obtained from Hill Samuel. Further, Mr. Wildgust and his wife gave security to Hill Samuel in the form of the assignment to Hill Samuel of a policy of assurance on the life of each with Norwich Union Life Assurance Society (“Norwich Union”). A monthly premium payable on the policies was paid by way of direct debit from an account in the name of Mrs. Wildgust held with Bank of Ireland. The premium payment due in March 1992 was not paid by direct debit. Although Bank of Ireland was originally a defendant in the proceedings, the plaintiffs’ claim against Bank of Ireland was settled. In essence, the dispute which was the subject of the appeal to this Court was the dispute between Mr. Wildgust and Norwich Union, which had refused to pay out on the policy on the life of Mrs. Wildgust after her death. The claim against Norwich Union was for an order compelling Norwich Union to pay out on the policy on Mrs. Wildgust’s life or for damages for negligent misstatement.
57. The negligent misstatement at the heart of the claim against Norwich Union arose in circumstances in which, Hill Samuel having been notified by Norwich Union on 6th April, 1992 of default in payment on foot of the direct debit of the monthly premium then due, an officer of Hill Samuel, Declan O’Hanlon (“Mr. O’Hanlon”), contacted Mr. Wildgust and was informed by him that a cheque had been sent to Norwich Union which would cover the premium due. Mr. O’Hanlon subsequently contacted Norwich Union by telephone on 22nd April, 1992 seeking confirmation that the policy was correct and in order. It was confirmed by Norwich Union that the cheque had been received and that everything was correct and in order.
58. However, subsequently it became apparent that everything was not correct and in order from the perspective of Norwich Union because of the manner in which Norwich Union treated the payment by cheque. As a result, the policy on the life of Mrs. Wildgust was treated as having lapsed in May 1992.
59. As recorded by Geoghegan J. in his judgment (at para. 7), Mr. O’Hanlon had not informed Mr. Wildgust that he had sought confirmation from Norwich Union that the premiums were paid up, so that Mr. Wildgust could not be said to have personally relied on the information given to Mr. O’Hanlon by Norwich Union. As is also recorded, Mr. Wildgust’s claim against Norwich Union failed in the High Court on the single ground of non-reliance. Geoghegan J. quoted what he described as the “quite crucial” final paragraph of the judgment of the High Court (Morris P.) delivered on 15th October, 2001. In that passage, which illustrates the “non-reliance” ground on which Mr. Wildgust failed at first instance, Morris P. stated:
“In my view the one major insurmountable difficulty for the plaintiff is that at no stage did he become aware of the fact that the misstatement had been made by the Norwich Union nor did he place any reliance upon it. He was not misled by the misstatement because he was not aware of it. He was not prejudiced by it. It was not until two months later that he became aware of the fact that the premium had not been paid. In my view the misstatement in no way influenced or contributed towards the conduct of the plaintiff. It did not influence him or cause him to act to his detriment. I do not believe that it would be reasonable that the law should impose a duty on the defendant for the benefit of the plaintiff in these circumstances.”
60. In his judgment (at para. 8 et seq.) Geoghegan J. analysed the development of the law of negligence, in particular having regard to the dichotomy of “negligence in act” and “negligence in a statement” and the necessity of some kind of control mechanism to limit the scope of liability for negligent misstatement in relation to the range of prospective claimants. He recognised (at para. 8) that Caparo had –
“. . . introduced a third element into liability for negligence, in addition to reasonable foreseeability and proximity, and that is reasonableness in the imposition of a duty of care.”
He also recognised that that principle had been endorsed, albeit obiter, by Keane C.J. in Glencar.
61. Geoghegan J. also referred to other English authorities on the tort of negligent misstatement, including Hedley Byrne, stating (at para. 10) that overall the concept of “special relationship” was accepted in the speeches of the Law Lords in Hedley Byrne, although recognising the nuanced differences referred to earlier. However, as he put it, before travelling further into the case law, he made the following observation on his consideration of the facts of the case before him, stating (at para. 11):
“The person in the Norwich Union giving the information had reason to believe that the first plaintiff may have been under the impression that his account was in order and he would also be aware or ought to have been aware that Hill Samuel would have paid the premium if a negative answer had been given. It should have been clear, therefore, that an incorrect answer would potentially damage the plaintiffs. That was enough to create the ‘special relationship’, if such is needed but quite apart from that, given that the assignment of the policy to Hill Samuel was by way of mortgage, the first plaintiff had an equity of redemption in the policy. Even though Hill Samuel was making the request in its own business interest, nevertheless in providing the information the second defendant would reasonably be expected to treat Hill Samuel and their customer, the mortgagor, as identified with each other. Even if one might quibble with the word ‘identified’, there was sufficient linkage to create a special relationship but as I have already indicated, I think that such relationship existed at any rate. I do not think that Hill Samuel or Mr. O’Hanlon can be said to have been an agent of the first plaintiff in making the inquiry or in relying on the answer but proof of such agency is not necessary to establish liability.”
What that passage illustrates is that Geoghegan J. was pointing to the concept of a “special relationship” as a controlling mechanism.
62. In his judgment (at para. 13) Geoghegan J. stated that the case which he found of greatest assistance was White, and, in particular, the speech of Lord Browne-Wilkinson, in which, as recorded earlier (at para. 52) in the context of the discussion of the judgment of Hobhouse L.J. in McCullagh, it was noted that the importance of the concept of assumption of responsibility was emphasised. In fact, Geoghegan J. quoted a passage from the speech of Lord Browne-Wilkinson in White, which was quoted by Hobhouse L.J. in his judgment in McCullagh, in support of the emphasis on the importance of the concept of assumption of responsibility. While that concept on its own was not crucial to Geoghegan J. finding for the plaintiff appellants in Wildgust, in my view, the submission made on behalf of Mr. Walsh that the concept was doubted by this Court in Wildgust is simply not correct. I will return to the analysis by Geoghegan J. of the judgment of Lord Browne-Wilkinson in White later. It is perhaps worth noting that the claim in White was a claim against a solicitor who had acted for a testator for failure to comply with instructions from his client to make provision for the plaintiffs, who would have been beneficiaries under the testator’s last will had such failure not occurred. In other words, it was a case of negligent action, or, more correctly, negligent inaction, not of negligent misstatement, although Geoghegan J. saw its importance as the further analysis of the Law Lords of the principles underlying Hedley Byrne.
63. Following his analysis of the aspects of the speech of Lord Browne-Wilkinson in White, which will be considered later, Geoghegan J. stated (at para. 14):
“The essence of this case was that the person in the [Norwich Union] giving the information in response to the request ought to have known that it would be relied on at least by Hill Samuel and that if the statement was incorrect, the policy could lapse to the detriment not just of Hill Samuel but to their customer who was paying the premiums and who had a beneficial interest in the form of the equity of redemption in the policy. I fail to see how that did not amount to a special relationship. Put shortly, the first plaintiff was a ‘neighbour’ for the purposes of the law of negligence and a specially close one at that. There is no question here of the [Norwich Union] being liable to large numbers of perhaps unknown persons. In my view, the [Norwich Union] is liable to the plaintiffs and I would, therefore, allow the appeal.”
In applying that reasoning to the facts, the “non-reliance” problem was obviated. Indeed, Geoghegan J. pointed to this solution to the problem earlier in a passage (at para. 9), which is quoted in the written submissions filed on behalf of Mr. Walsh, in which Geoghegan J. stated:
“In Hedley Byrne the only relationship alleged was the relationship between the inquirer and the person giving the information. Hence, the emphasis on reliance by the inquirer. It is, however, a small extension of this, and justified by later caselaw, that where a person who is not the inquirer is damaged as a consequence of the wrong answer and where the existence of such a person and the reasonable foreseeability of such damage ought to have been present in the mind of the person giving the information, there was a special relationship with that person also which gave rise to a duty of care.”
64. There is a comprehensive analysis of the development of the law on negligence and negligent misstatement in the judgment of Kearns J. in Wildgust, which forges a path from Donoghue v. Stevenson [1932] AC 562 to Hedley Byrne, and, ultimately, to Caparo and Glencar. Kearns J. (at para. 56), considered the application of what he described as the “most authoritative recent statement of the law in relation to the general duty of care in negligence”, the passage from the judgment of Keane C.J. in Glencar, quoted earlier (at para. 45). Significantly, Kearns J. went on to pose the question (at para. 57) whether the principles in Caparo, itself a case in negligent misstatement, should apply in this jurisdiction to cases of negligent misstatement, as distinct from cases of the general duty of care in negligence, where application of those principles has already been established by Glencar. The answer to that question is to be found in his judgment (at para. 63), where he stated:
“In a nutshell, I would interpret Hedley Byrne … in the light of what was stated in Caparo … on the facts of this case.”
However, it is important to emphasise that Kearns J., in reaching that conclusion, primarily focused on one only of the tests involved in determining whether a duty of care arises in the context of negligent misstatement, that is to say, the “proximity” test, stating that the “proximity” test in respect of a negligent misstatement –
“. . . must . . . include persons in a limited and identifiable class when the maker of the statement can reasonably expect, in the context of a particular inquiry, that reliance will be placed thereon by such person or persons to act or not act in a particular manner in relation to that transaction.”
Those words reflect the words of Lord Bridge in Caparo, which had been quoted earlier by Kearns J. with emphasis (at para. 51).
65. Following on from those conclusions, Kearns J. (at para. 64) expressed the view that they did not represent “any major extension of the principles in Hedley Byrne . . . as the facts of that case may indicate”. That view differed slightly from the reasoning of Geoghegan J., who perceived “a small extension”, as justified by later case law. Significantly for present purposes, later (at para. 66) Kearns J. stated that it must be borne in mind that the plaintiffs lost in Hedley Byrne largely because there was an express disclaimer of responsibility for accuracy of the information provided by the bank, a feature entirely absent from the Wildgust case.
66. It will be recalled that the basis on which the trial judge found that JLL owed a duty of care to Mr. Walsh to ensure that the measurements of the floor area in the brochure were accurate, included the finding that the relationship between JLL and Mr. Walsh was sufficiently proximate to give rise to a “special relationship” of the kind identified in Wildgust. However, it is not clear that, in reaching that conclusion, the trial judge considered, or adequately considered, the fundamental distinction between the position of Norwich Union in Wildgust and of JLL in this case, namely, that in this case there was a disclaimer in which JLL made it clear that the particulars in the brochure were not warranted and that Mr. Walsh was aware of that disclaimer.
Discussion/conclusions as to the relevant legal principles and their application to the facts
67. Having carefully considered the legal principles identified in the authorities cited on behalf of the parties as being applicable to the determination as to whether a person in the position of JLL, an auctioneer or an estate agent who gives information in relation to the property being sold in a sales advertisement or a sales brochure, which is communicated or distributed to intending purchasers, has liability to a purchaser for loss incurred by the purchaser in consequence of reliance on such information which proves to be incorrect, I consider that the first question which must be addressed is whether a duty of care is owed by the estate agent giving the information to the recipient of it. Where the person giving the information in so doing has expressly included a disclaimer in the brochure or advertisement, in my view, the core issue in determining whether a duty of care exists is whether the existence of the disclaimer by reference to its terms has the effect that there is no assumption of responsibility for the task of furnishing correct information on the part of the estate agent giving the information to the recipient. If it has that effect, a duty of care is not owed to the recipient. In my view, what was referred to as the “right approach” by Hobhouse L.J. in McCullagh in the passage from his judgment quoted earlier (at para. 53), is also the proper approach to be adopted in this jurisdiction.
68. Accordingly, the core issue on the facts of this case is whether, in furnishing the brochure to Mr. Walsh, having regard to the existence of the disclaimer on the first page of the brochure, JLL can be found to have assumed responsibility to Mr. Walsh for the accuracy of the information, including the floor area measurements, contained in the brochure. As was pointed out by Hobhouse L.J., that question must be determined objectively. In this case it must be determined by reference to what a reasonable person in the position of Mr. Walsh interested in the Property would have understood on and after 14th July, 2000. Such a reasonable person, having knowledge of the disclaimer, and there is no question here but that Mr. Walsh did have knowledge of the disclaimer, would have taken notice of the following aspects of the disclaimer, namely:
(a) that it related to the particulars in the brochure, which, in turn, related to a range of factors which probably would have affected the value of the Property, for example, the location of the Property on the ground and by reference to the commercial and institutional surroundings, its zoning for the purposes of planning and development, and its area, both the site area externally and the floor area internally;
(b) that, while the appellant represented that every care had been taken in the preparation of those particulars and that it believed them to be correct, such representation was unequivocally qualified, in that it was explicitly stated that the particulars were not warranted, which, on a plain reading, means that the particulars were not guaranteed as being correct; and
(c) that intending purchasers or lessees were expressly told that they should satisfy themselves as to the correctness of the information given.
69. Obviously, in interpreting the disclaimer objectively, it must be read as a whole. When that is done, in my view, it is clear and unambiguous as to non-assumption by JLL of responsibility for the correctness of the particulars, in that, even though JLL is stating that it has done its best to ensure, and it believes, that the information is correct, it is made clear that it is not guaranteeing that such is the case, and Mr. Walsh is told in clear terms that he should satisfy himself as to the correctness of the information. On the facts of the case, it is clear that Mr. Walsh was in a position to satisfy himself as to the correctness or otherwise of the internal measurements set out in the brochure. He could have instructed Mr. O’Brien to measure the internal areas on the 27th July, 2000, when he was conducting the “condition survey”. Mr. O’Brien’s evidence in cross-examination was that, if he had been asked to measure the property, he would have done so, and, indeed, he did so in March 2001.
70. The references in the disclaimer to every care having been taken, and the particulars being believed to be correct, cannot be read on their own as a representation that there is no misstatement or incorrect information in the brochure. Having regard to the context in which they appear, there is no basis on which those words can be taken as a representation that everything is correct and that Mr. Walsh need not enquire or satisfy himself any further. As to the suggestion of the trial judge that, in order to relieve itself of liability to intending purchasers, there would have been an obligation on JLL to draw the attention of Mr. Walsh and other prospective purchasers to “the fact that seemingly precise measurements published were likely to be wholly unreliable and should not be relied upon in any circumstances”, if there was such a requirement, the probability is that auctioneers and estate agents would furnish no information to prospective purchasers. However, in my view, there is no such requirement. What is required is that a person in the position of JLL should clearly and unambiguously state that it is not assuming responsibility for the task of ensuring that the information furnished is correct, and that the recipient of the brochure has responsibility for such task. I am satisfied that, on the proper interpretation of the disclaimer, JLL did so in this case.
71. While it must be acknowledged that, when one compares the language of the disclaimer clause relied on by Lane Fox & Partners Limited in McCullagh with the language in JLL’s brochure, the wording in the former is more precise than the words of the disclaimer in JLL’s brochure, particularly, having regard to the reference to all statements being made “without responsibility on the part of Lane Fox”, nonetheless, I consider that, read objectively, JLL’s disclaimer does clearly convey the message that JLL is not assuming responsibility for the accuracy of the particulars in the brochure and that it is for the intended purchaser to satisfy himself of the correctness of the information. Any other interpretation would ignore the part of the message to the effect that the correctness of the particulars is not warranted. More importantly, it would wholly ignore the part of the message which tells the intending purchasers that they should satisfy themselves as to the correctness of the information given. In short, there is no ambiguity in the message conveyed in the disclaimer and no other interpretation of the words used is open.
72. While Mr. Walsh testified that he was aware of the disclaimer, his evidence was that he thought it referred to minor discrepancies. Mr. Smith also testified that he believed that it was just for small discrepancies, as did Mr. Tony Rooney who prepared the report dated 15th August, 2000 of Palmer McCormack. Mr. Rowan’s evidence was that the disclaimer covered all issues, not just minor errors and, on the basis of his experience, he rejected the proposition that the common perception in the industry was that such a disclaimer only covered minor errors. Accordingly, there was a conflict of evidence on the point before the High Court. However, the Court’s function is to interpret the disclaimer objectively, having regard to the words used. The disclaimer in JLL’s brochure, assessed objectively, is not open to the interpretation that it refers only to minor discrepancies, even assuming that what amount to minor discrepancies could be identified with certainty. On the contrary, what it states is that JLL was not guaranteeing the correctness of any of the information. Aside from that, it could be suggested that it would make no sense for an auctioneer or an estate agent furnishing particulars to a potential purchaser to disclaim responsibility for minor discrepancies, and thereby by implication to assume responsibility for major discrepancies.
73. It is instructive to consider JLL’s disclaimer in the context of the factual framework envisaged by Lord Bridge in the passage from his speech in Caparo (at p. 620), which is quoted above (at para. 47), and to consider whether, and to what extent, it would impact on the propositions set forth in the second and third sentences of that passage. The question arising from the second sentence is whether JLL could clearly be expected specifically to anticipate that Mr. Walsh would rely on the information given by JLL for the very purpose for which Mr. Walsh did, in the event, rely on it. In my view, the answer is that JLL could not, because the message conveyed in the disclaimer to the intended purchaser is that the appellant is not guaranteeing the correctness of the information, and it is up to Mr. Walsh to satisfy himself as to its correctness. The question which arises out of the third sentence is whether Mr. Walsh could reasonably suppose that he was entitled to rely on the information contained in the brochure, for the purpose for which he required it. Once again, the answer is that he could not, because JLL, in the disclaimer, has told him that he must satisfy himself as to the correctness of the information, which included the internal measurements which Mr. Walsh intended to utilise to calculate how much he should tender for the Property.
74. Returning to the emphasis placed by Lord Browne-Wilkinson on the importance of the concept of assumption of responsibility in White, the passage from his speech, quoted by Geoghegan J. in Wildgust, which was also quoted by Hobhouse L.J. in McCullagh, is, as Lord Browne-Wilkinson put it, the bringing together of various strands previously addressed, in considering earlier authorities, in particular, Hedley Byrne. In the passage quoted by Geoghegan J., which sets out the underlying principles which Geoghegan J. adopted (at para. 14), Lord Browne-Wilkinson stated (at p. 274):
“The law of England does not impose any general duty of care to avoid negligent misstatements or to avoid causing pure economic loss even if economic damage to the plaintiff was foreseeable. However, such a duty of care will arise if there is a special relationship between the parties. Although the categories of cases in which such special relationship can be held to exist are not closed, as yet only two categories have been identified, viz. (1) where there is a fiduciary relationship and (2) where the defendant has voluntarily answered a question or tenders skilled advice or services in circumstances where he knows or ought to know that an identified plaintiff will rely on his answers or advice. In both these categories the special relationship is created by the defendant voluntarily assuming to act in the matter by involving himself in the plaintiff’s affairs or by choosing to speak. If he does so assume to act or speak he is said to have assumed responsibility for carrying through the matter he has entered upon. In the words of Lord Reid in Hedley Byrne . . ., he has ‘accepted a relationship which requires him to exercise such care as the circumstances require’, i.e. although the extent of the duty will vary from category to category, some duty of care arises from the special relationship.”
(Emphasis in original).
The corollary of what is stated in that passage obviously is that, if the defendant expressly disclaims assumption of responsibility, he does not come within the second category identified, so that a special relationship does not exist between the defendant and the plaintiff and a duty of care does not arise. Indeed, Lord Browne-Wilkinson earlier in his speech (at p. 272), in the context of demonstrating that assumption of responsibility was a crucial element in the reasoning of the majority in Hedley Byrne, stated:
“. . . it is clear that the basis on which (apart from the disclaimer) the majority would have held the bank liable for negligently giving the reference was that, were it not for the disclaimer, the bank would have assumed responsibility for such reference.”
In short, it is to be inferred that it was the disclaimer which saved Heller & Partners from assuming responsibility and, ultimately, from liability and negligence.
75. Earlier in his speech, Lord Browne-Wilkinson in a passage (at p. 273), which was also quoted in part by Hobhouse L.J. in McCullagh, explained one strand, the meaning of assumption of responsibility outside a fiduciary relationship and its consequences, stating:
“Just as in the case of fiduciary duties, the assumption of responsibility referred to is the defendant’s assumption of responsibility for the task, not the assumption of legal liability. Even in cases of ad hoc relationships, it is the undertaking to answer the question posed which creates the relationship. If the responsibility for the task is assumed by the defendant he thereby creates a special relationship between himself and the plaintiff in relation to which the law (not the defendant) attaches a duty to carry out carefully the task so assumed. If this be the right view, it does much to allay the doubts about the utility of the concept of assumption of responsibility voiced by Lord Griffiths in Smith . . . and by Lord Roskill in Caparo . . .”
76. There is an interesting commentary on the concept of assumption of responsibility in Buckley: The Law of Negligence 4th Ed., (Oxford, 2005) at para. 4.17 where it is stated:
“In Henderson . . ., Lord Goff pointed out that, in Hedley Byrne, ‘all of their Lordships spoke in terms of one party having assumed or undertaking a responsibility towards the other’. Although the concept of ‘assumption of responsibility’ was criticised in the House of Lords in two cases subsequent to Hedley Byrne, its validity was emphatically reaffirmed by the House itself in Henderson . . . and White . . . . In both cases, however, the concept of assumption of responsibility was redefined as revolving around the task which the defendant undertook to carry out rather than the notion of an assumption of legal responsibility towards a specific individual. The earlier approach had been open to criticism on the grounds of artificiality, not least where liability was imposed under the Hedley Byrne principle despite the defendant’s having sought to disclaim responsibility. By focusing upon the work undertaken, rather than the person who originally commissioned it, the new approach sought not only to avoid that artificiality but also to provide a coherent basis for the imposition of liability in favour of third parties.”
The two cases referred to in that passage in which the concept was criticised in the House of Lords were in the speech of Lord Roskill in Caparo and in the speech of Lord Griffiths in Smith. That commentary is repeated in the 5th edition of Buckley published in 2011 (Buckley: The Law of Negligence and Nuisance).
77. As counsel for JLL emphasised, the disclaimer in JLL’s brochure specifically referred to the particulars in the brochure and it invited Mr. Walsh to satisfy himself as to the correctness of the “particulars”, which included the internal measurements of the Property. Adopting the words of Lord Browne-Wilkinson in the passage from White quoted earlier (in para. 75), there was no “assumption of responsibility” by JLL “for the task” of providing information in the particulars in the brochure in relation to the Property, including the internal floor area measurements, which would be accurate and correct. Accordingly, there was not created a “special relationship” between JLL and Mr. Walsh “in relation to which the law . . . attaches a duty to carry out carefully the task so assumed”. In summary, the absence of an assumption of responsibility for the task, because of the existence and effect of the disclaimer, resulted in the proximity or special relationship requirement not being met and there being no duty of care imposed by law on JLL and no liability to Mr. Walsh for the loss which Mr. Walsh claimed was a consequence of the errors in the internal measurements.
78. While it is not necessary to apply the “third element” introduced in Caparo in determining whether a duty of care was owed by JLL to Mr. Walsh and JLL’s liability on the facts here, I feel constrained to observe that it would be difficult to conclude that it would be fair, just or reasonable to impose a duty of care on JLL for the benefit of Mr. Walsh in relation to the accuracy of the particulars set out in the brochure, given the existence and effect of the express disclaimer of responsibility of which Mr. Walsh was aware, even if, on the basis of his evidence, he misunderstood that effect. He should have got advice as to its meaning.
79. The disclaimer in the brochure was not immaterial in the manner suggested by the trial judge in the passage from his judgment (at para. 51) quoted earlier or, indeed, in any respect. The point on which I fundamentally disagree with the reasoning in the judgment of the High Court, which ultimately led to what I consider to be the incorrect conclusion that JLL owed a duty of care to Mr. Walsh and was in breach of that duty, was the failure, having considered the matter objectively, to recognise that there was no assumption of responsibility on the part of JLL in relation to the task of furnishing accurate internal measurements to Mr. Walsh and that the consequence was that the law imposed no duty of care on JLL. As such recognition should have been the starting point in the process of determining whether a duty of care was owed by JLL to Mr. Walsh and whether liability for negligent misstatement lay on JLL, the controversies in relation to the findings of fact made by the trial judge raised on the appeal do not have to be resolved, even if they could, or should, be.
80. The conclusion that JLL did not owe a duty of care to Mr. Walsh in respect of the accuracy of the internal measurements of the Property as shown in the brochure furnished by JLL to Mr. Walsh spells the death knell of Mr. Walsh’s claim against JLL for damages for negligent misstatement. Accordingly, whether there was negligence or contributory negligence on the part of Mr. Walsh in failing to have the internal measurements checked, in addition to having the “condition” survey carried out, does not have to be considered.
Order
81. For the reasons outlined above, I consider that there should be an order allowing the JLL’s appeal and discharging the order of the High Court finding that JLL was negligent and awarding damages to Mr. Walsh against JLL.
Draft Judgment of Mr. Justice John MacMenamin dated the 1st day of June, 2017
1. The appeal before the Court raises issues of some importance. The Court must assess how the law of negligent mis-statement is to be applied in the case of an auctioneers’ brochure that contained an incorrect statement in an exemption clause, to the effect that “every care” had been taken in its preparation. A further question is no less significant: that is, the application here of the established jurisprudence of this Court to the effect that findings of fact made by a trial judge are binding, unless there was no evidence to support such findings.
2. In a judgment delivered by the High Court on the 24th January, 2007. Quirke J. found the appellant firm (the defendant, or JLL) liable to pay the respondent, (the plaintiff, or Mr. Walsh), €350,000 in damages on foot of its negligence and negligent mis-statement, in the preparation of an auctioneer’s brochure. (See [2009] 4 IR 401). At the level of legal principle, the case might be perceived as therefore necessitating a broad consideration of the legal issues in an area where the law of torts and the law of contract intersect. In other instances, such a case might require consideration and analysis of the scope of liability for a negligent mis-statement; whether there existed a “special relationship” creating a duty of care between the parties; whether the facts established that Mr. Walsh was sufficiently proximate to JLL, so as to make him a person “reasonably likely to be affected” by the firm’s acts or omissions; whether personal reliance on statements made by employees of JLL would be necessary for the recovery of damages; and lastly, but importantly, whether JLL was entitled to rely upon what is said to be an exclusion or exemption clause printed at the base of one page of the brochure issued by that firm for the purposes of the sale. But this case is less complex than that.
3. The essential facts of this case are quite simple. As long ago as July in the year 2000, Mr. Walsh (who then had 20 years experience in the property market) decided to buy a two-storey north Dublin city centre commercial property. JLL sent him a brochure. This described both the measurements of the ground floor, and those of the first floor of the property. But the measurement of the first floor contained a very significant error. Contrary to what the brochure stated, it did not, in fact, measure 10,463 sq. feet, but instead, measured only 8,575.5 sq. feet. Mr. Walsh did not get what he paid for. He paid in excess of Ir.£2 million for the property. As a result of the incorrect measurement, the property was significantly less valuable. The brochure did contain what is said to be an exemption clause. The High Court judge was unimpressed with this clause. He described it as having been placed in very small type at the bottom of the first page of the document. He held that it was not binding on the purchaser, on the facts later described. Having held that a special relationship existed, and that the disclaimer in this case was insufficient to exonerate the firm from liability, he found for the purchaser.
4. JLL has appealed that judgment. The “proximity issue”, in fact, does not present much difficulty. The critical point in the case is largely contextual and fact dependent, that is, the presentation and terms of the disclaimer itself, when seen in their full context. The key point there is not the existence of an exclusion clause, but rather the terms in which this clause is expressed, its location in the brochure, and the other statements to be found in the brochure which were presented as highly factual. Thus, I see this appeal is quite a narrow one.
5. The vexed issues of proximity and reliance in misrepresentation have recently been considered by this Court. (See Cromane Fisheries Limited v. Minister for Agriculture & Others [2016] IESC 6, [2016] I.L.R.M. 81 delivered on the 22nd February, 2016; also, Atlantic Marine Supplies v. Minister for Transport & Others [2016] IESC 43, [2016] 2 I.L.R.M. 397 delivered on the 19th July, 2016. But for the purpose of this appeal, between two private parties to this commercial transaction, questions of proximity are to be seen through the lens of the judgments delivered by this Court in Wildgust v. Bank of Ireland & Others [2006] 1 IR 570. The High Court judgment relies heavily on the principles established there. The correctness of the judgments in Wildgust, and the principles expressed therein, were not challenged in this appeal. It is, therefore, helpful now to set out what was established in that authority, and compare the principles with their application in the instant case at first instance.
6. In Wildgust, Kearns J. pointed out at p. 593, par. 43 that, as long ago as Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] AC 465, a negligent, though honest, misrepresentation could give rise to an action for damages for financial loss, caused thereby, on the basis that a duty of care was implied when a party seeking information from a party possessed of a special skill, trusted the person imparting that information to exercise due care, when that party knew, or ought to have known, that reliance was being placed on his or her skill and judgement. This Court held that, in respect of a negligent mis-statement, the proximity test included a person of limited and identifiable class, when the maker of the statement could reasonably expect, in the context of a particular enquiry, that reliance would be placed thereon by such persons to act, or not act, in a particular manner in relation to that transaction. Concurring, Geoghegan J. held that personal reliance was not always essential, and that, for the purposes of the appeal, he, for his part, would be prepared to assume that the law of negligent mis-statement fell into a separate code from the law of negligent acts.
7. In Hedley Byrne, the only relationship alleged was between the enquirer and the person giving the information. In Wildgust, Geoghegan J. expressed the view that the court’s finding (which related to information given to a third party also affected by the incorrect information), was only a small extension of the principle that a court might hold there was a special duty of care when a person, even one who was not the enquirer, was damaged as a consequence of an incorrect statement; and where the existence of such an affected person, and the reasonable foreseeability of such damage, ought to have been present to the mind of the person imparting the information. He held that, quite apart from contractual or fiduciary relationships, a duty of care in the making of a statement may be held to arise in the context of “other special relationships”, which the court may find to exist in particular cases. He held this duty might emerge when it was plain that the relationship was such that a party seeking information or advice was trusting the other party to exercise such a degree of care as the circumstances required, where it was reasonable for the party seeking information to do that, and where the imparter of information gave advice when he knew, or ought to have known, that the enquirer was relying upon him.
8. Kearns J., who delivered the main judgment in Wildgust, cited with approval the judgment of the House of Lords in Caparo Industries Plc. v. Dickman [1990] 2 AC 605. It is true that, in his speech there, at p. 620 – 621, Lord Bridge of Harwich expressed the view, having regard to the development of the law in respect of negligent mis-statement, that:
“… The salient feature of all these cases is that the defendant giving advice or information was fully aware of the nature of the transaction which the plaintiff had in contemplation, knew that the advice or information would be communicated to him directly or indirectly and knew that it was very likely that the plaintiff would rely on that advice or information in deciding whether or not to engage in the transaction in contemplation. In these circumstances the defendant could clearly be expected, subject always to the effect of any disclaimer of responsibility, specifically to anticipate that the plaintiff would rely on the advice or information given by the defendant for the very purpose for which he did in the event rely on it. So also the plaintiff, subject again to the effect of any disclaimer, would in that situation reasonably suppose that he was entitled to rely on the advice or information communicated to him for the very purpose for which he required it.” (Emphasis added)
The appellants rely heavily on this passage. They say that it is clear that the existence and effect of the relevant disclaimer is crucial in any given case.
9. I agree that the content and effect of a relevant disclaimer is crucial. However, to my mind, the passage just quoted must not be understood to mean that “any” disclaimer of responsibility will necessarily exonerate a defendant, but rather, an “appropriate” disclaimer should have that effect. (See the speech of Lord Goff of Chieveley in Henderson v Merrett Syndicates Ltd. [1994] 3 ALLER 506, at page 521, where that judge referred to an assumption of responsibility being negatived by an “appropriate disclaimer”. Whether the disclaimer in this case was “appropriate” is one of the main issues of contention in the case. The learned trial judge held that it was not appropriate, in the sense of being sufficient to exonerate the firm from liability. I agree with him, and would uphold this decision in full.
10. This appeal, in my view, hinges on findings of fact made by the trial judge. These are to be assessed with reference to the tests set out by McCarthy J. in Hay v. O’Grady [1992] I.R. 210, and Henchy J. in Northern Bank Finance Corporation v. Charlton [1979] I.R. 149. It is a common feature of both judgments that such findings, when supported by credible evidence, should not be disturbed by an appeal court. I consider that this appeal is, essentially, a ‘fact case’, in particular as regards the judge’s finding as to the state of knowledge of Mr. Walsh, and findings as to “market custom”. The judge’s assessments of the context and content of the disclaimer clause were reasonable. But, because of the fact based nature of these considerations, it is necessary to rehearse the High Court findings in rather more detail than might normally occur in an appeal of this type.
11. The judge’s analysis of the evidence began with matters which are not in controversy. He set out that the property was bought for Ir.£2,342,000, in a sale completed on the 28th September, 2000, some three months after the brochure was given to Mr. Walsh by a Mr. “Woodie” O’Neill, a valuer with JLL. Mr. O’Neill’s role was very significant, as will be seen. He was not called to give evidence. Mr. Walsh already held other property on the northside of Dublin. He wished to buy this property to use as units for commercial tenants.
12. The property was put on sale early in July, 2000. Mr. Walsh visited it on the 13th July, 2000, and following that, went back for a second visit. Mr. Walsh told his contact, Mr. O’Neill, that he was interested in buying, and Mr. O’Neill then gave him the sales brochure, to which reference will be made later. On the 21st July, 2000, Mr. O’Neill wrote to Mr. Walsh, telling him a number of prospective parties had shown interest, and that JLL had been instructed to finalise offers; and that, as a result, the firm had put a deadline on “best offers” of 12 noon on the 28th July, 2000. This was one week from the date of Mr. O’Neill’s earlier letter on the 21st July, 2000.
13. Mr. Walsh engaged a solicitor to examine the title. He retained a Dublin property surveyor, Mr. Val O’Brien, (who had worked for him previously), to conduct an informal “conditions survey”. But Mr. O’Brien did not measure the dimensions of the property, nor did Mr. Walsh ask him to do so. Mr. O’Brien testified that while he regularly carried out such pre-purchase surveys, he had never been actually asked to measure the floor area of a property prior to the submission of offers to a vendor.
14. Mr. Walsh made his offer for the property in an undated handwritten letter, which he said was based upon a “back of the envelope” calculation. This was predicated on the income he estimated he could receive as owner of the property, based on the rent he could potentially receive both for the ground floor and the first floor, which was, at the time Ir.£20 per square foot. His offer for the property was accepted.
Knowledge of the Disclaimer
15. The judge found that Mr. Walsh had been “generally aware” of the disclaimer contained in the JLL brochure, but could not recall whether he had read it with any care. He had, however, noted that it contained a statement to the effect that JLL had “taken every care” in preparing the brochure, and that, in his view, they were a firm of the utmost probity. The plaintiff testified that he had purchased other properties on previous occasions, but had never had a building measured before making a purchase. He relied on JLL’s reputation, credibility and integrity. The evidence was that viewings were designated to take place on Saturday afternoons, as the property was in commercial use. Mr. Walsh testified that it would be difficult to carry on commercial life if everyone had to go round with a measuring tape, so as to be sure of the measurements of premises which they were thinking of buying.
16. The plaintiff testified that his belief was that Mr. Woodie O’Neill had carried out a survey while the previous tenants were in the premises. His belief was fortified by the fact that JLL were to be paid a substantial sum in commission if, and when, the property was sold. The sale was completed on the 28th September, 2000. Between the acceptance and completion, Mr. Walsh did not requisition a measurement survey. He said he continued to rely on the description and measurements which JLL had given to him. It is noteworthy in passing that Mr. Walsh’s bank, who extended credit to him for this transaction, did not carry out a survey on the premises either. This is to be seen in light of other evidence as to what was the then accepted practice among Dublin surveyors.
17. After the sale was completed, the property was let to the Commissioners of Public Works. This letting was negotiated over a period of time, and involved substantial alterations. It was only then, that Mr. Walsh’s surveyor, Mr. O’Brien, discovered that the first floor measurement was incorrect. By letter dated the 20th March, 2001, the surveyor informed Mr. Walsh that, in fact, the total floor area of the property was 21,248 sq. feet, that is, 12,674.6 sq. feet at ground floor, but just 8,573.5 sq. feet – and not 10,463 sq. feet – at the first floor level.
18. Mr. Walsh testified that, he was astonished when he received this information, because he had believed the floor area was 20% greater, as a result of what JLL had said in the brochure concerning the sale. As to the disclaimer, he testified that his belief was that such waivers contained in brochures were only intended to safeguard auctioneers from liability in respect of minor miscalculations, but not otherwise. As a preface to what follows it is necessary to point out that it was established in evidence, and JLL acknowledged, that none of the 10 or 12 other potential investors who looked at the property carried out a measurement survey either.
An Issue in the Case – “Customary Practice”, or “The Prudent Investor”
19. What was the custom and practice among Dublin valuers and surveyors at the time? Was it customary or prudent for investors to require properties to be measured before making an offer? Was it negligent for Mr. Walsh not to requisition a survey?
20. On behalf of Mr. Walsh, Mr. Barry Smyth of De Vere White, Auctioneers, and Mr. Tony Rooney, another valuer, testified to the effect that neither of them had ever encountered circumstances where such measurements had been required. Their evidence was also to the effect that it was an understood matter that disclaimers used by most auctioneers were to be seen as covering only minor discrepancies.
21. Two witnesses testified on behalf of JLL on these issues. Mr. Peter Rowan, a surveyor and valuer (who had formerly worked for JLL), testified that a “prudent investor” should carry out a detailed inspection, and measure all floor areas, prior to purchase. Mr. Rowan’s background was generally, in advising financial institutions in property transactions. His testimony was that it would be neither normal, nor prudent, nor acceptable practice, to rely solely on the measurements contained in a sales brochure.
22. Mr. Nigel Healy, a director of JLL, testified to the same effect. Regarding the disclaimer, Mr. Healy testified, it was to be seen as a form of “advice” to a purchaser to carry out inspections and property measurement as a form of due diligence. He said that the measurements in the brochure were to be seen merely as a general guide. Mr. O’Neill did not give evidence. Thus, how the measurements came to be placed in the brochure remained unexplained.
23. In this appeal, counsel for the appellant submitted that the trial judge had erred by not attaching sufficient weight to the fact that Mr. Smyth had testified he would not contradict Mr. Rowan’s opinion on the prevalent practice as to measurement in Dublin. It is said that the judge failed to have regard to the fact that Mr. Smyth had, in terms, “expressly deferred” to Mr. Rowan’s testimony. In fact, although Mr. Smyth did use the word “defer”, I think the situation was slightly more nuanced. There was clear evidence as to what was then common practice in the Dublin property market. Mr. Rowan’s evidence is to be seen at a number of levels. His testimony was to the effect that it was neither acceptable nor prudent practice to purchase without measuring, nor was it normal.
24. Counsel’s note of the evidence shows that, in fact, the judge asked Mr. Rowan a number of rather searching questions regarding his testimony. The judge pointed out to him that twelve potential purchasers had viewed the property, and that not one of those had gone back to JLL to bring to that firm’s attention that there had been a discrepancy of approximately 2,000 ft. between what the brochure said, and the actuality. The judge based his findings, in part, on inference from this evidence.
25. Counsel for the appellant also submitted that the trial judge did not adequately take into account evidence adduced by Mr. Nigel Healy, and Mr. Rowan, to the effect that the disclaimer not only covered minor discrepancies, but rather all issues. In fact, this point was addressed by the trial judge, in the context of his findings as to evidence regarding the common and accepted practice in the Dublin property market in the year 2000. That evidence was to the effect that this understanding was that disclaimers related only to minor discrepancies, and not all issues. His finding on this was a question of fact.
26. The appellants rely on the judgment of Walsh J. in O’Donovan v. Cork County Council [1967] I.R. 173, at 193. There, Walsh J. observed, in the context of a medical negligence action, that if there was a common practice which had inherent defects, which ought to be obvious to any person giving the matter due consideration, the fact that it was shown to have been widely and generally adopted over a period of time, did not make the practice any less negligent. There are passages in the judgment of Henchy J. in Roche v. Peilow [1985] 1 I.R. 232, at page 254, to similar effect. However, reliance on these two statements is apt to mislead, because it might suggest that these questions, so important for determination in this case, were simply matters of law. In fact, this is not so in this case. Having observed ([1967] I.R. 173 at 193) that “Neglect of duty does not cease by repetition to be neglect of duty”, Walsh J. went on at p. 193 – 194 to enter the following caveat:
“… Furthermore, if there is a dispute of fact as to whether or not a particular practice is a general and approved practice, it is a matter for a jury to determine whether or not the impugned treatment is general and approved practice. In such circumstances, a jury would be told that if they find that there is such a general and approved practice they must acquit the practitioner where there is not the qualification that I have referred to above. If some witnesses say that a particular practice is a general and approved one, and other medical witnesses deny that, then it is an issue of fact to be determined as any other issue of fact. This particular issue cannot be withdrawn from a jury merely because the practice finds support among some medical witnesses, if there be others who deny the fact that it is [a] general and approved practice.” (Emphasis added)
27. Thus, in this “post jury” era, whether or not adherence to a general custom constituted negligence, and whether it contained an inherent defect, were matters for the trial judge to determine as questions of fact. He resolved these in favour of the plaintiff.
28. In giving judgment, the trial judge observed that JLL were a large firm, in existence for a considerable period of time, who had justifiably acquired an excellent reputation for competence, probity and integrity in its business dealings. JLL held itself out as a company with particular skills and expertise in the commercial property markets, both in Ireland, and elsewhere. It relied upon its reputation for excellence in order to encourage prospective customers to avail of its services.
29. He held that the brochure was expressly designed to attract the attention of potential purchasers, in order to encourage them to bid or tender against one another for the property; that the brochure was an integral part of the tendering process, with the explicit intent of maximising the price which potential purchasers would pay; and that was issued with the implicit motivation of maximising the fee which JLL would obtain upon the sale of the property. Thus, he concluded, it was to be expected that potential purchasers would rely upon the information contained in the brochure when deciding whether or not to purchase. The brochure had been published by JLL for the express purpose of influencing a limited number of identifiable persons, and the publication of the disclaimer was immaterial to that fact. The judge held that Mr. Walsh was among the persons to whom the brochure was expressly directed. He, (the purchaser), had been influenced by the information published within the brochure, and had relied on its contents, (including the measurements), when calculating his precise bid or tender for the purchase of the property. He accepted the evidence adduced on behalf of the plaintiff as to what was the general and approved practice in the Dublin market. These were specific findings of fact, based upon credible evidence. It is obvious there was contrary evidence from Mr. Rowan: but here the trial judge’s role was pivotal.
The Brochure
30. The judge carefully analysed, in detail, the extent to which the property was described, in quite large type, on the front page of the brochure, as being of “2,142 m2 – (23,057 square feet), with a site area of 0.13 hectares (0.31 acres)”. On the back page, the brochure described the ground floor as having an area of 12,594 square feet, and the first floor as having an area of 10,463 square feet. This gave rise to a total square footage of 23,057 square feet as set out on the brochure. Corresponding measurements were provided in square metres.
31. Turning to the exemption or waiver clause, the judge pointed out that this was to be found at the bottom of the front page of the brochure, in words, “in very small type”. (See [2009] 4 IR 401 at 404.) The clause read: “Whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers/lessees should satisfy themselves as to the correctness of the information given.” In my view, his criticisms of the brochure were well justified.
32. I now wish to explain, in a little more detail, other areas where, to my mind, the appellants’ submissions are legally misconceived. While not mentioned in argument, the facts of this case are quite distinct from the those of Scullion v. Bank of Scotland Plc. [2011] IWLR 3212, where the Court of Appeal of England and Wales held (at p. 3226 at par. 54) that it was to “be expected” that a commercial purchaser would obtain an independent valuation (See Charlesworth on Negligence, Thirteenth Ed., Sweet & Maxwell, 2014, p. 31, paragraph 2-30). The findings of fact here are entirely different, and have been described.
33. To my mind, the judgments of the Court of Appeal in Yianni v. Evans [1982] QB 438, and Smith v. Bush [1990] 1 AC 831, must be seen against their own quite distinct and different factual background. Unlike Yianni and Smith, this case does not concern reliance on building society/surveyor statements, or representations from such sources. Thus, those judgments are not on point, and, in any case, this appeal must be looked at from the standpoint of the findings of fact on the evidence. It is nowhere suggested that the respondents’ evidence was not based on evidence. I see no reason to interfere with the judge’s findings on these questions. It is necessary to next consider the disclaimer.
Assumption of Responsibility and The Disclaimer
34. In law and commerce, questions,such as assumption of responsibility, waiver and disclaimer clauses, have an importance which go far beyond the narrow range of this case. Anyone who engages in an online commercial transaction will find that these clauses are said to be part of the contract. To my mind, a clause of such potential importance must be very carefully analysed.
35. The appellants rely on the opinion of Lord Goff of Chieveley in Henderson v. Merrett Syndicates Ltd. [1994] 3 ALLER 506. Dealing with the assumption of responsibility, he stated, at page 521:
“It follows that, once the case is identified as falling within the Hedley Byrne principle, there should be no need to embark upon any further enquiry, whether it is “fair, just and reasonable” to impose liability for economic loss – a point which is, I consider, of some importance in the present case. The concept indicates too that in some circumstances, for example where the undertaking to furnish the relevant service is given on an informal occasion, there may be no assumption of responsibility, and likewise that an assumption of responsibility may be negatived by an appropriate disclaimer.” (Emphasis added)
36. The appellants also rely on a passage in White v. Jones [1995] 1 ALLER 691, at 715 – 16, where Lord Browne-Wilkinson, speaking for the majority in the House of Lords, laid emphasis on the importance of the concept of assumption of responsibility, to the following effect:
“Just as in the case of fiduciary duties, the assumption of responsibility referred to is the defendants’ assumption of responsibility for the task not the assumption of legal liability. Even in cases of ad hoc relationships, it is the undertaking to answer the question posed which creates the relationship. If the responsibility for the task is assumed by the defendant, he thereby creates a special relationship between himself and the plaintiff in relation to which the law (not the defendant) attaches a duty to carry out carefully the task so assumed.”
37. Counsel for the appellant points out that the disclaimer referred to the particulars of the sales brochure, and invited the respondent to carry out the task of measuring the particulars himself. It is said it was open to the respondent to have the area measured when the appellant facilitated him with surveying the property, but that he failed to do so.
38. In Patchett & Another v. Swimming Pool & Allied Trades Association Ltd. [2009] EWCA Civ 717, the claimant suffered damages when the contractor he had engaged to construct a swimming pool went into liquidation. Before retaining the contractor, the claimant consulted a website which was maintained by the defendant which asserted that members of the Association were checked for solvency when they became members, and their work was covered by a guarantee. It was not clear, however, that the builder was not a full member. Lord Clarke M.R. found that there was no representation as to continuing solvency, and the claimants had not taken the steps recommended by the website. To my mind, the nature of the representation and the extent of the invitation are to be distinguished on the facts of this case.
39. In my view, the critical issue is not just the invitation; but, additionally, the representation, that is, the factual context against which the invitation was conveyed. What is at issue are not only principles of law, but rather the application of those principles in the context of the facts as found in this case. The true question here is, whether the facts, and in particular the brochure itself, created a duty to take reasonable care to provide accurate information in the brochure. If JLL did owe that duty, then they breached it by providing inaccurate figures.
40. If the disclaimer had been clear to the normal reader and, therefore, “appropriate”, I would entirely accept the appellants could avoid liability. But, the trial judge held that the disclaimer, in its form, was a “quite inadequate means” of notifying prospective purchasers that the seemingly precise measurements of the floor areas, so prominently published within the sales brochure, were wholly unreliable. He laid emphasis on the very precise nature of the figures provided by JLL. He described the waiver, as having been expressed in an “enigmatic sentence”, in small print, wherein JLL had claimed, in terms, to have taken “every care” in the preparation of all the particulars within the brochure, albeit in the context of advising prospective purchasers to “satisfy themselves as to the correctness of the information given”. He held that JLL themselves had arranged to have the property surveyed and measured. This was to accommodate potential purchasers. They arranged to have the results published in the brochure, but the floor area had been negligently measured.
41. The judge found the auctioneers had failed to take appropriate steps to ensure that the information published was accurate. He pointed out that no evidence had been adduced to the effect that it was the practice for prospective purchasers to measure the floor areas of properties after entering into a contract, but before completion. I do not disagree with any of the trial judge’s descriptions of the disclaimer clause. These were matters of fair inference and observation, I believe one could go further: the type face of the disclaimer is better described as “miniscule” rather than small. The findings of fact were based on evidence before him.
42. The test to be applied to the disclaimer is an objective one. On an objective reading what is the effect of the disclaimer, seen in the context of the factual findings? The judge rejected the suggestion that the words in the disclaimer were to cover every contingency. His rejection was supported by credible evidence from Mr. Walsh and his witnesses. I do not accept that an objective assessment of the disclaimer would put the reader of the brochure on a “clear duty of enquiry”, or that it would make it clear to any person reading it that they must go and verify what was contained in the brochure.
43. Counsel for the appellant submitted that the terms of the disclaimer clause were clear and unambiguous. I disagree. To my mind, the disclaimer itself contained a number of representations. The first was to the effect that this highly reputable firm had taken “every care” in the preparation of the particulars. Second, it was represented that the measurements were believed to be correct, although they were not warranted, and that intending purchasers should satisfy themselves as to those measurements. This clause was ambiguous, in the sense that, while it conveyed an invitation, it also contained a representation that acceptance of the invitation was hardly necessary.
44. It is, in my view, erroneous simply to suggest that the very existence of ‘any’ disclaimer clause is sufficient. I do not agree that the statement of law cited from Caparo v. Dickman, quoted earlier at par. 7 supra, is to be read with the broad meaning that any “disclaimer clause” will be sufficient to exonerate the proferror from responsibility. What is, in my view, determinative is, rather, an objective reading of everything that is said in the waiver. It contained an explicit representation to the effect that ‘every care’ had been taken by the firm. This is to be seen in the context of the findings of fact regarding the practice in Dublin among auctioneers, valuers, and surveyors. There was no finding of fact that this was an inherently defective practice.
45. A further key question is the extent to which, upon an objective reading, the potential purchaser was put on notice? It is, of course, true that Mr. Walsh was aware as to the existence of a waiver. But, as the judge found, he was not aware of its purported scope. This was a reasonable inference based on the judge’s assessment of the witness.
46. To the eye of a potential purchaser then, the brochure, which came from a highly reputable firm, conveyed that the firm had taken “every care” in carrying out the measurements of the property. What else was a purchaser to believe? The brochure elsewhere conveys that what was given were accurate, precise measurements in square feet. By its reputation, and by the precise nature of the measurements, the firm conveyed the message that the measurements were reliable. The situation is not altered by deploying the term “while”, as a preface to the disclaimer.
47. For a court to be asked to carrying out a “weighting process” between one half and the other half of this disclaimer clause is itself a rather artificial process. But it can be assisted by looking to the backdrop of the evidence as to how that disclaimer was generally understood. The disclaimer clause contained a representation, intended to instil belief, regarding care. I do not accept that an objective reading entails that the reader should treat the latter part of the waiver as being, in some way, more legally significant than the former. I reject the proposition that the first part of the disclaimer is mere “flowery language”, as it was called, and that only the latter part is legally significant. A disclaimer can only be given the legal significance imparted by all of the actual words it contains, and the sense that all those words, taken together, would reasonably convey. If there is opacity, or ambiguity, it should, at minimum, be strictly construed; if necessary, it should be interpreted contra proferentem. I choose the former.
48. There is, surely, something rather incongruous about a highly reputable firm of auctioneers and valuers seeking to make the case that potential bidders should not, really, lend total credence to, or place complete faith in, their own representation, that they have taken “every care” in preparing measurements. In fact, the evidence did not at all establish that the firm had taken “every care”. The trial court was left in the situation where it might infer that JLL had either carried out the measurements incorrectly and negligently, or, alternatively, had itself conveyed information which was communicated to JLL by another, accepted it at face value, and put it in the brochure, without any intermediate checking. At risk of repetition, the appellant did not call any evidence on this issue.
49. There was a duty upon JLL to take reasonable care to provide accurate information. If the firm owed such a duty, they were in breach of that duty. To my mind, there is only one answer to the question, whether, objectively considered, the information on the website created a relationship of proximity between the parties? It did. Equally, I would hold there is only one answer to the question as to whether it is fair, just and reasonable to impose a duty of care. In my view, it is.
50. I do not think that the terms of the disclaimer, or the findings of fact, support the proposition that what is in question here is some form of “first step”, where the reader is put on enquiry to take further steps. The reader was not told that the figures on the brochure were “estimated” or “approximate”. One cannot avoid the conclusion that the disclaimer was intended to induce a state of belief or trust, which two attributes are fundamental to all business transactions. The precisely conveyed actual words and figures, in the context of their presentation, can only be viewed as an assertion of the appellant’s own corporate belief of the truth of what was said in the brochure, rather than some ‘best guess’, or an ‘estimate’. The measurements contained were not “flowery statements”, or guesses, or estimates, but rather conveyed the impression of being statements of hard, physical fact.
51. Counsel for the appellant has drawn our attention to the judgment of the Court of Appeal of England and Wales in McCullagh v. Lane Fox & Partners [1996] PNLR 205. There, the Court of Appeal held that an estate agent, who carelessly mis-described the size of a property, was not liable to a purchaser who bought the property relying on the mis-description, if the mis-description was part of the particulars which contained standard disclaimers.
52. At first sight, the judgment would appear to favour the appellant. But, what is instructive, and I believe critical, are the form and words of the disclaimer which that court held would put a purchaser on notice that he or she should carry out their own checks. The disclaimer, specifically, negatived any assumption of responsibility for the statements contained in the brochure. It told the recipient, in terms, that if he or she chose to rely upon it, then they must realise that the maker of the statement was not accepting responsibility for the accuracy of what was said. The nature and character of the disclaimer was, unavoidably, part of the factual circumstances, and part of the transaction. It clearly conveyed the issues where the valuers were, and were not, accepting responsibility. It read, as set out at page 209 of the Report:
“1. These particulars do not constitute, nor constitute any part of, an offer or contract.
2. All statements contained in these particulars, as to this property are made without responsibility on the part of Lane Fox or the vendors or lessors.
3. None of the statements contained in these particulars, as to this property are to be relied on as statements of representations of fact.
4. Any intending purchasers must satisfy themselves, by inspection or otherwise as to the correctness of each of the statements contained in these particulars.
5. The vendors do not make or give, and neither Lane Fox, nor any person in their employment has any authority to make or give any representation or warranty what[so]ever in relation to this property.”
53. What could be clearer? The terms of that disclaimer were crystal-clear. Those auctioneers announced that they unconditionally disclaimed any responsibility for the contents of the brochure. The disclaimer negatived, in terms, one of the essential elements for the existence of a duty of care. The purchaser was told that, if he, or she, chose to rely upon the description contained in the brochure, they must realise that the auctioneers were not accepting responsibility for the accuracy of the representations. There was nothing opaque or ambiguous about what it said. It was not in small print. The contrast with the disclaimer in the present case is self-evident.
54. To my mind, the trial judge carefully analysed each of the principles identified in Wildgust. He held the foreseeability and proximity tests to be satisfied. He was satisfied there was communication to a member of an identifiable class who would rely upon it. Correctly in my view, he held that the waiver carried with it a representation from a firm of the highest integrity that every care had been taken in preparing the brochure. He concluded on cogent evidence that the information given was for a specific purpose, actually made known to the purchaser, in circumstances where the firm should have known that the information would be relied on, and acted upon. He held on the facts that the remainder of the disclaimer had no legal efficacy. I would uphold the judgment of the High Court, and dismiss the appeal.
Glencar Exploration plc v. Mayo County Council
[2001] IESC 64; [2002] 1 ILRM 481 (19 July 2001)
KEANE, C.J,
DENHAM, J.
MURRAY, J.
MCGUINNESS, J.
FENNELLY, J.
BETWEEN
GLENCAR EXPLORATION PLC
AND ANDAMAN RESOURCES PLC
AND
MAYO COUNTY COUNCIL
[Judgments delivered by Keane C.J.and Fennelly J.; Denham, Murray, and McGuinness J.J. concurring.]
JUDGMENT delivered the 19th day of July, 2001, by Keane C.J.
1. The facts in this case, to the extent that they are not in dispute, are summarised with such admirable clarity in the High Court judgment under appeal, that I can limit myself. for the purposes of this judgment, to a relatively brief résumé.
2. The applicants are two publicly quoted companies engaged in prospecting for and mining ores and minerals. On 30 May 1968, they were granted ten prospecting licences by the Minister for Energy for the purpose of exploring for gold in an area south of Westport in Co. Mayo. Those licences were renewed from time to time and, during the period from the date on which they were granted to the adoption by the respondents of what has been described as a ‘mining ban’ in the County Mayo Development Plan on 17 February 1992, they expended a sum of £1,938,264 in prospecting for gold in the relevant areas. In July 1990, Mr McCullough, the managing director of the first applicant, had written to the respondents pointing out that the applicants’ exploration work in south Mayo was well advanced and that they hoped to develop a gold mine in the area.
3. Although the results of the prospecting activities were highly encouraging, the applicants were of the view that, if the gold which appeared to exist in these areas was to be commercially mined, a further substantial investment would be required. They accordingly entered into a joint venture agreement with a company called Newcrest Mining Ltd, one of the largest Australian gold producers (hereafter ‘Newcrest’) in November 1991. Under that agreement, Newcrest was to spend at least £1.6 million on further exploration and, in return, was to be given a 51% interest in the venture. In February 1992, however, Newcrest withdrew from the joint venture as a direct result, the applicants alleged, of the inclusion in the county development plan of the mining ban.
4. The applicants then applied for and were granted leave to institute the present proceedings by way of judicial review in the High Court, in which they claimed, inter alia, the following reliefs:
(1) Declarations that the respondents were not empowered by the relevant legislation to include the mining ban in the County Mayo Development Plan and that it was ultra rues the legislation, unreasonable and contrary to constitutional and/or natural justice;
(2) An order of certiorari quashing so much of the development plan as included the mining ban; and
(3) Damages for negligence and breach of duty, including breach of statutory duty.
5. A statement of opposition having been filed on behalf of the respondents, the substantive hearing of the claim for judicial review came on before Blayney J. In a reserved judgment delivered on 13 November 1992 and reported in [1993] 2 IR 237, he granted the declaration sought by the applicants that the mining ban was ultra vires the respondents powers under the relevant legislation and was, accordingly, null and void. The applicants’ claim for damages was adjourned with liberty to apply.
6. The learned High Court judge found that the inclusion of the mining ban was ultra vires the respondents on two grounds:
(1) That a development plan under Part III of the Local Government (Planning and Development) Act 963 (hereafter ‘the 1963 Act’) must consist of a written statement and plan indicating the development objectives for the area of the planning authority, that such development objectives must be positive in character and that an objective which aims to prevent development cannot be such an objective;
(2) That the use of land for the purpose of winning and working of minerals is prima facia exempted development under the relevant regulations, that only An Bord Pleanála may determine whether such development is or is not exempted development and that, accordingly, the respondents could not, as a matter of law, include the mining ban in their development plan.
7. The applicants had relied on a further ground in support of their claim, i.e. that the mining ban was in breach of the policy of the government as conveyed to them in a letter dated 16 December 1991 written on behalf of the Minister for Energy and that, accordingly, the respondents had not had regard, as they were statutorily obliged to do, to the policy of the government. The learned High Court judge, however, while satisfied that the respondents had acted in disregard of government policy, did not find it necessary to come to any conclusion as to the effect in law of their having done so, having regard to his conclusion that, in any event, the mining ban was ultra vires.
8. On 11 December 1995, the applicants brought a notice of motion seeking directions as to the time and mode of trial of the applicants’ claim for damages. It was ordered by consent that points of claim and defence should be delivered, that discovery should be made by both parties and that the applicants should be at liberty to amend their claim for damages by extending it to a claim for damages for breach of duty not to inflict damage by acting ultra vires and to respect the applicants legitimate expectations, for misfeasance in public office and for wrongful interference with the applicants’ constitutional rights.
9. The application came on for hearing before Kelly J. In his written judgment delivered on 20 August 1998, the learned High Court judge dismissed the applicants claim for damages. In particular, while finding that the respondents were negligent in adopting the mining ban, in the sense that they did something which no reasonable authority would have done, he was satisfied that the negligence in question did not give rise to any right to damages.
10. The applicants have appealed to this court from the dismissal by the learned High Court judge of their claim for damages. While no notice to vary the judgment in the High Court ‘was served on behalf of the respondents, arguments were advanced to this court on the hearing of the appeal to the effect that the findings of negligence by the High Court judge were erroneous in point of law.
11. It is now necessary to consider in some more detail the circumstances in which the mining ban w as adopted by the respondents.
12. The question as to whether mining should he permitted in the Westport area gave rise to acute controversy in the early 1990s. It had come to a head with the ‘work carried out by Burmin Exploration and Development plc and Tara Mines plc on the slopes of Croagh Patrick. There was similar opposition to a proposed development by Ivernia West in an area about a mile south east of the Westport urban district area.
13. When the applicants obtained their prospecting licences, the development plan which had been made by the respondents under Part III of the 1963 Act did not contain a mining ban. In 1990, a new draft development plan was put on public display by the respondents. Paragraph 3.6.1 of the draft plan, dealing with mineral extraction, was as follows:
It is clear that there are large potential mineral resources within the county from the scale of exploration currently underway. Development of the resources will have major implications for the environment, water resources, aquaculture, tourism and employment.
Policy
It is the policy of the council that where mining and quarrying developments would seriously injure the visual environment, water resources, aquaculture, tourism, sites of archaeological, geological, historical, religious or scientific interest, the development shall not be permitted.
It is the policy of the council that, as part of any planning application for the large scale extraction of minerals, an environmental impact assessment under EC Directive 85/337/EC and SI No. 349 of the 1989 European Communities (Environmental Impact Assessment) Regulations 1989, shall be required by the Mayo County Council.
Objectives
It is an objective of the council to ensure, through control of mineral extraction developments. that the physical environment, flora and fauna is reinstated, on a phased basis. and with land, farms and vegetation in keeping with the natural environment.
It is an objective of the council to ensure that all forms of discharges from mineral extraction shall be strictly controlled and monitored and that any breaches ~ such controls be prosecuted in accordance with the appropriate legislation.
It is an objective of the council to ensure that adequate environmental safeguards are enforced to minimise disturbance and nuisance during operations.
It is an objective of the council that features of archaeological interest are protected and preserved and if this is not possible that they be properly surveyed and recorded.
14. The mining ban was effected by an amendment to this section of the development plan which was passed at a meeting of the respondents held on 11 March 1991 It consisted of the insertion of a paragraph between the two paragraphs under the heading ‘Policy’ as follows:
It is the policy of the council that no development and/or work shall take place in relation to minerals (as defined by the Minerals Act 1940 as amended) in the areas shown dotted on map 10A.
15. Map 10A indicated that the area in which mining was prohibited consisted of over 300 square miles extending from Achill Head in the west to Westport in the east and from Ballycroy in the north to Inisturk Island in the south. There was already a map 10 in the development plan delineating what were described as ‘areas of special scenic importance’ and which included some, though not all, of the area delineated as the mining ban area in map 10A. It should be noted that, at an earlier stage, the possibility of making a special amenity area order in respect of the area subsequently affected by the mining ban had been considered by the respondents but rejected by them.
16. There was support for the mining ban across party lines, two of its most enthusiastic supporters being Mr Seamus Hughes and Mr Enda Kenny, who represented the Fianna Fail and Fine Gael parties respectively on the council. Indeed at the meeting of the respondents held on 11 March 1991, the vote in favour of amending the draft plan in this fashion was passed unanimously. The amended draft plan was then put on display and various representations and objections were received and circulated to the respondents. Among them was a letter from the applicants which, however, was received outside the statutory period for the receipt of such representations.
17. On 11 November 1991 the respondents, having considered the written representations received in relation to the mining ban, resolved that the development plan should be amended so as to include the mining ban. The draft plan as amended could, in the normal course, have been adopted by the respondents at their meeting in the following December. However, on the day of the meeting, the letter already referred to on behalf of the Minister for Energy was received by them. That letter stated inter alia:
I am directed by the minister to state that he views with grave concern the draft policy statement in relation to minerals development in parts of County Mayo. The statement runs contrary to stated government policy that mineral resources should be explored for and should he exploited where this can be done in an environmentally acceptable manner. The statement, which implies that planning permission would be automatically refused to any mining project means that there will in fact, be no exploration investment whatsoever…
The minister is of the view that there is in principle nothing fundamentally wrong with the existing planning procedures and that it should be possible to accommodate the needs of both the mining industry and those concerned with the environment within the current legal and procedural framework.
Finally, I am directed by the minister to state that it is his official view that the statement proposed for the draft development plan should be deleted.
18. In view of the contents of this letter, the meeting of 16 December was adjourned. A motion was proposed by six members of the respondents to rescind the resolution of 11 November 1991 which had approved the inclusion of the mining ban in the draft development plan. At a meeting of the respondents on 17 February 1992 that motion was defeated by 22 votes to eight.
19. The mining ban which was thus inserted in the development plan and which led to the institution of these proceedings was adopted by the elected members of the respondents despite repeated advice from the officials of the respondents that it was not an appropriate course to take. The relevant evidence is referred to in detail in the judgment of the learned High Court judge: it is sufficient to say that the county manager, the senior executive planner and the county engineer were all of the view that the ban was unwise for a number of reasons. First, it was in the interest of the council, through prospecting activities, to find out what minerals were actually in the county, irrespective of whether or not permission to extract them was forthcoming: prospecting in the area would be improbable if the mining ban was adopted. Secondly, each application for such permission, in the event of the mining ban not being adopted, would he judged on its merits and in the light of all the relevant planning considerations and the provisions of the EC Directives on the environment.
20. Mr Hughes and Mr Kenny appear to have been under the impression that the effect of the mining ban would not be to prevent any mining development in the prohibited area: it would simply ensure that any application for permission was considered by the elected members, who could then decide that a permission should be granted, although constituting a material contravention of the development plan. It was, however, pointed out by the officials that this would not necessarily be the case, since, under the relevant legislation, the application for permission would come before the elected members only where the county manager decided to institute such a process. They also said that it was the duty of the elected members to take such steps as might be necessary to secure the objectives in the plan and that, if the plan were adopted, the granting of a permission in defiance of it could well be successfully challenged by an objector on the ground that the council were behaving irrationally and illogically. The difficulties arising from the fact that the course adopted by them was also contrary to stated government policy were also pointed out to them.
21. The respondents were also advised as to the legal implications of the mining ban by one of the foremost authorities on planning law at the time, Mr Philip O’Sullivan SC (now O’Sullivan J.). The county solicitor, Mr Michael Browne, in response to a letter from the county secretary on 15 May 1991, pointed out that those who had objected to the adoption of the mining ban might succeed in having the resolution declared invalid for a number of reasons, which he enumerated, and said that he considered he should submit a detailed case to advise to senior counsel. He specifically referred to the fact that it was public knowledge that the first named applicants had been prospecting in the relevant area for some time.
22. In his opinion, Mr O’Sullivan said that he had not seen map 10A but that since the terms of the ban referred to ‘areas’ in the plural he assumed that it referred to a number of different locations and that the map was prepared with the degree of attention to detail and care to limit the exclusionary prohibition to specified amenity locations rather than by reference to a crude exclusionary policy.
23. He went on:
In my opinion a planning authority is perfectly within its rights to make a decision in principle in its development plan that no mining would take place in particular areas where they perceive such mining activities are in conflict with amenity or other natural resources and to have a policy in the development plan stating this. A planning authority in general is under a positive obligation to formulate policies and to express them in the development plan and in my opinion the proposed amendment is doing just this. I assume the proposal is reasonable in the sense that it is made by reference to objective criteria.
24. Commenting on this passage in Mr O’Sullivan’s opinion, the learned High Court judge said that had he seen map 10A and been aware of the evidence adduced in the hearing in the High Court, there could be little doubt but that he would have concluded that the ban was nothing more than a ‘crude exclusionary policy’. He would also probably have concluded that the proposal could not be regarded as reasonable. because it was not made by reference to objective criteria. However as Kelly J went on to point out, it appears that, unfortunately, it was mistakenly thought by the respondents that they were legally empowered to impose the ban, despite the important caveats in Mr O’Sullivan’s opinion. Minutes of the meeting of 17 February 1992 record the manager as stating:
The council was informed that it was legally entitled to include such a ban although advised not to do so.
The High Court Judgment
25. In his judgment, Kelly J having set out the facts, went on to deal with the various legal headings under which the applicants’ claim for damages was brought.
26. The first was the tort of misfeasance in public office. He said that he was satisfied that the applicants had not established that, in opposing the ban, the elected members of the respondent were actuated by malice against the applicants or realised that what they were doing amounted to an abuse of office. While he was of the view that considerable criticism could be made of the approach of the elected members to the ban, he was satisfied that they were responding in good faith to the pressures brought to bear on them by the electorate: while they had acted unlawfully, they had also acted honestly and in the belief that they were entitled in law to adopt the ban.
27. As to the claim based on a breach of statutory duty, Kelly J said that he was of the view that the duties imposed by the relevant sections of the 1963 Act and the Local Government Act 1991 were for the benefit of the public or the government and that, accordingly, no action for damages lay at the suit of individual member of the public in respect of the alleged breach of duties.
28. As to the claim based on legitimate expectations, Kelly J held that, while the applicants were entitled to expect that any application they might make for permission would be fairly considered by the respondents, that expectation had not been frustrated, since no such application had ever been made. He was also satisfied that, even if any legitimate expectations on their part had been frustrated by the actions of the respondents, damages would not be available as a remedy in respect of it because of the absence of a contractual relationship or a relationship similar thereto, between the parties. He also rejected submissions that the applicants were entitled, in the alternative, to damages for what was alleged to be a wrongful invasion of their property rights under the Constitution.
29. As to the claim based on negligence, Kelly J said that he had concluded that the respondents had acted negligently in adopting the mining ban in the sense that they did something which no reasonable authority would have done. He expressed his conclusions as follows:
Whatever may have been the motives of the elected members, they set about achieving their goal in a way which, in my view, no reasonable local authority in receipt of the advice which they obtained would have done. It is not the function of elected representatives to slavishly give effect to their constituents’ demands come what may. They must exercise a degree of judgment in any particular case.
In this case, the evidence demonstrates that the provision of the mining ban was unnecessary. The existing planning code was sufficient to protect all legitimate planning interests. This was the advice they received from their officials. It was also the view made clear to them by the Minister for Energy. Not merely was it unnecessary from a planning point of view, but the evidence was that it was in fact contrary to the best interest of the county because it would drive away investment and exploration and the county would lose the chance of evaluating the benefits of any project put forward for planning permission. Furthermore, there was in my view no objective justification for the adoption of the ban, It was to operate in respect of all minerals, regardless of their method of extraction, value or the quantity likely to be extracted. The ban was of enormous span and it was clear, particularly from the evidence of Mr Dunleavy, that little or no thought went into the nature or the extent of the ban. It was nothing more than a crude exclusionary policy.
30. However, while Kelly J was of the opinion that, to that extent, the respondents had acted negligently in adopting the mining ban, he also came to the conclusion, having reviewed the authorities, that, in so acting, they were not in breach of any duty of care which they owed to the applicants and that, accordingly, no actionable claim for damages for negligence had been established.
31. Although, as a result of those conclusions, Kelly J was satisfied that the applicants’ claim for damages should be dismissed, he went on to consider the extent of the damages to which they would have been entitled had they succeeded in their claim. He was of the view that, if the damages were to be assessed as of the date of the mining ban, they would be entitled, at the most, to one-tenth of the expenditure they had actually incurred, ie £193,826.40. If, however, the damages were to be assessed as of the date of the trial, then they would have to be reduced further, because of the greater unlikelihood of permission ever having been granted as a result of the enactment of a European Union habitats directive: in that event, the most they could have hoped to recover was one-twentieth of the expenditure incurred by them.
Submissions of the parties
32. The claim of the applicants based on misfeasance in public office was not pursued in this court.
33. As to the claim based on breach of statutory duty and the applicants’ constitutional rights, Mr Sreenan, SC and Mr Brady SC on behalf of the applicants submitted that the judgment of Finlay CJ in Pine Valley Developments Ltd v. Minister for the Environment [1987] IR 23, [1987] ILRM 747, left open the possibility of an action for damages arising from the commission of an ultra vires administrative action where the action in question was in breach of a duty owed to a particular person. They submitted that where, as here, the breach of a statutory duty had caused loss and damage to an individual, the latter was entitled to be compensated and that the granting of any immunity to public authorities in such circumstances was not in accordance with the jurisprudence of the European Court of Human Rights or of the Court of Justice of the European Economic Communities, citing in support the decisions in Osman v. United Kingdom 29 EHRR 245 and Francovich v. Italy (Case-6/90 [1991] ECR I-5357. They further submitted that, in any event, even adopting what they described as the restrictive interpretation of the tort of breach of statutory duty by the trial judge, the duty to have regard to government policy was in fact for the benefit of a limited class of persons who were the beneficiaries of that policy, i.e. the holders of mining licences.
34. As to the claim based on legitimate expectations, they submitted that the trial judge had been in error in treating their claim as based on a representation, express or implied, that they would obtain planning permission. The legitimate expectation on which they relied was that the respondents would act lawfully and with due regard to the advices they received from their officials and to relevant government policy as communicated to them, that they would not seek to prejudge all applications for planning permission for mining development within a substantial part of the area for which they were responsible and that they would act legally and fairly towards the applicants. They submitted that it was clear from cases such as Fakih v. Minister for Justice [1993] 2 IR 406; Dascalu v. Minister for Justice High Court (O’Sullivan J.) 4 November 1999 and Philips v. Medical Council [1991] 2 IR 115; [1992] ILRM 469 that a person could legitimately expect that public authorities would act in accordance with the law. They also cited in support the decision of this court in Duff v. Minister for Agriculture (No. 2) [1997] 2 IR 22. They further submitted that the trial judge was wrong in law in holding that damages would not be available for a breach of a legitimate expectation in the absence of a subsisting contractual or equivalent relationship, citing in support the decisions in Duggan v. An Taoiseach [1989] ILRM 710 and Webb v. Ireland [1988] IR 353; [1988] ILRM 565.
35. As to the finding of the High Court that the claim for damages for negligence was not maintainable because of the absence of any duty of care, they submitted that the existence of a duty of care had not been traversed in the points of defence furnished by the respondents. On the assumption that the respondents were entitled to argue that no duty of care existed, they submitted that this was not the law, having regard to the decision of the High Court and the Supreme Court in Ward v. McMaster [1985] IR 29; [1988] IR 337; [1989] ILRM 400.
36. The duty of care arose by virtue of:
(a) the foreseeability of damage to the applicants as a consequence of the respondents’ action;
(b) the statutory framework under which the relationship between the parties existed;
(c) the relationship of proximity between the parties, there being no factors in the relationship between the parties that would negative a duty of care;
(d) the absence of any factors that would make it ‘fair and reasonable’ to relieve the respondents from any duty of care, applying the formulation adopted by Costello J. at first instance in Ward v. McMaster.
37. They further submitted that, if the criteria laid down by McCarthy J. in Ward v. McMaster for determining whether a duty of care existed were to be adopted, the argument for holding that the respondents were under a duty of care was even more compelling.
38. On behalf of the respondents, Dr Forde SC submitted that, on the facts of the present case, no question of a legitimate expectation, as that doctrine had been developed in the authorities in Ireland and the United Kingdom, arose. The applicants had never applied for planning permission and, accordingly, could not contend that any expectation they might have of obtaining such a permission had been frustrated by any action on the part of the respondents: the evidence, indeed, established that the applicants had expressly refrained from applying for planning permission in order to preserve their possible claim for damages. In any event, he submitted that the doctrine of legitimate expectation was a guarantee of procedural fairness, not of substantive outcomes, citing Tara Prospecting Ltd. v. Minister for Energy [1993] ILRM 771. Moreover, damages were not a remedy for the breach of a legitimate expectation, assuming one existed, in the absence of a subsisting contractual or equivalent relationship. Webb v. Ireland was not authority for the proposition that a remedy by way of damages was available in cases of a breach of legitimate expectation: in that case, there had been an express assurance that the plaintiff would be reasonably treated and the court had treated this as a form of promissory estoppel rather than legitimate expectation.
39. As to the claim for damages based on a breach of statutory duty, Dr Forde submitted that it had been clear since the decision in Cutler v. Wandsworth Stadium Ltd. [1949] AC 398 that, for a liability to damages to arise, it had to be established that the legislature intended that a breach of the Act should result in an award of damages in favour of a category of persons to which the plaintiff belonged. The ultra vires act found by Blayney J. to have been committed by the respondents in adopting the mining ban was, at most, a breach of a duty owed by the respondents to the public in general and not to any specific category of persons to whom the plaintiff belonged.
40. As to the contravention alleged to have been committed of the duty under the 1991 Act to have regard to the policy of the government, Dr Forde submitted that the trial judge was erroneous in point of law in inferring from the evidence that the respondents had acted in breach of their duty: both the trial judge and the applicants, in their submissions to this court, mistakenly assumed that, because the respondents, having considered the Minister’s letter, had decided to proceed with the mining ban, they had acted in disregard of the policy of the government. The 1991 Act did not oblige the respondents to implement government policy, but rather to have regard to it in arriving at a decision. That did not mean, he said, that, having given appropriate consideration to the policy in question, they were then obliged to give effect to that policy.
41. Dr Forde further submitted that, in any event, even assuming that the respondents were in breach of their duty under the 1991 Act, that was a duty owed at best to the government or one of its individual ministers and not to any category of persons to which the plaintiff belonged.
42. As to the claim based on negligence, Dr Forde took issue with the inferences of fact drawn by the trial judge from the evidence. Since he had correctly found that the elected representatives believed with good reason that they had the legal power to impose the ban, there was no basis for his finding that they had acted negligently. Specifically, he gave no reason for holding that the ban had not been made by reference to objective criteria. Nor was it negligent for the elected representatives to act the contrary to the advise of their officials on a matter of policy such as this on which their constituents had strong views. It was also not an act of negligence on their part to decline to have regard to government policy, even supposing that that was what the elected representatives did.
43. On the assumption that the trial judge was entitled to infer from the evidence that the respondents had acted negligently, in the sense that they had done what no reasonable authority should have done, Dr Forde submitted that this afforded them no cause of action against the respondents. In the first place, the law of negligence was intended to provide redress for personal injuries and physical damage to property: it was only in exceptional circumstances, which did not arise here, that liability could arise in negligence for exclusively economic loss. He cited in this context the summary of the law in McMahon and Binchy on the Law of Torts, 3rd ed. chapter 10. He further submitted that there was no authority for the proposition that a duty of care rested on a local authority in circumstances such as the present: the decision in Ward v. McMaster was clearly distinguishable. He said that it had also been held in a number of cases, such as Yuen Kun Yeu v. Attorney General of Hong Kong [1988] AC 175; Pine Valley Developments Ltd. v. Minister for the Environment and Dunlop v. Woollahra Municipal Council [1982] AC 158 that where a decision in a policy area by a public authority was in issue, liability in negligence should not normally arise. He said that the public policy underlying that principle was reinforced, in the case of local authorities, by the fact that, if the respondents were made liable in the present case, they would be liable to a surcharge.
44. Dr Forde further submitted that the collapse of the joint venture agreement with Newcrest and the impossibility of getting other joint venturers was not reasonably foreseeable by the respondents. He further submitted that the respondents’ resolution was not the cause of any loss that the applicants’ claimed to have sustained: even if the resolution had not been adopted, the provisions of the county development plan prohibiting mining and quarrying development which would impair the visual environment, etc., might well have resulted in a refusal of planning permission. The collapse of the joint venture with Newcrest, moreover, was not caused by the ban, but by the low price of gold, the failure of the government to take any action regarding the ban and the subsequent unilateral act of Newcrest.
45. In reply, Mr Brady submitted that, in determining whether a duty of care existed, the correct approach was to look first at the conduct of the alleged wrongdoer and then determine whether, in the circumstances of the particular case, a legal relationship in the form of a duty to exercise reasonable care existed. He submitted that this was in accordance with the well known tests adopted by Lord Wilberforce in Anns v. Merton LBC [1978] AC 728 and by Costello J at first instance and McCarthy J in this court in Ward v. McMaster. He also urged that, far from indicating any public policy against a finding of negligence in cases such as the present, the statutory liability to a surcharge reflected a public policy in favour of making such findings where appropriate.
Conclusion
46. Before stating my conclusions on the issues that arise in this appeal, I think it appropriate to make some observations concerning the decision of Blayney J which gave rise to the claim for damages the subject of the appeal.
47. The first ground on which he found the resolution adopting the mining ban ultra vires was that it was not positive in nature but simply constituted a restriction on a particular form of development. He based that conclusion on the undoubted fact that, by virtue of s. 19(2) of the 1963 Act, a development plan is to consist of a written statement and a plan indicating the ‘development objectives’ for the area in question. He pointed out that ‘development’ is defined in s. 3(1) as ‘the carrying out of any works on, in or under land…’ From that, he inferred that the ‘development objectives’ referred to must have as their aim the carrying out of works on, in or under land and that they must be positive in character.
48. That is at least questionable, since sub-s. (2)(a)(i) states that the ‘development objectives’ referred to may include objectives:
for the use solely or primarily . . . of particular areas for particular purposes (whether residential, commercial, industrial, agricultural or otherwise)…
49. Thus, in the case of agricultural land, development plans may, and frequently do, legitimately include provisions ensuring that, during the currency of the plan, the land will continue to be used as agricultural land. Far from requiring the carrying out of any works on the land, such an objective would have the effect of restricting any development which would involve a change of use of the land, save for exempted development.
50. Even more critically, however, the learned judge does not appear to have had any regard to sub-s. (3) which provides that:
Without prejudice to the foregoing subsection and subs. (5) of this section, a development plan may indicate objectives for any of the purposes mentioned in the Third Schedule to this Act. . .
51. At this point the word ‘objectives’ is used without any qualification and the Third Schedule itself indicates a number of objectives which can be achieved which do not require the carrying out of works of any sort, such as (of particular relevance in the context of the present case) in Part IV at paragraph 7:
Preservation of views and prospects and of amenities of places and features of natural beauty or interest.
52. As to the second ground on which the learned judge found the mining ban ultra vires, it is undoubtedly the case that it was for An Bord Pleanala, and not the planning authority, to decide in any particular case whether a particular development constituted an exempted development or not. However, it seems to me that the prohibition of mining in a particular area could not, in law, have the effect of restricting the carrying out of any exempted development. Under the then law, contained in the Local Government (Planning and Development) Regulations 1977 (SI No. 65 of 1997) the following was an exempted development:
The use of land for the purpose of the winning and working of minerals, the carrying out of works incidental thereto (other than open cast mining or surface working or the deposit of refuse or waste materials) and, in the case of land other than land situate in an area to which a special amenity area order relates, the erection or placing of structures on the land for such specific purposes.
53. It will be noted that open cast mining or surface working is removed from the category of exempted developments and, accordingly, the effect of the mining ban would have been to require permission to be obtained for any such development in the area of the ban. No doubt the fact that the mining ban would not preclude purely underground mining would limit its efficacy to that extent, but it by no means follows, in my view, that the ban was thereby rendered ultra vires.
54. It is noteworthy in this context that Mr O’Sullivan advised the council that the imposition of the ban would be lawful, provided that the prohibition was limited to specified high amenity locations and not by reference to a crude exclusionary policy. The ban might well have been successfully challenged on the ground that it failed to meet the criteria identified by Mr O’Sullivan but that did not happen.
55. The parties naturally accepted that, there having been no appeal from the decision of Blayney J, it is binding as a matter of law for the purpose of these proceedings. I would expressly reserve for another occasion the question as to whether the decision that the mining ban was ultra vires on the grounds set out in the judgment of Blayney J was correct in point of law.
56. I consider next the different headings under which it has been contended on the hearing of this appeal that the applicants were entitled to damages.
(1) Breach of statutory duty and the applicants’ constitutional rights
57. The first breach of statutory duty alleged against the respondents arises out of the provisions of s. 19 of the 1963 Act which imposed on the respondents an obligation to make a development plan for their area. The applicants cannot complain that the respondents did not fulfil their obligation under that section, because they manifestly did. Their complaint is rather that the development plan which they made in fulfilment of their obligation under the section contained, in the form of the mining ban, a provision which was ultra vires. On one view, that complaint was met when the offending section of the plan was deleted in consequence of the judgment and order of the High Court and it is difficult to see how, in those circumstances, a claim for damages for breach of statutory duty could be well founded.
58. However, apart from that consideration, it seems to me that, in any event, a claim for damages for breach of the statutory duty imposed by s. 19 could not arise in the circumstances of the present case. The applicants, in abandoning their claim based on the tort of misfeasance in public office, have in effect conceded that the respondents, in adopting the mining ban, were not deliberately and dishonestly abusing the powers conferred on them under the 1963 Act. The decision by the respondents to include the mining ban constituted the purported exercise by them of a power vested in them by law for the benefit of the public in general. It was not the fulfilment by them of a duty imposed by statute for the specific protection of particular categories of persons, the breach of which may lead to an action for damages. It follows that the ultra vires exercise of the power in the present case could not of itself provide the basis for an action in damages. This view of the law is authoritatively confirmed by the judgment of Finlay CJ in Pine Valley Developments v. Minister for the Environment where he cited with approval the following statement of the law in the 5th edition of Wade on Administrative Law at p. 673:
The present position seems to be that administrative action which is ultra vires but not actionable merely as a breach of duty will found an action for damages in any of the following situations:
1. If it involved the commission of a recognised tort, such as trespass, false imprisonment or negligence.
2. If it is actuated by malice, e.g. a personal spite or a desire to injure for improper reasons.
3. If the authority knows that it does not possess the power which it purports to exercise.
59. The learned Chief Justice added that he was satisfied that there would not be liability for damages arising under any other heading.
60. In the present case, paragraphs 2 and 3 in the passage cited are clearly not applicable. It will be necessary to consider at a later point in this judgment whether the ultra vires act in the present case involved the commission of the tort of negligence.
61. The applicants sought to rely on the reference in the passage quoted to an administrative action which is ‘not actionable merely as a breach of duty’ and submitted that it was, accordingly, envisaged that in some instances at least an ultra vires administrative act might be actionable as a breach of duty. That is undoubtedly so, but only where, as pointed out by the learned Chief Justice, the statutory duty in question is imposed on the body concerned for the specific protection of the rights of individuals. It is clear that this is not such a case.
62. As for the damages allegedly sustained by the applicants as a result of the breach of their constitutional rights, a similar claim was made in Pine Valley, but was also rejected. In that case, the ultra vires decision by the Minister for Local Government (as he then was) to grant permission for the development of the plaintiff’s lands was treated by Finlay CJ in the course of his judgment, as having probably contributed towards a diminution in the value of the land in the plaintiff’s hands. Similarly, it could no doubt be said in the present case that the imposition of the mining ban contributed to a reduction in value of the property right represented by the prospecting licences which was vested in the applicants. Finlay CJ, however, said that:
That fact, itself however, does not, in my view necessarily mean that an injustice was done to the plaintiffs and I am certain that that does not constitute an unjust attack on the plaintiffs’ property rights…
I am satisfied that it would be reasonable to regard as a requirement of the common good an immunity to persons in whom are vested statutory powers of decision from claims or compensation where they act bona fide and without negligence.
Such an immunity would contribute to the efficient and decisive exercise of such statutory powers and would, it seems to me, tend to avoid indecisiveness and delay, which might otherwise be involved.
63. I am satisfied that those considerations also apply to the present case. The remedy available to persons affected by the commission of an ultra vires act by a public authority is an order of certiorari or equivalent relief setting aside the impugned decision and not an action for damages, to allow which, in the case of public officials, would be contrary to public policy for the reasons set out by Finlay CJ in the passage just cited.
64. It was urged in the present case that this view of the law was not in accordance with the provisions of the European Convention on Human Rights and Fundamental Freedoms as applied by the European Court of Human Rights in Osman v. United Kingdom. At the time of writing, the Convention is not part of our domestic law. However, I am in any event satisfied that the decision in Osman is of no assistance to the applicants. That was a case in which the courts in the United Kingdom had struck out proceedings for negligence against the police brought by the family of a victim of manslaughter. The Court of Appeal had done so on a preliminary application on the basis of a so-called exclusionary rule laid down by the House of Lords on grounds of public policy in Hill v. Chief Constable of West Yorkshire [1989] AC 53. That was held to be in breach of article 6(1) guaranteeing to everyone the right to have any claim relating to civil rights and obligations brought before a court or tribunal. However, that was because the court was considering a claim in negligence and not one based on an ultra vires act. It was, moreover, a case in which the merits of the applicants’ claim having regard to the facts of the particular case had never been the subject of an adjudication by a competent tribunal. In the present case, the plaintiffs’ claim based on negligence has been fully considered and rejected by the High Court and has been the subject of a fully argued appeal to this Court.
65. It was also submitted that the decision in Pine Valley and of the High Court in the present case were not in accordance with EC Law as laid down by the Court of Justice in Francovich v. Italy. However, the decision in the latter case was to the effect that an action for damages would lie against a public authority in a member state which had acted in breach of EC Law where damage had been sustained as a result. The applicants’ claim for damages in the present case is grounded on alleged breaches of Irish law and not of EC Law.
(2) Legitimate expectation
66. The doctrine of legitimate expectation, as it has come to be called, derives, it would seem, from the jurisprudence of the European Court of Justice, although some have seen it as also constituting a development of the English doctrine of promissory estoppel. It made its first appearance in our law in Smith v. Ireland and Others [1983] ILRM 300 where Finlay P, as he then was, found on the facts that it had not been established that a legitimate expectation of the plaintiff had not been met. In Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374, Lord Diplock said that it arose in the case of decisions which affected other persons by
(a) altering rights or obligations of that person which are enforceable by or against him in private law; or
(b) … depriving him of some benefit or advantage which either
(i) he had in the past been permitted by the decision maker to enjoy and which he can legitimately expect to be permitted to continue to do until there has been communicated to him some rational grounds for withdrawing it on which he has been given an opportunity to comment, or
(ii) he has received an assurance from the decision maker will not be withdrawn without giving him first an opportunity for advancing reasons for contending that they should not be withdrawn.
67. In the same case, Lord Roskill said:
As the cases show, the principle is closely connected with ‘a right to be heard’. Such an expectation may take many forms. One may be an expectation of prior consultation. Another may be an expectation of being allowed time to make representations especially where the aggrieved party is seeking to persuade an authority to depart from a lawfully established policy adopted in connection with the exercise of a particular power because of some suggested exceptional reasons justifying such a departure.
68. There is authority in Ireland for the proposition that, to the extent that the doctrine of ‘legitimate expectation’ exists in our law, the circumstances in which it arises are those identified in the passages cited. As Costello J pointed out in Tara Prospecting Ltd v. Minister for Energy [1993] ILRM 771 (a case coincidentally also arising out of the exploration of gold in County Mayo) at p. 783:
…The case law developed in England has established that a duty to afford a hearing may be imposed when such expectations are created by public authorities. The correlative right thus arising is therefore a procedural one. And it is important also to recognise that the claim I am now considering is a very different one. It is not that the legitimate expectations which the applicants held entitled them to a fair hearing (such a right arising from constitutional and well established common law principles I have already considered), but that they created a right to the benefit itself which should be enforced by an order of mandamus….
69. Having considered the authorities in Ireland and elsewhere, he then went on to hold inter alia that:
In cases involving the exercise of a discretionary statutory power the only legitimate expectation relating to the conferring of a benefit that can be inferred from words or conduct is a conditional one, namely, that a benefit will be conferred provided that at the time the Minister considers that it is a proper exercise of the statutory power in the light of current policy to grant it. Such a conditional expectation cannot give rise to an enforceable right to the benefit should it later be refused by the Minister in the public interest.
70. It has been said that this is an unduly restrictive approach and that there is no reason, in logic or principle, why the doctrine cannot be successfully invoked so as to declare a person entitled, in an appropriate case, not simply to fair procedures, but to the benefit which he was seeking in the particular case. (See the decisions of the High Court in Duggan v. An Taoiseach [1989] ILRM 710 and Abrahamson v. Law Society of Ireland [1996] 1 IR 403; [1996] 2 ILRM 481.)
71. It is unnecessary, however, in the context of the present case to determine whether the more expansive approach suggested by those decisions is to be preferred to the view of the law taken by Costello J in Tara Prospecting Ltd.v. Minister for Energy. The applicants cannot, and do not, complain that they were deprived of a benefit in the form of a grant of planning permission which, in the language of the doctrine, they reasonably and legitimately expected to receive. They never applied for such a permission. Their complaint is that the respondents imposed an improper and illegal constraint on the manner in which they would propose to consider an application from the applicants for permission, in the form of the mining ban. That unlawful fetter on the powers of the applicants was removed by the decision of the High Court and thereafter the doctrine of legitimate expectations ceased to have any relevance in this case.
72. It should also be pointed out that the judgment of Finlay CJ in Webb v. Ireland, on which the applicants also relied, proceeded on the basis that the facts in that case gave rise to a sustainable claim based on promissory estoppel, rather than on the doctrine of legitimate expectations as that doctrine has been explained in the other authorities to which I have referred. Webb was, moreover, a decision which turned on particular facts – specifically the assurance that the finder of the chalice would be honourably treated – which have no parallel in the present case.
(3) Negligence
73. There are two preliminary matters which must first be considered.
74. It was submitted on behalf of the applicants that the existence of a duty of care had not been traversed in the points of defence furnished by the respondents. However, at paragraph 19 of the points of defence the respondents denied that they were guilty of negligence or breach of duty and the particulars of negligence and breach of duty are also expressly denied in paragraph 22. It was clearly implicit in those pleas that the respondent was contending that it was under no duty of care or, if it was, that it was not in breach of the relevant duty. Apart from that consideration, whether a duty of care existed in the particular circumstances of this case was a matter of law and, on the orthodox view of the function of pleadings, the absence of a duty of care did not have to be expressly pleaded by the respondents. There is, of course, no question of the applicants having been taken in any way by surprise either in this court or in the High Court, having regard to the detailed written submissions furnished in both courts on the legal aspects of the case, and I would, accordingly, reject the submission based on this pleading point.
75. The second issue is in relation to the findings of fact made by the learned trial judge. As already noted, although no notice to vary had been served on behalf of the respondent, Dr Forde argued that the inferences of fact drawn by the trial judge from the evidence were not justified.
76. Although the trial judge found that the respondents had acted negligently in adopting the mining ban, I think that it is clear that, in so finding, he was not holding that they had been in breach of any duty of care they owed the applicants: a finding to that effect would have been inconsistent with the conclusions he later reached, after a consideration of the authorities, that the respondents had not been in breach of any duty of care they owed the applicants. He did, however, conclude that, in adopting the mining ban, they had done something which no reasonable local authority would have done.
77. I am satisfied that this was an inference which the trial judge was entitled to draw from the evidence and is not one which should be set aside by this court. The uncontested evidence was that the ban was adopted in the face of unequivocal advice from the officials of the respondent that it was unnecessary in planning terms and would be contrary to the interests of the people of County Mayo, since it would be a disincentive to investment and exploration and the absence of any prospecting would mean that the county would not know the extent of its mineral resources. The ban, moreover, was clearly to operate in an arbitrary manner and could not be objectively justified as being solely designed to protect high amenity locations. I will return at a later point to the question as to whether the trial judge was correct, in point of law, in also holding that the respondents had acted unlawfully in acting, as it was claimed they did, in disregard of government policy.
78. The next, and final, issue which has to be determined is as to whether the trial judge was correct in point of law in holding that, although the respondents’ action in adopting the mining ban was properly characterised as one which no reasonable planning authority could have taken, it did not constitute a breach of a duty of care owed by the respondents to the applicants as a result of which they suffered loss and are entitled to damages.
79. This has resulted in a impressively wide ranging discussion in this court as to the nature of the modern tort of negligence. The starting point is obviously the famous passage in the speech of Lord Atkin in Donoghue v. Stephenson [1932] AC 562 which, however often quoted, must be set out here again, but including an introductory passage, which is of critical importance, and is frequently omitted:
At present I content myself with pointing out that in English law there must be, and is, some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of ‘culpa’ is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes in law, you must not injure your neighbour; and the lawyer’s question, Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which were called in question.
80. The opening passage indicates that, in Lord Atkin’s view, while the law of negligence involves some general conception of relations giving rise to a duty of care, it necessarily embodies rules of law which limit the range of complainants and the extent of their remedy. The well known biblical reference is then followed by Lord Atkin’s clarification of the dicta in Le Lievre v. Gould [1893] 1 QB 91 which suggested that the duty of care arose because of the ‘proximity’ of the person or property injured to the person or property which caused the injury. He pointed out that ‘proximity’ in this context should not be confined to ‘mere physical proximity’ but should extend:
to such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act.
81. That was clearly an essential clarification when what was under consideration was the duty of the manufacturers of articles to the ultimate purchaser with whom they had no relationship in contract.
82. Finally, it should be noted that in Le Lievre v. Gould, in a passage cited with approval by Lord Atkin (subject to the qualification just mentioned), Lord Esher said:
If one man is near to another, or is near to the property of another, a duty lies upon him not to do that which may cause a personal injury to that other, or may injure his property.
83. That passage is of importance for two reasons. It makes it clear in the first place, that, in general, the law of negligence is directed to a positive act which causes injury or damage rather than a failure to take action so as to prevent such injury or damage. No doubt in the course of a particular operation an omission to do something may render the defendant amenable in damages: the failure of a motorist to give a required signal which results in an accident converts a blameless form of driving into negligent driving.
84. The second feature of the law of negligence identified in that passage is that, in general, for a defendant to be found guilty of negligence the careless act must have caused personal injury to, or damage the property of, the plaintiff. The law of negligence normally does not afford redress to those who have suffered what has come to be described in the authorities as ‘economic loss’ simpliciter.
85. Lord Atkin’s speech in Donoghue v. Stephenson thus established (or on another view, apparently his own, simply confirmed) that reasonable foreseeability on the part of the defendant that his actions would be likely to injure the plaintiff was a necessary but, of itself, insufficient condition of liability in negligence. It was also necessary for the plaintiff to establish that there was a relationship of ‘proximity’ between himself and the defendant which gave rise to the legal duty to take care that the foreseeable consequence was avoided. However, in cases where the damage occurred outside the familiar territory of the highway and the workplace, the application of these principles has led, throughout the common law world, to a vast range of judicial decisions not always easy to reconcile.
86. So too with the principle that no action for negligence lay in respect of purely economic loss. A major qualification of that principle was established in Hedley Byrne & Co. Ltd v. Heller & Partners Ltd. [1964] AC 465 in the case of pecuniary loss caused by a negligent misstatement, but until the much discussed decision of the House of Lords in Junior Books Ltd. v. Veitchi Co Ltd. [1983] 1 AC 520 it remained the law in both England and Ireland that, negligent misstatement apart, no action in negligence lay in respect of such damage.
87. In the following passage in his speech in Anns v. Merton London Borough Council [1978] AC 728 at p. 751, Lord Wilberforce set out the principles which in his view determined the existence of the scope of a duty of care:
Through the trilogy of cases in this House, Donoghue v. Stephenson, Hedley Byrne & Co Ltd. v Heller & Partners Ltd. and Home Office v. Dorset Yacht Co. Ltd the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First, one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage, there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise. . . .
88. In later English cases, doubts were expressed as to whether this formula was of such universal applicability as a superficial reading might suggest. In Governors of the Peabody Donation Fund v. Sir Lindsay Parkinson & Co Ltd [1985] AC 210 at p. 240 Lord Keith of Kinkel said of this reading of the passage (and an observation of a similarly general nature by Lord Reid in Dorset Yacht Company Ltd.):
This is a temptation which should be resisted … in determining whether or not a duty of care of a particular scope was incumbent on a defendant it is material to take into consideration whether it is just and reasonable that it should be so.
89. In Yuen Kun Yeu v. Attorney General of Hong Kong, the judicial committee of the Privy Council said that the two step test had:
been elevated to a degree of importance greater than it merits, and greater perhaps than its author intended.
90. Moreover, in the compressed form adopted by Lord Wilberforce, it was open to the possible interpretation that foreseeability alone was a sufficient criterion of liability. It was also seen as eroding the distinction, already noted, between positive acts causing injury or damage and a failure to prevent such injury or damage.
91. Ultimately, in Caparo Industries Plc. v. Dickman [1990] 2 AC 605, a different approach was adopted, epitomised in a passage in the judgment of Brennan J in the High Court of Australia in Sutherland Shire Council v. Heyman (1985) 60 ALR 1:
It is preferable in my view that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by undefinable considerations which ought to negative, or to reduce or limit the scope of the duty, and the class of person to whom it should be owed.’
92. In Caparo, Lord Bridge summed up the approach in England as follows:
What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there exists between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of proximity’ or ‘neighbourhood’ and the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope on the one party for the benefit of the other.
93. The law in Ireland must now be considered. The decisions in both Donoghue v. Stephenson and Hedley Byrne v. Heller & Partners Ltd. have been considered and adopted by our courts in a number of cases and unquestionably represent the law in this jurisdiction. It has also been said (see, for example, the 3rd edition of McMahon and Binchy on the Law of Torts, chapter 6) that the two stage test adopted by Lord Wilberforce in Anns is also the test which must be adopted in this jurisdiction, having regard to the decision of this court in Ward v. McMaster.
94. The plaintiffs in that case, a married couple, had purchased a house from a builder. Shortly afterwards, they discovered that it contained serious structural defects which, if not repaired, would render it dangerous and a risk to health. The plaintiffs had bought the house with the assistance of a loan from the local authority under the relevant housing legislation. They had not had any independent examination of the house by a surveyor carried out before they bought it, but it had been examined on behalf of the local authority by an auctioneer. The plaintiffs sued both the builders/vendor and the local authority. Their claim against the latter was based on the contention that the local authority should have known that the plaintiffs, not being persons of means, would be unlikely to retain their own independent surveyor and would have relied on an appropriate inspection having been carried out on behalf of the authority. In fact, as already noted, the examination was carried out by an auctioneer who was not a qualified surveyor and whose report did not reveal the defects in the house.
95. In the High Court, the plaintiffs’ claim against both the builder and the local authority succeeded. Although the damage which resulted was, on one view, purely economic loss, Costello J in the High Court was satisfied that it was recoverable in the light of the decision in Junior Books Ltd. v. Veitchi Company Ltd. Having considered the authorities in England, he stated the legal principles which were applicable in determining whether a duty of care arose in the circumstances of that case to be as follows:
(a) When deciding whether a local authority exercising statutory functions is under a common law duty of care the court must firstly ascertain whether a relationship of proximity existed between the parties such that in the reasonable contemplation of the authority carelessness on their part might cause loss. But all the circumstances of the case must in addition be considered, including the statutory provisions under which the authority is acting. Of particular significance in this connection is the purpose for which the statutory powers were conferred and whether or not the plaintiff is in the class of persons which the statute was designed to assist.
(b) It is material in all cases for the court in reaching its decision on the existence and scope of the alleged duty to consider whether it is just and reasonable that a common law duty of care as alleged should in all the circumstances exist.
96. In the case of the local authority, he held that it was within the reasonable contemplation of the second named defendant that carelessness on its part in carrying out the valuation of the house might be likely to cause damage to the purchaser. It was consistent with the local authority’s public law powers that they should be accompanied by a common law duty of care in favour of the plaintiffs and he further held that, for similar reasons, it was ‘just and reasonable’ that the court should hold that a duty of care arose in that case.
97. The local authority appealed to this court which unanimously upheld the judgment of Costello J. However, although there was, as in this case, an extensive debate as to the nature and scope of the duty of care, Henchy J was satisfied that the facts of the case were such that it could be decided in accordance with what he described as ‘well established principles’. In his view, the relationship between the first named plaintiff and the local authority was such that the latter owed a duty to him to take due care in the valuation of the house since they should have known that, in the light of his lack of means, he would rely on their having carried out an appropriate valuation. There is, accordingly, nothing in his judgment to indicate that he was adopting the more expansive view of the extent of the duty of care, rightly or wrongly attributed to Lord Wilberforce in Anns, rather than the more restrictive approach subsequently adopted in the English authorities.
98. By contrast, in the only other judgment delivered in this court, McCarthy J expressly endorsed the two stage test adopted by Lord Wilberforce and added
Whilst Costello J essentially rested his conclusion on the ‘fair and reasonable’ test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.
99. As to the passage already cited from the judgment of Brennan J in Sutherland Shire Council v. Heyman, the learned judge commented that:
This verbally attractive proposition of incremental growth …suffers from a temporal defect – that rights should be determined by the accident of birth.
100. Finlay CJ and Griffin J said that they were in agreement with the judgments of both Henchy J and McCarthy J: Walsh J confined his concurrence to the judgment of McCarthy J
101. While the decision in Ward v. McMaster has been treated by some as an unqualified endorsement by this court of the two stage test adopted by Lord Wilberforce in Anns, it is by no means clear that this is so. As already noted, Henchy J was satisfied that the case could be decided by reference to ‘well established principles’ and made no reference in his judgment to the two stage test in Anns. Since Finlay CJ and Griffin J expressed their agreement with both the judgments of Henchy J and McCarthy J, it is not clear that the observations of the latter in relation to the two stage test in Anns necessarily formed part of the ratio of the decision. Given the far reaching implications of adopting in this jurisdiction a principle of liability in negligence from which there has been such powerful dissent in other common law jurisdictions, I would not be prepared to hold that further consideration of the underlying principles is foreclosed by the dicta of McCarthy J in Ward v. McMaster.
102. In considering whether that approach, or the more cautious approach favoured in Caparo Industries plc. v. Dickman and Sutherland Shire Council v. Heyman should be adopted, I think it is helpful to refer again to the philosophy reflected in Lord Atkin’s approach in Donoghue v. Stephenson. The bystander who sees a building on fire and knows that there are people inside no doubt foresees that if he waits for the fire brigade to arrive rather than attempting to rescue them himself they may die. But the law has never imposed liability in negligence on a person who fails to act as a more courageous citizen might in such circumstances. A strict moral code might censure his timidity: the law of negligence does not. It is precisely that distinction drawn by Lord Atkin between the requirements of morality and altruism on the one hand and the law of negligence on the other hand which is in grave danger of being eroded by the approach adopted in Anns as it has subsequently been interpreted by some. There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ or ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J at first instance in Ward v. McMaster, by Brennan J in Sutherland Shire Council v. Heyman and by the House of Lords in Caparo Industries plc. v. Dickman. As Brennan J pointed out, there is a significant risk that any other approach will result in what he called a ‘massive extension of a prima facie duty of care restrained only by undefinable considerations…’
103. I observe, in this context, that it has been suggested in England that the difference in approach between Anns and Caparo may ultimately be of no great significance, since the considerations which, in a particular case, may negative the existence of a duty of care under the Anns formulation are consistent with an assessment as to whether it is just, fair and reasonable to impose such a duty in the particular circumstances. (See the comments of Lord Hoffman in Stovin v. Wise [1996] AC 923 at p. 949.)
104. In the present case, we are concerned with negligence alleged against a public authority in the performance of a statutory function. The circumstances in which a duty of care can be said to arise in the case of such authorities when exercising statutory functions has also given rise to an enormous volume of decided cases in the common law world, to many of which we were referred. There are, of course, many instances in which a public authority will be liable in negligence because the duty of care imposed on the law by them is no different from that arising in private law generally. Obvious examples are the duties owed by local and other public authorities arising out of their occupation of premises or their role as employers. In such cases, the plaintiff does not have to call an aid the fact that the defendants may have been exercising a statutory function: their duty of care as occupiers, employers, etc., is no greater, but also no less, than that of their counterparts in the private sector.
105. Difficulties have arisen, however, in determining whether, and to what extent, a statutory authority can be made amenable in damages for the negligent exercise of a power which they were entitled, but not obliged, to invoke. In Anns, it had been held that, although a local authority was not under a duty to inspect the foundations of buildings, it could be made liable where proper consideration had not been given to the question as to whether they should inspect or not. In Siney v. Dublin Corporation [1980] IR 400, this court held that, where a flat had been provided by a local authority pursuant to their duties under the relevant housing legislation, they were obliged to take reasonable care to ensure that it was fit for human habitation and that, accordingly, they were liable in damages because appropriate humidity tests had not been carried out in order to determine whether the flat would be sufficiently ventilated. In Ward v. McMaster, as we have seen, the local authority were found liable in damages for having failed to carry out a valuation by a qualified surveyor in circumstances where it could not be suggested that they were under a statutory duty to provide themselves or anyone else with such a valuation, although they were undoubtedly authorised so to do. Again, in the judgments of Costello J at first instance and McCarthy J in this court, Anns is cited with approval as authority for the proposition that a duty of care arises in such circumstances.
106. In Anns, it was suggested that the imposition of a duty of care in cases of this nature was justified where the nature of the statutory power was such that it was obviously the intention of the legislature that it would be exercised and that, accordingly, a negligent failure to exercise what were described as ‘operational’ powers or duties could give rise to liability. In subsequent cases in England, however, it has been said that the distinction between policy and operations may not be a particular useful guide in determining whether a duty of care should be found to exist in any particular case. Similar considerations apply to the distinctions drawn in some of the authorities between discretionary and non-discretionary decisions.
107. For the purposes of this case, it is sufficient to say that the mere fact that the exercise of a power by a public authority may confer a benefit on a person of which he would otherwise be deprived does not of itself give rise to a duty of care at common law. The facts of a particular case, however, when analysed, may point to the reasonable foreseeability of damage arising from the non-exercise of the power and a degree of proximity between the plaintiff and the defendant which would render it just and reasonable to postulate the existence of a duty of care. That approach is consistent with the reluctance of the law to impose liability for negligence arising out of an omission to act rather than out of the commission of positive acts which may injure persons or damage property. In the present case, the decision by the respondents that they would not grant planning permission for any mining development within the area covered by the ban was, on the assumption that it was intra vires, the exercise by them of a statutory power which would result in the withholding of a benefit from the applicants which would foreseeably result in their suffering financial loss. But, although such a loss was undoubtedly reasonably foreseeable, when one bears in mind that the powers in question were exercisable by the respondents for the benefit of the community as a whole and not for the benefit of a defined category of persons to which the applicant belonged (as in Siney and Ward v. McMaster), I am satisfied that there was no relationship of ‘proximity’ between the plaintiffs and the respondents which would render it just and reasonable to impose liability on the respondents.
108. In considering whether such a relationship of ‘proximity’ existed and whether it would be just and reasonable to impose a duty of care on the respondents, I think one also has to bear in mind that this was not a case in which it could reasonably be said that the applicants, in incurring the expense of their prospecting activities, could be said to have been relying on the non negligent exercise by the respondents of their statutory powers. Their position is in contrast to that of the plaintiffs in both Siney and Ward v. McMaster where, in each case, they belonged to a category of persons for whose benefit a particular statutory framework had been created and who might reasonably be said to have relied on the local authority in each case taking reasonable care in the exercise of the statutory powers vested in them. The applicants in the present case could rely on no more than a general expectation that the respondents would act in accordance with the law which is not, in my view, sufficient to give rise to the existence of a duty of care.
109. It is also far from clear that the applicants have established that what the High Court judge found to be the unreasonable manner in which they had adopted the mining ban caused the damage of which they complain. Had they observed the criteria which Mr O’Sullivan SC had advised were appropriate in adopting the ban they would still have been found to have acted ultra vires in the High Court on the grounds set out in the judgment of Blayney J Accordingly, even if they had confined the ban to a significantly smaller area in a manner which could have been justified on objective criteria relating to the need to protect areas of particular scenic beauty, and which included those areas in which the applicants were prospecting, it would still have been set aside on those grounds. I should add that I am also satisfied that Dr Forde was correct in submitting on behalf of the respondents that it had not been established that the respondents had acted in breach of their statutory obligation pursuant to s. 7(1)(e) of the Local Government Act 1991 to
have regard to….
(e) policies and objectives of the government or any Minister of the government in so far as they may affect or relate to its functions…
110. There was no evidence to indicate that the respondents simply ignored the letter from the Minister for Energy: on the contrary, they adjourned the meeting at which they were to make the vital decision so that the Minister’s views could be considered. The fact that they are obliged to have regard to policies and objectives of the government or a particular Minister does not mean that, in every case, they are obliged to implement the policies and objectives in question. If the Oireachtas had intended such an obligation to rest on the planning authority in a case such as the present, it would have said so.
111. There remains the question of economic loss. The reason why damages for such loss – as distinct from compensation for injury to persons or damage to property – are normally not recoverable in tort is best illustrated by an example. If A sells B an article which turns out to be defective, B can normally sue A for damages for breach of contract. However, if the article comes into the possession of C, with whom A has no contract, C cannot in general sue A for the defects in the chattel, unless he has suffered personal injury or damage to property within the Donoghue v. Stephenson principle. That would be so even where the defect was latent and did not come to light until the article came into C’s possession. To hold otherwise would be to expose the original seller to actions from an infinite range of persons with whom he never had any relationship in contract or its equivalent.
112. That does not mean that economic loss is always irrecoverable in actions in tort. As already noted, economic loss is recoverable in actions for negligence misstatement. In Siney, economic loss was held to be recoverable in a case where the damages represented the cost of remedying defects in a building let by the local authority under their statutory powers. Such damages were also held to be recoverable in Ward v. McMaster, the loss being represented by the cost of remedying defects for which the builder and the local authority were held to be responsible. In both cases, the loss was held to be recoverable following the approach adopted by the House of Lords in Anns. While the same tribunal subsequently overruled its earlier conclusion to that effect in Murphy v. Brentwood District Council [1991] 1 AC 398, we were not invited in the present case to overrule our earlier decisions in Siney and Ward v. McMaster.I would expressly reserve for another occasion the question as to whether economic loss is recoverable in actions for negligence other than actions for negligent misstatement and those falling within the categories identified in Siney and Ward v. McMaster and whether the decision of the House of Lords in Junior Books Ltd. v. Veitchi Co. Ltd. should be followed in this jurisdiction.
113. I would dismiss the appeal and affirm the order of the High Court.
The Supreme Court
1998/323, 2000/61J
Keane, C.J,
Denham, J.
Murray, J.
McGuinness, J.
Fennelly, J.
Between
Glencar Exploration PlC
and Andaman Resources plc
And
Mayo County Council
JUDGMENT delivered the 19th day of July, 2001, by Fennelly J.
114. I agree with the judgment of the Chief Justice that the appeal should be dismissed. The appeal raises issues of importance concerning the liability of public authorities to pay compensation for ultra vires decisions.
115. It is necessary for a proper understanding of the issues to be aware of the facts. These have been very fully explained both in the judgment of the learned High Court judge and that of the Chief Justice. Any repetition of those accounts would be needless and wasteful. I will content myself with recounting the barest essentials facts so as to highlight the central legal issues.
116. The appellants, at all material times, held licences to prospect for minerals in areas of Count Mayo. These were granted to them in 1986 by the Minister for Energy under statutory powers. As a result of prospecting and exploration operations pursuant to the licences, they had made findings of gold deposits in commercial quantities in these area but this was an expensive business. They had expended some £2 million in proper and effective reliance on their rights under the licences. The finds were attractive enough to persuade Newcrest Mining Ltd, an important Australian gold producer, to agree in 1991 to invest £1 .6 million in the venture and, in reality, by acquiring a 5 1% interest to become a partner in the enterprise.
117. The elected members of the respondent, the planning authority for the County of Mayo, adopted a new development plan, in early 1992. Amidst considerable controversy, an amendment providing for a policy which would amount to an effective ban on mining development was included in the plan. It said:
It is the policy of the council that no development and/or work shall take place in relation to minerals (as defined by the Minerals Act 1940, as amended) in the areas shown dotted on map 10A.
118. I will call this, for the sake of brevity, the ‘mining ban.’ Obviously, the statute is the Minerals Development Act 1940. The mining ban purported to affect an area, delineated in map 10A. of some 300 square miles, in the Westport electoral area, constituting about one seventh of the area of the entire county, and including the areas covered by the appellants’ licences.
119. The result of the mining ban was that the prospective partner withdrew. For practical purposes the entire venture has become what was colourfully described by the managing director of the first named appellant as a ‘dead duck.’ Its investment expenditure is written off as a total loss. The learned trial judge found that the appellants have no further intention of carrying out any work in the areas covered by the licences.
120. The appellants challenged the validity of the mining ban in judicial review proceedings. In a judgment of 13 November 1992. Blayney J held the mining ban to be ultra vires the powers of the respondent and made an order annulling it. I do not consider it necessary to review the reasons for that decision. Although the Chief Justice raises significant queries as to its correctness, the respondent did not appeal the order of the High Court, which now must be regarded as correct. The starting point for consideration of the legal issues on the appeal is that the respondent, as planning authority, in purported exercise of its statutory powers, made a decision, which it had no power to make. As a consequence, it became obvious that the appellants’ mining prospect was rendered valueless. The learned trial judge has found as a fact that the mining ban caused the appellants’ mining project to collapse and that the judgment of Blayney J did not lead to any revival of confidence. The appellants claim that they should be allowed to recover damages from the respondent for losses in the form of the monies expended by them prior to the imposition of the mining ban.
121. A large part of the argument concerning the liability of the respondent necessarily centred on the contents of the legal advice received by the respondent from its solicitors and counsel regarding its power to include the mining ban in its development plan combined, of course, with the respondents state of knowledge of the likely effect of the mining ban on the appellants.
122. The knowledge of the respondent of the appellants’ interest is easily established. The appellants objected in writing to the draft development plan on 2 May 1991. Its letter was transmitted to Mr Michael Browne, the county solicitor, who, in conveying his legal advice dated 5 May 1991 to the respondent at the height of the controversy specifically drew attention to the fact that the appellant had been prospecting in the area for some time. He presciently warned that adversely affected mining companies might seek judicial review. On 5 December 1991, the appellants wrote to the respondent pointing out that the only areas selected for inclusion in map 10A were areas which had been of particular interest to mining companies. They demanded the withdrawal of the mining ban and put the respondent clearly on notice of its intention to sue it for any loss it would suffer as a result of the ban. Thus, the respondents were fully conscious not only of the fact that the mining ban would cause loss to mining companies and the appellants in particular but that they would be sued for any consequential losses. Loss to the mining interest was, of course, inherent in the mining ban. Its very purpose was to make it difficult if not impossible for mining to be permitted in the area covered by map 10A.
123. The position regarding the state of knowledge of the respondent of its legal power to impose the mining ban is not so clear cut. Central to this issue is the advice of Mr Philip O’Sullivan, senior counsel, now O’Sullivan J and the respondent’s appreciation of its effect. Mr Browne had raised in quite a pointed way the question of the validity of the resolution to include the mining ban in the development plan. He covered issues of powers under the planning acts, breach of Article 43 of the Constitution and legitimate expectation all of which, to some degree, have made an appearance in the course of this litigation. Mr Browne’s advice was not, of course, conclusive. He said:
In view of the risks to the council in adopting this resolution as an objective of the plan and the many and complex areas of Iaw involved I would require some time to complete inquiries . . . to consider further the implications and to submit a detailed case for the opinion of the appropriate senior counsel.
124. In the event, Mr O’Sullivan was asked to advise. Because of its central role in considering the matters now before the court, at the risk of repetition, I will set out in full the part of his opinion which is cited by the learned trial judge:
125. I have not seen map 10A referred to in the resolution proposing the amendment to the mineral policy in the draft plan, but the wording refers to areas in the plural and I make the assumption that the map refers to a number of locations where mining activity is to be excluded. This suggests that the map was prepared with a degree of attention to detail and care to limit the exclusionary prohibition to specified high amenity locations rather than by reference to a crude exclusionary policy. In my opinion a planning authority is perfectly within its rights to make a decision in principle in its development plan that no mining would take place in particular areas where they perceive such mining activities are in conflict with amenity or other natural resources and to have a policy in the development plan stating this. A planning authority in general is under a positive obligation to formulate policies and to express them in the development plan, and in my opinion the proposed amendment is doing just this. I assume the proposal is reasonable in the sense that it is made by reference to objective criteria. It does not have to be the best policy or a policy which a judge would approve, or a policy which no one could criticise or which could not be improved. Providing it is based on objective criteria and is made bona fide, having regard to the proper planning and development of the area then, in my opinion, it is within the powers of the planning authority to have such a policy and the jurisdiction to make it is contained in Part III of the 1963 Planning Act as amended.
126. Having quoted this extract, the learned trial judge continued:
127. Had Mr O Su1livan seen map 10A, comprising as it does three hundred square miles or one-seventh of the total area of Co. Mayo, and had he been privy to the evidence in this case, I have little doubt but that he would have concluded, as indeed do I, that this ban was nothing more than a crude exclusionary policy. The map was not prepared with a degree of attention to detail. Care was not taken to limit the exclusionary prohibition to specified high amenity locations. Neither could the proposal be regarded as reasonable because it was not made by reference to objective criteria.
128. The learned trial judge then concluded: ‘It is clear from the foregoing that in essence the legal advice was to the effect that there was no power to impose it’ (meaning the mining ban). In this passage, the learned trial judge reached a conclusion as to what the opinion of Mr O’Sullivan would have been if he had seen map 10A. In doing so, he was possibly influenced by the reasoning of Blayney J. However, that decision was delivered subsequent to Mr O’Sullivan’s opinion. The core of the opinion was to the effect that a planning authority was entitled to ‘make a decision in principle in its development plan that no mining would take place in particular areas. . . .’ Kelly J may, of course, be right, but there is a degree of speculation involved. Personally, I am not persuaded that Mr O’Sullivan’s opinion would necessarily have been different if he had seen map 10A. In so saying, I acknowledge that I am, myself, influenced by the doubts cast on the correctness of the judgment of Blayney J. In any event, I do not agree with the learned trial judge’s summation of the effect of Mr O’Sullivan’s opinion being that there was no power to impose the mining ban. Kelly J himself made it clear, in any case, in an ensuing passage, that the opinion was not so understood. He went on:
That said, I am by no means satisfied that the import of Mr O’Sullivan’s advice was understood by the respondent. His advice as to the legal ability to include the ban was clearly conditional on the matters addressed in that part of the opinion from which I have just quoted. The conditions were not met. Yet the respondent appears to have concluded that the advice was to the effect that there was power to proceed, This is particularly clear when one reads the minutes of the meeting of 17 February 1992. There, there is set forth the advice of the county manager on the procedural aspect of that meeting In the course of his recital of the events giving rise to the motion being proposed, he is reported to have said:
The council considered the written representations following the last public display, at a meeting held on 11 November 1991. The plan contained a ban on mineral extraction in a specific area as outlined in map 10A. The council was informed that it was legally entitled to include such a ban although advised not to do so.
This strongly suggests that Mr O’Sullivan’s advice was understood as an imprimatur for the proposal whereas, properly understood, it did not even amount to a nihil obstat.
In any event, I am of opinion that the respondent believed (wrongly) that it had power to impose the ban.
129. The legal issues can thus be approached on the basis that Mr O’Sullivan’s opinion was not understood by the respondent as questioning the power to adopt the mining ban. My only gloss on the judgment of the learned trial judge is that I do not necessarily think that the respondents were misreading Mr O’Sullivan’s opinion when they reached that conclusion.
Damages for ultra vires acts
130. I will now turn to the legal issues which arise on the appeal. These and in particular the arguments of the appellant have been fully explained in the judgment of the Chief Justice. The starting point of the plaintiff’s claim has to be the decision of Blayney J that the mining ban was ultra vires the powers of the respondent. Since it had no power to adopt the mining ban and since the appellants suffered loss as a result of its inclusion in the development plan, they should be compensated by the respondent for the making of this invalid decision. Such a crude characterisation of the issue does not, of course, do justice to the appellants’ arguments. They do not suggest that they can establish the right to be compensated without bringing themselves within the four walls of one of the established causes of action. The lack of any link between the invalidity of a decision of a public authority and loss caused by it underlies to a substantial extent the real legal issues in the case.
131. As the learned trial judge correctly pointed out, ‘there is no direct relationship between the doing of an ultra vires act and the recovery of damages for that act.’ This fundamental proposition can be underlined in two ways.
132. Firstly, an individual needs no power to perform a wide range of actions which affect others and with the potential to affect them adversely. An individual’s activity is not actionable, however, unless it consists of the commission of some civil wrong, most usually a breach of contract or a tort. The fact that a public authority must act within the scope of the powers conferred upon it has no necessary connection with loss which may be suffered by persons affected by it. Many people or bodies corporate are affected for better or worse by the actions of public authorities in the performance of their statutory functions. However, the incidence of gain or loss to individuals is unrelated to the validity of the decisions made. A valid decision is no more or less likely to cause loss than an invalid one. Breach of a specific statutory duty is, of course, a special case to which I will return.
133. Secondly,.the nature of the tort of misfeasance in public office emphasises that lack of vires is insufficient on its own to ground a cause of action sounding in damages. Keane J, as he then was, observed in his judgment in McDonnell v. Ireland [1998] 1 IR 134 at p. 156, that that ‘tort is only committed where the act in question is performed either maliciously or with actual knowledge that it is committed without jurisdiction and with the known consequence that it would injure the plaintiff. …’ The common characteristics of those two alternative elements of that rare and unusual civil wrong are, as explained by Clarke J in Three Rivers DC v. Bank of England (No 3) [1996] 3 All ER 558 at p. 632, in a passage cited by the learned trial judge as being that the tort ‘is concerned with a deliberate and dishonest wrongful abuse of the powers given to a public officer.’ The appellants have not, of course, pursued their appeal against the rejection by the learned trial judge of their reliance on misfeasance in public office. Nonetheless, the conditions demanded by the law for success in invoking it explain the policy of the law that public authorities should not be at risk of claims for damages if they exercise their powers bona fide. Finlay CJ in a well-known passage from his judgment in Pine Valley Developments Ltd v. Minister for the Environment [1987] IR 23; [1987] ILRM 747 at pp. 38/759 said:
I am satisfied that it would be reasonable to regard as a requirement of the common good an immunity to persons in whom are vested statutory powers of decision from claims for compensation where they act bona fide and without negligence. Such an immunity would contribute to the efficient and decisive exercise of such statutory powers and would, it seems to me, tend to avoid indecisiveness and delay, which might otherwise be involved.
134. In his judgment in the same case, Henchy J stated:
Breach of statutory duty may occur in a variety of circumstances and with a variety of legal consequences. Here we are concerned only with a breach of statutory duty in the making of a decision which has been committed by statute to the decision-maker. The weight of judicial opinion as stated in the decided cases suggests that the law as to a right of damages in such a case is as follows. Where there has been a delegation by statute to a designated person of a power to make decisions affecting others, unless the statute provides otherwise, an action for damages at the instance of a person adversely affected by an ultra vires decision does not lie against the decision-maker unless he acted negligently, or with malice …in the sense of spite, ill-will or suchlike improper motive), or in the knowledge that the decision would be in excess of the authorised power:
see, for example, Dunlop v Woohllhara Municipal Council [1982] AC 158; Bourgoin SA v Ministry of Agriculture [1985] 3 All ER 585. While the law as I have stated it may be lacking in comprehensiveness I believe it reflects, in accordance with the requirements of public policy, the limits of personal liability within which persons or bodies to whom the performance of such decisional functions are delegated are to carry out their duties.
135. I respectfully agree with those statements. I would add that the absence of the right to automatic compensation for loss caused by an ultra vires act can find further justification from the protection of individual rights afforded by the existence of the remedy of judicial review. While the sufferer of loss from a lawful but non-tortious private act is entirely without a remedy, a similarly positioned victim of an ultra vires act of a public authority, by way of contrast, has at his disposal the increasingly powerful weapon of judicial review. Thus, he may be able to secure, as in this case, an order annulling the offending act. In appropriate cases, a court may be able to grant an interlocutory injunction against its continued operation. I believe that the considered statements of the law made in Pine Valley remain the law, despite apparent inconsistency with some dicta in the majority judgments in Duff v. Minister for Agriculture (No. 2) [1997] IR 22, which appear to treat liability for damages as automatically flowing from a mistake of law said to have been made by a minister. The Pine Valley case, though fully considered and applied in the High Court judgment of Murphy J in that case, does not figure at any point in the judgments of the Supreme Court. I do not believe that it can have been intended to depart from such an important principle as that laid down in Pine Valley.
136. On the appeal, the appellants pursued only the claims based respectively on breach of statutory duty, negligence, breach of legitimate expectations and infringement of constitutional rights. I propose to consider the first three. As already stated, I agree with the Chief Justice that the appeal should be dismissed. It is only in respect of the issue of legitimate expectations that my views may appear to differ to any extent.
Breach of statutory duty
137. In my judgment, the learned trial judge was correct to say that: ‘nowhere do I find either expressly or by implication that it (s. 19 of the Act) creates any duty which the legislature intended to be enforceable by an individual in a claim for damages.’ He was, in that passage thinking of the type of statutory duty that is not infrequently imposed by the legislature with the object of protecting the interests of or creating a benefit for an identifiable class of persons. The notion of a protective norm is familiar to many systems of law. For example, the appellants have cited Francovich v Italy (Case C’—6/90) [1991] ECR 1—5357, the decision which first established the principle and then laid down the criteria for establishing state liability for breach of a provision of European Community law. The first condition enunciated by the Court of Justice is that the community act which is invoked – in that case a directive – ‘should entail the grant of rights to individuals’ (paragraph 40 of the judgment). A duty imposed by statute on a public body will not be held to create a right to damages for its breach unless it can be shown to have within the scope of its intendment a reasonably identifiable protective purpose and identifiable class intended to benefit.
138. It is not possible without straining language to transpose that principle to the present case. The statutory duty, in the sense of obligation, which is imposed by the Local Government (Planning and Development) Act 1963 on planning authorities is, as the Chief Justice has made clear and as seems to be accepted by the appellants, to adopt a ‘plan indicating development objectives for their area’. However, that is a ditty imposed for the benefit of the public and not for the protection of any particular class of the public. Moreover, it is not the duty whose breach is invoked by the appellants. It was, in fact, observed when the plan was adopted. Their complaint is that the respondent acted ultra vires when it decided to include the mining ban in the development plan. The decision to include any particular objective in such a plan is more appropriately characterised as the exercise of a discretion. Whether the decision fell properly within the range of the statutory powers of the body in question is nihil ad rem. No breach of statutory duty is involved. I agree with the Chief Justice’s response to the appellants’ argument based on the qualifying phrase in the judgment of Finlay CJ in Pine Valley, which it is claimed leaves the door open for liability for an act which is ‘not actionable merely as a breach of duty’.
139. The appellants developed this argument in their written submissions stating that the degree of immunity granted to public authorities by virtue of the strict restrictions on the tort of breach of statutory duty were inconsistent with the jurisprudence of the European Court of Human Rights, in particular Osman v. United Kingdom (1998) 29 EHRR 245. The latter case originated in an action for damages commenced against the police alleging negligence in investigating complaints with tragic consequences. In Osman the Court of Human Rights held that the United Kingdom had violated article 6(1) of the convention by denying the complainants access to a court. The Court of Appeal had struck out the applicants’ statement of claim for failure to disclose a reasonable cause of action against the police. The police could not be held liable in negligence, under the precedent of Hill v. Chief Constable of West Yorkshire [1989] AC 53, for failures in the investigation of crime even to persons, who, like the applicants, had justifiably sought protection from known and identified persons who posed a real and imminent threat to their safety.
140. In evaluating the relevance of this case-law to the present case, it has to be borne in mind that the pertinent article of the convention guarantees the right to a fair trial, a right held to include the right to have access to a court competent to adjudicate on a complaint. Article 6 does not purport to regulate the substance of the legal remedies available under the law of the contracting states. The Court of Human Rights took the view that English law, as it had been interpreted by the Court of Appeal, conferred an automatic blanket immunity on the police from civil suit in respect of their acts or omissions in the investigation and suppression of crime. It was this component of English law which was held to prevent the English courts from even considering competing public interest considerations. In effect, counsel for the United Kingdom had been unable to persuade the court that ‘the rule as interpreted by the domestic court did not provide an automatic immunity to the police.’
141. Had the matter stood on the basis of the Osman ruling alone, I would not have been persuaded that Irish law confers any blanket immunity on public authorities for the consequences of their negligent acts of the sort which was there found to exist. Moreover, as it happens, the Court of Human Rights has taken the opportunity to clarify its Osman ruling in a case decided since the hearing of the appeal in the present case. On 10 May 2001, it gave judgment in Z. v United Kingdom (Application No. 29392/95,), a case concerning the liability of local authorities for alleged failures in the performance of its functions regarding the taking into care of children feared to be at risk. The court was at pains to stress, recalling earlier case-law, that article 6 did not guarantee any particular content for the relevant rights and obligations in the domestic law of the contracting states. It accepted that the House of Lords in particular, in its development of the public policy element of the law of negligence, had not conferred any blanket immunity on the public authorities in question in that case. It also frankly acknowledged that its own judgment in Osman had to be ‘reviewed in the light of the clarifications subsequently made by the domestic courts and notably the House of Lords’ (paragraph 100 of the judgment).
142. The judgments of the Court of Human Rights may be useful sources of persuasive authority where they contain reasoning relevant to the interpretation of legal rights guaranteed by the convention which are analogous to rights which are known in our law and Constitution and which our courts have to apply. The value of the Osman case as an authority is, in my view, undermined for the present case by the fact that it is concerned with a right of access to justice rather than the substance of the legal right asserted. The appellants claim in essence that the civil wrong of breach of statutory duty is unduly narrow, by reason of its failure to include within its scope the claim made in this case, namely that the appellants should be compensated for the ultra vires act of the respondent. This is a claim that the substance of the legal right being asserted insufficiently protects the interests of the appellants. The appellants’ access to the courts have not been restricted or impaired. The convention cannot via article 6 supply what is lacking in Irish law. I agree with the respondent that Osman is irrelevant.
Negligence
143. On the issue of negligence, I am in full agreement with the judgment of the Chief Justice and with his extensive treatment of the English and Irish case-law. I should advert, at first, as does the Chief Justice in his judgment, to the parameters of the appeal. The appellants failed in their claim because the learned trial judge held that the respondent did not owe them a duty of care in the exercise of their statutory powers pertaining to the drawing up of the development plan and specifically the inclusion of the mining ban. The appellants take issue with this conclusion in their notice of appeal. They say in particular that the learned trial judge:-
– gave undue weight to his view that the statutory powers were to be operated for the benefit of the public at large;
– having made findings of negligence, should have concluded that there was a duty of care;
– failed to conclude that there was no compelling reason to base an exemption from liability based on public policy.
144. They object, however, that the defence did not specifically contest the existence of a duty of care.
145. It seems to me artificial in the highest degree to ask this court to parse the pleadings of the parties in the High Court, when it seems that the existence of a duty of care was very fully considered on its merits by the learned trial judge and in circumstances where no significant objection appears to have been taken in the High Court. It is commonplace that the issues debated become transformed as a trial proceeds. If one party finds itself significantly disadvantaged by having to deal with a point not pleaded, that will become an issue at the trial and the trial judge will make rulings to ensure the fairness of the hearing. The points of claim and defence, in fact, seem to have concentrated very much on the question of whether the respondent was under a duty to ensure that it did not adopt a development plan containing a provision which it had no power to adopt. They focus very much on whether the respondent had taken proper legal advice or had proper regard to the advice which it had received.
146. I agree with the Chief Justice that the existence of a duty of care must be regarded as being in issue on the appeal. However, I think it is impossible before proceeding to discuss that issue to ignore the nature of the findings of negligence made by the learned trial judge, upon which the appellants place so much reliance. They do not, in fact, relate to the alleged duty not to act in excess of statutory powers. They are contained in the following passage from the judgment under appeal:
I have come to the conclusion that the imposition of the mining ban in the present case was done negligently. Whatever may have been the motives of the elected members, they set about achieving their goal in a way which, in my view, no reasonable local authority in receipt of the advice which they obtained would have done. It is not the function of elected representatives to slavishly give effect to their constituents’ demands come what may. They must exercise a degree of judgment in any particular case.
In this case, the evidence demonstrates that the provision of the mining ban was unnecessary. The existing planning code was sufficient to protect all legitimate planning interests. This was the advice they received from their officials. It was also the view made clear to them by the Minister for Energy. Not merely was it unnecessary from a planning point of view, but the evidence was that it was in fact contrary to the best interests of the county because it would drive away investment in exploration and the county would lose the chance of evaluating the benefits of any project put forward for planning permission. Furthermore, there was in my view no objective justification for the adoption of the ban. It was to operate in respect of all minerals, regardless of their method of extraction, value or the quantity likely to be extracted. The ban was of enormous span and it was clear, particularly from the evidence of Mr Dunleavy, that little or no thought went into the nature or the extent of the ban. It was nothing more than a crude exclusionary policy.
In concluding that the council were negligent in the sense that they did something which no reasonable authority would have done, I have yet to address the question as to whether that negligent act was done in the context of a duty of care being owed to the applicants. It is only in such context that a right to damages would arise.
147. This approach, by making findings of negligence before determining whether a duty of care exists, risks reversing the correct order of analysis. Admittedly, it was the course followed in this court in Pine Valley, where it was held that the minister could not be considered negligent without pronouncing on the existence of a duty of care. The elements of the tort of negligence are the existence of a duty of care, lack of proper care in performing that duty and consequential damage. The lack of care which we commonly call negligence consists in commission or omission of acts. In order to be actionable, the acts or omissions must be such as will reasonably foreseeably cause damage to any person to whom the duty is owed. Mere causation is not enough. As a matter of principle, it seems to me that the failure to exercise due care can only be established by reference to a recognised duty. Then one can know what sorts of act are liable to cause damage for which one is liable. This dilemma is well-illustrated by the passage from the judgment of Kelly J, which I have just quoted. At the beginning and the end of the passage, he concludes that the respondent acted as ‘no reasonable authority would have done’, a test more relevant to the validity of the exercise of statutory powers than to the failure to respect that standard of care which is owed to another to whom a duty is owed. This is consistent with the concrete criticisms made in the rest of the passage. Whether the mining ban was ‘unnecessary’ or ‘contrary to the best interests of the county. .’ or lacked ‘objective justification’ are not in my view relevant to the question of negligence. To treat these conclusions uncritically as having found the respondent to have acted negligently not only begs the question as to whether it owed the relevant duty of care but also obscures the difficult issue of liability for pure economic loss. The learned trial judge was perfectly entitled to expose the actions of the respondent to the severest criticism. However, these particular criticisms do not appear to me to have any bearing on the issue of negligence. I agree, of course, with the Chief Justice that these findings of the learned trial judge cannot be disturbed on this appeal. I also agree with his view that the making of such findings did not mean that the learned trial judge was finding the respondent to be in breach of any duty of care owed to the appellants. For these reasons, the passage in question ceases to have relevance for the issues to be decided on this appeal.
148. In these circumstances, the question has to be whether the making of an admittedly ultra vires decision can form the basis for any finding of negligence against the respondent. In this connection, the focus has to be on the legal validity of the decision. I will consider whether a public authority in the position of the respondent can be held to owe a duty of care to persons affected by its decisions to see that the decision falls within the scope of its statutory powers.
149. That seems to me to be the real issue here.
150. Let us consider the position on the hypothesis that the planning authority had the power to adopt the mining ban. On that assumption, could it have been liable to persons, natural or legal, to compensate them for economic damage suffered as the result of the incidence of the operation of the plan? In my judgment, the answer would clearly be in the negative. The development represents the culmination of a process designed to gather the views of all relevant interests, economic and social, and to give appropriate weight to them in the plan formally adopted. The authority is required to publish its proposals and receive representations from those affected or potentially affected. In its final form, it inevitably represents a whole series of compromises between potentially conflicting economic, social and environmental aims – the list is not exhaustive – and objectives. The preference given to one objective will be to the disadvantage of another and consequently to those who have an interest in that other. This is inherent in the process. In certain circumstances, a person whose property is affected by a provision in a development plan may have the right to receive compensation. Such provisions recognise the possibility that an invasion of rights for the common good may be entitled to recompense from the public purse. However, as a general proposition, those affected by the restrictive provisions of a development plan are not entitled to payment. Equally obviously, landowners affected by zoning provisions or businesses affected by restrictions adopted for policy reasons in the general interest cannot, in my view, be regarded as coming within the scope of any duty of care owed by the authority in the framing of its plan.
151. This type of effect is quite different from that which arose in Ward v. McMaster [1988] IR 337; [1989] ILRM 400. The loss suffered by the plaintiff in that case did not flow inevitably from the decision of the local authority to make the loan but rather from an act of incidental negligence in the performance of its statutory function. Similarly in Siney v. Dublin Corporation [1980] IR 400, the defendant housing authority owed a duty of care to the tenant of a flat which it provided in pursuance of its statutory power because the tenant was entitled to rely on it to ensure that the flat would be habitable. In each of these cases, an individual direct relationship came into existence by reason of the statutory context. They do not support any principle of liability arising from lack of care in the decision-making process producing foreseeable loss.
152. I return then to what I consider to be the nub of the case, whether a successful claim can be made for damages for the fact of the decision being invalid. It may be no accident that almost all of the cases in which courts have had to consider this issue concern the exercise of planning powers. The most relevant authority in this jurisdiction is Pine Valley. The judgment of Finlay CJ dealt with the claim for damages in negligence as follows:
Having regard to that finding, I am quite satisfied that the learned trial judge was right in reaching the conclusion which he did that the first defendant could not be said to have been negligent or to have been guilty of negligent misrepresentation. If a minister of state, granted as a persona designata a specific duty and function to make decisions under a statutory code (as occurs in this case), exercises his discretion bona fide, having obtained and followed the legal advice of the permanent legal advisers attached to his department, I cannot see how he could be said to have been negligent if the law eventually proves to be otherwise than they have advised him and if by reason of that he makes an order which is invalid or ultra vires. . . . I am, therefore, satisfied that in so far as the plaintiffs have appealed against the learned trial judge’s findings, that an action in damages for negligence or for negligent misrepresentation does not and cannot lie, the appeal must fail.
153. The court, having found that the minister had not, in fact, been negligent because he had taken legal advice, did not consider whether the minister would have been liable if he had taken no legal advice, in other words whether he owed a duty of care to take advice. In Pine Valley, it should be recalled, there was a close causal relationship between the losses allegedly suffered by the plaintiff and the invalidity of the decision. The plaintiff was in a position to argue at a minimum that a decision to grant planning permission would foreseeably be relied upon by potential purchasers of the affected land who would equally foreseeably suffer loss if the permission turned out to be invalid. Consequently, it could be argued that the minister should exercise reasonable care in deciding whether he had power to make the decision, In the result, the judgment of the Supreme Court did not determine whether the minister had any such obligation. He had, in fact, taken legal advice. Even though the advice was actually mistaken, the minister was not liable, because he had reasonably followed legal advice from a reputable source.
154. This problem was considered only slightly more directly in two Privy Council cases in the 1980s. In Dunlop v Woollahra Municipal Council [1982] AC 158, also, as it happens, a case concerning losses caused by an invalid planning decision, the authority had passed two resolutions subsequently held to be invalid (one for lack of vires and one for failure to observe fair procedures) which adversely affected the plaintiffs interest in a development site. Although it was expressly argued that the council owed a duty to the plaintiff to exercise reasonable care not to affect adversely his property rights by passing invalid resolutions, the Privy Council, whose advice was delivered by Lord Diplock, contented itself with saying that it shared the doubts of the New South Wales Supreme Court as to the existence of any such duty of care. It ruled against the claim in negligence on the rather more debatable ground that the plaintiff was in as good a position as the council to know that the decision was void: ‘He can ignore the purported exercise of the power’ (see p. 172.) The existence of a duty of care to take legal advice was also considered by the Privy Council in Rowling v Takaro Properties Ltd [1988] AC 473, a case which concerned a decision by a New Zealand government minister to refuse his consent under statute to an investment transaction involving the sale of shares to a non-New Zealand investor. The New Zealand Court of Appeal annulled the decision on the ground that the minister had mistakenly taken into account a reversion factor, i.e. the desirability that the property should revert to New Zealand interests. An action for damages was brought against the minister. The advice of the Privy Council on the issue of duty of care, upon which the respondent relied strongly. contains the following interesting statement (p. 500):
The character of the claim is novel. So far as their Lordship are aware, it has never previously been held that where a minister or other governmental agency mistakes the extent of its powers and makes a decision which is later quashed on the ground of excess of statutory powers or of an irrelevant matter having been taken into account, an aggrieved party has a remedy in damages for negligence.
155. The Privy Council did not, however, find it necessary to provide a definitive answer. It did, nonetheless, suggest some powerful considerations militating against the imposition of the duty of care. These may be summarised:
— since the process of judicial review is available to correct any legally erroneous administrative decisions, the effect of such decisions is likely to be limited to delay;
— it is most unlikely that a mistaken ministerial view of the law will amount to negligence: even a judge may be mistaken in construing a statute;
— the imposition of a duty of care may be counterproductive: public authorities may become over-cautious;
— it will be extremely difficult to say in which cases a minister is under a duty to seek legal advice; it would not be reasonable to expect a minister to seek legal advice before exercising a statutory discretion.
156. Even if somewhat tentatively, the Privy Council (at p. 503) suggested:
In all the circumstances, it must be a serious question for consideration whether it would be appropriate to impose liability in negligence in these cases, or whether it would not rather be in the public interest that citizens should be confined to their remedy, as at present, in those cases where the minister or public authority has acted in bad faith.
157. Counsel for the respondent also referred the court to a decision to similar effect by the Supreme Court of Canada in 1970 (Welbridge Holdings Ltd v Metropolitan Cprporation of Greater Winnipeg (1970) 22 DLR (3d) 470). That court firmly rejected as ‘incredible’ the proposition that the municipality which had in the ultimate view of a court (albeit upon the advice of counsel) acted beyond its powers could be held to have ‘owed a duty of care giving rise to liability in damages for its breach.’
158. In my judgment, the concerns of the Privy Council are highly relevant to the question of whether and in what circumstances a duty of care to act within the limits of its statutory powers should be held to exist. If a duty to obtain legal advice is to become a component of the duty of a public authority, in which cases will it apply? An enormous number of discretionary statutory powers are exercised on a daily basis. An obligation to seek legal advice even as a counsel of perfection could have a paralysing effect on public administration. As is clear from the judgment of the learned trial judge, the mere fact of an ultra vires decision does not confer a right to compensation. It is equally clear that liability of that type including liability for failure to take legal advice has never in fact been imposed. Individuals enjoy protection from the consequences of unlawful public action in three respects: firstly, if that action consists of the commission of a recognised existing tort, including, in certain cases, negligence; secondly, unlawful decisions can be quashed on judicial review; thirdly, misfeasance in public office by knowing or malicious abuse of power, combined with the right in appropriate cases to award exemplary or punitive damages is the most appropriate remedy. I do not consider that a general duty to take legal advice can realistically be imposed on public authorities.
159. As a matter of principle, it would not be wise to rule out the possibility that a case may in the future present itself where the relationship between a person liable to be affected by a ministerial or other public law decision is entitled to expect that care will be exercised in and about the decision to take legal advice and the manner of its taking. At the least, I think it would have to be shown that the statutory power in question was of the type which is designed to protect particular interests and that the plaintiff comes within its scope. In addition, it would probably be necessary for the claim to arise from the context of the type of individual transaction which was the subject-matter of Ward v. McMaster or perhaps from the sort of reliance on the expertise of another which formed the background to Hedley Byrne & Co Ltd v. Heller & Partners Ltd [1964] AC 465. I do not consider, however, that this is such a case. There is, of course, no doubt that the appellants’ interest was well known to the respondent at the time the decision was in contemplation. The appellants could scarcely have made their interest more clear or their complaint more insistent. The respondent was fully aware that the appellants would be affected by a mining ban. But that is not enough to take them out of a class of mining enterprises actual and potential similarly affected. They were not engaged in any direct legal relationship with the respondent. Their prospecting licences had been granted by the State. They had not made any application for planning permission, not that that would necessarily alter the position. In short, I do not believe that the respondent owed a duty of care to the appellants either to take legal advice or to take further steps to follow it up.
160. In addition to the foregoing, I think it is clear in any event that the effect of the legal advice actually given, as I have summarised it above, was not understood as casting any doubt on the respondent’s power to impose the mining ban. For that reason, the respondent could not be held to have acted negligently, I would uphold the decision of the learned trial judge that the respondent did not owe a duty of care to the appellants to ensure that its decision to adopt the mining ban was valid.
Legitimate expectations
161. I am in full agreement both with the learned trial judge and with the Chief Justice that the appellants have not made out a case for infringement of their legitimate expectations. This is because the particulars of failure they allege do not come, in my view, in any meaningful way at all within the concept of action or inaction by a public authority which an affected individual has the right legitimately to expect. Consequently, I am not sure that this is an appropriate case in which to delineate the contours of the principle of legitimate expectations.
162. I believe that the learned trial judge was correct in concluding that:
There is neither allegation nor evidence supporting any promise, express or implied, on the part of the respondent. It was never represented to the applicants that they would obtain planning permission. Furthermore, the applicants could not, in my view, have had a legitimate expectation that planning permission would be given for mining even in the absence of the mining ban.
163. In their written submissions, the appellants say:
The appellants submit that they had a legitimate expectation that the respondent would act lawfully; that the respondent would have regard to ministerial and governmental policy; that the respondent would only include development objectives in the development plan; that the respondent would pay due regard to the advices of the county manager, county engineer, senior executive planner and solicitor advising Mayo County Council; that the respondent would not act contrary to its legal obligations having received the letter from the Minister for Energy dated 16 December 1991; that the respondent would not seek to circumvent the statutory procedure for the making of a special amenity area order by the misuse of the powers to make a development plan; that the respondent would not seek to prejudge all applications for the development of mines within a substantial part of the area for which they were responsible; that the respondent would act legally and fairly toward the appellants.
164. None of these matters, which paraphrase and repeat the submissions of the appellants as summarised in the judgment of the learned trial judge, amount in substance to saying any more than that the appellants had a legitimate expectation that the respondent would act properly and lawfully. Kelly J was right, in my view, to seek in the evidence or submission something in the nature of an undertaking or promise or representation express or implied addressed to or applicable to the appellants. I do not say that there must be a direct nexus. It may be sufficient that the claimant belongs to a class or group of persons affected by an act which is accompanied by or implies an intention to follow an identifiable course of conduct by the public authority. Every citizen can, however, assert an expectation that public authorities will act within the law, but that is clearly not enough. If it were, the doctrine would be almost meaningless and would duplicate the ordinary right, for example, to seek judicial review of administrative action. For that reason, I would dismiss the appeal. Consequently, my further comments on this issue are obiter.
165. The principle of respect for legitimate expectations is generally acknowledged to have originated in German administrative law where it is stated to constitute a fundamental, even a constitutional principle. Its proximate origins are to be found in the decision of the Court of Justice in 1973 (Commission v Council (Case 81/72) [1973] ECR 575), a case described as the locus classicus of the principle, concerning the indexation of pay of community officials. The council had gone back on a decision to adopt an average of two indices for annual pay increases in favour of the single lower one, and the commission challenged this before the court. The court annulled the relevant parts of the Council regulation, resting its decision on what it called ‘the rule of protection of the confidence that the staff could have that the authorities would respect undertakings’ (paragraph 10 of the judgment). Thus there came to be recognised the doctrine, described in the headnote of the case as ‘legitimate confidence’ corresponding to the French ‘confiance légitime’. In the context of European Community law, the doctrine undoubtedly has potentially substantive content. Part of the milk quota regime was annulled for failure to take account of the legitimate expectations of a group of farmers who should have been allowed a quota. (Mulder v Minister van Landbouw en Visserij (Case 120/86,)[1988] ECR 2321).
166. The Chief Justice in his judgment has reviewed a number of the cases on the doctrine of legitimate expectations as it has come to be recognised independently in our courts as well as in the United Kingdom. The dilemma he identifies is whether the doctrine, as Costello J ruled in Tara Prospecting Ltd v. Minister for Energy [1993] ILRM 771, confers only a conditional expectation’ capable of being withdrawn by the authority, following a fair hearing in the public interest, or whether it is capable of conferring substantive rights. I agree with the Chief Justice that it is not necessary for the court to choose in this case between those two alternatives. The appellants have not identified any meaningful legitimate expectation.
167. It is true that an official exercising a statutory power will, in most cases, have no greater obligation than to afford a hearing to an affected individual before departing from a prior position or policy. In other cases, this may not be enough. The damage may be done. It may not be possible to restore the status quo. If the official position is altered, the court may have to furnish ‘such remedy as the equity of the case demands’ (per Denning MR in Amalgamated lnvestment & Property Co. v Texas Commerce International Bank [1982] QB 84 at p. 122). The Court of Justice seems to me to accord due weight to the competing imperatives of private justice and public policy in an often quoted passage (Tomadini v. Amministrazioni delle Finanze dello Stato (Case 84/78) [1979] ECR 1801 at paragraph 20):
… [I]f in order to deal with individual situations the community institutions have laid down specific rules enabling traders in return for entering into certain obligations with the public authorities to protect themselves – as regards transactions definitively undertaken – from the effects of the necessarily frequent variations in the detailed rules for the application of the common organisation the principle of respect for legitimate expectations prohibits those institutions from amending those rules without laying down transitional measures unless the adoption of such a measure is contrary to an overriding public interest.
168. In order to succeed in a claim based on failure of a public authority to respect legitimate expectations, it seems to me to be necessary to establish three matters. Because of the essentially provisional nature of these remarks, I would emphasise that these propositions cannot be regarded as definitive. Firstly, the public authority must have made a statement or adopted a position amounting to a promise or representation, express or implied, as to how it will act in respect of an identifiable area of its activity. I will call this the representation. Secondly, the representation must be addressed or conveyed either directly or indirectly to an identifiable person or group of persons, affected actually or potentially, in such a way that it forms part of a transaction definitively entered into or a relationship between that person and group and the public authority or that the person or group has acted on the faith of the representation. Thirdly, it must be such as to create an expectation reasonably entertained by the person or group that the public authority will abide by the representation to the extent that it would be unjust to permit the public authority to resile from it. Refinements or extensions of these propositions are obviously possible. Equally they are qualified by considerations of the public interest including the principle that freedom to exercise properly a statutory power is to be respected. However, the propositions I have endeavoured to formulate seem to me to be preconditions for the right to invoke the doctrine.
Flanagan -v- Houlihan
[2011] IEHC 105 (4 March 2011)
Judgment by: Feeney J.
Status of Judgment: Approved
Neutral Citation Number: [2011] IEHC 105
THE HIGH COURT
2006 4199 P
BETWEEN
MARY FLANAGAN
PLAINTIFF
AND
MARY HOULIHAN
DEFENDANT
AND
CONCEPTA KELLY AND SEAMUS KELLY
THIRD PARTIES
Judgment of Mr. Justice Feeney delivered on the 4th day of March, 2011.
1. The background to the third party issue which is the subject matter of this judgment arises out of an appalling and fatal traffic accident which occurred on the 31st March, 2005. On that day Mary Flanagan was driving her car on the main Sligo to Bundoran road near Bunduff Bridge, Tullaghan, when she was involved in a collision with another motor vehicle. She was travelling in the direction of Bundoran and was accompanied by her daughter, Anne MacSorley. The collision took place at approximately 4pm on a straight stretch of road adjacent to a shop known as “All Cash Stores”. The road at the point of impact was wide with each carriageway being over twelve feet, six inches in width and there was a hard shoulder on each side. The total road width was over 43 feet. Mary Flanagan’s car collided with a car driven by the late John (also known as Jonnie) Connolly which was heading in the direction of Sligo. The cause of the collision was that John Connolly’s car crossed on to the incorrect side of the road and collided with Mary Flanagan’s oncoming car some four feet and eight inches over the centre line. The collision resulted in two fatalities, one being John Connolly, the driver of the car which crossed on to the incorrect side, the other being Anne MacSorley, who was a front seat passenger in her mother’s car.
1.2 There is no dispute but that the accident was caused by the driving of the late John Connolly in that he drove on to the incorrect side of the road without warning and collided with an oncoming car. Not only were John Connolly and Anne MacSorley killed as a result of the accident but Mary Flanagan sustained serious personal injuries. She commenced a claim in relation to the personal injuries and damages that she sustained in the accident. Proceedings were brought against the nominated representative of John Connolly (deceased), namely, Mary Houlihan, the defendant. In March 2007 the defendant brought an application seeking to join Concepta Kelly and Seamus Kelly as third parties to the proceedings. An order joining them as third parties was made by this Court on the 5th March, 2007. The claim against the third parties was that they or their servants or agents were negligent and in breach of duty in serving alcohol to the late John Connolly prior to the collision and it was claimed that alcohol had been served to him in circumstances where the third parties knew or ought to have known that, following the consumption of the alcohol, John Connolly would drive a motor vehicle on the public roadway and would thereby constitute a danger to himself and other road users.
1.3 The defendant served a third party statement of claim wherein it was pleaded that it had been admitted on behalf of the defendant that there was negligence on the part of John Connolly (deceased) in and about the driving of his motor vehicle at the material time and it was further pleaded that that negligence was caused or contributed to by the deceased being under the influence of alcohol. The defendant also pleaded that the collision the subject matter of the proceedings and the personal injuries and loss arising therefrom as suffered by the plaintiff were caused or contributed to by the negligence and breach of duty on the part of the third parties. The third parties were identified as being at all material times the owners and occupiers of a public house known as the Diamond Bar, Tullaghan, County Leitrim. The defendant pleaded that the third parties or their servants or agents served and continued to serve alcohol to John Connolly immediately prior to him being involved in the collision and that they knew, as was his custom that he intended driving a motor vehicle having consumed alcohol. The particulars of negligence and breach of duty alleged against the third parties as set out in the third party statement of claim served by the defendant were that the third parties, one or both of them, their servants or agents, were negligent and in breach of duty in:
(a) Selling and serving alcohol to John Connolly (deceased) when they knew or ought to have known that he intended driving a motor vehicle.
(b) Serving an excessive quantity of alcohol to John Connolly (deceased) when they knew or ought to have known that he intended driving a motor vehicle.
(c) Failing to take any or any adequate steps to prevent John Connolly (deceased) driving his motor vehicle when they knew or ought to have known that he was intoxicated.
(d) Continuing to serve alcohol to John Connolly (deceased) when they knew or ought to have known that he had consumed an excessive quantity of alcohol and was unfit to drive.
(e) The defendant reserves the right to adduce further particulars.
Relying on those particulars the defendant claimed an indemnity or in the alternative a contribution in respect of the plaintiff’s claim and costs.
1.4 Particulars were raised by the solicitors on behalf of the third parties and in replies to particulars it was claimed that John Connolly (deceased) had consumed a minimum of five to six pints of Guinness shortly prior to driving his car and that he was observed driving on the incorrect side of the road. It was further stated that the collision the subject matter of the proceedings occurred on John Connolly’s incorrect side of the road. It was also claimed that a toxicology report following post mortem established that John Connolly had an ethanol reading of 242mg% which was claimed to equate to roughly an alcohol reading three times the statutory limit. It was also claimed that immediately prior to the collision John Connolly had been observed driving on the incorrect side of the road for a distance of some fifty yards and that the collision occurred on a straight stretch of road and on the deceased’s incorrect side of the road. The defendant claimed that the third parties knew or ought to have known that the deceased always arrived and departed from the third parties’ premises by car and it was claimed that the third parties or their servants or agents could have requested John Connolly not to drive, or threaten to report him to An Garda Síochána, or reported him to An Garda Síochána, or asked him for the keys of his vehicle.
1.5 The third parties delivered a defence to the third party statement of claim which claimed that the accident had been solely caused by the negligence of John Connolly and that the defendant was not entitled to any relief against the third parties. It was also denied that the defendant was entitled to an indemnity or contribution. The third parties gave particulars of negligence alleged against John Connolly (deceased) and included within the particulars a claim that he had consumed an excessive amount of alcohol and that he had driven his motor car when he knew that he had consumed a large amount of alcohol and had exposed himself to a risk of injury of which he knew or ought to have known. The third parties denied all the particulars pleaded by the defendant.
1.6 The issue heard by this Court was whether or not the third parties or either of them or their servants or agents should indemnify the defendant or alternatively contribute to the defendant in respect of the plaintiff’s claim and costs. By agreement between the parties the Court was informed that the plaintiff’s action against the defendant had been settled by the discharge of damages and costs without any deduction for contributory negligence and that the parties agreed that the issue for decision by the Court was whether or not on the facts of the case the defendant was entitled to an indemnity or a contribution.
2. A number of matters were effectively agreed or were established in evidence without dispute. Those matters included the following:
• John Connolly was an elderly man of 79 years of age at his death.
• The impact between the two vehicles was “a very heavy impact and both vehicles had momentum at the time of the collision”.
• Prior to the collision on the road leading from the Diamond Bar to the place where the collision occurred, John Connolly’s car was observed being driven in an erratic manner to the extent that it was crossing over on to the incorrect side of the road.
• John Connolly was entirely responsible for the collision and there was no contributory negligence on the part of Mary Flanagan.
• Prior to the accident John Connolly had been drinking in the third parties’ licensed premises known as the Diamond Bar. The precise time that he left the premises and the quantity of alcohol he consumed was to some extent in issue and will be dealt with later in this judgment.
• There are two other public houses in Tullaghan and one was open on the day of the accident.
• During the period that John Connolly was in the Diamond Bar he purchased some five to six pints of Guinness and drank all of the Guinness except for approximately a half pint.
• The accident happened in or about 4pm in the afternoon.
• When John Connolly was involved in the accident he had an ethanol or alcohol level of 242mg% which was measured in a laboratory analysis of a blood sample taken as part of the post mortem process.
• The ethanol reading in the blood sample taken from the late John Connolly recorded a blood alcohol level which was approximately three times the statutory limit permitted under the Road Traffic Acts.
• John Connolly was negligent in driving his motor car and going on to the road having consumed an excessive amount of alcohol.
• The Diamond Bar is some one and a half to two miles from the scene of the accident.
• The scene of the accident is on the direct route from the Diamond Bar to John Connolly’s home.
• The distance from the scene of the accident to John Connolly’s home is a further two miles. The total distance from the Diamond Bar to John Connolly’s home is approximately four miles.
• The Diamond Bar is a small local public house with a bar and a lounge area situated on the old Bundoran road.
• There is a parking area utilised by the public just across the road from the Diamond Bar.
• Seamus Kelly and Concepta Kelly are a married couple who own and operate the Diamond Bar.
• Concepta Kelly made a statement to An Garda Síochána on the 1st April, 2005, the day following the accident. Her husband, Seamus Kelly, made a statement on the 8th April, 2005.
• John Connolly was a regular customer of the Diamond Bar.
• John Connolly’s usual means of transport to the Diamond Bar was to use his own motor car.
• It was his regular but not invariable practice to use his motor car to depart from the area where the Diamond Bar is located.
• On occasions John Connolly left his motor car adjacent to the Diamond Bar and returned home by other means.
• There are a number of taxis operating in the locality, particularly in the Bundoran area with a lesser number operating out of Kinlough.
• A list of the taxi drivers’ names and their mobile telephone numbers was on display in the Diamond Bar.
• There were so few buses operating in the area that the capacity for John Connolly to use a bus was limited.
• On occasions John Connolly arranged to get a lift home from the Diamond Bar or took a taxi.
2.1 A number of matters were established to the satisfaction of the Court. This occurred as a result of the Court accepting the evidence given in respect of such matters as being credible and also ensued from evidence given to the Court which was not disputed in cross-examination and which was accepted by the Court. Those matters included the following:
• The evidence established that it was probable that the deceased, John Connolly, was at “a wake” some distance from his home on the night before the accident.
• On that night John Connolly left his car parked adjacent to the Diamond Bar.
• The Court accepts the evidence that John Connolly was not in the Diamond Bar on the day or night previous to the accident.
• In the light of the evidence which the Court heard concerning the habits and personality of John Connolly, the Court is satisfied that on the balance of probability the reason that John Connolly left his car parked adjacent to the Diamond Bar on the night before the accident was that he had consumed alcohol and had decided not to drive home.
• The Court accepts the evidence that John Connolly got a lift to the area of the Diamond Bar on the morning of the accident from a neighbour, Paul Rooney.
• Paul Rooney had on a number of previous occasions given John Connolly a lift to collect his car which had been parked outside the public house overnight.
• John Connolly was left in the area of the Diamond Bar shortly after 9.30am.
• The Diamond Bar did not open until 10.30am on the morning of the accident and John Connolly did not come into the premises until approximately 11.30am.
• Concepta Kelly was working in the Diamond Bar when John Connolly arrived and during the time that she remained in the bar she served him with four to five pints of Guinness.
• Concepta Kelly provided John Connolly with two bowls of soup and some sandwiches during the time that he was in the bar.
• At approximately 2pm or some short time thereafter Seamus Kelly took over from his wife who departed from the bar.
• At the time that Seamus Kelly took over from his wife, John Connolly was in the bar with one other customer. That customer was deceased by the date the Court heard evidence in this case.
• At the time Concepta Kelly handed over control of the bar to her husband she made no comment or observation concerning John Connolly.
• After Seamus Kelly took over in the bar John Connolly purchased one pint of Guinness.
• While John Connolly was drinking that pint of Guinness, Seamus Kelly left the public bar area where John Connolly was drinking and went upstairs in the premises to carry out some clerical work.
• When Seamus Kelly returned to the public bar after approximately five minutes, around 3.15pm., John Connolly had left the bar leaving approximately a half pint of Guinness in his glass. Neither Seamus Kelly nor Concepta Kelly were in the public bar when John Connolly decided to leave nor was any other bar person and the bar was effectively unattended at that time.
• The evidence establishes that it is probable that John Connolly drank four and a half to five and a half pints of Guinness in the Diamond Bar between 11.30am and 3.15pm on the day of the accident.
• Neither Concepta Kelly or Seamus Kelly noticed anything unusual about the condition of John Connolly and neither of them came to the conclusion that he had had too much to drink or was drunk.
• Both Seamus Kelly and Concepta Kelly were aware that it was the normal practice of John Connolly to drive to and from his home to their public house.
• On occasions when John Connolly had driven to the public house and he formed the opinion that he had drunk too much to drive home, he arranged for a taxi to be sent to the public house or to get a lift to his home. When he did that it was more common for him to use a taxi rather than get a lift.
• On a number of occasions John Connolly had left his car outside the public house and had gone home without driving his car.
• The evidence from Seamus Kelly and Concepta Kelly, which the Court accepts, is that John Connolly was a man who respected himself and that if he came to the view that he was not able to drive would leave his car behind and find an alternative way home.
• The evidence was that on the occasion when John Connolly decided not to drive, this decision had been taken by him and there was no evidence that such decision was taken as a result of any request from the publican, his wife or any other member of staff.
• Seamus Kelly gave evidence that if a customer appeared to be unsteady on his feet or intoxicated he would advise that customer not to drive. Concepta Kelly gave evidence that she would not allow a customer to stagger out the door but would advise that customer to take a taxi.
• Both Seamus Kelly and Concepta Kelly gave evidence that they never had to advise John Connolly not to drive as he made his own decision in relation to that matter.
• The Court accepts the evidence of Seamus Kelly and Concepta Kelly that they dealt with John Connolly on the basis that he was the sort of customer who would decide of his own accord whether or not he was unfit to drive and, if he decided that he was unfit to drive, he would arrange a lift or have either the bar staff or a friend call for a taxi. The evidence established that John Connolly had left his car on a number of occasions but that it was not a frequent occurrence.
• The evidence established that John Connolly left the public house at 3.15pm or shortly thereafter and was not involved in the accident until approximately 4pm. As the scene of the accident was some five minutes by car away from the public house, the Court was left in the position that there was no evidence as to what John Connolly did for most of the period of approximately thirty to forty minutes immediately prior to the time of the accident.
• During the time that John Connolly was in the bar and was observed by both Concepta Kelly and Seamus Kelly, neither of them observed John Connolly to be in an intoxicated condition or to be drunk. The Court accepts that evidence.
• The expert evidence of Robert McQuillan, a consultant in emergency medicine, was that the blood alcohol level which was present in a sample of John Connolly’s blood taken after his death of 242mgs% would approximate with the consumption of approximately nine pints of Guinness over a period of three hours.
• That estimation was an approximation which was dependent upon a number of circumstances and was based upon averages. Any equation between the blood alcohol level found in a person’s blood and the amount of alcohol consumed would be affected by matters such as the size of the person consuming the alcohol, his food intake and whether or not there was any alcohol in his blood at the time that he commenced to drink. The calculation of nine pints of Guinness over a three hour period leadings to a 242mgs% blood alcohol level was based upon averages and upon the assumption that there was no alcohol present at the time that the first pint of Guinness was drunk.
• The evidence was that a blood alcohol level in excess of 80mgs% would be above the legal limit for the driving of a motor vehicle under the Road Traffic Acts.
• The expert evidence of Mr. McQuillan was that it is very difficult to ascertain blood alcohol levels from observation as there are so many variables.
• The Court accepts Mr. McQuillan’s expert evidence that with a blood alcohol level of 200mgs% being present in a person it would be difficult not to detect that that person was drunk and that that person would “manifest significant intoxication”. Such detection would require you to speak to or to observe such person.
• Mr. McQuillan’s evidence that even for a person who was a regular consumer of alcohol with a blood alcohol level of 240mgs% it would be hard for that person not to significantly manifest intoxication.
• There is a potential conflict in evidence between the observations of Seamus and Concepta Kelly and the expert evidence of Mr. McQuillan. Based upon Mr. McQuillan’s evidence on the amount of alcohol which was present in the blood sample taken from John Connolly after his death, he should have manifested the appearance of being intoxicated or drunk whilst the evidence of Seamus and Concepta Kelly is that they did not observe John Connolly to be drunk or intoxicated.
• A possible explanation for the failure of Seamus or Concepta Kelly to notice or observe that John Connolly was intoxicated is that there is evidence to suggest that he had consumed a considerable amount of alcohol on the previous evening and that therefore there could have been alcohol present in his blood from the previous evening or from the earlier consumption of alcohol between 9.30am and 11.30am, that is, the period of time up to his arrival in the Diamond Bar. There is also a period of some thirty to forty minutes from the time John Connolly left the Diamond Bar up to the time of the accident which is unexplained. The matter is further complicated by the fact that neither Seamus Kelly or Concepta Kelly were present when John Connolly left the public house and therefore were not in a position to observe him at that time. Notwithstanding Mr. McQuillan’s expert evidence as to what would be likely to be observed of a person who had a blood alcohol level of 242mgs%, the Court is satisfied that Seamus Kelly and Concepta Kelly gave truthful evidence as to their observations. The evidence that they gave observed nothing untoward about John Connolly’s condition during the time that he was in their public house is accepted by the Court as being accurate.
• The Court accepts the expert evidence to the Court given by Clive Kilgallen, a Consultant Pathologist in Sligo General Hospital, that a blood alcohol level identified in a blood sample taken at an autopsy on a day following death would give a reasonable representation of a sample that would have been taken in life and there would be no significant difference between the alcohol level present in the blood at the time of the accident and present in the sample taken at the post-mortem carried out on the following day.
• The evidence to the Court from Seamus Kelly and Concepta Kelly established that John Connolly was served five to six pints of Guinness over a period of approximately four hours and that he drank all but half a pint. That evidence was unchallenged and the Court accepts the evidence given on this point, not only because it was unchallenged and was set out in statements made by Seamus Kelly and Concepta Kelly in the days immediately following the accident, but also on the basis of the manner in which Seamus Kelly and Concepta Kelly gave their evidence.
• There is no evidence in relation to where John Connolly spent parts of the day leading up to the time of the accident. The relevant parts are the period 9.30am to 11.30am and the thirty to forty minute period from the time that he left the public house up to the time of the accident. Given the volume of alcohol in his blood at the time of the accident it is probable that John Connolly consumed more alcohol on the day of the accident than he consumed in the third parties’ public house.
• The Court also accepts the evidence of Jacqueline Gray who gave evidence to the effect that she had on a number of occasions drank in the Diamond Bar in the months prior to the accident and that she had never seen John Connolly to be intoxicated.
• The balance of the evidence satisfied the Court that John Connolly regularly drank a number of pints of Guinness but did not do so in such a manner as to appear to be intoxicated. The evidence also established that on a number of occasions John Connolly determined of his own violation that he had drunk too much to drive safely and left his car at the public house and returned home by alternative means. The Court also accepts the evidence of the third parties that at no time did they have to intervene to request John Connolly not to drive home as they had no occasion to make such request.
2.2 Based upon the above admitted facts and on the findings and conclusions which the Court has made from the evidence, as set out above, the Court must consider the claims made by the defendant against the third parties.
3. In these proceedings the defendant seeks to impose liability on the third parties as proprietors of a licensed premises. It is common case that there is no definitive decision in this jurisdiction which imposes an affirmative duty upon proprietors of licensed premises relying on facts and circumstances similar to this case. The parties have opened extensive case law from other jurisdictions concerning the approach that those jurisdictions have taken to the liability of the proprietors of licensed premises in respect of the intoxicated. Before considering the position in those jurisdictions it is necessary to identify, in brief, the statutory position in this jurisdiction in relation to the conduct and control of licensed premises. The Intoxicating Liquor Act 2003 amended and extended the existing Licensing Acts of 1833 to 2003. Part 2 of the Intoxicating Liquor Act 2003 deals with the conduct of licensed premises and s. 4 deals with drunken persons. A holder of a license commits an offence in supplying drunken persons with intoxicating liquor or supplying any person with intoxicating liquor for consumption by a drunken person. The legislation also prohibits a licensee from permitting drunkenness to take place in the licensed premises or in admitting any drunken person to the premises. Those offences are set out in s. 4 of the Intoxicating Liquor Act 2003 and a breach by the licensee is an offence under s. 4(2). Breaches of the terms of a licence by supplying drunken persons with intoxicating liquor or permitting drunken or disorderly conduct on the premises not only may constitute an offence resulting in fines but may in some instances result in an order for the temporary closure of the premises under s. 9 of the Intoxicating Liquor Act 2003. A licensee commits an offence in supplying “a drunken person” with intoxicating liquor. A drunken person is defined in s. 2 of the 2003 Act in the following terms, namely:
“‘drunken person’ means a person who is intoxicated to such an extent as would give rise to a reasonable apprehension that the person might endanger himself or herself or any other person.”
The legislation which has been enacted recognises that a licence is a privilege and places on licence holders the obligation to regulate the conduct of customers by ensuring that they will not be served alcohol if they are drunk and in ensuring that drunkenness does not take place in the licensed premises or that drunken persons are not admitted to the licensed premises. It also places an obligation on the license holder to ensure that he does not permit disorderly conduct to take place on the premises. The definition of a drunken person identifies such a person as being one who is intoxicated to such an extent as will give rise to a reasonable apprehension that the person might endanger himself or herself. Under the Road Traffic Acts there is a prohibition on persons driving a motor vehicle with a blood alcohol level in excess of a designated amount. The approach under the Road Traffic Act as to what would be commonly called a drunk driver is entirely different from what is identified as a drunken person under the Intoxicating Liquor Acts. A drunk driver is a person with alcohol in his blood above a designated level whether or not that person is a danger to himself or any other person. The definition of a drunken person in the Intoxicating Liquor Act 2003 identifies what must be established to prove that a person is a drunken person and those matters are not dependent upon any particular blood alcohol level but rather on the effect that alcohol has on the conduct and capacity of a person. In the light of the evidence which this Court heard from Mr. McQuillan there is no doubt but that a person who would be marginally in excess of the permitted blood alcohol level to drive a motor car would not be a person who would be within the definition of a drunken person under the Intoxicating Liquor Acts. For a person to be a drunken person under those Acts that person would have to be so intoxicated as to give rise to a reasonable apprehension that the person might endanger himself or any other person and that would mean that the conduct, appearance or behaviour of such a person would manifest a degree of intoxication that such apprehension was reasonable. It is important, therefore, in considering the facts of this case and the arguments made on behalf of the defendant, to acknowledge the differences between the legal definition of a drunk driver and a drunken person under the different legislation.
4. There is no doubt that alcohol impairs driving skills. Alcohol consumption is a voluntary act and is a human factor in many road accidents. Estimates have indicated that alcohol is a significant factor in almost one third of fatal road accidents. This has led to State intervention in a number of ways. This intervention has taken a number of forms including widespread public awareness campaigns to discourage motorists from driving after drinking alcohol. The State has also addressed the issue by the imposition of a more exacting approach to drink driving in the criminal law together with provisions providing enhanced powers relating to enforcement including mandatory alcohol testing. The Gardaí have been provided with the power to breathalyse any driver stopped at a mandatory alcohol checkpoint. The continued calls for a more stringent approach to drink driving with the resulting benefit in reducing alcohol related crash deaths and injuries resulted in the enactment of the Road Traffic Act 2010 (the Act of 2010) in July of that year. That Act lowered the drink driving limit from 80mg to 50mg as well as introducing a lower 20mg limit for learner and professional drivers. Those lower levels have yet to come into force but are provided for in the Act of 2010. The core of the approach to alcohol and driving has been based upon personal responsibility in the form of campaigns emphasising the responsibility of the driver parallel with more stringent provisions in the criminal law including the enactment of lower drink driving limits. That approach has sought to deter persons from drinking and driving and to place the personal responsibility on a driver.
4.1 Society’s attitude to drink driving was considered in a recent judgment in the Supreme Court dealing with proceedings arising out of a road traffic accident and the issue as to how contributory negligence was to be assessed in relation to a person who elected to travel as a passenger in a motor vehicle when the driver had consumed alcohol. That case was Hussey v. Twomey & Ors. [2009] IESC 1 and in his judgment Kearns J. stated (at para. 23):
“I think it fair to say that the society’s understanding of the role of alcohol in driving cases had undergone radical change in the space of the last forty years. … (at 15). There has been undoubtedly an enormous sea change in society’s attitude to drink driving since then, influenced no doubt by the extent of carnage on our roads and the effectiveness of multiple campaigns which inform the public of the hazards of driving whilst under the influence of even small quantities of alcohol. It is thus now commonplace, if not yet a universal practice, for groups of people on a night out to appoint one of the group as a designated driver who will drink no alcohol or alternatively to make arrangements whereby no member of the party will be driving under any circumstances. Thus, I think it can fairly be said that any measure of tolerance towards intoxicated drivers and their passengers, if indeed it formerly existed to any appreciable degree, is very much a thing of the past.” (para. 24)
Hussey v. Twomey illustrates society’s change of attitude to drink driving. The change in attitude is to some extent testimony to the effectiveness of the multiple campaigns which inform the public of the hazards of driving whilst under the influence of even small quantities of alcohol. The approach adopted in this jurisdiction has been very much centred on the personal responsibility of the driver and to some extent on passengers’ responsibility when they knowingly accept transport from a driver who they know to be intoxicated.
4.2 Central to the issue in this case and to the defendant’s claim against the third parties is whether or not there is a duty of care on the third parties as suppliers of alcohol to protect a customer from risk resulting from self-induced intoxication and if there is such a duty that it is foreseeable that if breached the customer may cause harm to others when driving a motor vehicle. The defendant claims that the third parties were in breach of their duty of care towards a customer, namely, John Connolly and the public at large who were at risk of coming into contact with John Connolly after he left the third parties’ pub in a state of intoxication. The defendant claims that the third parties were in breach of their duty of care towards John Connolly and the plaintiff on the day when the accident occurred by knowingly serving John Connolly an amount of alcohol in excess of the levels permitted by law while operating a mechanically propelled vehicle and knowing that John Connolly was likely to drive his car and in circumstances where it was foreseeable that members of the public who might be using the road might suffer injury as a result of John Connolly’s driving. The third parties contend that there was no such duty of care and that for this Court to hold that there was such a duty would impose into the common law a new duty of care or cause of action where none has existed to date.
4.3 Within the last one hundred years the common law has developed the tort of negligence. The necessary elements to be present to establish the tort of negligence include; first, a duty of care; secondly, a failure to conform with the appropriate standard of care; thirdly, that loss or damage was caused to the plaintiff; and, fourthly, that there is a causal connection between the conduct complained of and the resulting loss and damage to the plaintiff. Notwithstanding the development of the tort of negligence and its increased scope, the common law continues to apply an individualistic position in relation to the question of affirmative duties. The courts have consistently recognised and enforced an approach that there is a difference between doing something and merely letting something happen. This is most clearly demonstrated by the approach adopted that there is no general duty to go to the assistance of another who is in danger. Whilst the courts have recognised that there is no general duty to act, it is also recognised that specific relationships may give rise to a particular affirmative duty. This has included consideration of whether or not there is a duty to protect incapacitated or intoxicated persons and their potential victims from injury.
4.4 The law of tort has evolved in such a manner that its evolution has been used as a device for identifying values, promoting safety and setting minimum standards of acceptable behaviour in society which has resulted in the law bringing about social change as well as being used as a means of delivering compensation. This has resulted in there being an intrinsic issue as to where the line is between individual and collective responsibility for injury and loss. That issue has been considered in many cases in different common law jurisdictions and has been applied by the manner in which the courts have addressed the existence and extent of a duty of care. It is clear from the authorities opened to the Court that different jurisdictions have adopted contrasting approaches and the common law has developed in divergent ways in relation to the so-called alcohol provider liability issue depending upon the history and culture in those countries. The decisions have also been guided by the statutory composition within each country.
4.5 The extensive and multinational authorities and legal commentaries opened to the Court have identified that different common law jurisdictions have adopted and continue to apply fundamentally different approaches to the legal question of whether there is a duty of care to protect intoxicated patrons and their potential victims from injury. I will return later to consideration of some of the individual authorities.
4.6 As indicated above, a defendant can be held liable in the tort of negligence if his or her negligent conduct results in reasonably foreseeable injury to the plaintiff. In considering the potential liability of publicans or alcohol providers, those persons could be held liable, under the law of tort, in respect of a customer who becomes intoxicated in one of two different ways. First, a publican could be held liable for harm caused to the intoxicated person and in that scenario the duty of care which would arise would be one of protection owed to the person who is intoxicated. Secondly, the publican could be held liable for the tortious behaviour of the intoxicated person and in that case the duty of care which would arise would be one owed to third parties. Any liability in the law of tort and duty arising thereby to protect the intoxicated customer and any liability and duty to protect third parties from that customer must be recognised as two entirely separate legal duties which are each governed by different legal rules and principles. The different approaches taken by different common law jurisdictions is illustrated by the approach taken by the Canadian courts as opposed to the approach adopted in the courts of the United Kingdom including Northern Ireland. An examination of the Canadian authorities demonstrates that the Canadian courts base their analysis of alcohol provider liability on the foreseeability of harm. A consideration of the approach of the courts in the United Kingdom demonstrate in relation to alcohol provider liability that the courts have approached that matter based upon the issue of duty of care and have consistently demonstrated a reluctance to impose alcohol server liability even in cases against commercial providers. The courts in the United Kingdom have approached consideration of the matter on the basis that adults are responsible for their own alcoholic consumption. The courts have followed an approach that for liability to arise the court must be able to identify an assumption of liability for the intoxicated customer. (See, for example, judgment of Carswell LCJ in Joy v. Newell (t/a Copper Room) [2000] NI 91 (CA (NI)).
4.7 In Canada the approach to alcohol provider liability has been, by and large, to impose tort liability on those who are in the business of selling and serving alcohol. That approach is embraced in the statutory law in the majority of the provinces and has led to a series of cases where alcohol providers or publicans have been held responsible for drunken customers. The liability of commercial hosts was established in Canada by the 1973 Supreme Court decision in Jordan House v. Menow [1974] S.C.R. 239. Even though the Supreme Court of Canada was divided in its analysis of the duty of care, the Canadian courts have consistently held thereafter that alcohol providers owe a broad duty of care.
5. In considering the common law approach to the issue of alcohol provider liability and the authorities opened to the Court, it is clear that there is a divergence in approach between that adopted in the USA and Canada, on the one hand, and in the United Kingdom and Australia, on the other hand. In considering the various judgments it is apparent that such divergence and the underlying approach and assumptions of the different national courts have a basis or foundation in the different countries’ approach to alcohol and the cultural attitude to alcohol consumption. In the United States the eighteenth amendment to the Constitution resulted in nationwide prohibition being in force from 1920 until 1933. Even after prohibition was repealed, the majority of the individual States in the USA introduced and continue to maintain so-called dram shop laws. These laws hold retail establishments accountable by statute for any harm, death, injury or other damages caused by an intoxicated customer. The laws vary from state to state and some ten of the fifty States have no dram shop law. A number of the states where such laws are in force have liability limitations. In Canada prohibition was widespread in the 1920s even though the approach varied from province to province. It was not until 1930 that most of the provinces voted against prohibition even though Prince Edward Island remained a province where there was total prohibition until 1948. In Canada even after the provinces voted against prohibition the Government continued to be significantly involved in relation to the sale and consumption of alcohol and adopted a paternalistic approach. A majority of the provinces have a higher legal drinking age than in the United Kingdom. In a number of the provinces the government maintain a monopoly over the retail sale of alcohol. In considering authorities from different common law jurisdictions, it is important to have regard to the legislative, regularity and cultural framework that exists in each country as there are significant differences.
5.1 The Court also has regard in considering the divergent approach to the central position of legislation regulating the sale and consumption of alcohol. In particular, this Court has regard to the warning contained in the judgment of Hardiman J. in the Supreme Court case of O’Keeffe v. Hickey and Ors. [2009] 2 IR 302. That was a case with dealt with the issue of the State’s vicarious liability for the tortious acts of the defendants. In dealing with the role of the legislature, Hardiman J. stated (at 341, para. 123):
“I have to say that I find some of the formulations, in the Canadian cases in particular, vague in the extreme and quite unhelpful. Asking ‘whether it is just’ to impose no fault liability is not a constructive or thought out approach, nor one likely to assist the discussion. It begs a huge number of questions. Imposing liability on an individual or entity on the basis of ‘broader policy rationales’ smacks, with great respect, of political or social engineering rather than the administration of commutative justice. And if the law is to change towards the notably vague Canadian formulation, that is so great a change from our present concepts of justice in this area that, in my view, it should be changed by legislation. I say this on the basis of the general separation of powers principles as outlined in my judgments in Sinnott v. Minister for Education [2001] 2 IR 545 and T.D. v. Minister for Education [2001] 4 IR 259, and out of respect for the legislature’s exclusive power to make laws as expressed in Article 15.2 of the Constitution. This approach would also have the separate advantage of committing law reform in this area into the hands of those who will have to provide the wherewithal to fund the exceptionally generous regime of recovery which would be involved in following the Canadian model.”
While that judgment dealt with a different subject matter than this case, it does illustrate the difficulty of applying the decisions of other common law countries’ decisions where those decisions are to some not insignificant extent based upon broader policy rationales or cultural backgrounds or where such decisions are made within the context of long established statutory provisions.
6. In the USA the starting point for consideration of liability in tort is identified in various legal textbooks. The approach identified reflects the thinking that “human beings, drunk or sober are responsible for their own torts” (W. Page Keeton et. al., Prosser and Keeton on The Law of Torts, s. 53, note 27 (5th ed. supp 1988)). It would follow that under common law a plaintiff would generally not have an action arising out of injuries sustained to them as a result of their intoxicated state. This has resulted in two different approaches evolving. First, in the majority of States there are State laws where dram shop acts or civil damage acts have been enacted by state legislatures. Those laws impose civil liability upon sellers of alcohol for injuries caused to third parties by the intoxicated. The majority of the statutes do not allow an intoxicated patron to recover for his own injuries. Those statutes provide for strict liability and therefore the issue of negligence does not arise. The second way in which this matter has been dealt with in certain US states is by using a common law negligence theory premised on violation of statutory duties. This has resulted in a series of decisions which are based upon an analysis that if a state statute only provides criminal penalties for violation, the courts in some instances have been prepared to determine that such statute creates a specific duty of care. This means that a violation of the criminal statute operates to establish both duty and the breach of that duty in a common law civil negligence action. The approach taken within the individual states is far from consistent. In a number of states, contributory negligence or assumption of risk on the part of the injured plaintiff have barred an action, and, other states have barred actions by holding that it is the consumption of alcohol and not the dispensing of it which is the proximate cause of injuries inflicted upon others by an intoxicated person. As a general rule, there is no duty on a person to control the conduct of another to prevent harm to third parties unless there is a special relationship between the two. This approach is illustrated in the Kansas decision McGee v. Chalfont (806 p. 2d 980 [1991] (KAN)). In that case the court held that there was no duty owed to a third party by a person transporting an intoxicated person to his car. However, in the decision in a Colorado court the court held that liability was established where a tavern owner refused to serve an intoxicated patron but allowed his employee to jump start the patron’s car as that constituted an affirmative act which gave the patron mobility which he otherwise would not have had (Leppeke Seguara 632 p. 2d 1057 [1981] (COLO)). Overall where decisions in the US have held alcohol providers liable they have done so either where there is an affirmative act for which the provider is responsible or where the state courts have relied on the statutory framework and imposed liability under common law negligence premised on violation of statutory duties. Where that approach has been adopted, such decisions are of little benefit to this Court in deciding how to apply the law in this jurisdiction. Absent reliance on violation of statutory duties, the authorities indicate that liability under common law in the US requires some form of affirmative act or assumption of liability.
6.1 The liability of an alcohol provider or a commercial host was established in Canada by the Supreme Court of Canada’s decision in Jordan House Ltd. v. Menow. The facts of that case were that Menow was a regular patron of the defendant hotel and had been banned on a previous occasion due to his tendency to become drunk and abusive. The management permitted him to return and the entire hotel staff were instructed not to serve Menow unless he was accompanied by a responsible adult. Menow arrived in the hotel with fellow workers on the night in question and drank alone for some three hours. Eventually he was ejected by the hotel staff after he had become intoxicated and began to irritate other patrons. Whilst attempting to stagger home along the highway he was struck by a negligent driver and Menow sued both the driver and the hotel. The Supreme Court of Canada upheld both claims but was divided three/two in its analysis of duty of care. Laskin J. giving the leading judgment of the Court began with the words “This is a case of first instance”. This meant that the Court was relying on first principles. Laskin J. determined that there was a duty of care on the defendant hotel and that duty arose from the facts of the case which established the hotel’s special knowledge of the plaintiff, Menow, and he cautioned (at 250) that his decision did not impose using the words of the trial judge “a duty on every tavern owner to act as a watchdog for all patrons who enter his place of business and drink to excess”. Laskin J. held that the hotel owners were liable in that they should have known given their knowledge of Menow that serving him the quantity of beer which he consumed might well result in him being incapable of taking care of himself when exposed to the hazards of traffic. That placed on the hotel owners a duty to take reasonable steps to ensure that the customer got home safely, for example by arranging safe transport for him, putting him up for the night in the hotel or calling the police. Ritchie J. in the same case in a one paragraph minority opinion (at 251) proposed a broader duty of care for commercial hosts. As a result of the commercial hosts’ special knowledge of Menow’s susceptibility to alcohol Ritchie J. determined that staff owed a duty not only to protect him when intoxicated, but also to prevent his intoxication in the first place. This wider duty implied that a foreseeable risk is inherent in the over service of alcohol. The decision in Jordan House was subsequently adopted in a number of Canadian cases and the analysis of Ritchie J. was followed (see Canada Trust v. Porter 2 A. C.W.S. (2d) 428 (1980) and Schmidt v. Sharpe [1983] 27 CCLT 1. The Supreme Court of Canada revisited the issue of alcohol provider liability in Stewart v. Pettie [1995] 1 S.C.R. 131. In that case the Supreme Court determined on the basis of the Jordan House decision that a duty of care was owed by commercial providers of alcohol to their patrons and to third parties who might reasonably be expected to come into contact with an intoxicated person, which would include a user of the highway. The facts of the case were that the plaintiff sued her brother-in-law in circumstances where both had attended a dinner theatre with their spouses and the couples were served by the same waitress throughout the evening who kept a running tab of the drinks consumed. Neither of the wives consumed any alcohol whilst Pettie consumed between five and seven double mixed drinks and was legally intoxicated by the time he left the dinner theatre. The party of four discussed Pettie’s driving capacity prior to departing from the theatre and none of them expressed any concern about him driving. On the way home, driving on a slippery road, the car lost control and struck a pole. The plaintiff was thrown from the car and was rendered quadriplegic. She sued not only Pettie, the driver, but also the owners of the dinner theatre. Major J. in writing for the court concluded on the basis of the principles identified in the Jordan House case that commercial establishments owed a duty of care to patrons who become intoxicated and he went on to reason that it was a logical step that such a duty was also owed to third parties who might reasonably be expected to come into contact with the patron. The Court concluded that in relation to the standard of care, it considered that positive steps need only be taken by a publican if there was a reasonably foreseeable risk that a patron would drive and the fact that the patron in issue on the facts of this case was accompanied by two sober adults negated that such a risk was foreseeable. On that basis a claim against the alcohol provider was dismissed. Consideration of the judgment indicates that the claim would in any event have failed due to a lack of causation because the court concluded that even if the defendant had intervened, the claimants would still have allowed the intoxicated patron to drive. The Canadian case law has developed to the extent where it can be said with some degree of confidence that the law imposes a duty on an alcohol provider and that that provider may be liable if there is a foreseeable risk that a patron will drive after having been served alcohol.
6.2 In the UK there have been a limited number of cases decided by the courts involving the potential liability attaching to others in respect of the intoxicated. In those cases the courts have adopted a relatively consistent approach in that they have been reluctant to impose any liability absent a clear assumption of responsibility. A recurring feature of the approach of the courts is the use of contributory negligence as a limiting factor. Consideration of a number of the leading authorities in the UK results in this Court being able to identify certain principles which have been followed in those cases. In Barrett v. Ministry of Defence [1995] 1 WLR 1217, Beldam L.J. delivered the main judgment for the Court of Appeal. That case arose in circumstances where the plaintiff was the widow and executrix of a deceased naval airman who had died after becoming so drunk one night at a naval base where he was serving that he passed out into a coma, became asphyxiated on his own vomit and died. The plaintiff alleged that the defendant as employer owed her husband a duty of care whilst he was under their control and a duty to prevent him becoming so drunk that he caused himself injury or death. The trial Judge found that the deceased had been a heavy drinker and that that fact was widely known. It was therefore foreseeable in the particular environment of the naval base, with unlimited quantities of cheap alcohol and a lax attitude to drinking, that the deceased would become heavily intoxicated and that in those exceptional circumstances it was just and reasonable to impose a duty of care on the defendant to protect a person of full age and capacity such as the deceased, from his own weakness. The trial Judge made a finding of contributory negligence against the deceased and reduced the damages by twenty five per cent. In the judgment of the Court of Appeal it was stated that to impose a duty on the defendant to control the actions of the deceased in order to prevent him from injuring himself would undermine the principle of individual responsibility. Beldam L.J. held (at 1224):
“I can see no reason why it should not be fair, just and reasonable for the law to leave a reasonable adult to assume responsibility for his own actions in consuming alcoholic drink. No one is better placed to judge the amount that he can safely consume or to exercise control in his own interest as well as in the interests of others. To dilute self responsibility and to blame one adult for another’s lack of self control is neither just nor reasonable and in the development of the law of negligence an increment too far.”
In that case Beldam L.J. also considered the decision of the Supreme Court of Canada in Jordan House together with another Canadian authority and identified that in each of those cases the Court founded the imposition of a duty on factors additional to the mere provision of alcohol and the failure to strictly enforce provisions against drunkenness. Beldam L.J. went on to hold (at 1225):
“In the present case I would reverse the Judge’s finding that the appellant was under a duty to take reasonable care to prevent the deceased from abusing alcohol to the extent he did. Until he collapsed I would hold that the deceased was in law alone responsible for his condition. Thereafter, when the defendant assumed responsibility for him, it accepts that the measures taken fell short of the standard reasonably to be expected. It did not summon medical assistance and its supervision of him was inadequate.”
The crucial element in any finding of liability was therefore the assumption of responsibility by the defendant in putting the deceased into his bunk after he collapsed and thereby assuming responsibility for him. It was because of that assumption of responsibility that the Court of Appeal held that the defendant had a continuing duty to exercise reasonable care and the steps taken were inadequate. The Lord Justice reviewed the Lower Court’s finding in respect of contributory negligence where the deceased had been held twenty five per cent responsible and Beldam J. came to the conclusion that individuals should be made to take primary responsibility for their own actions and increased the deceased’s level of contributory negligence from one quarter to two-thirds.
6.3 In Jebson v. Ministry for Defence [2000] 1 WLR 2055, the Court of Appeal adopted a similar approach as identified in the earlier decision in Barrett v. Ministry for Defence and Potter L.J. held that ordinarily an adult could not rely on his drunkenness so as to impose a duty on others to exercise special care. However, Potter L.J. went on to state (at 2066):
“… In the ordinary way and in most situations, an adult (and these young men were adults) is not entitled to pray in aid his own drunkenness as giving rise to a duty or responsibility in others to exercise special care. However, that is not an invariable rule; nor is it one which is fair and just and reasonable to apply in circumstances where an obligation of care is assumed or impliedly undertaken in respect of a person who it is appreciated is likely to be drunk.”
In that case the facts were that the plaintiff was a soldier who had fallen from the back of an army lorry when intoxicated after he had been on a night out with a group of soldiers. The night was organised by the Company Commander and the accident occurred when the soldiers were being transported back to their barracks. Potter L.J. in his judgment held that the fact that the Ministry of Defence had provided the transport for the soldiers, knowing that they were likely to become inebriated, was critical evidence which enabled the Judge to come to the conclusion that the defendants had impliedly assumed a duty of care towards the claimant and that it was foreseeable that if men were not supervised an injury could occur. It was on those facts and in those circumstances that a duty was imposed and the Court of Appeal upheld the finding that the claimant was seventy five per cent responsible for contributory negligence once more emphasising the Court’s approach that individuals are primarily responsible for their own actions and that the plaintiff was “largely the author of his own misfortune”. In both the cases considered by the Court of Appeal the defendant was the Ministry of Defence and to some extent the decision of the Court in each case to impose a liability was in part based to a degree on the nature of the relationship between the soldier and his employer. The judgments in both cases came to the conclusion that there was not an obligation to prevent another person becoming inebriated but that the common law did create a duty of care not to expose the plaintiff to further harm after having provided him with alcohol.
6.4 In the case of Griffiths v. Brown [1998] The Times, October 23 (QBD) the plaintiff had been injured crossing a road when he had been dropped by a taxi driver (the defendant) on the far side of the road. As he was crossing the road the plaintiff who was significantly intoxicated was struck by a car and injured. The plaintiff claimed that the taxi driver was under a duty of care not to drop him off at a place where it was foreseeable that because of his intoxication he would be at a greater risk of injury than a sober person. Jones J. held that the only duty on the defendant was a duty to take reasonable care to carry the plaintiff passenger safely during his journey and to set him down at a place where he could safely alight. In the judgment Jones J. expressed the view that there would be a duty of care if a passenger had reached such a stage of intoxication as to be plainly incapable of taking care of his own safety. That was identified as the only circumstance where a duty of care might arise and be breached. In the facts of that case the plaintiff had consumed twelve to thirteen pints and was clearly intoxicated but the fact that he was able to walk without staggering and give instructions to the defendant was accepted by the Judge as being evidence that he possessed enough control over himself for liability not to be imposed. In the Northern Ireland case of Joy v. Newell (t/a Copper Room) [2000] NI 91 (CA (NI)), Carswell L.C.J. dealt with the issue of the liability of a publican in circumstances where the plaintiff in that case had entered the defendant’s licensed premises is an already intoxicated state, sat on a bar stool and ordered a drink and shortly thereafter fell off the stool and suffered quadriplegia. The publican was sued and it was argued on behalf of the plaintiff that the publican or alcohol provider had an affirmative or positive duty to protect him whilst on the premises. Carswell L.C.J. dealt with the claims in terms of liability for pure omissions and rejected the claim based upon occupiers’ liability on the ground that the bar stool was not unsafe. Carswell L.C.J. stressed that an affirmative duty could only arise where the defendant had assumed responsibility for the plaintiff’s safety, and that the unlawful service of an intoxicated customer did not amount to an assumption of responsibility. In that case Carswell L.C.J. considered and rejected the Canadian authorities starting with Jordan House on commercial host liability and did so on the basis that he was of the view that they imposed “an unreasonable burden on licensees”.
6.5 In the UK cases including the Northern Ireland case identified above there is no doubt but that each case is fact dependent. The authorities demonstrate a clear reluctance to impose liability unless there has been a clear assumption of responsibility and insofar as there is an exception to that approach it would appear to arise only in circumstances where a person is so intoxicated that they cannot look after their own safety or where they are plainly incapable of taking care of themselves.
6.6 Having considered the authorities from Australia which have been opened to the Court it is apparent that the Australian Courts have adopted a similar approach to the approach that the UK Courts have taken. The Australian Courts are consistent in their judgments in declining to impose alcohol provider liability. The common approach to be gleaned from the Australian cases, the legislation in that country, and in the individual states is that people are responsible for their own actions and that to drink or not to drink is a matter of choice for each individual. The High Court of Australia has adopted a uniform approach which has been identified as an individualistic approach to injury and duty in the context of intoxication. The approach of the High Court is mirrored in Australian legislation where different states have, within the last ten years, enacted statutes to limit liability in civil cases for inebriated plaintiffs who suffer personal injury.
6.7 In 2004 the High Court of Australia in considering an appeal from the Supreme Court of New South Wales addressed the issue of alcohol server liability. That case was Cole v. South Tweed Heads Rugby League Football Club Ltd. and Anor. [2004] HCA 29. The facts of Cole was that the plaintiff, Cole, had been run over in a motor accident and seriously injured whilst walking along the roadway after dark in a seriously inebriated condition. The Court heard evidence that the plaintiff had spent some nine hours on the defendant’s premises drinking heavily and following the accident she sued both the car driver and the club. She was awarded significant damages in the New South Wales Supreme Court with liability apportioned thirty per cent each to the car driver and club and forty per cent to the plaintiff. The New South Wales Court of Appeal held the plaintiff entirely responsible and the majority of the High Court of Australia agreed. The plaintiff alleged that the club breached its duty of care to her by supplying her with alcohol when a reasonable person would have known that she was intoxicated and by allowing her to leave the premises in an unsafe condition without proper assistance. In his judgment Gleeson C.J. held (at para. 14):
“A duty to take care to protect an ordinary adult person who requests supply from risks associated with alcohol consumption is not easy to reconcile with a general rule that people are entitled to do as they please, even if it involves a risk of injury to themselves. The particular circumstances of the individual cases, or classes of case, might give rise to such a duty, but we are not here concerned with a case that is out of the ordinary.
Again, as a general rule a person has no legal duty to rescue another. How is this to be reconciled with a proposition that the respondent had a duty to protect the appellant from the consequence of her decision to drink excessively? There are many forms of excessive eating and drinking that involve health risks but, as a rule, we leave it to individuals to decide for themselves how much they eat and drink. There are sound reasons for that, associated with values of autonomy and privacy.” (at para. 15).
Gleeson C.J. went on to consider an argument put forward on behalf of the plaintiff/appellant based upon the fact that it is an offence to supply liquor to an intoxicated person and even though on the facts the Court of Appeal had found that there was no breach of that statutory provision, Gleeson C.J. identified that the provision did not assist the appellant’s argument and did so on the following basis (at para. 16):
“A person may be at risk of physical injury following the consumption of alcohol even if the person is well short of the state of intoxication contemplated in the provision. As has been noted, the most obvious example of such a risk is that involved in driving a motor vehicle, and the risk becomes real and significant well before a person has reached a state at which a supplier is legally obliged to refuse service. If the argument for the appellant is correct the legal responsibility for the supplier is more onerous than that imposed by s. 44A.”
Gleeson C.J. went on to hold (at para. 17):
“It is possible that there may some circumstances in which a supplier of alcohol comes under a duty to take reasonable care to protect a particular person from the risk of physical injury resulting from self-induced intoxication. However, the appellant cannot succeed in this case unless there is a general duty upon a supplier of alcohol, at least in a commercial setting, to take such care. I do not accept that there is such a general duty. I would add that, if there were, it is difficult to see a basis in legal principle, as distinct from legislative edict, by which it could be confined to commercial supply. When supply of alcohol takes place in a social context, there may be a much greater opportunity for appreciating the risks of injury, for monitoring the condition of the consumer, and for influencing the consumer’s behaviour. In a social, as in a commercial, context, the risk of injury associated with the consumption of alcohol is not limited to cases where there is an advanced state of intoxication. Depending upon the circumstances, a guest who has had a few drinks and intends to drive home may be at greater risk than a guest who is highly intoxicated but intends to walk home. If there is a duty of the kind for which the appellant contends, it would be the degree of risk associated with the consumption of alcohol, rather than the degree of intoxication, that would be significant. In many cases the two would go together, but in some cases they would not.
The consequences of the appellant’s argument as to duty of care involve both an unacceptable burden upon ordinary social and commercial behaviour, and an unacceptable shifting of responsibility for individual choice. The argument should be rejected.” (para. 18).
Gleeson C.J. recognised the particular circumstances of individual cases or classes of case might give rise to a duty to take care to protect an inebriated customer but identified that the case under consideration was not a case which was out of the ordinary. In that case Callinan J. whilst expressing the view that a drinker was exercising autonomy for which that person should carry personal responsibility at law went on to deal with situations which might be described as exceptional. Callinan J. held (at para. 131):
“I am also of the opinion that in general – there may be some exceptional cases – vendors of products containing alcohol will not be liable in tort for the consequence of the voluntary excessive consumption of those products by the persons to whom the former have sold them. The risk begins when the first drink is taken and progressively increases with each further one. Everyone knows at the outset that if the consumption continues, a stage will be reached at which judgment and capacity to care for oneself will be impaired, and even ultimately destroyed entirely for at least a period.”
In arriving at the conclusion that there was no responsibility on the defendant in that case, Callinan J. expressly disagreed with any propositions to the contrary deducible from the Canadian cases referred to in argument, namely, Stewart v. Pettie and the Jordan House case (at para. 132). Earlier in his judgment Callinan J. had identified a number of factors pointing decisively against the recognition of a duty of care owed by publicans not to serve customers whom they know will become or have become intoxicated in order to prevent the customers causing injury to themselves. Callinan J. held as follows (at para. 130):
“One is that if the duty existed it might call for constant surveillance and investigation by publicans of the condition of customers. That process of surveillance and investigation might require publicans to direct occasional oral inquiries to customers. Inquiries of this kind would ordinarily be regarded as impertinent and invasive of privacy. Quite apart from the inflammatory effect of these activities on publican-customer relations and on good order in the hotel or club, the impact of these activities on the efficient operation of the businesses of publicans would ‘contravene their freedom of action in a gross manner’.
The other significant matter is that if a customer reached a state of intoxication requiring that no further alcohol be served and the customer decided to depart, recognition of the duty of care in question might oblige publicans to restrain customers from departing until some guarantee of their safety after departure existed. … How are customers to be lawfully restrained? If customers are restrained by a threat of force, prima facie the torts of false imprisonment and of the assault will have been committed. If actual force is used to restrain customers, prima facie the tort of battery will have been committed as well as the tort of false imprisonment.”
Callinan J. went on to consider the legislation in Australia and identified that such legislation made it lawful for the secretary or an employee of a registered club to use whatever reasonable force is necessary to turn out of the club intoxicated persons and then went on to hold (at para. 130):
“But the legislation says nothing about using reasonable force to keep intoxicated persons in pending the appearance of some guarantee for their safety after departure. In short, if the tort of negligence were extended as far as the [appellant] submitted, it would ‘subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms’.”
6.8 The High Court of Australia revisited the same legal issues in the later case of C.A.L. No. 14 Pty Ltd. t/a Tandara Motor Inn and Ors. v. Motor Accidents Insurance Board [2009] HCA 47. The facts of that case were that the deceased had agreed with the defendant hotel to leave his motorcycle in the hotel storeroom, giving them his keys, while the deceased’s wife would drive him home. He consumed a lot of alcohol and refused to give the hotel his wife’s details, subsequently driving his bike and being involved in an accident which resulted in his death. His wife claimed that the hotel had a duty to phone her to collect him and the High Court rejected that claim. The Court concluded that the agreement with the hotel as regards the motor bike was terminable at will, for the benefit of the deceased, and did not mean that the defendants had assumed responsibility for the deceased. A duty to protect the deceased would interfere with his freedom to consume alcohol and accept responsibility for his own actions. The Court reasoned that trying to stop the deceased from driving his motorcycle would cause other torts and involve the criminal law. The Court held in that case that licensees owed no general common law duty to monitor or minimise their customer’s alcohol consumption or to protect them from the consequences of their excess. In the judgment of the Court (at para. 52) the Court held:
“There is in general no duty. The conclusion in this Court that the Full Court majority decision must be reversed as a practical matter overcomes these problems. However, even though the arguments in this Court proceeded in a much narrower way, being closely tied to the specific facts of this case, it is desirable to avoid repetition in future of what happened in this case by explicitly stating the fundamental reason why the Full Court majority decision on duty of care is wrong. The reason is that outside exceptional cases, which this case is not, persons in the position of the Proprietor and the Licensee, while bound by important statutory duties in relation to the service of alcohol and the conduct of the premises in which it is served, owe no general duty of care at common law to customers which requires them to monitor and minimise the service of alcohol or to protect customers from the consequences of the alcohol they choose to consume. That conclusion is correct because the opposite view would create enormous difficulties, apart from those discussed above [57], relating to customer autonomy and coherence with legal norms. The difficulties can be summarised as follows.”
The judgement also went on to identify that expressions like intoxication, inebriation and drunkenness are difficult both to define and apply and the fact that legislation compels publicans not to serve customers who are apparently drunk does not make the introduction of a civil duty of care defined by reference to those expressions any more workable or attractive. The judgment went on to conclude (at para. 55):
“A duty to take reasonable care to ensure that persons whose capacity to care for themselves is impaired are safeguarded also encounters the problems of customer autonomy[63] and legal coherence[64] discussed above. A further problem of legal coherence arises where legislation compels a publican to eject a drunken customer but the tort of negligence requires the person’s safety to be safeguarded by not permitting the person to drive or to walk along busy roads, and hence requires the person to be detained by some means. Even if the customer wants to leave, the publican is caught between the dilemma of committing the torts of false imprisonment or battery and committing the tort of negligence.”
The High Court went on in its judgment to consider the duty of care of publicans to persons other than customers (at para. 57) and stated:
“The conclusion that, save in exceptional circumstances, publicans owe no duty of care to their customers in relation to how much alcohol is served and the consequences of serving it says nothing about whether publicans owe a duty to third parties who may be damaged by reason of the intoxication of those customers. Defendants owe duties of care not to the world, but to particular plaintiffs. Some of the arguments against imposing a duty of care on publicans to their customers may have less application where the plaintiff is a third party injured by the customer. The Supreme Court of Canada has recognised, in statements not necessary to the decision, that there is a duty of care to a third party[71]. The Supreme Court regarded this as a logical step from the conclusion that there is a duty to the customer[72]. In this country, since there is generally no duty to the customer, the step cannot be taken on that ground.”
The Australian courts do recognise that publicans or licensees have a duty to ensure that their premises are physically safe and that duty extends to protecting customers from the violent, quarrelsome or disorderly conduct of others on the premises (see Adeels Palace Pty. Ltd. v. Moubarak [2009] HCA 42).
7. Both parties acknowledge that there is no direct judicial decision or precedent in this jurisdiction concerning the duty of care of a publican in a case such as this. A number of cases were referred to by the parties relating to the issues which impinge or impact upon the issues which require to be considered by this Court in addressing the question as to whether or not there is a duty on a publican to protect incapacitated persons, including their potential victims, from injury and if such duty exists the nature and extent of such duty. Personal injury claims arising out of assaults in licensed premises have frequently been litigated in this jurisdiction. In those cases, injured parties who were customers have sued the proprietors of public houses. In Hall v. Kennedy and Rudledge t/a The White House (Unreported, High Court, 20th December, 1993), Morris J. held that the proprietors of a public house were not guilty of negligence in failing to prevent an assault on the plaintiff who was a customer by another customer. The factual basis of that finding was that the violent customer had shown none of the signs or manifestations of drink such as should have alerted a reasonable publican or his staff to the prospect that he might assault another customer. Morris J. (at p. 5 of his judgment) identified the publican’s duty in the following terms:
“The obligation of the [publican] at law is to take all reasonable care for the safety of the [customer] while on the premises. This would include in this case ensuring that [another] customer in the premises did not assault him. The necessary steps would include, in an appropriate case, removing such a customer from the premises, refusing to serve him drink [and] staffing the bar with sufficient barmen or security staff so as to ensure the safety of the [customer]”.
In that case, it was a lack of any specific knowledge on the part of the bar staff which was central to the Court determining that there was no liability. The judgment also identified certain steps available, within the law, which a publican could take when dealing with drunk and violent customers. Those steps included the ability to refuse to serve such a customer drink and to seek to remove the customer from the premises. Intrinsic in the approach to liability identified by Morris J. was the acceptance of an obligation to take reasonable care for the safety of a customer whilst on the premises. In the Circuit Court case of Bridie Murphy v. Phyllis O’Brien (1987) 6 1LT (ns) 75 (cc), Sheridan J. had to consider a case where a plaintiff who had “plenty to drink” was allowed into the defendant’s public house and then three drinks were served to the group who she accompanied. It was uncertain as to whether the plaintiff herself had consumed any alcohol. Whilst descending the stairs to the toilets, the plaintiff fell, as the handrail did not go all the way down to the foot of the stairs. The evidence was that if a sober person had been using the stairs, the banister would have been adequate, but the plaintiff succeeded in her action, in part, due to her inebriated condition. In all the circumstances of the case, there was a two-thirds finding of contributory negligence made against the plaintiff. Sheridan J. imposed liability, not under the principle of occupiers’ liability, but on the basis of Donoghue v. Stevenson, as the plaintiff was a prospective customer. In Walsh v. Ryan (Unreported, Lavan J., 12th February, 1993) the High Court had to consider a claim by a customer who had been assaulted by another customer who had arrived on the premises in an intoxicated condition. Lavan J. reached a conclusion similar to that of Morris J. in the Bridie Murphy case, and held that the plaintiff was entitled to succeed on the basis of occupiers’ liability, but during the course of the judgment, also quoted the “neighbour principle” of Lord Atkin and referred to Murphy v. O’Brien. In the Walsh case, unlike the position in the Hall case, the publican knew of the customer’s tendency towards violence and so was held liable to the plaintiff who was assaulted by that customer.
7.1 In an unreported judgment of Morris J. in Murphy v. Ballyclough Co-Operative Creamery Ltd. and Ors. (Unreported, High Court, 27th February, 1988), the Court dealt with an application to have the plaintiff’s claim against the first and second named defendants struck out. The facts of that case were that the plaintiff, Denis Murphy, had gone to a meeting at a creamery in Mallow, County Cork where free alcohol had been provided. Following the meeting, the plaintiff went to the Roundabout Tavern where he consumed a considerable amount of drink and became inebriated. He was then driven by Kay Napier, another of the defendants, to his van, which had been parked some one mile distance from the Roundabout Tavern. Kay Napier stated that Mr. Murphy was sober at that stage, as he had only consumed four pints in her pub. On retrieving his car, the plaintiff drove to another hotel where, it was claimed, he was served one drink. The owners of that hotel denied that the plaintiff had been served any alcohol on their premises. After he left the hotel, he attempted to drive home and crashed his vehicle into a wall and was badly injured, rendering himself a paraplegic. The plaintiff brought proceedings, not only against the creamery, where he had received complimentary drinks, but against all the publicans and hoteliers who operated premises where he had drunk, thereafter claiming that each of those parties owed him a duty of care, and breached such duty by allowing him to drive his vehicle when he was drunk. On application by the first two defendants, that is, the defendants who were responsible for the creamery, the proceedings were struck out. Morris J. held that any negligence on the part of the first two defendants in providing alcohol to the plaintiff would have been overwhelmed by the alleged negligence of the remaining defendants, if established. Given the narrow range of focus in the judgment of Morris J. where he was dealing with a preliminary application to strike out a defence and where no evidence was heard, such authority is of no real assistance to this Court in addressing the issues herein.
7.2 The defendant seeks to rely, by analogy, on the decision of the Supreme Court in Breslin v. Corcoran [2003] 2 IR 203. It is contended that if a person can be liable for carelessly leaving the keys in a car, resulting in another person stealing that car and causing injury to another, it should follow that a publican can be liable, when, in breach of the criminal law, he serves a customer with so much alcohol that such customer is transformed from being a safe driver into being a dangerous driver, and then releases that person on to the highway. There are a number of difficulties with that line of reasoning. There is no doubt that if one leaves one’s keys in a motorcar on a busy public highway, it is reasonably foreseeable that the car will be stolen. However, a separate and distinct question has to be asked as to whether it is foreseeable, as a reasonable probability, that if the car is stolen, it will be driven so carelessly as to cause injury to another. The facts in Breslin v. Corcoran case were that the first named defendant left his car outside a café in central Dublin, unlocked, with the keys in the ignition, so that he could go in to buy a sandwich, and when he came out, a thief had driven off in the car at speed. The car then turned in to another road, where it crashed into the plaintiff who was crossing the road. The plaintiff brought an action against the first named defendant alleging negligence in leaving the car unattended with the keys in the ignition. The Supreme Court declined to find the first defendant liable due to the fact that the forseeability of the car being stolen, which was acknowledged, did not extend to the car being driven in a negligent manner. Fennelly J. held (at 215):
“There is nothing in the present case to suggest that the first named defendant should have anticipated, as a reasonable probability, that the car if stolen, would be driven so carelessly as to cause injury to another user of the road such as the plaintiff.”
In this case, the defendant claims that the third parties were negligent and in breach of duty in serving excessive quantities of alcohol to John Connolly, and/or in failing to persuade him from leaving the public house, and/or in failing to attempt to restrain or otherwise prevent him from driving. They also seek to rely on a claim that the third parties were in breach of the criminal law and that they participated in transforming John Connolly from a safe driver into a dangerous driver and then released him on to the highway. In considering those claims, it is important to consider which breach of the criminal law is being suggested. The defendant seeks to rely on the criminal law relating to drunk driving, which applies to drivers. The criminal law applicable to publicans is set down in the Intoxicating Liquor Acts. On the facts of this case, the Court is satisfied that it has not been established that the third parties were in breach of the criminal law under the Intoxicating Liquor Acts in supplying intoxicating liquor to a drunken person or in permitting a drunken person to consume intoxicating liquor or in permitting drunkenness to take place in the third parties’ public house. The Court is satisfied that the evidence does not establish that John Connolly was a drunken person within the definition contained in the Intoxicating Liquor Act of 2003. A difficulty with the defendant’s argument, based upon a claim that it was the third parties who released John Connolly on to the highway, is that it was John Connolly himself who decided to leave the third parties’ public house, and it cannot be said that the third parties released him. He was entitled to leave the public house and indeed on the facts of this case did so without the knowledge of the third parties or any of their servants or agents. Insofar as it could be claimed that the third parties should have restrained John Connolly, the Court does not consider that that argument is well founded, as there is no legal basis for such restraint, and insofar as it is suggested that advice should have been tendered in relation to the risk of driving when drunk, the Court is satisfied that the risk attached to drunken driving is so well publicised and appreciated within the community, that such advice would be futile, as the import of such advice would have been well known.
7.3 It was argued by the defendant, that after John Connolly had been served two pints he should not have been served any further alcohol, given that he was likely to depart by car, if he indicated, in response to questioning, that he would not drive. That argument is impractical and would place an impossible burden on publicans. First, it would lead to a situation where publicans would have to question customers as to their future conduct on a recurring basis, making the management of the premises difficult, if not impossible. Secondly, there is no legal basis to permit of such questioning, and it would place the publican in a situation where customers could claim that the question raised by the publican had indicated that such customer was about to commit a crime. Thirdly, the publican would be faced with a situation that if he was informed by the customer that the customer was not intending to drive, that the publican would either have to serve the customer, provided he was not drunk under the Intoxicating Liquor Act 2003, or proceed on the basis that he did not believe the customer and refuse to serve him. The Court is in effect being requested to place a burden on publicans without the publican being provided with the legal safeguards to deal with such obligation.
7.4 In the light of the basis upon which the Supreme Court, in the Breslin case, declined to attribute liability to the car owner who left his car unattended with the keys in the ignition and held that to establish liability, it was a necessary requirement to look beyond the fact that it was foreseeable that the car would be stolen, and to consider whether the car owner should have anticipated as a reasonable probability that the car, if stolen, would be driven so carelessly as to cause injury to another, this Court is satisfied, on the basis of the facts of this case, that Breslin v. Corcoran is of no assistance to the defendant. This Court accepts the evidence which establishes that John Connolly had demonstrated a willingness to exercise his own judgment as to his capacity to drive, and on the day in question he had the capacity to exercise such judgment. The Court is satisfied that it cannot be contended, on the facts of this case, that the third parties knew that it was probable that John Connolly would drive his car, and would do so in such a manner as to cause injuries to other users of the road.
8. Earlier in this judgment, the claims made by the defendant against the third parties are set out; together with the particulars relied on. During the course of argument, it was submitted on behalf of the defendant that the third parties have a duty of care, as proprietors of a licensed premises, that when they have knowledge that a customer they are serving is likely to drive, and when that customer has consumed an amount of alcohol that would put him in excess of the blood alcohol level permitted under the Road Traffic Acts, that the third parties, as publicans, are under a duty not to serve such a customer any more alcohol. The defendant also argued that when the third parties, as publicans, had knowledge that a customer, such as John Connolly, was likely to drive, they had an obligation and a duty “not to serve such an amount of alcohol as would put him over the limit”. The defendant also contended that when the third parties, as publicans, had knowledge that John Connolly was likely to drive having consumed an amount of alcohol that would put him over the legal limit permitted under the Road Traffic Acts, they must take reasonable steps to prevent him from driving. The defendant claims that such duty arises as a result of the special relationship between the third parties and the deceased, in that, he was a customer or patron of the third parties’ pub and, also, that the duty arose by way of the neighbour principle and, further, that the duty arose through the third parties’ knowledge of John Connolly. The defendant claims that the third parties breached their duty to John Connolly and to innocent road users by serving or continuing to serve alcohol to him, to a point well beyond the legal limit for driving a motorcar, while having knowledge of the fact that it was more likely than not that John Connolly would drive after he had consumed that alcohol.
9. In the light of those claims, and in the light of the authorities identified above, and recognising the absence of any authority within this jurisdiction, the Court must determine whether or not the third parties had the duty of care which it is claimed that they owed to John Connolly and to the plaintiff as a potential victim of his driving.
9.1 The third parties, as licensees and publicans, have certain, well-established duties towards their customers. The third parties owed various duties to John Connolly, including the obligation to take reasonable care to ensure that the third parties’ premises, including its contents, were reasonably safe, and to ensure that the premises were conducted in an orderly manner and to conduct the sale of alcohol in such a manner so as to not permit the supply of alcohol to a drunken person, or to permit a drunken person to consume alcohol or to permit drunkenness to take place in the licensed premises. However, the duty contended for by the defendant extends beyond those well-established duties. The defendant’s formulation of the duty of care seeks to place an obligation on a publican or licensee, where a customer regularly drives to the pub in question, to stop serving that customer if he has drunk an amount of alcohol that would place him at or over the legal limit for driving and to proceed on the basis that the publican must presume that the customer will drive his vehicle from the licensed premises. The defendant also seeks to impose a duty that if a customer, whom the publican reasonably expects to drive a motorcar, has consumed an amount of alcohol in excess of the legal limit for driving a motor vehicle, that they must, if necessary, not only advise that customer not to drive, but restrain by force such customer from driving and, if necessary, take by force the keys of the customer’s car. The fact that the Oireachtas has identified particular strict limits in relation to the blood alcohol level permitted in a driver does not and cannot, of itself, impose a liability on a publican to desist from serving a customer an amount of alcohol which would place such customer over that legal limit. Indeed, to impose such a duty, would place an impractical obligation on a publican and would be so vague and indefinite as to be incapable of compliance. Insofar as the defendant’s formulation of the duty of care places an obligation of restraint or the taking by force of the keys of a customer, that obligation would be in direct conflict with the third parties’ duty not to commit torts such as assault or false imprisonment. None of the recognised defences to those torts would be available to the third parties. If such a duty, as claimed, is to arise, such could only realistically be imposed by statute, and cannot arise from an expansion of the scope of the duty of care in negligence, where such expansion, were it to take place, would place publicans or licensees in a position where they had a potential obligation to commit a tort or a crime without any legal defence. This Court agrees with the analysis of the High Court of Australia in relation to this matter as set out in the C.A.L. No. 14 Pty. Ltd. case, where it was held that to impose the suggested duty to restrain, assault or falsely imprison a customer would subvert other principles of law and statutory provisions. As stated by the High Court of Australia in that case (at para. 130):
“In short, if the tort of negligence were extended as far as the [appellant] submitted, it would ‘subvert many other principles of law, and statutory provisions, which strike a balance of rights and obligations, duties and freedoms.”
It is for the Oireachtas to impose such a duty by law where any necessary powers to comply with such duty are expressly provided so that the imposition of such duty can be dealt with by a publican acting within the law and can be considered both practical and feasible.
It is for legislation to strike such a balance and not for a court to impose such a duty, regardless of any balance of rights or obligations.
10. The defendant contends that if the Oireachtas has determined a maximum blood alcohol level for driving, and that such level represents the threshold for the commission of the crime of drunk driving, it follows that it is difficult to contend that civil liability should adopt a more lenient standard. This Court is satisfied that that such contention is without merit. It is not for a publican to supervise or enforce the provisions of the Road Traffic Acts. The obligation identified by the Oireachtas is placed upon the driver of a motor vehicle. It is the obligation of a driver of a motor vehicle to refrain from driving under influence and that obligation is individual to the driver and does not extend to other parties. This Court is not prepared to extend the common law duty of care imposed on publicans premised on violation of statutory duties which are placed on others and not on publicans. Any statutory violation by a publican of any statutory obligation placed on publicans has nothing to do with driving or the Road Traffic Acts. Where the courts have held passengers of drunken drivers guilty of contributory negligence for travelling in a car driven by an intoxicated person, those findings have been predicated on the passengers knowingly getting into a car to be driven by such a driver. It is the passengers’ act in choosing to travel in such a car which grounds the finding of contributory negligence.
11. For completeness sake, it is appropriate for the Court to deal with the complaint made by the defendant that the third parties did not have a policy to monitor, observe and advise customers in relation to the quantity of drink and the danger of drunken driving. This Court is satisfied that such obligation does not arise other than to ensure compliance with the Intoxicating Liquor Acts and, in any event, on the facts of this case, the Court is satisfied that the evidence establishes that John Connolly was a courteous and civil man who was an experienced drinker and who had demonstrated an ability to take care of himself and behave in a sensible and responsible manner. On the day in question, the Court is satisfied that there is no evidence that John Connolly was so incapacitated as to be helpless or in jeopardy by a reduction in his capacity to make sensible decisions or judgments. The facts of the case also establish that on the day in question, neither Concepta Kelly nor Seamus Kelly were present when John Connolly left, and when they were with John Connolly, neither of them observed any of the expected or customary signs of drunkenness. The Court accepts that evidence. In those circumstances, the third parties could proceed on the basis that John Connolly was capable of looking after himself and of exercising his own judgment as to how he would go home. Insofar as the defendant contends that there was an obligation to advise John Connolly as they served him the third, fourth or fifth pint as to the dangers of drunken driving, even if there was such an obligation, the Court is satisfied that it could only arise in circumstances where the third parties were aware that John Connolly could not exercise his own judgment, and was so helpless or in jeopardy that he did not have the capacity to make sensible decisions or judgments. The Court is satisfied, on the evidence, that neither of the third parties observed or were aware of John Connolly being in such a condition.
12. The Court has considered the facts of this case, and in the light of the findings set out earlier in this judgment, and having considered the various authorities opened to it, the Court finds that the following determinations and conclusions can be identified. The third parties did not owe the duty of care claimed to John Connolly. In arriving at that conclusion, the Court has taken into consideration the fact that there has been no identified case within this jurisdiction to support the existence of such duty. In considering the different approaches adopted in other jurisdictions to such a duty, this Court is satisfied that the approach identified in the United Kingdom and Australian case law is to be preferred over the approach adopted by the Canadian courts as set out in Stewart v. Pettie. This Court is satisfied that Gleeson C.J., in the Cole v. South Tweed Heads Rugby League Football Club Ltd. case, correctly identified the lack of a duty of care on a publican and, in particular, this Court concurs with the statement in his judgment, as made at paragraph 14 and as quoted earlier in this judgment. The duty of care sought to be imposed by the defendant would, in the words of Gleeson C.J. (at para. 17):
“. . . involve both an unacceptable burden upon ordinary social and commercial behaviour, and an unacceptable shifting of responsibility for individual choice.”
In preferring the approach identified in the United Kingdom and Australian cases, the Court has had regard to the different statutory framework and legislative approach in Canada, which has resulted in the duty of care placed upon publicans in that country being based upon the legal obligations placed by legislation on those publicans. It was on the basis of the legal duty of care owed to patrons that the Canadian courts have concluded that it was a logical step that such a duty was also owed to third parties who might reasonably be expected to come into contact with a patron. The courts in the United Kingdom, in considering the obligation attaching to others in respect of the intoxicated, have adopted the relatively consistent approach that the law does not impose any liability, absent a clear assumption of responsibility. On the facts of this case, there is no assumption of liability by the third parties. The statement of Carswell L.C.J. in the Joy v. Newell case that an affirmative duty on the part of a publican could only arise where the publican had assumed responsibility for the plaintiff’s safety is a statement with which this Court concurs. The third parties did not assume responsibility for John Connolly’s safety and no duty of care arose. In both the Australian and United Kingdom cases, it has been recognised that there could be situations where responsibility or a duty of care could arise in exceptional circumstances. The courts have recognised that such responsibility or duty could occur in circumstances where a customer was so intoxicated that he could not look after his or her own safety and was plainly incapable of taking care of himself or herself. This Court adopts that approach, and in determining that the third parties owed no duty of care to John Connolly, it does so, in part, based upon its finding that he was not a person who was so intoxicated that he could not look after his own safety or was plainly incapable of taking care of himself.
12.1 The duty of care sought to be imposed by the defendant on the third parties includes in part an obligation on publicans to resort to commit acts which would result in the publican committing a tort or a criminal offence. To place such an obligation and to provide the legislative balance enabling such obligation to be carried out is for the legislature, not the courts. If there was such a duty on publicans or licensees, the law would require to be altered to provide the licensees with the necessary powers and privileges to carry out and enforce the steps necessary to comply with such duty.
12.2 This Court is satisfied that in applying and adopting the approach identified in the High Court of Australia in the C.A.L. No. 14 Pty Ltd. case, and in the Court of Appeal in England in Jebson v. The Ministry for Defence, there is generally no duty of care owed to the intoxicated, absent an assumption of responsibility or exceptional circumstances. In Canada, the duty of care owed to the intoxicated has been identified as the logical basis for the expansion of the duty of care to the third party victims of the intoxicated. This Court is satisfied that there is generally no duty of care to a customer, such as John Connolly, and therefore, a duty of care cannot be extended to third party victims on the basis of such duty. The defendant has failed to identify or establish in evidence any other ground to support there being a duty of care owed to third party victims. The duty of care relied upon by the defendant is based upon the duty of care which it is claimed is owed to the customer, that is, to John Connolly. The claim that there was a breach of that duty in serving, or desisting from serving, John Connolly, is rejected on the basis that there is no such duty. The claim by the defendant that there was a breach of duty by the third parties to the plaintiff flows directly from the alleged breach of duty owed to John Connolly. The defendant has not identified any separate or distinct breach other than the ones claimed to be owed to John Connolly. Absent a duty of care owed to John Connolly, a separate duty of care owed to the plaintiff could only arise if the defendant identified and established a separate and distinct breach. The defendant has not done so and there was no breach by the third parties of any duty owed to the defendant.
13. This Court is satisfied that there is no legal basis for the imposition of the duty of care contended for by the defendant and it follows that the defendant’s claim against the third parties should be dismissed.
UK Cases
Donoghue v Stevenson
House of Lords [1932] All ER Rep 1
LORD ATKIN: . . .
The sole question for determination in this case is legal: Do the averments made by the pursuer in her pleading, if true, disclose a cause of action? I need not re-state the particular facts. The question is whether the manufacturer of an article of drink sold by him to a distributor in circumstances which prevent the distributor or the ultimate purchaser or consumer from discovering by inspection any defect is under any legal duty to the ultimate purchaser or consumer to take reasonable care that the article is free from defect likely to cause injury to health. I do not think a more important problem has occupied your Lordships in your judicial capacity, important both because of its bearing on public health and because of the practical test which it applies to the system of law under which it arises. The case has to be determined in accordance with Scots law, but it has been a matter of agreement between the experienced counsel who argued this case, and it appears to be the basis of the judgments of the learned judges of the Court of Session, that for the purposes of determining this problem the law of Scotland and the law of England are the same. I speak
with little authority on this point, but my own research, such as it is, satisfies me that the principles of the law of Scotland on such a question as the present are identical with those of English law, and I discuss the issue on that footing. The law of both countries appears to be that in order to support an action for damages for negligence the complainant has to show that he has been injured by the breach of a duty owed to him in the circumstances by the defendant to take reasonable care to avoid such injury. In the present case we are not concerned with the breach of the duty; if a duty exists, that would be a question of fact which is sufficiently averred and for the present purposes must be assumed. We are solely concerned with the question whether as a matter of law in the circumstances alleged the defender owed any duty to the pursuer to take care.
It is remarkable how difficult it is to find in the English authorities statements of general application defining the relations between parties that give rise to the duty. The courts are concerned with the particular relations which come before them in actual litigation, and it is sufficient to say whether the duty exists in those circumstances. The result is that the courts have been engaged upon an elaborate classification of duties as they exist in respect of property, whether real or personal, with further divisions as to ownership, occupation or control, and distinctions based on the particular relations of the one side or the other, whether manufacturer, salesman or landlord, customer, tenant, stranger, and so on. In this way it can be ascertained at any time whether the law recognises a duty, but only where the case can be referred to some particular species which has been examined and classified. And yet the duty which is common to all the cases where liability is established must logically be based upon some element common to the cases where it is found to exist. To exist’ a complete logical
definition of the general principle is probably to go beyond the function of the judge, for, the more general the definition, the more likely it is to omit essentials or introduce non-essentials. The attempt was made by Lord Esher in Heaven v Pender2 . . . As framed it was demonstrably too wide, though it appears to me, if properly limited, to be capable of affording a valuable practical guide.
At present I content myself with pointing out that in English law there must be and is some general conception of relations giving rise to a duty of care, of which the particular cases found in the books are but instances. The liability for negligence, whether you style it such or treat it as in other systems as a species of `culpa’, is no doubt based upon a general public sentiment of moral wrongdoing for which the offender must pay. But acts or omissions which any moral code would censure cannot in a practical world be treated so as to give a right to every person injured by them to demand relief. In this way rules of law arise which limit the range of complainants and the extent of their remedy. The rule that you are to love your neighbour becomes in law: You must not injure your neighbour, and the lawyers’ question: Who is my neighbour? receives a restricted reply. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who then, in law, is my neighbour? The answer seems to be persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question. This appears to me to be the doctrine of Heaven v Pender2 as laid down by Lord Esher when it is limited by the notion of proximity introduced by Lord Esher himself and A. L. Smith LJ in Le Lievre v Gould.3 Lord Esher MR says ([1893] 1 QB at p. 497):
`That case established that, under certain circumstances, one man may owe a duty to another, even though there is no contract between them. If one man is near to another, or is near to the property of another, a duty lies upon him not to do that which may cause a personal injury to that other, or may injure his property.’
So A. L. Smith LJ says ([1893] 1 QB at p. 504):
`The decision of Heaven v Pender2 was founded upon the principle that a duty to take due care did arise when the person or property of one was in such proximity to the person or property of another that, if due care was not taken damage might be done by the one to the other.’
I think that this sufficiently states the truth if proximity be not confined to mere physical proximity, but be used, as I think it was intended, to extend to such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act. That this is the sense in which nearness or `proximity’ was intended by Lord Esher is obvious from his own illustration in Heaven v Pender2 (11 QBD at p. 510) of the application of his doctrine to the sale of goods.
`This [i.e. the rule he has just formulated] includes the case of goods, & c., supplied to be used immediately by a particular person or persons, or one of a class of persons, where it would be obvious to the person supplying, if he thought, that the goods would in all probability be used at once by such persons before a reasonable opportunity for discovering any defect which might exist, and where the thing supplied would be of such a nature that a neglect of ordinary care or skill as to its
condition or the manner of supplying it would probably cause danger to the person or property of the person for whose use it was supplied, and who was about to use it. It would exclude a case in which the goods are supplied under circumstances in which it would be a chance by whom they would be used, or whether they would be used or not, or whether they would be used before there would probably be means of observing any defect, or where the goods would be of such a nature that a want of care or skill as to their condition or the manner of supplying them would not probably produce danger of injury to person or property.’
I draw particular attention to the fact that Lord Esher emphasises the necessity of goods having to be ‘used immediately’ and ‘used at once before a reasonable opportunity of inspection’. This is obviously to exclude the possibility of goods having their condition altered by lapse of time, and to call attention to the proximate relationship, which may be too remote where inspection even by the person using, certainly by an intermediate person, may reasonably be interposed. With this necessary qualification of proximate relationship, as explained in Le Lievre v Gould,’ I think the judgment of Lord Esher expresses the law of England. Without the qualification, I think that the majority of the court in Heaven v Pender2 was justified in thinking that the principle was expressed in too general terms. There will, no doubt, arise cases where it will be difficult to determine whether the contemplated relationship is so close that the duty arises but in the class of case now before the court I cannot conceive any difficulty to arise. A manufacturer puts up an article of food in a container which he knows will be opened by the actual consumer. There can be no inspection by any purchaser and no reasonable preliminary inspection by the consumer. Negligently in the course of preparation he allows the
contents to be mixed with poison. It is said that the law of England and Scotland is that the poisoned consumer has no remedy against the negligent manufacturer. If this were the result of the authorities, I should consider the result a grave defect in the law and so contrary to principle that I should hesitate long before following any decision to that effect which had not the authority of this House . . . There are other instances than of articles of food and drink where goods are sold intended to be used immediately by the consumer, such as many forms of goods sold for cleaning purposes, when the same liability must exist. The doctrine supported by the decision below would not only deny a remedy to the consumer who was injured by consuming bottled beer or chocolates poisoned by the negligence of the manufacturer, but also to the user of what should be a harmless proprietary medicine, an ointment, a soap, a cleaning fluid or cleaning powder. I confine myself to articles of common household use, where everyone, including the manufacturer, knows that the articles will be used by persons other than the actual ultimate purchaser—namely, by members of his family and his servants, and, in some cases, his guests. I do not think so ill of our jurisprudence as to suppose that its principles are so remote from the ordinary needs of civilised society and the ordinary claims which it makes upon its members as to deny a legal remedy where there is so obviously a social wrong.
It will be found, I think, on examination, that there is no case in which the circumstances have been such as I have just suggested where the liability has been negatived. There are numerous cases where the relations were much more remote where the duty has been held not to exist. There are also dicta in such cases which go further than was necessary for the determination of the particular issues, which have caused the difficulty experienced by the courts below. I venture to say that in the branch of the law which deals with civil wrongs, dependent in England, at any rate, entirely upon
the application by judges of general principles also formulated by judges, it is of particular importance to guard against the danger of stating propositions of law in wider terms than is necessary, lest essential factors be omitted in the wider survey and the inherent adaptability of English law be unduly restricted. For this reason it is very necessary, in considering reported cases in the law of torts, that the actual decision alone should carry authority, proper weight, of course, being given to the dicta of the judges . . .
I do not find it necessary to discuss at length the cases dealing with duties where a thing is dangerous, or, in the narrower category, belongs to a class of things which are dangerous in themselves. I regard the distinction as an unnatural one so far as it is used to serve as a logical differentiation by which to distinguish the existence or non-existence of a legal right. In this respect I agree with what was said by Scrutton LJ in Hodge & Sons v Anglo-American Oil Cos (12 Ll L Rep at p. 187), a case which was ultimately decided on a question of fact:
`Personally, I do not understand the difference between a thing dangerous in itself as poison and a thing not dangerous as a class, but by negligent construction dangerous as a particular thing. The latter, if anything, seems the more dangerous of the two; it is a wolf in sheep’s clothing instead of an obvious wolf.’
The nature of the thing may very well call for different degrees of care, and the person dealing with it may well contemplate persons as being within the sphere of his duty to take care who would not be sufficiently proximate with less dangerous goods, so that not only the degree of care but the range of persons to whom a duty is owed may be extended. But they all illustrate the general principle .
proposition that by Scots and English law alike a manufacturer of products which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him, with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in injury to the consumer’s life or property, owes a duty to the consumer to take that reasonable care.
It is a proposition that I venture to say no one in Scotland or England who was not a lawyer would for one moment doubt. It will be an advantage to make it clear that the law in this matter, as in most others, is in accordance with sound common sense. I think that this appeal should be allowed.
LORD MACMILLAN: . . .
The law takes no cognizance of carelessness in the abstract. It concerns itself with carelessness only where there is a duty to take care and where failure in that duty has caused damage. In such circumstances carelessness assumes the legal quality of negligence and entails the consequences in law of negligence. What then are the circumstances which give rise to this duty to take care? In the daily contacts of social and business life human beings are thrown into or place themselves in an infinite variety of relationships with their fellows, and the law can refer only to the standards of the reasonable man in order to determine whether any particular relationship gives rise to a duty to take care as between those who stand in that relationship to each other. The grounds of action may be as various and manifold as human errancy, and the conception of legal responsibility may develop in adaptation to altering social conditions and standards. The criterion of judgment must adjust and adapt itself to the changing circumstances of life. The
categories of negligence are never closed. The cardinal principle of liability is that the party complained of should owe to the party complaining a duty to take care and that the party complaining should be able to prove that he has suffered damage in consequence of a breach of that duty. Where there is room for diversity of view is in determining what circumstances will establish such a relationship between the parties as to give rise on the one side to a duty to take care and on the other side to a right to have care taken.
To descend from these generalities to the circumstances of the present case I do not think that any reasonable man or any twelve reasonable men would hesitate to hold that if the appellant establishes her allegations the respondent has exhibited carelessness in the conduct of his business. For a manufacturer of aerated water to store his empty bottles in a place where snails can get access to them and to fill his bottles without taking any adequate precautions by inspection or otherwise to ensure that they contain no deleterious foreign matter may reasonably be characterised as carelessness without applying too exacting a standard. But, as I have pointed out, it is not enough to prove the respondent to be careless in his process of manufacture. The question is: Does he owe a duty to take care, and to whom does he owe that duty? I have no hesitation in affirming that a person who for gain engages in the business of manufacturing articles of food and drink intended for consumption by members of the public in the form in which he issues them is under a duty to take care in the manufacture of these articles. That duty, in my opinion, he owes to those whom he intends to consume his products. He manufactures his commodities for human consumption; he intends and contemplates that they shall be consumed. By reason of that very fact he places himself in a relationship with all the potential consumers of his commodities, and that relationship, which he assumes and desires for his own ends, imposes upon him a duty to
take care to avoid injuring them. He owes them a duty not to convert by his own carelessness an article which he issues to them as wholesome and innocent into an article which is dangerous to life and health.
. . . It must always be a question of circumstances whether the carelessness amounts to negligence and whether the injury is not too remote from the carelessness. I can readily conceive that where a manufacturer has parted with his product and it has passed into other hands it may well be exposed to vicissitudes which may render it defective or noxious and for which the manufacturer could not in any view be held to be to blame. It may be a good general rule to regard responsibility as ceasing when control ceases. So also where between the manufacturer and the user there is interposed a party who has the means and opportunity of examining the manufacturer’s product before he reissues it to the actual user. But where, as in the present case, the article of consumption is so prepared as to be intended to reach the consumer in the condition in which it leaves the manufacturer and the manufacturer takes steps to ensure this by sealing or otherwise closing the container, so that the contents cannot be tampered with, I regard his control as remaining effective until the article reaches the consumer and the container is opened by him. The intervention of any exterior agency is intended to be excluded, and was in fact in the present case excluded..
Governors of the Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd
House of Lords [1984] 3 All ER 529
LORD KEITH OF KINKEL:
Lord Atkin’s famous enunciation of the general principles on which the law of negligence is founded, in Donoghue v Stevenson [1932] AC 562 at 580, [1932] All ER Rep 1 at 11, has long been recognised as not intended to afford a comprehensive definition, to the effect that every situation which is capable of falling within the terms of the utterance and which results in loss automatically affords a remedy in damages. Lord Reid said in Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294 at 297-298, [1970] AC 1004 at 1027:
`It is not to be treated as if it were a statutory definition. It will require qualification in new circumstances. But I think that the time has come when we can and should say that it ought to apply unless there is some justification or valid explanation for its exclusion. For example, causing economic loss is a different
matter; for one thing it is often caused by deliberate action. Competition involves traders being entitled to damage their rivals’ interests by promoting their own, and there is a long chapter of the law determining in what circumstances owners of land can, and in what circumstances they may not, use their proprietary rights so as to injure their neighbours. But where negligence is involved the tendency has been to apply principles analogous to those stated by Lord Atkin (cf Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] 2 All ER 575, [1964] AC 465). And when a person has done nothing to put himself in any relationship with another person in distress or with his property mere accidental propinquity does not require him to go to that person’s assistance. There may be a moral duty to do so, but it is not practicable to make it a legal duty.’
Lord Wilberforce spoke on similar lines in Anns v Merton London Borough [1977] 2 All ER 492 at 498, [1978] AC 728 at 751-752:
`Through the trilogy of cases in this House, Donoghue v Stevenson [1932] AC 562, [1932] All ER Rep 1; Hedley Bryne & Co Ltd v Heller & Partners Ltd [1963] 2 All ER 575, [1964] AC 465, and Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294, [1970] AC 1004, the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter, in which case a prima facie duty of care arises. Secondly, if the first
question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise (see the Dorset Yacht case [1970] 2 All ER 294 at
297-298, [1970] AC 1004 at 1027 per Lord Reid).’ There has been a tendency in some recent cases to treat these passages as being themselves of a definitive character. This is a temptation which should be resisted. The true question in each case is whether the particular defendant owed to the particular plaintiff a duty of care having the scope which is contended for, and whether he was in breach of that duty with consequent loss to the plaintiff.
A relationship of proximity in Lord Atkin’s sense must exist before any duty of care can arise, but the scope of the duty must depend on all the circumstances of the case. In Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294 at 307-308, [1970] AC 1004 at 1038 1039 Lord Morris, after observing that at the conclusion of his speech in Donoghue v Stevenson [1932] AC 562 at 599, [1932] All ER Rep 1 at 20 Lord Atkin said that it was advantageous if the law `is in accordance with sound common sense’ and expressing the view that a special relation existed between the prison officers and the yacht company which gave rise to a duty on the former to control their charges so as to prevent them doing damage, continued:
`Apart from this I would conclude that in the situation stipulated in the present case it would not only be fair and reasonable that a duty of care should exist but that it would be contrary to the fitness of things were it not so. I doubt whether it is necessary to say, in cases where the court is asked whether in a particular situation a duty existed, that the court is called on to make a decision as to policy. Policy need not be invoked where reasons and good sense will at once point the way. If the test whether in some particular situation a duty of care arises may in some cases have to be whether it is fair and reasonable that it should so arise the court must not shrink from being the arbiter. As Lord Radcliffe said in his speech in Davis Contractors Ltd v Fareham Urban District Council [1956] 2 All ER 145 at 160, [1956] AC 696 at 728, the court is “the spokesman of the fair and reasonable man”.’
So in determining whether or not a duty of care of particular scope was incumbent on a defendant it is material to take into consideration whether it is just and reasonable that it should be so. .
Caparo Industries plc v Dickman House of Lords [1990] UKHL 2, [1990] 1 All ER 568
LORD BRIDGE OF HARWICH: . . .
In determining the existence and scope of the duty of care which one person may owe to another in the infinitely varied circumstances of human relationships there has for long been a tension between two different approaches. Traditionally the law finds the existence of the duty in different specific situations each exhibiting its own particular characteristics. In this way the law has identified a wide variety of duty situations, all falling within the ambit of the tort of negligence, but sufficiently distinct to require separate definition of the essential ingredients by which the existence of the duty is to be recognised. Commenting on the outcome of this traditional approach, Lord Atkin, in his seminal speech in Donoghue v Stevenson [1932] AC 562 at 579-580, [1932] All ER Rep 1 at 11, observed:
`The result is that the Courts have been engaged upon an elaborate classification of duties as they exist in respect of property, whether real or personal, with further divisions as to ownership, occupation or control, and distinctions based on the particular relations of the one side or the other, whether manufacturer, salesman or landlord, customer, tenant, stranger, and so on. In this way it can be ascertained at any time whether the law recognizes a duty, but only where the case can be referred to
some particular species which has been examined and classified. And yet the duty which is common to all the cases where liability is established must logically be based upon some element common to the cases where it is found to exist.’
It is this last sentence which signifies the introduction of the more modern approach of seeking a single general principle which may be applied in all circumstances to determine the existence of a duty of care. Yet Lord Atkin himself sounds the appropriate note of caution by adding:
`To seek a complete logical definition of the general principle is probably to go beyond the function of the judge, for the more general the definition the more likely it is to omit essentials or to introduce non-essentials.’
. . . The most comprehensive attempt to articulate a single general principle is reached in the well-known passage from the speech of Lord Wilberforce in Anns v Merton London Borough [1977] 2 All ER 492 at 498, [1978] AC 728 at 751-752 . . .
But since Anns’s case a series of decisions of the Privy Council and of your Lordships’ House, notably in judgments and speeches delivered by Lord Keith, have emphasised the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed and, if so, what is its scope: see Peabody Donation Fund v Sir Lindsay Parkinson & Co Ltd [1984] 3 All ER 529 at 533-534, [1985] AC 210 at 239-241, Yuen Kun-yeu v A-G of Hong Kong [1987] 2 All ER 705 at 709-712, [1988] AC 175 at 190-194, Rowling v Takaro Properties Ltd [1988] 1 All ER 163 at 172, [1988] AC 473 at 501 . . . What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or `neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope on the one party for the benefit of the other. But it is implicit in the passages referred to that the concepts of proximity and fairness embodied in these additional ingredients are not susceptible of any such precise definition as would be necessary to give them utility as practical tests, but amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope. Whilst recognising, of course, the importance of the underlying general principles common to the whole field of negligence, I think the law has now moved in the direction of attaching greater significance to the more traditional categorisation of distinct and recognisable situations as guides to the existence, the scope and the limits of the varied duties of care which the law imposes. We must now, I think, recognise the wisdom of the words of Brennan J in the High Court of Australia in Sutherland Shire Council v Heyman (1985) 60 ALR 1 at 43-44, where he said:
`It is preferable in my view, that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable “considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed”.’
One of the most important distinctions always to be observed lies in the law’s essentially different approach to the different kinds of damage which one party may have suffered in consequence of the act or omissions of another. It is one thing to owe a duty of care to avoid causing injury to the person or property of others. It is quite another to avoid causing others to suffer purely economic loss . . .
. . . It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless:
`The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it.’
LORD ROSKILL:
I agree with your Lordships that it has now to be accepted that there is no simple formula or touchstone to which recourse can be had in order to provide in every case a ready answer to the questions whether, given certain facts, the law will or will not impose liability for negligence or, in cases where such liability can be shown to exist, determine the extent of that
liability. Phrases such as `foreseeability’, ‘proximity’, ‘neighbourhood’, ‘just and reasonable’, ‘fairness’, ‘voluntary acceptance of risk’ or ‘voluntary assumption of responsibility’ will be found used from time to time in the different cases. But, as your Lordships have said, such phrases are not precise definitions. At best they are but labels or phrases descriptive of the very different factual situations which can exist in particular cases and which must be carefully examined in each case before it can be pragmatically determined whether a duty of care exists and, if so, what is the scope and extent of that duty. If this conclusion involves a return to the traditional categorisation of cases as pointing to the existence and scope of any duty of care, as my noble and learned friend Lord Bridge, suggests, I think this is infinitely preferable to recourse to somewhat wide generalisations which leave their practical application matters of difficulty and uncertainty. This conclusion finds strong support from the judgment of Brennan J in the High Court of Australia in the passage cited by my noble and learned friends (see Sutherland Shire Council v Heyman (1985) 60 ALR 1 at 43-44) . . .
LORD OLIVER OF AYLMERTON:
[I]t is now clear from a series of decisions in this House that, at least so far as concerns the law of the United Kingdom, the duty of care in tort depends not solely on the existence of the essential ingredient of the foreseeability of damage to the plaintiff but on its coincidence with a further ingredient to which has been attached the label ‘proximity’ and which was described by Lord Atkin in the course of his speech in Donoghue v Stevenson [1932] AC 562 at 581, [1932] All ER Rep 1 at 12 as—
`such close and direct relations that the act complained of directly affects a person whom the person alleged to be bound to take care would know would be directly affected by his careless act.’
It must be remembered, however, that Lord Atkin was using these words in the context of loss caused by physical damage where the existence of the nexus between the careless defendant and the injured plaintiff can rarely give rise to any difficulty. To adopt the words of Bingham LJ in the instant case ([1989] 1 All ER 798 at 808, [1989] QB 653 at 686):
`It is enough that the plaintiff chances to be (out of the whole world) the person with whom the defendant collided or who purchased the offending
ginger beer.’
The extension of the concept of negligence since the decision of this House in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] 2 All ER 575, [1964] AC 465 to cover cases of pure economic loss not resulting from physical damage has given rise to a considerable . . . difficulty of definition. The opportunities for the infliction of pecuniary loss from the imperfect performance of everyday tasks on the proper performance of which people rely for regulating their affairs are illimitable and the effects are far reaching. A defective bottle of ginger beer may injure a single consumer but the damage stops there. A single statement may be repeated endlessly with or without the permission of its author and may be relied on in a different way by many different people. Thus the postulate of a simple duty to avoid any harm that is, with hindsight, reasonably capable of being foreseen becomes untenable without the imposition of some intelligible limits to keep the law of negligence within the bounds of common sense and practicality. Those limits have been found by the requirement of what has been called a ‘relationship of proximity’ between plaintiff and defendant and by the imposition of a further requirement that the attachment of liability for harm which has occurred be `just and reasonable’. But, although the cases in which the courts have imposed or withheld liability are capable of an approximate categorisation, one looks in vain for some common denominator by which the existence of the essential relationship can be tested. Indeed, it is difficult to resist a conclusion that what have been treated as three separate requirements are, at least in most cases, in fact merely facets of the same thing, for in some cases the degree of foreseeability is such that it is from that alone that the requisite proximity can be deduced, whilst in others the absence of that essential relationship can most rationally be attributed simply to the court’s view that it would not be fair and reasonable to hold the defendant responsible. `Proximity’ is, no doubt, a convenient expression so long as it is realised that it is no more than a label which embraces not a definable concept but merely a description of circumstances from which, pragmatically, the courts conclude that a duty of care exists.
There are, of course, cases where, in any ordinary meaning of the words, a relationship of proximity (in the literal sense of ‘closeness’) exists but where the law, whilst recognising the fact of the relationship, nevertheless denies a remedy to the injured party on the ground of public policy . . . But such cases do nothing to assist in the identification of those features from which the law
will deduce the essential relationship on which liability depends and, for my part, I think that it has to be recognised that to search for any single formula which will serve as a general test of liability is to pursue a will-o’-the wisp. The fact is that once one discards, as it is now clear that one must, the concept of foreseeability of harm as the single exclusive test, even a prima facie test, of the existence of the duty of care, the attempt to state some general principle which will determine liability in an infinite variety of circumstances serves not to clarify the law but merely to bedevil its development in a way which corresponds with practicality and common sense . . .
Perhaps . . . the most that can be attempted is a broad categorisation of the decided cases according to the type of situation in which liability has been established in the past in order to found an argument by analogy . . .
D v East Berkshire Community Health NHS Trust House of Lords [2005] UKHL 23, [2005] 2 All ER 443
LORD NICHOLLS OF BIRKENHEAD: . . .
52 My Lords, it must be every parent’s nightmare to be suspected of deliberately injuring his or her own child. In the three cases before your Lordships’ House doctors suspected a child had been the subject of non-accidental injury by a parent or, in one case, false reporting carrying a future risk of non-accidental injury. In each case after further investigation it turned out this was not so. In each case the parent then brought proceedings against the hospital trust and, in one instance, the doctor personally claiming damages for negligence in the clinical investigation, diagnosis and reporting of the child’s condition.
53 The primary question before the House is whether doctors and, vicariously or directly, health trusts are liable in damages to a parent in such a case. Hand-in-hand with this is a parallel question concerning the liability of a local authority in respect of its investigation of suspected child abuse.
54 None of these cases has proceeded beyond the pleadings stage.
· • •
70 There are two cardinal features in these cases. One feature is that a parent was suspected of having deliberately harmed his or her own child or having fabricated the child’s medical condition. The other feature, which is to be assumed, is that the ensuing investigation by the doctors was conducted negligently. In consequence, the suspected parent’s family life was disrupted, to greater or lesser extent, and the suspected parent suffered psychiatric injury.
71 It is the combination of these features which creates the difficult problem now before the House. In the ordinary course the interests of parent and child are congruent. This is not so where a parent wilfully harms his child. Then the parent is knowingly acting directly contrary to his parental responsibilities and to the best interests of his child. So the liability of doctors and social workers in these cases calls into consideration two countervailing interests, each of high social importance: the need to safeguard children from abuse by their own parents, and the need to protect parents from unnecessary interference with their family life.
72 The first of these interests involves protection of children as the victims of crime. Child abuse is criminal conduct of a particularly reprehensible character: children are highly vulnerable members of society. Child abuse is also a form of criminal conduct peculiarly hard to combat, because its existence is difficult to discover. Babies and young children are unable to complain, older children too frightened. If the source of the abuse is a parent, the child is at risk from his primary and natural protector within the privacy of his home. This both increases the risk of abuse and means that investigation necessitates intrusion into highly sensitive areas of family life, with the added complication that the parent who is responsible for the abuse will give a false account of the child’s history.
73 The other, countervailing interest is the deep interest of the parent in his or her family life. Society sets much store by family life. Family life is to be guarded jealously. This is reflected in art 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 (as set out
in Sch 1 to the Human Rights Act 1998). Interference with family life requires cogent justification, for the sake of children and parents alike. So public authorities should, so far as possible, co-operate with the parents when making decisions about their children. Public authorities should disclose matters relied upon by them as justifying interference with family life. Parents should be involved in the decision-making process to whatever extent is appropriate to protect their interests adequately.
74 The question raised by these appeals is how these countervailing interests are best balanced when a parent is wrongly suspected of having abused his child. Public confidence in the child protection system can only be maintained if a proper balance is struck, avoiding unnecessary intrusion in families while protecting children at risk of significant harm
75 . . . [T]he starting point is to note that in each of the three cases before the House the doctors acted properly in considering whether the claimant parents had deliberately inflicted injury on the child in question. The doctors were entitled, indeed bound, to consider this possibility. Further, having become suspicious, the doctors rightly communicated their suspicions to the statutory services responsible for child protection. This is the essential next step in child protection . . .
76 In each case the suspected parent was eventually cleared of suspicion. In one case this was after ten days, in the other cases after much longer periods. The second point to note therefore is that, essentially, the parents’ complaints relate to the periods for which they remained under suspicion . . . [T]he essence of the claims is that health professionals responsible for protecting a child victim owe a person suspected of having committed a crime against the child a duty to investigate their suspicions, a duty sounding in damages if they act in good faith but carelessly.
77 Stated in this broad form, this is a surprising proposition. In this area of the law, concerned with the reporting and investigation of suspected crime, the balancing point between the public interest and the interest of a suspected individual has long been the presence or absence of good faith. Good faith is required but not more. A report, made to the appropriate authorities, that a person has or may have committed a crime attracts qualified privilege. A false statement (malicious falsehood) attracts a remedy if made maliciously. Misfeasance in public office calls for an element of bad faith or recklessness. Malice is an essential ingredient of causes of action for the misuse of criminal or civil proceedings. In Calveley v Chief Constable of the Merseyside Police
[1989] 1 All ER 1025 at 1030, [1989] AC 1228 at 1238, Lord Bridge of Harwich observed that ‘where no action for malicious prosecution would lie, it would be strange indeed if an acquitted defendant could recover damages for negligent investigation’. This must be equally true of a person who has been suspected but not prosecuted.
78 This background accords ill with the submission that those responsible for the protection of a child against criminal conduct owe suspected perpetrators the duty suggested. The existence of such a duty would fundamentally alter the balance in this area of the law. It would mean that if a parent suspected that a babysitter or a teacher at a nursery or school might have been responsible for abusing her child, and the parent took the child to a general practitioner or consultant, the doctor would owe a duty of care to the suspect. The law of negligence has of course developed much in recent years, reflecting the higher standards increasingly expected in many areas of life. But there seems no warrant for such a fundamental shift in the long established balance in this area of the law . . .
INTERFERENCE WITH FAMILY LIFE
85 . . . Ultimately the factor which persuades me that, at common law, interference with family life does not justify according a suspected parent a higher level of protection than other suspected perpetrators is the factor conveniently labelled ‘conflict of interest’. A doctor is obliged to act in the best interests of his patient. In these cases the child is his patient. The doctor is charged with the protection of the child, not with the protection of the parent. The best interests of a child and his parent normally march hand-in-hand. But when considering whether something does not feel ‘quite right’, a doctor must be able to act single-mindedly in the interests of the child. He ought not to have at the back of his mind an awareness that if his doubts about intentional injury or sexual abuse prove unfounded he may be exposed to claims by a distressed parent.
86 This is not to suggest doctors or other health professionals would be consciously swayed by this consideration. These professionals are surely made of sterner stuff. Doctors often owe duties to more than one person; for instance, a doctor may owe duties to his employer as well as his patient. But the seriousness of child abuse as a social problem demands that health professionals, acting in good faith in what they believe are the best interests
of the child, should not be subject to potentially conflicting duties when deciding whether a child may have been abused, or when deciding whether their doubts should be communicated to others, or when deciding what further investigatory or protective steps should be taken. The duty they owe to the child in making these decisions should not be clouded by imposing a conflicting duty in favour of parents or others suspected of having abused the child.
87 This is not to say that the parents’ interests should be disregarded or that the parents should be kept in the dark. The decisions being made by the health professionals closely affect the parents as well as the child. Health professionals are of course fully aware of this. They are also mindful of the importance of involving the parents in the decision-making process as fully as is compatible with the child’s best interests. But it is quite a step from this to saying that the health professionals personally owe a suspected parent a duty sounding in damages.
88 The claimants sought to meet this ‘conflict of interest’ point by noting that the suggested duty owed to parents has the same content as the duty owed to the child: to exercise due skill and care in investigating the possibility of abuse. This response is not adequate. The time when the presence or absence of a conflict of interest matters is when the doctor is carrying out his investigation. At that time the doctor does not know whether there has been abuse by the parent. But he knows that when he is considering this possibility the interests of parent and child are diametrically opposed. The interests of the child are that the doctor should report any suspicions he may have and that he should carry out further investigation in consultation with other child care professionals. The interests of the parent do not favour either of these steps. This difference of interest in the outcome is an unsatisfactory basis for imposing a duty of care on a doctor in favour of a parent . . .
90 For these reasons I am not persuaded that the common law should recognise the duty propounded by Mr Langstaff. In principle the appropriate level of protection for a parent suspected of abusing his child is that clinical and other investigations must be conducted in good faith. This affords suspected parents a similar level of protection to that afforded generally to persons suspected of committing crimes.
91 This should be the general rule, where the relationship between doctor and parent is confined to the fact that the parent is father or mother of the
doctor’s patient. There may, exceptionally, be circumstances where this is not so. Different considerations may apply then. But there is nothing of this sort in any of these three cases.
92 A wider approach has . . . been canvassed. The suggestion has been made that, in effect, the common law should jettison the concept of duty of care as a universal prerequisite to liability in negligence. Instead the standard of care should be ‘modulated’ to accommodate the complexities arising in fields such as social workers dealing with children at risk of abuse: Fairgrieve, Andenas and Bell Tort Liability of Public Authorities in Comparative Perspective (2002) p 485. The contours of liability should be traced in other ways.
93 For some years it has been all too evident that identifying the parameters of an expanding law of negligence is proving difficult, especially in fields involving the discharge of statutory functions by public authorities. So this radical suggestion is not without attraction. This approach would be analogous to that adopted when considering breaches of human rights under the European Convention. Sometimes in human rights cases the identity of the defendant, whether the state in claims under the convention or a public authority in claims under the Human Rights Act 1998, makes it appropriate for an international or domestic court to look backwards over everything which happened. In deciding whether overall the end result was acceptable the court makes a value judgment based on more flexible notions than the common law standard of reasonableness and does so freed from the legal rigidity of a duty of care.
94 This approach, as I say, is not without attraction. It is peculiarly appropriate in the field of human rights. But I have reservations about attempts to transplant this approach wholesale into the domestic law of negligence in cases where, as here, no claim is made for breach of a convention right. Apart from anything else, such an attempt would be likely to lead to a lengthy and unnecessary period of uncertainty in an important area of the law. It would lead to uncertainty because there are types of cases where a person’s acts or omissions do not render him liable in negligence for another’s loss even though this loss may be foreseeable . . . Abandonment of the concept of a duty of care in English law, unless replaced by a control mechanism which recognises this limitation, is unlikely to clarify the law. That control mechanism has yet to be identified and introducing this protracted period of uncertainty is unnecessary, because claims may now bebrought directly against public authorities in respect of breaches of convention rights.
LORD RODGER OF EARL SFERRY: . . .
100 Harm which constitutes a ‘wrong’ in the contemplation of the law must, of course, be remedied. But the world is full of harm for which the law furnishes no remedy. For instance, a trader owes no duty of care to avoid injuring his rivals by destroying their long-established businesses. If he does so and, as a result, one of his competitors descends into a clinical depression and his family are reduced to penury, in the eyes of the law they suffer no wrong and the law will provide no redress—because competition is regarded as operating to the overall good of the economy and society. A young man whose fiancée deserts him for his best friend may become clinically depressed as a result, but in the circumstances the fiancée owes him no duty of care to avoid causing this suffering. So he too will have no right to damages for his illness. The same goes for a middle-aged woman whose husband runs off with a younger woman. Experience suggests that such intimate matters are best left to the individuals themselves. However badly one of them may have treated the other, the law does not get involved in awarding damages.
101 Other relationships are also important. We may have children, parents, grandparents, brothers, sisters, uncles and aunts—not to mention friends, colleagues, employees and employers—who play an essential part in our lives and contribute to our happiness and prosperity. We share in their successes, but are also affected by anything bad which happens to them. So it is—and always has been—readily foreseeable that if a defendant injures or kills someone, his act is likely to affect not only the victim but many others besides. To varying degrees, these others can plausibly claim to have suffered real harm as a result of the defendant’s act. For the most part, however, the policy of the law is to concentrate on compensating the victim for the effects of his injuries while doing little or nothing for the others. In technical language, the defendants owe a duty of care to the victim but not to the third parties, who therefore suffer no legal wrong . . .
Spring v Guardian Assurance plc House of Lords
[1994] 3 All ER 129
LORD GOFF
If so, whether such a duty will nevertheless be negatived because it would, if recognised, pro tanto undermine the policy underlying the defence of qualified privilege in the law of defamation
I think it desirable that I should first of all identify the nature of this policy objection. As I understand it, the objection is as follows. First of all, reference is made to the description of the policy underlying the defence of qualified privilege given by Lord Diplock in Horrocks v Lowe [1974] 1 All ER 662 at 669-670, [1975] AC 135 at 149, in the course of which he said:
`The public interest that the law should provide an effective means whereby a man can vindicate his reputation against calumny, has nevertheless to be accommodated to the competing public interest in permitting men to communicate frankly and freely with one another about matters with respect to which the law recognises that they have a duty to perform or an interest to protect in doing so. What is published in good faith on matters of these kinds is published on a privileged occasion. It is not actionable even though it be defamatory and turns out to be untrue.’
Second, it is suggested that the policy which underlies the defence of qualified privilege, viz that in the relevant circumstances men should be permitted to communicate frankly and freely with one another about all relevant matters, prevents the recognition of a duty of care owed by the giver of the reference to the subject of the reference. In this connection, reliance is
placed in particular upon decisions of the Court of Appeal of New Zealand in Bell-Booth Group Ltd v A-G [1989] 3 NZLR 148 and South Pacific Manufacturing Co Ltd v New Zealand Security Consultants and Investigations Ltd, Mortensen v Laing [1992] 2 NZLR 282 . . . Now I for my part accept that, as stated by Hallett J in Foaminol Laboratories Ltd v British Artid Plastics Ltd [1941] 2 All ER 393 at 399, ‘a claim for mere loss of reputation is the proper subject of an action for defamation, and cannot ordinarily be sustained by means of any other form of action . .
Furthermore, it is (with respect) understandable that, in the Bell-Booth case and the South Pacific case the New Zealand Court of Appeal rejected claims in negligence . . . In neither case was any question of assumption of responsibility to the plaintiffs before the court.
By way of contrast, in the English case of Lawton v BOC Transhield Ltd [1987] 2 All ER 608, [1987] ICR 7 Tudor Evans J held that an employer owed a duty of care to a former employee in respect of the preparation of a reference for him. However, on the facts of the case he held that there was no breach of duty; and in any event he gave no consideration to the impact of the law of defamation upon his decision that a duty was owed by the employer.
In these circumstances it is, I consider, necessary to approach the question as a matter of principle. Since, for the reasons I have given, it is my opinion that in cases such as the present the duty of care arises by reason of an assumption of responsibility by the employer to the employee in respect of the relevant reference, I can see no good reason why the duty to exercise due skill and care which rests upon the employer should be negatived because, if the plaintiff were instead to bring an action for damage to his reputation, he would be met by the defence of qualified privilege which could only be defeated by proof of malice. It is not to be forgotten that the Hedley Byrne duty arises where there is a relationship which is, broadly speaking, either contractual or equivalent to contract. In these circumstances, I cannot see that principles of the law of defamation are of any relevance.
It is true that recognition of a duty of care to an employee in cases such as the present, based on the Hedley Byrne principle, may have some inhibiting effect on the manner in which references are expressed, in the sense that it may discourage employers from expressing views such as those which are encouraged by r. 3.5(2) of the Lautro rules [the code of conduct of the insurance industry’s self-regulatory body, requiring reference to make ‘full and frank disclosure of all relevant matters . . .1. For my part, however, Isuspect that such an inhibition exists in any event. Employers may well, like many people, be unwilling to indulge in unnecessary criticism of their employees: hence the perceived necessity for r. 3.5(2). In all the circumstances, I do not think that we may fear too many ill effects from the recognition of the duty. The vast majority of employers will continue, as before, to provide careful references. But those who, as in the present case, fail to achieve that standard, will have to compensate their employees or former employees who suffer damage in consequence. Justice, in my opinion, requires that this should be done; and I, for my part, cannot see any reason in policy why that justice should be denied.
For these reasons I would allow the appeal; but I would nevertheless remit the matter to the Court of Appeal to consider the issue of the extent to which the damage suffered by the plaintiff was caused by the breach of duty of the defendants.
LORD LOWRY
The defendants . . . first argument is that to confer on the plaintiff a cause of action in negligence would distort and subvert the law of defamation in cases where the defence relied on is one of qualified privilege, that is, where, on an occasion when he has either a duty to communicate information or a legitimate interest of his own to protect, the defendant in good faith and without malice defames the plaintiff. I believe that the answer to this argument is that a person owes a general duty, subject to the principles governing the law of defamation and to the relationship, if any, between the defamer and the defamed, not to defame any other person, whereas a liability based on negligent mis-statement can exist only if (1) damage is foreseeable (and damage occurs) and (2) there is such proximity between the maker and the subject of the mis-statement as will impose a duty of care on the former for the protection of the latter. The existence of that foreseeability and that proximity between the plaintiff and the defendant is a justification, not for extending the liability for defamation by dispensing with the need for malice, but for bringing into play a different principle of liability according to which, in a restricted class of situations, a plaintiff can rely on negligence as the ingredient of the defendant’s conduct which is essential to the existence of that liability. I consider that in the instant case damage stemming from the defendants’ careless mis-statement when giving a reference was foreseeable and that the proximity between the defendants and the plaintiff imposed a
duty of care on the former for the protection of the latter . . . . . . I would allow this appeal . . .
Mitchell v Glasgow City Council House of Lords [2009] UKHL 11, [2009] 3 All ER 205
LORD HOPE OF CRAIGHEAD: . . .
2 The pursuers are the deceased’s widow and his daughter. They claim damages from the defenders for the loss, injury and damage which they suffered as a result of the deceased’s death. They base their case on two grounds. The first is negligence at common law. The second is that the defenders acted in a way that was incompatible with the deceased’s right to life under art 2 of the European Convention for the Protection of Human Rights and Fundamental Freedoms 1950 (as set out in Sch 1 to the Human Rights Act 1998) and was accordingly unlawful within the meaning of s 6(1) of the Human Rights Act 1998. On 30 June 2005 the Lord Ordinary, Lord Bracadale, dismissed the action: [2005] CSOH 84, 2005 SLT 1100. On 29 February 2008 an Extra Division (Lady Paton, Lord Reed and Lord Penrose) by a majority (Lord Reed dissenting) recalled the Lord Ordinary’s interlocutor and allowed a proof before answer on the pursuers’ case at common law. By a different majority (Lady Paton dissenting) it excluded from probation their averments that the defenders acted in a way that was incompatible with the deceased’s convention right: [2008] CSIH 19, 2008 SC 351. The defenders appeal to your Lordships against the allowance of a proof before answer. The pursuers cross-appeal against the exclusion from probation of their case under the Human Rights Act 1998 . . .
6 On 26 July 2001 the defenders wrote to Drummond inviting him to a meeting to be held on 31 July 2001. He was told that the purpose of this meeting was to discuss the incident of 10 July 2001 and the notice of proceedings for recovery of possession that had been served on him in January as they were considering issuing a further notice. Drummond attended the meeting on 31 July 2001, which began at 2pm. The defenders
told him that a fresh notice of proceedings to recover possession would be served on him. They said that they would continue to monitor complaints about his behaviour. They told him that continued anti-social behaviour could result in his eviction. Drummond lost his temper and became abusive. He then apologised to the defenders’ staff for having lost his temper. After leaving the meeting Drummond returned to Bellahouston Drive. At about 3pm he assaulted the deceased and inflicted the injuries which caused his death.
7 The defenders did not warn the deceased that they had summoned Drummond to the meeting that was held on 31 July 2001. Nor did they make any attempt to warn either him or the police about his behaviour at the meeting or of any possible risk of retaliation against the deceased as a result of it. The pursuers’ case is that if he had been given these warnings the deceased would not have died. He would have been alerted to the fact that Drummond was likely to be angry and violent. He would have been on the look out and taken steps to avoid him. The pursuers also allege that the deceased’s death was caused by the defenders’ failure to act on the repeated complaints by instituting proceedings against Drummond to recover possession by October 1999. But they gave notice in their written case that they did not intend to maintain that argument, which the Lord Ordinary had rejected. It has been held in a series of cases that a local authority is not normally liable for errors of judgment in the exercise of its discretionary powers under a statute: see Hussain v Lancaster City Council [1999] 4 All ER 125, [2000] QB 1; X (Minors) v Bedfordshire CC, M (a minor) v Newham London BC, E (a minor) v Dorset CC [1995] 3 All ER 353, [1995] 2 AC 633; D v East Berkshire Community Health NHS Trust, K v Dewsbury Healthcare NHS Trust, K v Oldham NHS Trust [2005] UKHL 23 at [82], [2005] 2 All ER 443 at [82], [2005] 2 AC 373, per Lord Nicholls of Birkenhead. So it is the allegations of a failure to give warnings that, for the purposes of this appeal, form the basis of the pursuers’ case against the defenders at common law and under the statute . . .
..
The case at common law
14 The issue of principle on which the defenders challenge the pursuers’ common law case was put into sharp focus by Mr McEachran at the outset of his argument. He said that there had been an operational failure by the defenders in circumstances where it was reasonably foreseeable that harm would flow to the deceased if they did not warn him about their meeting with Drummond. He stressed that his case was presented on a very narrow front. All he was saying was that there was a duty to warn, and that this duty arose because harm to the deceased was reasonably foreseeable. Beguilingly simple though this submission was, it raises fundamental issues about the scope of the duty that is owed to third parties by landlords, whether in the public or the private sector, whose tenants are abusive or violent to their neighbours.
15 Three points must be made at the outset to put the submission into its proper context. The first is that foreseeability of harm is not of itself enough for the imposition of a duty of care: see, for example, Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294 at 306-307, [1970] AC 1004 at 1037¬1038, per Lord Morris of Borth-y-Gest; Smith v Littlewoods Organisation Ltd [1987] 1 All ER 710 at 714, [1987] AC 241 at 251 (reported in the Session Cases as Maloco v Littlewoods Organisation Ltd 1987 SC (HL) 37 at 59), per Lord Griffiths; Hill v Chief Constable of West Yorkshire [1988] 2 All ER 238 at 241, [1989] AC 53 at 60, per Lord Keith of Kinkel. Otherwise, to adopt Lord Keith’s dramatic illustration in Yuen Kun-yeu v A-G of Hong Kong [1987] 2 All ER 705 at 710, [1988] AC 175 at 192, there would be liability in negligence on the part of one who sees another about to walk over a cliff with his head in the air, and forebears to shout a warning. The second, which flows from the first, is that the law does not normally impose a positive duty on a person to protect others. As Lord Goff of Chieveley explained in Smith v Littlewoods Organisation Ltd [1987] 1 All ER 710 at 729, [1987] AC 241 at 271, the common law does not impose liability for what, without more, may be called pure omissions. The third, which is a development of the second, is that the law does not impose a duty to prevent a person from being harmed by the criminal act of a third party based simply upon foreseeability: Smith v Littlewoods Organisation Ltd [1987] 1 All ER 710 at 730-735, [1987] AC 241 at 272-279, per Lord Goff…
17 In this case, as Mr McEachran pointed out, there was a relationship of proximity between the deceased and the defenders. He was their tenant, and so too was Drummond who lived next door. The defenders had accepted that they had a responsibility for the situation that had arisen as the parties’ landlords. This was why they had decided to take steps to address Drummond’s antisocial behaviour. That being so, he said, the only question was whether harm to the deceased was reasonably foreseeable as a result of
the action which they were taking. He referred to passages in the speech of Lord Mackay of Clashfern in Smith v Littlewoods Organisation Ltd [1987] 1 All ER 710 at 719-722, [1987] AC 241 at 258-261, which indicated that the test was whether in all the circumstances a reasonable person in the position of the defenders would be bound to anticipate that there was a real risk that the type of damage that resulted was likely to occur. Liability, he suggested, depended on the degree to which the harmful act was reasonably foreseeable: [1987] 1 All ER 710 at 721, [1987] AC 241 at 261.
18 There are other indications in the authorities that a high degree of likelihood of harm may be an appropriate limiting factor: see Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294 at 300, [1970] AC 1004 at 1030, per Lord Reid. In Hartwell v A-G of the British Virgin Islands [2004] UKPC 12 at [21], [2004] 4 LRC 458 at [21], [2004] 1 WLR 1273, Lord Nicholls said that the concept of reasonable foreseeability embraced a wide range of degrees of possibility, from the highly probable to the possible but highly improbable. As the possible adverse consequences of carelessness increase in seriousness, so will a lesser degree of likelihood of occurrence suffice to satisfy the test of reasonable foreseeability. In that case the police authorities had entrusted a gun to an officer who was still on probation and had shown signs of instability and unreliability. As Lord Nicholls explained at [32], loaded hand guns are dangerous weapons and the serious risks if a gun is handled carelessly are obvious. On the other hand the precautionary steps required of a careful person are unlikely to be particularly burdensome. Where such an article is handed over, the class of persons to whom the duty of care is owed is wide and the standard of care required is high.
19 It is not difficult to see that a duty of care was owed in the situation that arose in Hartwell v A-G of the British Virgin Islands. But it is not so easy to reconcile an approach that relies generally on the likelihood of harm with the general rule that a person is under no legal duty to protect another from harm. Addressing this point in Smith v Littlewoods Organisation Ltd [1987] 1 All ER 710 at 735, [1987] AC 241 at 279, Lord Goff said:
`I wish to emphasise that I do not think that the problem in these cases can be solved simply through the mechanism of foreseeability. When a duty is cast on a person to take precautions against the wrongdoing of third parties, the ordinary standard of foreseeability applies; and so the possibility of such wrongdoing does not have to be very great before liability is imposed . . . Per contra, there is at present no general duty at
common law to prevent persons from harming others by their deliberate wrongdoing, however foreseeable such harm may be if the defender does not take steps to prevent it.
20 Lord Reed [dissenting in the court below in Mitchell] examined this issue with great care, and concluded that Lord Goff’s analysis of the problem that arises in cases where harm is caused by a third party’s wrongdoing is to be preferred: 2008 SC 351 (para 94). The scope of the duty in cases where the risk has been created by the defender, such as Hartwell v A-G of the British Virgin Islands [2004] 4 LRC 458, [2004] 1 WLR 1273, may be capable of being determined by assessing the degree of likelihood of injury. But I agree with Lord Reed that Lord Goff’s approach is the one that should be applied to the problem raised by this case. We are dealing here with an allegation that it was the defenders’ duty to prevent the risk of harm being caused to the deceased by the criminal act of a third party which they did not create and had not undertaken to avert. The point at issue is whether the defenders were under a duty in that situation to warn the deceased that there was a risk that Drummond would resort to violence. I agree that cases of this kind which arise from another’s deliberate wrongdoing cannot be founded simply upon the degree of foreseeability. If the defender is to be held responsible in such circumstances it must be because, as Lord Reed suggests in para 97, the situation is one where it is readily understandable that the law should regard the defender as under a responsibility to take care to protect the pursuer from that risk.
Fair, just and reasonable
21 As the cases have developed it has become clear that Lord Goff was right to insist that something more than foreseeability is required, and answers have been provided to the question what that should be. As to what it is, in Caparo Industries plc v Dickman [1990] 1 All ER 568 at 573-574, [1990] 2 AC 605 at 617-618, Lord Bridge of Harwich referred to a series of decisions of the Privy Council and of this House which had emphasised the inability of any single general principle to provide a practical test which can be applied to every situation to determine whether a duty of care is owed, and if so, what is its scope . . .
22 [Having referred to the threefold test in laid down in Caparo (p. 39,
ante) and to Lord Bridge’s acknowledgment in Caparo that ‘proximity’ and `fairness’ were not much more than ‘convenient labels’, LORD HOPE continued:] [Lord Bridge in Caparo] said that the law had moved in the direction of attaching greater significance to the more traditional categorisation of distinct and recognisable situations as guides to the existence, the scope and the limits of the various duties of care which the law imposes. These are cases where, as Lord Reed suggested in para 97, the imposition of a duty of care is readily understandable.
23 It is possible to identify situations of that kind. One is where the defender creates the source of danger, as in Haynes v Harwood [1935] 1 KB 146, [1934] All ER Rep 103, where a van drawn by horses in a crowded street was left unattended and bolted when a boy threw a stone at them. Hartwell v A-G of the British Virgin Islands [2004] 4 LRC 458, [2004] 1 WLR 1273 may be seen as a case of this kind. Another is where the third party who causes damage was under the supervision or control of the defender, as in Home Office v Dorset Yacht Co Ltd [1970] 2 All ER 294, [1970] AC 1004 where the Borstal boys who escaped from the island and damaged the plaintiff’s yacht were under the control and supervision of the officers who had retired to bed and left the boys to their own devices. Another, which is of particular significance in this case, is where the defender has assumed a responsibility to the pursuer which lies within the scope of the duty that is alleged: Elguzouli-Daf v Metropolitan Police Comr, McBrearty v Ministry of Defence [1995] 1 All ER 833 at 843, [1995] QB 335 at 350, per Steyn LJ; Swinney v Chief Constable of Northumbria Police Force [1996] 3 All ER 449, [1997] QB 464. Other examples of that kind which may be cited are Stansbie v Troman [1948] 1 All ER 599, [1948] 2 KB 48, where a decorator who was working alone in a house went out leaving it unlocked and it was entered by a thief while he was away . . .
[LORD HOPE then set out other examples and went on to reject the argument that the Caparo test did not apply to a case like Mitchell which involved personal injury (and see further note 2, p. 46, ante) and also the argument that the test was not part of the law in Scotland. He continued:]
This case
26 Lord Bridge was careful to emphasise in Caparo Industries plc v Dickman [1990] 1 All ER 568, [1990] 2 AC 605 that the question to which the three-fold test must be directed is not limited to the question whether there is a duty
of care at all. It is to be applied to the question whether the situation gives rise to a duty of care of a given scope. It is the scope of the duty that lies at the centre of the argument in this case. The defenders do not deny that they owed a duty of care to their tenants in the exercise of their contractual duties as landlords, it having been accepted that this does not extend to the exercise of discretionary powers under the statute: Hussain v Lancaster City Council [1999] 4 All ER 125, [2000] QB 1. But this case falls outside the ambit of their contractual duty. In short the question is whether, acknowledging that the defenders were the deceased’s neighbour’s landlords, that relationship was such that it is fair, just and reasonable that they should be held liable in damages for the omissions to warn that are relied on in this case. As Taylor LJ observed in the Court of Appeal in Caparo Industries plc v Dickman [1989] 1 All ER 798 at 821, [1989] QB 653 at 703, the question is one of fairness and public policy.
27 The assertion that there was a duty to warn is deceptively simple. But the implications of saying that there was a duty to warn in this case are complex and far-reaching. This, it may be said, is a clear case where there had been threats to kill and Drummond’s behaviour suggested that, if provoked, he might give effect to them. But if there was a duty to warn in this case, must it not follow that there is a duty to warn in every case where a social landlord [an aspect of Scottish law involving some security of tenure for tenants] has reason to suspect that his tenant may react to steps to address his anti-social behaviour by attacking the person or property of anyone he suspects of informing against him? And if social landlords are under such a duty, must social workers and private landlords not be under the same duty too? In this case it is said that the duty was owed to the deceased. But others in the neighbourhood had complained to the defenders about Drummond’s behaviour. Was the duty to warn not owed to them also? It is said that there was a duty to keep the deceased informed of the steps that they proposed to take against Drummond, and in particular to warn him that a meeting had been arranged for 31 July. This suggests that the defenders would have had to determine, step by step at each stage, whether or not the actions that they proposed to take in fulfilment of their responsibilities as landlords required a warning to be given, and to whom. And they would have had to defer taking that step until the warning had been received by everyone and an opportunity given for it to be acted on. The more attentive they were to their ordinary duties as landlords the more onerous the duty to warn would become.
28 These problems suggest that to impose a duty to warn, together with the risk that action would be taken against them by anybody who suffered loss, injury or damage if they had received no warning, would deter social landlords from intervening to reduce the incidence of anti-social behaviour. The progress of events in this case shows that the defenders were doing their best to persuade Drummond to stop abusing his neighbours. These attempts might have worked, as no doubt they have done in other cases. Far better that attempts should be made to cure these problems than leave them unsolved or to be dealt with, inevitably after the event, by the police. As in the case of the police, it is desirable too that social landlords, social workers and others who seek to address the many behavioural problems that arise in local authority housing estates and elsewhere, often in very difficult circumstances, should be safeguarded from legal proceedings arising from an alleged failure to warn those who might be at risk of a criminal attack in response to their activities. Such proceedings, whether meritorious or otherwise, would involve them in a great deal of time, trouble and expense which would be more usefully devoted to their primary functions in their respective capacities: see Lord Brown of Eaton-under-Heywood’s observations in Van Colle v Chief Constable of Hertfordshire Police [2008] 3 All ER 977 at [133], [2009] 1 AC 225. There are other considerations too. Defensive measures against the risk of legal proceedings would be likely to create a practice of giving warnings as a matter of routine. Many of them would be for no good purpose, while others would risk causing undue alarm or reveal the taking of steps that would be best kept confidential.
29 As I have already noted, in Caparo Industries plc v Dickman [1989] 1 All ER 798 at 821, [1989] QB 653 at 703, Taylor LJ summed the matter up by saying that fairness and public policy were the tests. Public policy was at the root of the decision in Hill v Chief Constable of West Yorkshire [1988] 2 All ER 238, [1989] AC 53 about the scope of the duty owed by the police which the House followed in Brooks v Metropolitan Police Comr [2005] UKHL 24, [2005] 2 All ER 489, [2005] 1 WLR 1495 and again in Smith v Chief Constable of Sussex Police: see,Van Colle v Chief Constable of Hertfordshire Police [2008] 3 All ER 977, [2009] 1 AC 225. I would take the same approach to this case. The situation would have been different if there had been a basis for saying that the defenders had assumed a responsibility to advise the deceased of the steps that they were taking, or in some other way had induced the deceased to rely on them to do so. It would then have been
possible to say not only that there was a relationship of proximity but that a duty to warn was within the scope of that relationship. But it is not suggested in this case that this ever happened, and Mr McEachran very properly accepted that he could not present his argument on this basis. I would conclude therefore that it would not be fair, just or reasonable to hold that the defenders were under a duty to warn the deceased of the steps that they were taking, and that the common law case that is made against them is irrelevant. I would also hold, as a general rule, that a duty to warn another person that he is at risk of loss, injury or damage as the result of the criminal act of a third party will arise only where the person who is said to be under that duty has by his words or conduct assumed responsibility for the safety of the person who is at risk.
Lockwood v Ireland
[2010] IEHC 430JUDGMENT of Kearns P. delivered the 10th day of December, 2010
The plaintiff was the complainant in a prosecution for rape brought against J.W. by the Director of Public Prosecutions. The accused was arrested on the 22nd July, 1999 and the case was ultimately heard by the Central Criminal Court in May, 2003. It emerged during the course of the evidence at trial that, as a consequence of the unlawful arrest of J.W., certain admissions made by J.W. whilst in garda custody could not be placed before the jury. This difficulty arose because J.W. was arrested pursuant to the common law power of arrest for rape. However, at the time of the arrest, s. 3 of the Criminal Law Act 1997 had abolished the distinction between felonies and misdemeanours with the consequence that a garda member no longer had any common law power to arrest in respect of felonies. Thus whilst J.W. could have been arrested under s. 4 of the Criminal Justice Act 1984, this power was not exercised by the arresting garda on the occasion of the arrest. The learned trial judge (O’Higgins J.) thus held that J.W. was held in illegal custody in breach of his constitutional right to liberty and that any evidence obtained during the course of this illegal detention was, as a result, inadmissible in the proceedings before the Court.
The plaintiff understandably felt extremely aggrieved that, having been subjected to rape, and having undergone the ordeal of a trial in which she gave evidence, the prosecution’s case collapsed as a result of such a basic error on the part of the arresting garda.
As a result these proceedings were commenced by plenary summons on the 26th May, 2006. In the proceedings, the plaintiff claims damages arising from the alleged negligence and breach of duty of the defendants, notably the servants or agents of the third named defendant, in invoking a power of arrest that did not exist at the time of the purported arrest. The plaintiff asserts that the State has failed to vindicate her constitutional right to bodily integrity and to ensure that justice was achieved in her case.
Following the bringing of the proceedings, the defendants brought a motion to this Court for an order directing the trial of preliminary issues which effectively request that the Court should dismiss these proceedings on two grounds as follows:-
(1) The time limit for bringing the claim in question is statute barred by virtue of the Statute of Limitations 1957 as amended; and
(2) In the absence of mala fides in the performance of their investigative and prosecutorial functions, the Garda Síochána cannot be held liable in damages to the plaintiff in circumstances such as arose in the present case.
SUBMISSIONS MADE ON BEHALF OF THE PLAINTIFF
It was submitted on behalf of the plaintiff that her cause of action only accrued on the 28th May, 2003, when it became apparent to her for the first time during the course of the trial that the common law power of arrest had been wrongfully exercised in this case. She could not have known she had a cause of action until then and as the proceedings were issued within three years of that event, they could not be considered to be statute barred.
In relation to any supposed immunity from suit on the part of the Garda Síochána, counsel on behalf of the plaintiff submitted that where a citizen’s constitutional rights are infringed, a right to seek damages for such a breach exists when no other effective or sufficient remedy may be found (see The State (Quinn) v. Ryan [1965] I.R. 70; Byrne v. Ireland [1972] I.R. 241; and Meskell v. Córas Iompair Éireann [1973] I.R. 121).
Counsel further submitted that there was no doctrine of immunity available to the Garda Síochána which would afford a shield to them in all circumstances. It was submitted that the dictum of Costello P. in W. v. Ireland (No. 2) [1997] 2 IR 141 had been overtaken by more recent cases, including D.P.P. v. Cash [2007] IEHC 108; Hanahoe v. Hussey [1998] 3 IR 69; Gray v. Minister for Justice [2007] 2 IR 654; and Shortt v. Commissioner of An Garda Síochána [2007] 4 IR 587. Counsel for the plaintiff also placed reliance upon the recent decision of the European Court of Human Rights in McFarlane v. Ireland (no. 31333/06, 10 September 2010) as supporting the proposition that a claim for damages was sustainable on facts such as those which arose in the instant case.
A number of English cases were also opened to the Court, including Desmond v. The Chief Constable of Nottinghamshire Police [2009] EWHC 2362 (QB). While successive decisions of the House of Lords beginning with Hill v. Chief Constable of West Yorkshire [1989] AC 53 had held, as a matter of public policy, that police were immune from actions for negligence in respect of their activities in the investigation and suppression of crime, Wyn Williams J. observed as follows in Desmond at para. 42:-
“It seems to me that the following principles can be distilled from the authorities cited above. First, the police are immune from an action in negligence at the suit of an individual if the damage complained of was caused by an act or omission in furtherance of the investigation or suppression of crime (the core principle in Hill). Second, if the core principle is not engaged a duty of care may be imposed upon the police upon ‘ordinary principles’ if the police are directly involved in causing actionable damage to an individual. Third, the police can be held liable in negligence for damage (including pure economic loss) if they have assumed a responsibility to the individual in question to act with reasonable care.”
The plaintiff relied on this passage as supporting the proposition that the fact of gross negligence in the instant case was such as would entitle her to compensation.
Finally, counsel argued that in the case of Osman v. United Kingdom [1998] 29 EHRR 245, the European Court of Human Rights held that an immunity which the British police enjoyed from suit was incompatible with the guarantee of a fair hearing provided by Article 6 of the European Convention on Human Rights. Counsel further asserted that the present case was not one which could be seen as having the effect of encouraging defensive policing, but was instead a straightforward instance of negligence principles which every garda about to effect an arrest must be presumed to know. Nor were the present proceedings a collateral attack upon the verdict or acquittal. The plaintiff was not seeking to overturn the verdict in the criminal proceedings, but rather to obtain a remedy from the Court in respect of the State’s failure to ensure a proper arrest and trial.
SUBMISSIONS ON BEHALF OF THE DEFENDANTS
Counsel on behalf of the defendants adverted to three relevant dates in relation to the argument that the plaintiff’s claim was statute barred. The date of arrest of the accused was the 22nd July, 1999. The ruling of the Central Criminal Court to the effect that the arrest was unlawful was made on the 28th May, 2003. The plenary summons only issued on the 26th May, 2006. It was submitted on behalf of the defendants that time should be deemed to run from the date of the impugned arrest in 1999. If that contention was correct, the present proceedings had been brought outside the basic limitation period for a civil negligence claim.
In relation to the potential liability to suit of the Garda Síochána, it was the defendants’ submission that no liability arose because of the absence of a duty of care to the plaintiff in the particular circumstances rather than any immunity. Counsel submitted that the observations of Clarke J. in Osbourne v. Minister for Justice [2009] 3 IR 89 made it clear that, absent mala fides, a person against whom a power of arrest or search is exercised cannot successfully sue the gardaí for damages.
Counsel also noted various dicta in Glencar Exploration plc v. Mayo County Council (No. 2) [2002] 1 IR 84; Kennedy v. Law Society of Ireland (No. 4) [2005] 3 IR 228; and Keating v. Crowley [2010] IESC 29 in support of the argument that no cause of action for negligence lies against a public body in the absence of mala fides. A claim based on a complaint that there had been a failure to secure a conviction of an accused person was an entirely novel claim and it was submitted that no duty of care to prevent such an occurrence taking place could be said to exist.
Counsel for the defendants argued that, while every citizen is entitled to a fair system for the investigation of criminal offences, this could never amount to a guarantee of a perfect system, or one that would be error free. Equally, the State could not guarantee that every person who commits a crime would be successfully convicted at the end of a criminal trial. In this regard, counsel stressed that recognition of this fact was evidenced by the fact that there is a tort of malicious prosecution but not a tort of negligent prosecution.
Counsel also relied upon the judgment of Costello P. in W. v. Ireland (No. 2) [1997] 2 IR 141 as providing compelling public policy reasons why the Court should conclude that no existence of a duty of care arose as the result of the particular performance of a public function. Such had been the view of the House of Lords in Hill v. Chief Constable of West Yorkshire [1989] AC 53 and counsel submitted that the core principle of that case represents the law in this jurisdiction and had not been diluted by subsequent case law. In fact, the principles established in Hill were upheld by the House of Lords in Brooks v. Commissioner of Police of the Metropolis & Others [2005] 1 WLR 1495. In that case, the House of Lords held that, as a matter of public policy, police did not generally owe a duty of care to victims or witnesses in respect of their activities when investigating crime.
While it was true that the case of Osman v. United Kingdom [1998] 29 EHRR 245 suggested that striking out a tort claim against the police amounted to a violation of Article 6 of the European Convention on Human Rights, the decision in question was less than authoritative. In Z. & Ors. v. The United Kingdom [2002] 34 EHRR 3, the same court accepted that its ruling in Osman was based on an understanding of the law of negligence “which has to be reviewed in the light of the clarifications subsequently made by the domestic courts and notably by the House of Lords”.
Counsel concluded by noting that the law did not purport to deprive the plaintiff of a remedy, given that at all times it was open to the plaintiff to sue the accused directly for damages in a civil case.
DISCUSSION AND DECISION
The recent decision of the High Court (Clarke J.) in Osbourne v. Minister for Justice [2009] 3 IR 89 is of particular interest in determining whether or not a cause of action arises against the Garda Síochána in the absence of mala fides in the performance of their duties and functions. In that case, Clarke J. stated (at pp. 96-97):
“While it (The People (Attorney General) v. O’Brien [1965] I.R. 142) is concerned with the admissibility of evidence there is no reason, in my view, not to apply the overriding principle to the question of the consideration of any other consequences of reliance upon an invalid warrant. I am therefore satisfied that no claim in damages (whether for breach of constitutional rights or in tort) can be brought in respect of actions taken on foot of the warrant which though apparently valid was technically infirm, but was not relied upon in circumstances which amounted to, as Walsh J. put it in O’Brien, a ‘deliberate or conscious violation’ of the rights concerned. There could, of course, be a deliberate or conscious violation of rights where a false basis was put forward for obtaining the warrant or where a basis was put forward which, while correct on the facts, was one which the person seeking the warrant knew did not justify the grant of the warrant. Furthermore it is implicit from the judgments in O’Brien that reliance on a warrant which is subject to a technical defect but where that defect was known, prior to the execution of the warrant, by those involved in its execution might also amount to a deliberate or conscious violation of rights. Such an overall view of the entitlement to damages arising from the consequences of the execution of a warrant which is technically defective is, in my view, consistent with the jurisprudence of the courts in the analogous area of breach of statutory duty by officials or others charged with carrying out public functions. In such circumstances it is now well settled that damages do not arise in the absence of a deliberate and knowing breach of statutory obligation.”
In Kennedy v. The Law Society (No. 4) [2005] 3 IR 228, the Supreme Court applied the ruling in Glencar Exploration plc v. Mayo County Council (No. 2) [2002] 1 IR 84 to restate that, as a general rule there is no remedy in damages for an ultra vires act by a local authority outside of a claim for misfeasance in public office. As Geoghegan J. stated in the Supreme Court at p. 259 of his judgment:-
“As a general proposition, it can safely be said that, apart from exceptional circumstances, a body such as the first respondent, carrying out a public function in pursuance of a public duty, is not liable to a private individual in tort unless the authority, in so acting, has committed the tort of misfeasance in public office. I will be explaining this tort in more detail later on in this judgment but subjective mala fides is an essential feature of it. To allow damages to be awarded for breach of an alleged duty of care owed to the individual on the basis of what a reasonable person might have done (and therefore an objective test) would be to undermine the clear limits attached to the tort of misfeasance in public office.”
The case of W. v. Ireland (No. 2) [1997] 2 IR 141 also considered the nature of the duty of care to victims of crime. In that case the plaintiff and members of her family were victims of sexual abuse perpetrated by Fr. Brendan Smith. The offences were alleged to have been committed by the accused in Northern Ireland between 1982 and 1987. Extradition warrants had been forwarded from the authorities in Northern Ireland to the Garda Commissioner for execution. However, the Attorney General was required to give a direction that the Commissioner not execute the warrants unless the Attorney General considered there was a clear intention to prosecute and such an intention was founded on sufficient evidence as required by the Extradition Act 1965 as amended. The Court held that the Extradition Acts imposed no common law duty of care on the Attorney General in relation to the plaintiff. Furthermore, it was held that no statutory duty was imposed upon the Attorney General by virtue of the Extradition Acts in relation to the victims of crimes referred to in the warrant. At p. 160 of his judgment, Costello P. stated:-
“There are further compelling reasons why, in the public interest, the duty claimed by the plaintiff in this action should not be allowed. If a duty under the Act of 1965 exists it must logically follow (a) that the Attorney General would be under a similar duty in respect of any prosecutorial functions conferred on him by s. 5 of the Prosecution of Offences Act 1974 and (b) that in exercising his prosecutorial functions under that Act, the Director of Public Prosecutions would owe a like duty to all victims of crimes in the cases in which he is considering the institution of prosecution. Because of the inhibiting effect on the proper exercise by the Attorney General and the Director of Public Prosecutions of their prosecutorial functions, it would be contrary to the public interest that a duty of care at common law be imposed on them. So to conclude is not to submit to a ‘flood gates’ argument of doubtful validity, it is to accept the logical consequences, should the duty of care at common law be imposed in the execution by the Attorney General of his functions under the Act of 1965.”
The Court thus held that even if there had been a sufficient relationship of proximity and even if the kind of injury of which the plaintiff complained was reasonably foreseeable, it would be contrary to public policy to impose a duty of care on the Attorney General. Costello P. was at pains to point out in his judgment that the function conferred on the Attorney General by the statute created no relationship of any sort between him and the victims of crime referred to in the warrants under consideration. Costello P. was satisfied that it would be contrary to public policy to impose on the Attorney General a duty of care towards the plaintiff’s victims. Nor was there any constitutional duty to so do because the exigencies of the common good justified the court in declining to grant to the plaintiff a claim for damages for breach of duty not to infringe a right to bodily integrity in those particular circumstances.
I am satisfied that no action arises in the circumstances of this case for negligence against the gardaí in the absence of mala fides. I am satisfied also that within tort law a duty of care does not arise such as would create an entitlement to damages arising from the manner in which the gardaí conduct an investigation. As Barrington J. pointed out in McDonnell v. Ireland [1998] 1 I.R. 134 (at p. 148):
“[C]onstitutional rights should not be regarded as wild cards which can be played at any time to defeat all existing rules. If the general law provides adequate cause of action to vindicate a constitutional right it appears to me that the injured party cannot ask the court to devise a new and different cause of action.”
It was quite clear in the present case that there had been no mala fides and thus no cause of action in negligence. Therefore, there could be no basis for creating a cause of action based on alleged infringement of constitutional rights. As Murray C.J. pointed out in Keating v. Crowley [2010] IESC 29:-
“It is undoubtedly the case that in certain circumstances the State is liable to pay compensation to individuals for breach of their constitutional rights. This may be particularly so when the State at the time the damage was caused, was acting unlawfully and with mala fides or in misfeasance of public office.”
Given that it is my view that a claimant must establish mala fides to bring her claim within the law of tort within this jurisdiction, I am satisfied to conclude that no duty of care arises in respect of bona fide actions and decisions carried out by An Garda Síochána in the course of a criminal investigation and/or prosecution. Any other view would have quite alarming consequences. One might begin by enquiring where the duty of care would begin or end. Would the victim of a crime, such as that perpetrated on the plaintiff in the present case, be the only person with an entitlement to sue, or would any such entitlement extend to immediate members of her family or perhaps to some person who might have been a witness in the trial or a witness to the event itself? By the same token, the inhibiting nature of any such duty would effectively cripple the capacity of An Garda Síochána, or any other police force for that matter, to carry out its duties effectively and with expedition. It would be unacceptable that those charged with responsibility for the investigation and prosecution of crime should have to take legal advice at every hand’s turn in respect of every step in the criminal process. Any such approach would simply render the present system, struggling as it is with the multiple obligations imposed on the Garda Síochána in respect of those suspected of crime, to constraints of unimaginable proportions.
I have no hesitation therefore in granting the relief sought by the defendants in respect of this particular issue and holding that the plaintiff’s claim should be dismissed.
Insofar as the Statute of Limitations point is concerned, I would hold with the plaintiff’s contention that the clock could not be deemed to have commenced to run on any cause of action she might have had until such time as the plaintiff became aware of the particular error which gave rise to her complaint.
Smyth v Commissioner of An Garda Síochána [2013] IEHC 209JUDGMENT of Ms. Justice Dunne delivered the 1st day of February 2013
The applicant in this case was born on the 28th June, 1986 and is now 26 years of age. It was an ambition of the applicant to become a member of the Irish army and to that end he applied for a traineeship as a three star private in the Defence Forces via its website in August 2010. Ultimately, on the 5th October, 2011, the applicant, having been through a number of steps in furtherance of his ambition, was informed that as he would be over the age of 25 on the enlistment date of the 14th November, 2011, he would not be recruited as a member of the Defence Forces.
As a consequence, the applicant has brought an application for judicial review seeking the following reliefs:-
“1. A declaration that there was a binding contract between the applicant and the respondents made on the 4th October, 2011, when the applicant accepted the offer of a traineeship as a three star private in the Defence Forces;
2. An order of certiorari by way of application for judicial review of the purported decision of the respondents on the 5th October, 2011, to rescind the said contract and or withdraw the offer of a traineeship as a three star private in the Defence Forces;
3. A declaration that the requirement that recruits to the Defence Forces be under that age of 25 years on the date of enlistment is unlawful;
4. If necessary, an order quashing the requirement of the respondents that recruits to the Defence Forces be under the age of 25 years on the date of enlistment;
5. A declaration that s. 37(5) of the Employment Equality Act 1998, does not apply to recruitment to the ranks of the Defence Forces;
6. If necessary, an order of specific performance of the contract between the applicant and the respondents;
7. Further or in the alternative damages for loss and damage suffered by the applicant.”
A number of ancillary reliefs were sought.
I do not propose to set out all of the grounds upon which relief was sought but it would be helpful to set out some of the grounds relied on by the applicant. The first relief sought by the applicant relates to an alleged breach of contract and the grounds relied on are as follows:-
“The respondents made an unconditional offer of employment as a three star private in the Defence [Forces] on the 4th October, 2011, to the applicant after a formal process in which the applicant had completed an application form and a medical examination. The offer of employment was made to the applicant by a servant or agent of the respondents who was duly authorised so to do. The offer was formally communicated to the applicant and the applicant unambiguously accepted the offer on the terms it was made. Pursuant to the agreement the applicant then notified his employers that he would be resigning from his job in order to take up the position in the Defence Forces (although the applicant has subsequently been able to retrieve employment). Since the 5th October, 2011, when the respondents purported to withdraw the offer and/or rescind the agreement the respondents have failed and/or refuse to acknowledge their obligations to the applicant.”
The grounds for reliefs 2, 3 and 4 are set out collectively. They are as follows:-
“(a) There was no valid or lawful reason to purport to rescind the contract and/or offer.
(b) The purported rescission of the said contract and/or withdrawal of the offer on the 5th October, 2011, constituted a breach of contract to which the parties had bound themselves. The reason advanced on behalf of the respondents is the mistaken and/or incorrect belief (which the applicant says is in any event not lawfully permissible as a reason) that there is a rule or regulation that persons such as the applicant must be under 25 years of age at the date of enlistment (the applicant’s date of birth is the 28th June, 1986).
(c) …
(d) Secondly, the stipulation that recruits be 25 years or more is in clear breach of s. 8(1) of the Employment Equality Act 1988, which prohibits discrimination by an employer against a prospective employee in relation to inter alia access to employment or training for employment. The discrimination is of a kind included in s. 6(2)(f) of the said Act, and which is referred to in the provision as “the age ground”.
(e) The reference to the upper age limit of 25 years was stated to offend against the European Directive on equal treatment in employment and education (Directive 2000/78/EC). Article 2.2(a) of the European Directive on equal treatment in employment and education states that ‘direct discrimination shall be taken to occur where one person is treated less favourably than another is, has been or would be treated in a comparable situation, on any grounds referred to in Article 1.’
(f) The decision to withdraw the offer of employment to the applicant on age grounds runs counter to the recruitment guidelines contained in the Defence Forces policy document – dated November 2007 – and entitled Equality, Diversity and Equally Status Policies.
(g) There is no justification – objective or otherwise – for an upper age limit of 24 years in the Defence forces.
(h) To deprive the applicant of a position in the Defence Forces on the grounds that he is 25 years of age is to breach his constitutional rights to equality and to earn a livelihood contrary to Articles 40.1 and 4.3.1 of Bunreacht na hEireann.
(i) The upper age limit was never drawn to the attention of the applicant at any stage during the lengthy and rigorous course of the application process.”
The other reliefs sought are such that the grounds for same are self evident and it is not necessary to set them out in detail at this point.
Leave to apply for judicial review was granted by order of the court (Peart J.) on the 12th December 2011.
A series of affidavits have been exchanged between the parties starting with that of the applicant grounding the statement required to ground applications for judicial review. Affidavits were sworn by Georgina James, a captain in the Permanent Defence forces and by Peter Norton, a Commandant in the Permanent Defence Forces on behalf of the respondents. The applicant furnished a supplemental affidavit and an affidavit sworn by his father, Thomas Smyth. Finally, an affidavit of discovery was sworn by Linda Brady on behalf of the Minister for Defence.
First affidavit of Michael Smyth
Mr Smyth explained that following his application he attended a medical examination in September 2012, which he passed and he was invited for interview in October 2010. Subsequently he was advised that he was not successful.
In March 2011, he received a phone call from a captain in the Defence Forces asking if he was still interested in joining as a recruit. He attended a further medical examination, which he subsequently passed. Mr. Smyth exhibited three emails at this point, dated the 24th September, 201, the 28th September, 2010 and the 15th October, 2010, which make the following references to the age limit:
“If you are 24 years old on application but turn 25 before 03 December 2010, you will no longer be eligible for recruitment.”
and
“As per the terms and conditions outlined on our web site candidates must be ‘under 25 years of age on the date of enlistment’ to qualify for service in the Irish Defence Forces.”
The latter clause appeared in the email of the 24th September, while the former clause appeared in those of the 28th September, 2010, and 15th October, 2010.
The applicant then dealt with the matter at the heart of these proceedings and it would be useful to set out in full his averments in this regard:-
“6. I say that on Tuesday, October 4 2011, I received a telephone call from Captain Georgina James of the Defence Forces. When I told her that I was still interested in joining the army, she was pleased to inform me of a Government decision to recruit a platoon of 40 new trainee soldiers. She added my name was in ninth position on the list of would be recruits and she formally offered me one of the positions.
7. I was thrilled and I expressed with the offer which I unambiguously accepted. The telephone call concluded by her saying: “Yes, I can guarantee you a place. You will be starting on November 14, 2011”. I immediately informed my employers that I would be resigning from my work no later than November 12, 2011, so that I would be ready to take up my new career in the Defence Forces.
8. I say that the following day – Wednesday, October 5, 2011 – I received a second telephone call from the same Captain Georgina James. She informed me that there had been a mistake regarding my application. Specifically, she said that she could not offer me the position because I would be 25 years old on the enlistment date, November 14, 2011. She apologised for the ‘misunderstanding’ and hung up. I was devastated.”
Following this, the applicant contacted a local representative and the ombudsman for the Defence Forces. He said the issue of an upper age restriction was never notified to him at any stage in the recruitment process. He referred to confusion on the part of the respondents in regard to the actual upper age restriction. In this respect, he referred to a page in the Defence Forces website in which it is stated, “the upper age limit for recruits is 25 years”. In a subsequent visit to the website, this had been changed to read, “the upper age limit for recruits is 24 years of age”.
Finally I should refer to the fact that applicant stated in his affidavit that following the phone call of the 4th October, 2011, he informed his employers that he would resigning from his work, but fortunately, he had no difficulty in retaining his employment with them. He has accordingly suffered no loss of income as a result, but claims that he will be at a financial loss into the future when promotional prospects, pension rights and so on are taken into account.
Affidavit of Captain Georgina James
Captain Georgina James in her first affidavit explained that sanction to induct a platoon of 40 recruits into Easter Brigade was received on the 27th September, 2011. Fourteen applicants including the applicant herein had already passed a physical fitness test, medical examination and Garda vetting and thus were already on a panel of applicants. The applicant herein was the ninth of the fourteen on the list. She then explained that she contacted the fourteen applicants by telephone on that date.
At para. 5 of her affidavit she made the following averment:
“I had a short and similar conversation with each of the fourteen. I explained to each of them:
‘(a) A platoon of recruits will be inducted to two Eastern Brigade;
(b) The 14th November, 2011, was the proposed start date, but this was not as yet confirmed;
(c) Location of training was not confirmed’
I also clarified their contact details and I inquired as to their continuing availability for an interest in the Defence Forces. I asked whether they were employed or studying. Finally, I advised each of them that should he be eligible and selected, a formal offer in the form of an email would be sent out in the coming weeks to successful candidates. Accordingly, they should monitor their email account and reply accordingly.”
She went on to say that the following day, when finalising an administration work relating to the applicants on the panel, she checked this applicant’s date of birth and realised that he was 25 years of age and therefore, no longer eligible for recruitment. She rang the applicant to confirm his date of birth and then explained to him that because he had turned 25, he was no longer eligible. She explained that his date of birth was not on the application for as was required and had it been, she would not have phoned him the previous day. She “reminded the applicant that he would have received a number of emails throughout the process but highlighted the age requirements . . .”. She asked him whether he was aware that the upper age limit was being under 25 years old. He responded to the effect that he did, but added that he knew someone in the army who said he would be “alright”. She said that she did not apologise for the “misunderstanding” as it occurred because of the applicant’s failure to include his date of birth on the application form. She added that she did not hang up abruptly. She went on to explain that an offer of a place is made by email and that she did not “formally offer” a position or “guarantee” a place and to that extent she said that the applicant’s averment was mistaken.
In any event, she added that she had no authority to make a formal offer over the telephone. She added, that while the proposed induction date was the 14th November, 2011, the induction date was ultimately not until the 28th November, 2011. She also confirmed that she had a phone call from the applicant’s father on the 5th October, 2011, as spoke to him in similar terms as in her conversation with the applicant.
Affidavit of Commandant Peter Norton.
An affidavit was also sworn by Cmdt. Peter Norton. He dealt with the conditions governing recruitment which was set out in Defence Force Regulations made pursuant to the Defence Act 1954, as amended. It is specified in the regulations that the age limits for recruits for general service in the army are “17 and less than 25 on a date to be determined by the Minister”. He added “that date has always been determined as the date of enlistment which in this case was the 28th November, 2011”. In 2000, the age limit was increased from “under 20 years of age” to the present limit to increase the number of eligible candidates.
Cmdt. Norton reiterated a number of the points made by Capt. James in her affidavit. He disputed the possibility that the applicant would be at a financial loss in the future as there was no guarantee that the applicant would have successfully completed recruit training. He then exhibited the applicant’s application which left blank the section referring to date of birth.
Finally, Cmdt. Norton referred to the Employment Equality Acts 1998 to 2011, which he stated avail of a derogation permitted by the European Directive 2000/78/E.C. This deals with the issue of a derogation in respect of the Defence Forces in the context of alleged age discrimination.
Supplemental Affidavit of the Applicant
A supplemental affidavit was furnished by the applicant in which he disputed the averments of Capt. James in relation to the telephone conversation of the 4th October, 2011. He said that in the conversation, Capt. James asked if he was still interested in joining the Defence Forces. He said he was. He continued: “. . . she said she was happy to tell me that on foot of a recent Government decision, a platoon of 40 new trainees were to be enlisted. She told me that my name was on the list of people to be offered traineeships and she then formally offered me one such traineeship. She told me that the place was guaranteed and that the start date was the 14th November, 2011”.
He added that he had no doubt from this conversation that he had been made a formal offer to take up a traineeship which he accepted. He then told his father the news.
The applicant also took issue with Capt. James’s account of the conversation on the 5th October, 2011. He said that he could specifically recall that she said a mistake had been made in relation to the offer of the previous day, the problem being his age on the enlistment day. She said that she was sorry and ended the phone call abruptly.
He disputed the averment of Capt. James to the effect that she told him that he would not have received a telephone call the previous day had his date of birth been included on the application form. He also disputed the averment that Capt. James asked him if he was aware that the upper age limit was under 25 years. He did not at any stage say that he had a contact within the Defence Forces who could secure his admission.
Finally he exhibited what was described as contemporaneous note of the two conversations with Capt. James. He accepted that the note might not be a verbatim reproduction of the conversations but said it was an accurate and truthful account of the conversations. That note appears to have been compiled in the context of an email to the Office of Ombudsman for the Defence Forces.
Affidavit of Thomas Smyth
The applicant’s father swore a short affidavit confirming that his son contacted him on the 4th October, 2011, to tell him that he had been offered a traineeship. He said that in the conversation, his son confirmed that Capt. James had used the word “formal”. He received the news the following day about the withdrawal of the offer and contacted Capt. James directly. He denied being irate. She rejected the possibility of a meeting with Mr. Smyth.
Supplemental affidavit of Capt. James
Capt. James swore a second affidavit dealing with the applicant’s supplemental affidavit and that of his father. She reiterated her position as previously outlined.
Cross examination of deponents
Given the nature of the dispute on affidavits exchanged between the parties, not surprisingly, a notice of cross examination was served on behalf of the applicant in respect of the affidavits of Capt. James and Comdt. Norton. No such notice was served on behalf of the respondents on the applicant. When the matter came before me for hearing, Capt. James and Comdt. Norton were duly cross examined..
Comdt. Norton in the course of his cross examination went through administrative instructions for the Defence Forces in relation to personnel matters dealing with, inter alia, recruitment. That document states that it is to be read in conjunction with Defence Forces Regulations, A10. Enlistment procedures are dealt with in s. 2, para. 121. It deals with eligibility for enlistment, matters such as parental consent, where the applicant is under 18 years of age, medical examinations, the completion of form AF339 and so on. Comdt. Norton said that in April 2011, the applicant met all the criteria for enlistment.
In relation to the question of the age limit, he said that the critical date by which the age of the candidate was considered was the date of enlistment. He expressed the view that this allowed the maximum period of time for candidates but accepted that this was not of benefit to candidates at the upper end of the age limit. The point made by Comdt. Norton was that if the relevant date is the date of enlistment that is if benefit to candidates who were under 17 at the time of application, but have reached the age of 17 by the date of enlistment. Obviously, that is of no assistance to those at the upper end of the age limit.
Although Defence Forces Regulations at regulation 7 state the age limit in the following terms: “17 and less than 15 years on a date to be determined by the Minister”, Comdt. Norton said that it was his understanding that the relevant date had always been the date of enlistment and he assumed that the Minister had delegated to the Chief of Staff of the Defence Forces the task of determining the date.
In relation to the applicant’s birth certificate, he noted that under the administrative instructions at para. 107, the applicant is required to be in possession of their birth certificate and he had no reason to doubt that the applicant had produced his birth certificate at interview. He accepted that the attestation form contains a place for the applicant’s date of birth. (This is a form which is required to be completed by the attesting officer and by a medical officer It sets out a list of questions to be put to the intending recruit including as to his/her date of birth).
Capt. James was then cross examined. She explained that sanction to recruit was received in September 2011. She took over the role of attestation officer in June 2011, and was aware that there was a panel of candidates in existence. The applicant was called for a medical examination in St. Bricins Hospital on the 14th April, 2011, and on that date form AF339 was initiated. It was sent back to the Manpower office of the Eastern Brigade. She noted that the applicant was ninth in the list of fourteen on the panel.
She explained that the main purpose of the phone calls to the fourteen individuals on the panel was to find out if they were still interested. If not, she would have to increase the number to be recruited. At that stage, she had fourteen names on the panel and she had to recruit a total of 40. She would have to organise medical examinations and so on for further recruits.
She was cross examined in detail on the basis of the note of the conversations made by the applicant. It would be helpful to set out in full the note which as I have previously noted was contained in the email sent by the applicant to the Ombudsman for the Defence Forces on the 6th October, 2011. The first note dealing with the 4th October, 2011, is as follows:-
“Capt. GJ Hi, is this Michael Smyath?
Me It is indeed.
Capt GJ Hi, this is Capt. Georgina Jones (sic) ringing from Cathal Brugha Barracks, following up on your application to join the Irish Defence Forces. Are you still interested?
Me Yes I am.
Capt GJ Are you currently employed at the moment or what is your current situation?
Me Yes, I am actually employed in two jobs at the moment.
Capt. GJ Well would you like a third one?
Me A third one or a permanent one?
Capt GJ Well I am pleased to say that the Government have given us the go ahead to take in another recruit platoon of 40 and you are No. 9 on the list, so I can offer you a place.
Me Are you serious?
Me Yes definitely.
Capt. GJ Yes I can guarantee you a place, you will be starting on the 14th November, 2011. I don’t have all the information for you right now, but you will receive an email in the next couple of days with all the information.
Capt GJ are you still working off the same email address msmyth86@gmial.com ?
Me I am, yes.
Capt. GJ Ok, well keep an eye on your emails over the next few days.
Me I will do, thank you very much, you have really brightened up my day.
The following is the note of the conversation on the 5th October, 2011.
Capt. GJ Hi, is this Michael Smyth?
Me It is yeah.
Capt. GJ I believe I was talking to you yesterday.
Me You were, yes.
Capt. GJ Unfortunately, I was looking through your file and there is a slight problem.
Capt. GJ What age are you?
Me I am 25.
Capt. GJ Unfortunately you are over the age limit, we can’t take you on, once you have turned 25.
Capt. GJ You never filled out your date of birth on your application form.
Me I thought that if I had completed my fitness, interview and medical all when I was 24, that since the Government had a ban on recruiting I could still be taken on?
Capt. GJ No, that’s not the way it works, you can’t be sworn in when you are 25, we can’t touch anyone under 17 or anyone 25 or over.
Capt. GJ It’s not just figures that we make, legally we just cannot do it.
Capt. GJ It’s just unfortunate, had we been taking people on before June, you would have been fine, but its just unfortunate.
Me Ok.
I should point out that the applicant stated in the email to the Ombudsman for the Defence Forces that “the phone calls that I have logged may not be exact quotes”.
Capt. James stated that she did not offer the applicant a place. She was passing on what was undoubtedly good news to a number of people who had not been contacted for a number of months. She also denied saying “I can guarantee you a place”. She pointed out that she was not in a position to recruit anyone at that stage – there was always a chance that the recruitment of the proposed platoon would not go ahead. Capt. James added that when she was making the calls, she was doing so with a view to an induction date of the 14th November, 2011. She needed 40 offers and acceptances.
She was asked about the others on the list and indicated that one of those was no longer available as he had gone to Australia. She made a note of those she thought would accept an offer. She said that her understanding of the rules was that a candidate had to be no more than 24 years of age on the date of enlistment.
In relation to the second phone call, she said that she had his AF339 and she verified his date of birth. She said she would have explained to him that he was no longer eligible and that he would not be sent a formal offer. She said that the language in the note of the conversation of the 5th October, 2011, did not look like anything she would use. She added that there was no copy of the applicant’s birth certificate on file, but she was absolutely not suggesting that the applicant was concealing his age.
In re-examination, Capt. James spoke of the difference between attestation and induction. She said the induction process could take some time. She went on to describe the phone calls on the 4th October, 2011, as being courtesy calls to see if the candidates concerned were still interested and to confirm their contact details. Her main focus was to establish contact. The panel she was dealing with had been assembled in December 2010. When she was dealing with the matter, the applicant was ninth on the list. She had the candidates files. If the date of birth had been on the application form for the applicant, she would not have contacted him. She added that she would probably have sent him an email subsequently explaining that he was not eligible.
That concluded the evidence before the court.
Submissions.
The first part of the applicant’s case is to assert that there was binding contract between himself and the respondents following an offer of a traineeship as a three star private in the Defence Forces. I have outlined the nature of the cross examination that took place and in particular that of Capt. James on the question as to whether a “formal” offer of a traineeship was given to the applicant. I also had the benefit of the applicant’s affidavits in this regard. It is a pity that the respondents chose not to serve a notice of intention to cross examine the applicant on his affidavits as the hearing before me was somewhat incomplete on that basis.
Having made that observation, I have no doubt whatsoever, that following the phone call on the 4th October, 2011, the applicant was genuinely under the impression that was going to be given a place in the platoon about to be recruited. He acknowledged that further information was to be sent to him by email.
Having said that, and having considered the evidence of Capt. James as to the terms of the conversation she recalls and considered the affidavits of the applicant, together with that of his father, I am satisfied that Capt. James in the conversation did not make a formal offer to the applicant on the 4th October, 2011. I think it is clear that she was to provide further information to the applicant and I accept that the further information would have included a formal offer. The whole purpose of the conversation was to check contact details with a view to furnishing a formal offer by email. Consequently I am satisfied that no binding contract was entered into between the applicant and the first named respondent on the 4th October, 2011.
Other issues
I now want to consider the other points raised on behalf of the applicant. These can be summarised as follows:-
1. In the course of the hearing, one of the points made on behalf of the applicant was that the Defence Force Regulations (A.10) provide in relation to recruits for general service at regulation 7 that the recruit is to be “17 and less than 25 years on a date to be determined by the Minister”.
The evidence before me made it clear that this date is taken to be the “enlistment” date, that is the date on which the recruitment is first inducted into the Defence Forces as outlined previously in respect of the evidence of Comdt. Norton. It appears from the evidence that despite the provision in the Defence Forces Regulations referred to above, the Minister has never determined a date. Comdt. Norton in his evidence as recited above, assumed that the Minister had delegated to the Chief of Staff the task of determining the date. The practice of using the enlistment date as the relevant date is as noted by Comdt. Norton to the advantage of those at the lower age of the age requirement. In any event, the position appears to be clear that the Minister has never determined the date and no evidence was put before the court to suggest otherwise. I will return to this point at a later stage in the course of this judgment.
The second point relied on by the applicant is to the effect that the respondents requirement that a prospective recruit should be under the age of 25 is a breach of s. 8(1) of the Employment Equality Act 1998. It is also contended that the age limit of 25 years also offends against European Directive on Equal Treatment in Employment and Education (Directive 2000/78/E.C).
The third point relied on by the applicant is that the respondent is not entitled to rely on the provisions of s. 37(5) of the Employment Equality Act 1998, which affords a derogation from the provisions of the Act to the Defence Forces. It is contended that the derogation provided in that section is one in respect of those in “employment in the Defence Forces” and that as the applicant was not an employee of the Defence Forces, the exemption does not apply to him.
It would be helpful at this stage in order to consider the applicant’s submission to set out the relevant provisions of the European Directive and the Statutory Provisions relied on in these proceedings. Council Directive 2000/78/E.C establishing a general framework for equal treatment and occupation sets out in the preamble the following at paras. 18 and 19:
“18. This Directive does not require, in particular, the armed forces and the police, prison or emergency services to recruit or maintain in employment persons who do not have the required capacity to carry out the range of functions that they may be called upon to perform with regard to the legitimate objective of preserving the operational capacity of those services.
19. Moreover, in order that the Member States may continue to safeguard the combat effectiveness of their armed forces, they may choose not to apply the provisions of this Directive concerning disability and age to all or part of their armed forces. The Member States which make that choice must define the scope of that derogation.”
Further on at para. 25 it is provided in the preamble as follows:-
“25. The prohibition of age discrimination is an essential part of meeting the aims set out in the Employment Guidelines and encouraging diversity in the workforce. However, differences in treatment in connection with age may be justified under certain circumstances and therefore require specific provisions which may vary in accordance with the situation in Member States. It is therefore essential to distinguish between differences in treatment which are justified, in particular by legitimate employment policy, labour market and vocational training objectives, and discrimination which must be prohibited.” The purpose of the Directive is set out in Article 1 as follows:-
“The purpose of this Directive is to lay down a general framework for combating discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation, with a view to putting into effect in the Member States the principle of equal treatment.”
Article 2 continues;-
“(1) For the purposes of this Directive, the ‘principle of equal treatment’ shall mean that there shall be no direct or indirect discrimination whatsoever on any of the grounds referred to in Article 1.”
A number of other provisions are of assistance. Article 3.1 provides:-
“Within the limits of the areas of competence conferred on the Community, this Directive shall apply to all persons, as regards both the public and private sectors, including public bodies, in relation to:
(a) conditions for access to employment, to self-employment or to occupation, including selection criteria and recruitment conditions, whatever the branch of activity and at all levels of the professional hierarchy, including promotion; . . .
(4) Member States may provide that this Directive, in so far as it relates to discrimination on the grounds of disability and age, shall not apply to the armed forces.”
Article 6 describes justification of differences of treatment on grounds of age and specifically provides that:-
“Such differences of treatment may include, among others:
. . .
(c) The fixing of a maximum age for recruitment which is based on the training requirements of the post in question or the need for a reasonable period of employment before retirement.”
The Employment Equality Act 1998, in s. 6(1) provides:-
“(1) For the purposes of this Act, discrimination shall be taken to occur where, on any of the grounds in subsection (2) (in this Act referred to as ‘the discriminatory grounds’), one person is treated less favourably than another is, has been or would be treated.”
(2) As between any 2 persons, the discriminatory grounds (and the descriptions of those grounds for the purposes of this Act) are –
. . .
(f) that they are of different ages, but subject to subsection (3) (in this Act referred to as ‘the age ground’)”
It should be pointed out that the Equality Act 2004, substituted a different subsection for subs. (3), but nothing turns on the contents of subs. (3) of the context of this case.
Section 8(1) of the Employment Act 1998, provides:-
“(1) In relation to –
(a) access to employment,
(b) conditions of employment,
(c) training or experience for or in relation to employment,
(d) promotion or re-grading, or
(e) classification of posts,
an employer shall not discriminate against an employee or prospective employee and a provider of agency work shall not discriminate against an agency worker.”
Section 8(5) provides:-
“(5) Without prejudice to the generality of subsection (1), an employer shall be taken to discriminate against an employee or prospective employee in relation to access to employment if the employer discriminates against the employee or prospective employee –
(a) in any arrangements the employer makes for the purpose of deciding to whom employment should be offered, or
(b) by specifying, in respect of one person or class of persons, entry requirements for employment which are not specified in respect of other persons or classes of persons, where the circumstances in which both such persons or classes would be employed are not materially different.”
Finally s. 37 of the 1998 Act amended by s. 25 of the Equality Act 2004, provides as follows:-
“Section 37 (exclusion of discrimination on particular grounds in certain occupations) of the Act of 1998 is amended by the substitution of the following subsections for subsections (2) to (6):
(5) In relation to discrimination on the age ground or disability ground, nothing in this Part or Part II applies in relation to employment in the Defence Forces.”
The first point made on behalf of the applicant is that the derogation contained in s. 37(5) of the 1998 Act as amended and relied by the respondents does not avail the respondents.
It goes without saying that a restriction on the recruitment of an individual for a job by reason of age would offend against Council Directive 2000/78/E.C. The respondent s rely on the derogation permitted by the Directive and provided for in s. 37(5) of the 1998 Act in respect of the Defence Forces. However, it is contended on behalf of the applicant that s. 37(5) only affords an exemption to the Defence Forces in respect of those in employment and does not afford an exemption in respect of the applicant as he suffered discrimination in relation to his recruitment to the Defence Forces.
In support of this argument reference was made to a number of authorities commencing with the decision of the High Court in the case of the Minister for Justice, Equality and Law Reform and the Commissioner of An Garda Síochána v. Director of the Equality Tribunal (Unreported, High Court, 17th February, 2009). That case is under appeal to the Supreme Court, but reliance was placed on a passage at para 7 of the judgment of Charleton J. in which he stated:-
“The Equality Act 2004 was specifically passed in order to give effect to Council Directive 2000/78/E.C.. It is beyond the scope of any decision that I am required to make in this judicial review as to whether that national legislation correctly implemented the Directive. In circumstances where an ambiguity arises, both this Court and any administrative body, including the respondent, is obliged to construe national legislation in the light of the obligation under European law in which it had its origin. That obligation, however, does not extend to re-writing the legislation; to implying into it a provision which is not there; or to doing violence to its express language.”
Counsel on behalf of the applicant described this as a correct statement of the position in relation to the 2004 Act which as seen above, amends the provisions of Act of 1998. I see not reason to disagree with the general statement contained in the passage referred to above.
The plaintiff also relied on the Article 26 reference to the Supreme Court in the Employment Equality Bill 1996 [1997] 2 IR 321. One of the issues considered in that case was the provision of s. 37(6) of the Employment Equality Bill 1996, which provided that:-
“In relation to discrimination on the age ground or the disability ground, nothing in this Part or Part II applies to employment-
(a) in the Defence Forces;
. . .
The provisions as to the age ground are challenged as being discriminatory, without rational justification and a violation of Article 40, s. 1 of the Constitution.”
Hamilton C.J. in the court’s judgment stated at p. 344:-
“It was further submitted that s. 37, sub-s. 6 which exempted employment in the Defence Forces, the Garda Síochána and the prison service from the application of the provisions of the Bill outlawing discrimination on the age ground itself constituted an objectively unjustifiable discrimination between employees in the public and private sectors (such as, for example, employees of security firms) which was itself in breach of Article 40, subsection (1).
It was finally submitted in relation to the age ground by counsel assigned by the Court that, considered from the employers’ perspective, these provisions constituted an unjust and disproportionate interference with the rights of citizens to earn their livelihood and with their property rights in preventing them from taking into account in recruiting employees their suitability for the work in question having regard to their age.
Hamilton C.J. continued at p. 349 of the judgment:-
“It might be, at first sight, more difficult to defend on constitutional grounds the wide-ranging exclusion from the Bill’s provisions of employment in the Defence Forces, the Garda Síochána or the prison service. Once, however, it is accepted that discrimination on the grounds of age falls into a different constitutional category from distinction on grounds such as sex or race, the decision of the Oireachtas not to apply the provisions of the Bill to a relatively narrowly defined class of employees in the public service whose duties are of a particular character becomes more understandable. It must be emphasised again at this point that a provision of this nature in this particular Bill does not have as its consequence a shielding from judicial scrutiny on constitutional grounds of legislation fixing age limits for any of the employments in question. The right of persons affected by such legislation to advance a challenge to compulsory retirement at a specified age without any testing to determine individual fitness for the post in question, such as was unsuccessfully advanced in the United States case of Massachusetts Board of Retirement, et al v. Murgia 427 U.S. 307, remains. Given the distinctive requirements associated with these branches of the public service and the particular importance of ensuring a high level of physical and mental fitness, it can hardly be said, in the Court’s view, that the decision of the Oireachtas to remove them from the ambit of this particular measure, whether correct or not, is unrelated to a permissible legislative objective or irrational or unfair.”
Having referred to that decision it was submitted that at no point in the discussion of the provisions of s. 37(5) of the Bill was the suggestion made that the derogation could be availed of in respect of recruitment into the said institutions.
I was also referred to a decisions of the European Court of Justice in the case of Kucukdeveci v. Swedex Gmb H and Company Kg, case C-55/07 in which the ECJ held that:-
“European Union law, more particularly the principle of non-discrimination on grounds of age as given expression by Council Directive 2000/78/EC of 27th November 2000 establishing a general framework for equal treatment in employment and occupation, must be interpreted as precluding national legislation, such as that at issue in the main proceedings, which provides that periods of employment completed by an employee before reaching the age of 25 are not taken into account in calculating the notice period for dismissal.”
And further that:
“It is for the national court, hearing proceedings between individuals, to ensure that the principle of non-discrimination on grounds of age, as given expression in Directive 2000/78, is complied with, disapplying if need be any contrary provision of national legislation, independently of whether it makes use of its entitlement, in the cases referred to in the second paragraph of Article 267 TFEU, to ask the Court of Justice of the European Union for a preliminary ruling on the interpretation of that principle.”
In that case a preliminary ruling was requested in the following terms:-
“By its first question, the referring court asks essentially whether national legislation such as that at issue in the main proceedings, under which periods of employment completed by the employee before reaching the age of 25 are not taken into account in calculating the notice period for dismissal, constitutes a difference of treatment on grounds of age prohibited by European Union law, in particular primary law or Directive 2000/78. It is unsure, in particular, whether such legislation is justified on the ground that only a basic notice period is to be observed in the case of dismissal of younger workers, first, in order to enable employers to manage their personnel flexibly, which would not be possible with longer notice periods, and, second, because it is reasonable to require greater personal and occupational mobility from younger workers than from older ones.”
The court noted at para. 21 as follows:-
“In that context, the Court has acknowledged the existence of a principle of non-discrimination on grounds of age which must be regarded as a general principle of European Union law (see, to that effect, Mangold, para. 75). Directive 2000/78 gives specific expression to that principle (see, by analogy, Case 43/75 Defrenne [1976] ECR 455, para. 54).”
Finally the point was made on behalf of the applicant that regulation 7 of the Defence Force Regulation provides for a date to be determined by the Minister. No such date has been determined. Should the date be taken as the enlistment date? Should it be the date of application or when the AF339 form was initiated? There is no dispute that the applicant was of age when the process commenced. He has now been disqualified because of the application of loose terminology. This is not sufficient to disqualify the applicant and to allow the respondents to rely on the derogation. To avail of the derogation, the scope of the derogation must be clearly defined. It should not be ambiguous. There is simply no clarity as to the date by which one becomes ineligible on reaching 25. Accordingly, it was submitted there is no clear rule entitling the respondents to rely on the derogation provided for in s. 37(5) of the Act of 1988 from the obligations set out in Directive 2000/78/E.C..
Mr. Kerr on behalf of the respondent took issue with the arguments on behalf of the applicant to the effect that s. 37(5) of the Act of 1998 in so far as it was a derogation from the directive applied only to those in employment in the defence forces as opposed to those being recruited to the defence forces. He relied in this context on Recitals 18 and 19 of Directive 2000/78/EC as set out above. He also noted the specific terms of Articles 31 of the Directive which provides that it applies in relation to, inter alia, “access to employment, to self employment or to occupation including selection criteria and recruitment conditions” and “access to all types and to all levels of vocational guidance, vocational training, advance vocational training, including practical work experience” as well as employment and working conditions. Thus he pointed out that the article in using the word “including” applies just as much to access to employment as to conditions of employment.
Mr. Kerr went on to examine the positions of s. 37(5) of the Act of 1998 as amended and accepted that the decision of Charleton J. in the judgment referred to above as to the role of the court in interpretation of the legislation was the appropriate approach. He argued that the derogation provided for in s. 37(5) is expressly committed under the Directive. He made the point that when one looks at the provisions of the Act as a whole and considers the provisions in relation to the description of discrimination as set out in s. 6 of the Act of 1998 and the provisions of s. 8 of the Act that it is clear when one considers those provisions that the Act is addressing the question of discrimination in relation to access to employment as well as in relation to conditions of employment. He urged on the court that one should not consider the words used in s. 37(5) in isolation from the other provisions of the Act. Mr. Kerr finally made the point that the interpretation urged on the court by Mr. Quinn, S.C. on behalf of the applicant would result in an absurdity in the sense that it would be absurd to allow a derogation from the provisions of the Directive in relation to persons in employment in the defence forces but not to provide for such a derogation in relation to access to employment
Decision
A central part of the argument on behalf of the applicant was that the respondents could not rely on the provisions of s. 37(5) of the Act of 1998 as amended on the basis that the provisions of s. 37(5) applied only to “employment in the defence forces” as opposed to a person in the process of being recruited as an employee in the defence forces.
I cannot accept this argument. Looking at the provisions of the Employment Equality Act, 1998 as amended by the Equality Act 2004 implementing Directive 2007/78/E.C., it is, in my view the clear intention of the Oireachtas that the provisions of the legislation refer not just to the employment of an individual but also the recruitment of an individual. That this is so is clear from s. 8 of the Act of 1998. This is also clear from the terms of the Directive and in particular Article 31A of the Directive. Had the legislator intended that the derogation provided for in the Directive was applicable only to those actually employed in the defence forces, one would have expected such a distinction to be expressly and unambiguously provided for in the legislation. I accept that at some points, the legislation refers specifically to access to employment and to conditions of employment but I do not accept that the reference to different aspects of employment has the effect contended for on behalf of the applicant. The phrase “in relation to employment in the defence forces” as used in s. 37(5) includes, in my view, access to employment and conditions of employment and there is nothing therein that would lead me to the conclusion that s.37(5) does not apply to the recruitment of persons to the defence forces.
It follows from the conclusion that use of an age restriction in respect of persons seeking to join the defence forces is not contrary to s. 8 of the Act of 1998 as amended.
A further argument made by Mr. Quinn, on behalf of the applicant, was that if the defence forces are to rely on a derogation from the Directive, this must be done unambiguously and clearly. Recital 19 of the Directive noted that the Member States could choose not to apply the provisions of the Directive concerning disability and age to all or part of their armed forces and went to conclude as follows:-
“The Member States which make that choice must define the scope of that derogation”.
It is clearly the case that the Minister has never determined the date by which a recruit for general service has to be less than twenty five years of age. It does appear to be the case that members of the defence forces such as Comdt. Norton have operated under the assumption that the relevant date to consider is the date of enlistment but this simply has not been determined by the Minister. Comdt. Norton acknowledged that the use of the date of enlistment is to the advantage of recruits at the lower end of the age requirement. There are many practical reasons for choosing the date of enlistment as the relevant dates. For example an applicant may submit an application but if the date of application was the relevant date, there would be no obvious upper age limit in the sense that a person could be entitled to enlist long after they had reached and passed the age of twenty five.
Recital 19 of the Directive requires Member States to define the scope of the derogation. In circumstances where the Minister has failed to determine the relevant date, it could not be said that the scope of the derogation has been defined. Until such time as the date is determined by the Minister, one cannot say what is the relevant date. To that extent, it seems to me that whilst the legislation has appropriately implemented in accordance with the Directive and the Defence Force Regulations have provided for an age requirement, the final step, on evidence before me, to be taken to give effect to the derogation is the determination by the Minister of the relevant date and that step has not been taken. In those circumstances it appears to me that there is a difficulty for the respondents in relation to the derogation and they cannot rely upon the derogation against the applicant. The process by which the State can rely on the derogation is incomplete.
I will therefore hear the parties further in relation to the appropriate form of orders to be made having regard to the findings I have reached.