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1. The Notice Party's issue, on its issue paper in these proceedings, which was dated the 3rd October, 1997 was whether, by agreement or undertaking in writing made between the Plaintiff and the Notice Party on the 1st October, 1993, the Plaintiff is obliged to repay to the Notice Party the sum of approximately £51,972.58 outstanding from monies advanced to the Plaintiff by the Notice Party during his absence from employment with the Notice Party consequent on injuries received in an accident on the 4th September, 1993. The Notice Party was joined in these proceedings, on its own motion, by Order of this Court made on the 8th July, 1997 as being related to and having an interest in particular aspects of the Plaintiff's claim against the Defendant.

2. The Plaintiff was, at the time of the accident, in the employment of the Notice Party and was injured during the course of delivering materials to the Defendant's premises. He was then out of work due to his injuries, and during the course of that period of time, he was paid monies by the Notice Party, which were of the same amount as he would have been paid, had he been in full attendance. The Plaintiff's action against the Defendant in respect of his damages was subsequently settled, inter alia , on the basis of a sum of money for general damages, together with such sum as the Plaintiff might be entitled to from the Defendant in respect of his loss of earnings.

3. The issue which now arises is whether the Defendant is, at law, obliged to pay to the Plaintiff, the sum which the Plaintiff claims as the equivalent of "lost wages", having regard to the contention by the Defendant that the Plaintiff did not, in fact, suffer any loss because the Plaintiff was paid his wages by the Notice Party. The Defendant says, since there is no loss, it cannot be made liable to the Plaintiff.

4. The Plaintiff is now retired, but prior to his retirement he was employed by the Electricity Supply Board, now the Notice Party to the present aspect of the proceedings. Up to the date of the accident which is referred to below the Plaintiff was employed from 1966 as a transport driver. The accident occurred on the 14th September, 1993 when, in the course of his employment, the Plaintiff attended the Defendant's premises and there was injured by a fork lift truck driven by the Defendant's employee.

5. The Plaintiff did not return to work with the Notice Party and was absent for a period of 169 weeks in all, from the 4th September, 1993 until the 5th December, 1996 when he accepted retirement under a voluntary retirement scheme.

6. Although the issue as originally framed by the Notice Party concerned the Plaintiff's obligation to repay the Notice Party the monies paid to the Plaintiff, the real issue at this time is whether, in the circumstances which arise, the Defendant has any liability to pay to the Plaintiff.

7. Evidence was given by the Plaintiff, briefly, as to the accident, as to the settlement reached with the Defendant, and in particular, as to the arrangements reached between the Plaintiff and the Notice Party in respect of the payment of salary, wages, etc. The Plaintiff's evidence on this aspect of the matter included the following:-

8. As a result of this evidence and further evidence given by the Notice Party's account/wages personnel, it became clear that the total sum which the Plaintiff agreed in writing would be repaid to the Notice Party is calculated as being in the region of £51,972.58.

9. On behalf of the Notice Party evidence was given of the following:

10. I should draw attention to some relevant passages of the 1975 Agreement upon which all parties rely. The agreement provides for the payment of monies to various categories of persons under the general heading of Paragraph 9 of the agreement, which is listed under a main heading "sick absence". The contents, so far as this claim is concerned, include the following:

11. A. The stated general policy according to clause 9.1 of this agreement is as follows:

12. B. There then follow those part of the Agreement which require notification to the ESB of sick absence (9.1), Certification of Sick Absence (9.2). Payment for Sick Absence including a definition of eligible staff (which would include the Plaintiff (9.4), and the times during which sick pay is payable, and the calculation of the amount (9.4)

13. Absent the question of general liability, there has been no suggestion on the part of the Defendant that the payments made under Clause 9.9 are incorrect or are in any way unreasonable. There is however, an objection by the Defendant of any liability for amounts paid by the Notice Party for tax and/or pay related insurance, even if the Defendant is held to be liable for the so called loss of wages.

14. C. There then follow provisions for cases of doubt (dealt with by local management), and certain non-relevant provisions.

15. D. There is then provision for what is to happen in the case of employees on Social Welfare benefits (to be deducted from payments made by the ESB by way of credit).

16. E. Finally, there is Clause 9.9 under the heading "Third Party Accident" and this reads as follows:

17. On the evidence, including the evidence of the Plaintiff, it is clear that whereas the accident took place on the 4th September, 1993 the form was not signed by the Plaintiff until some weeks later, on the 1st October. Moreover, the actual undertaking signed by the Plaintiff was in slightly different terms than that set out in the 1975 Agreement, and reads as follows:

18. It will be seen that there is a slight alteration in the first party of the undertaking, and that the second part is entirely new and does not appear at all in the 1975 Agreement.

19. The Notice Party argues that its entitlement to the monies arises only from the entitlement of the Plaintiff to recover from the Defendant, and not otherwise. It does not seek to recover directly from the Defendant the equivalent monies to those paid to the Plaintiff, but is prepared to make the legal argument (a) on the entitlement of the Plaintiff to recover from the Defendant, and (b) on the legal entitlement of the Notice Party to recover monies from the Plaintiff, consequent on a finding in favour of the Plaintiff under (a).

20. In support of these claims, the Notice Party says that the Plaintiff was never entitled, as of right, to have any wages paid to him under the terms of the 1975 Agreement, while out of work and that the provisions of Clause 9.9 are clear on this. Mr Hardiman S.C. on behalf of the Notice Party further says that it has so arranged its agreement with its trades unions as to make it clear that payments for salary and/or wages are available, as a contractual right, only to those who suffer from sick pay while employed by the Notice Party, but without reference to third parties, and is genuine "sick pay" so called. He argues that, on the contrary, insofar as sickness or absence from duty arises where a third party is involved, no such sick pay is contractually payable. On the contrary, he argues that sick pay in such circumstances is specifically ruled out. He further argues that, on the correct interpretation of the 1975 Agreement, the most the Plaintiff could expect, or could have ever expected, was that the ESB might pay advances to the injured or sick employee, but only on condition that the employee agree in writing to repay those advances to the ESB. The third party argues that no other natural or reasonable constructions can be placed on the terms of the 1975 Agreement.

21. Mr Hardiman argues that, absent the written undertaking altogether the case law on the topic of such payments is in his favour, and cites numerous cases from this jurisdiction, as well as from The United Kingdom, Canada, The United States and elsewhere.

22. Mr Reidy, S.C. on behalf of the Defendant says that while the Defendant accepts it is liable for the payment of damages for any losses sustained by the Plaintiff, it is not prepared to accept as a matter of law that, in any case, that an employer is entitled to recover from a Plaintiff sums which have been paid to him by his employer for salary and wages. He says that such a claim is one which has already been rejected in law, on the basis that it is no more than the action per quod servitium amisit. He relies on the case of Ryan -v- The Minister for Defence (1965) IR. Moreover, he argues that even if the claim is not caught by the decision in that case, either as being directly applicable, or by analogy, he is still entitled to resist the payment of any monies on the basis that there is and has been and there never was likely to be any loss, because of the scheme under which the Plaintiff was, in reality, entitled by contractual or other arrangement, to be paid his salary and wages. He further says that this is supported by the evidence inter alia, that the monies were treated by the Notice Party and the Plaintiff, as being wages or salary, that the Notice Party as well as paying the monies to the Plaintiff as wages also paid the tax which would be due on those wages and the pay related social insurance payments.

23. Before moving to the cases which concern payment of salary and/or wages during illness or absence from work I wish to deal first with the Defendant's contention that the action is unsustainable by virtue of the decision in the Ryan case, supra. I do not think this is so. That case was one by which the Minister sought to recover, on his own behalf, and without reference to any right in the Plaintiff pre-existing, the amount of monies which the Minister alleged he had been "out of pocket" by reason of the lost services of the Plaintiff. The Court rejected his contention on several grounds, including the fact that members of the defence forces serve under a quite different arrangement to employees of non civil service employers. The present claim is made entirely by the Plaintiff and only, indirectly through the Plaintiff by the Notice Party, and is not to reward the Notice Party.

24. I do not therefore consider that the action on the part of the Plaintiff - argued as to legal principles by the Notice Party on this issue - is unsustainable in law because of the Ryan decision.

25. On the question of the entitlement to recover monies paid by an employer as wages/salary or an equivalent, the Irish decisions merit special consideration, and I will deal with these separately, in particular because two of these, at best, seem to be in conflict. There appears to be no doubt in law that the general principle is that loss of wages are part of the ordinary special damages which may be claimed. In certain circumstances however, that right may be cut down or limited. As to the balance of the cases, from the other jurisdictions, those cases appear to fall into a number of different categories, namely:

26. This category of case is epitomised by the decisions in Cunningham -v- Harrison [1973] 1 QB 942 where a payment of money for life was taken into account, because this sum was a contractual entitlement on the part of the employee, and Hussain -v- New Taplow Paper Mills [1988] I All ER 541. This case also concerned payments over a lengthy period of time, but the real basis for the decision was that, by the contractual arrangements existing, the Plaintiff was entitled to have his wages paid as part of a long term sickness programme. The policy behind these decisions appears to be that where, by the contract of employment, the employee is legally entitled to pay and without any agreement to reimburse his employer, no loss could arise to him at all, and therefore, no recoverable loss could exist against the wrongdoer.

27. The payments is, in reality, an unconditional payment, contractually earned or legally vesting in the employee.

28. These are epitomised by the decisions in cases such as Franklin -v British Railways Board [1993] P. 1, a Court of Appeal decision in the United Kingdom, in which the High Court had determined that sick pay, which had to be repaid by the terms of the contract, was to be ignored. However, in the Court of Appeal, it was held that, on the facts and on a correct interpretation of the contract, it did not, actually require the Plaintiff to repay the monies. The position is even more clear in the case in the case of Dennis -v- London Passenger Transport Board [1963] 1 QB 749, in which it was held that the monies should not be taken into account because, although not required to repay them by contractual obligation, nevertheless the Plaintiff was expected to refund the amount, if he recovered the same from the wrongdoer. I am not satisfied that this decision would pass muster at this time, having regard to the later decisions, and an analysis of the rationale behind them.

29. This category is epitomised by the decision in the case of Redpath -v- Belfast & County Down Railway [1947] NI 167, where a fund had been established from which the Plaintiff was paid certain monies. But this was held to be a sum which was purely and simply a "gift" and should not be taken into account. It is instructive to consider the headnote in that case which reads as follows:

30. The policy behind the approach to this type of money is clearly that where a Plaintiff benefits from the generosity or helpfulness of friends/neighbours/others, this generosity should not be taken into account and thereby relieve a wrongdoer who would otherwise be liable for the payment of the monies lost. Of particular importance is the fact that there is no legal right whatsoever to be in receipt of these monies.

31. This category is epitomised by various decisions and in any event such payments are now, by statute, not to be taken into account.

32. It is not always clear precisely what is the basis for these last decisions, but in general they appear to be determined on peculiar facts arising.

33. I do not find among the common law authorities cited by either the Notice Party of the Defendant, any clear elucidated policy running through all the cases, or a general policy that certain specified exceptions exist to any established principles.

34. The most that can be said from the case law is that there appears to be a general policy running through all of the cases, regardless of the outcome, that where there is no loss, there is no entitlement to payment. But that brings no resolution to the matter, because the question of what is "loss" still arises.

35. I now turn to the Irish cases, where I think there is some considerable guidance found on the matter. One of the earliest decisions on the matter, is the decision of The Supreme Court in McElroy -v- Aldritt unreported, 11 June, 1953. In that case one of the grounds of appeal concerned the question of the Plaintiff's loss of earnings. The Plaintiff had given evidence that his employers had continued to pay his wages after the accident but on an arrangement that if he succeeded in the proceedings against the Defendant, he would repay the amount. The jury made the award, including loss of earnings. It was contended for on the part of the Defendant that, in the circumstances, the Plaintiff suffered no loss, and it was alleged that the judge should have so directed the jury.

36. The jury had been directed that they were entitled to award as part of the damages "such sum for loss of earnings as in their opinion represented the period during which the Plaintiff was disabled by the injuries from working and unable to earn wages." Lavery J. in the Supreme Court considered this to be a correct direction and I must agree with him. It is an almost perfect description of what a Plaintiff is entitled to from a Defendant wrongdoer. Lavery J went on to express what he considered to be the principle behind the determination, as follows:

37. The next decision in time is the judgment of Lynch J. in the case of Honan -v- Syntex (Ireland) Limited , unreported October 22, 1990. In that case the question of loss of earnings also came up. There was, in the case, an agreement as to past loss of earnings of £7,000.00 but a dispute over a future sum for loss of earnings of £22,000.00 plus. This represented money paid by the Defendants (as the Plaintiff's employer) while the Plaintiff was still in their employment, but not working due to the injury. The case made it clear that it is paid "as long term disablement benefit" in lieu of wages and it was a payment, provided by the Defendants for their employees who were unable to work, whether on account of illness or accident. It was submitted on behalf of the Plaintiff that this payment came, initially, within the provisions of S.2 (a) of the Civil Liability (Amendment) Act, 1964 (which claim was subsequently abandoned), and then it was claimed to fall within the ambit of (b) of the same section, which refers to "any pension gratuity or other like benefits under statute or otherwise, in consequence of injury".

38. There appears, from the judgment, to have been no debate or argument as to the category of contribution which might or might not be taken into account. It was held by the learned Judge that the words "or otherwise" within the correct meaning of Section 2(b) of the 1964 Act were words which form part of the same genus as "pension or gratuity" and were no wider, and he therefore held that, since they did not come within the ambit of that section, they were to be taken into account. He explained that in his view the words were to be understood as being in the nature of a statutory obligation. But I do not think this ends the matter. The judgment implies that the Defendant was obligated to make the payments in question, although an obligation which the Defendant voluntarily undertook. At the very least the judgment makes it clear that there was no suggestion the payments were in any way of a purely voluntary or discretionary nature, without obligation, as the Notice Party contends for here. I therefore do not consider the judgment to be at odds with the general exception found in several of the English cases referred to above.

39. The next decision of relevance is that of Costello J. in the case of Boyce -v- Cawley , unreported, 13th November, 1991. There the Plaintiff was injured in a road traffic accident, and happened, coincidentally, to be an employee of the Notice Party in the present case. He sued the Defendant for damages, including in his claim for loss of wages. Liability was conceded, and the matter was determined by way of an issue on the question of the claim for loss of wages. The learned judge recognised that while, ordinarily, these would be claimed by way of special damages, there were special circumstances, namely, that he had received certain payments under the 1975 Agreement, mentioned above. An important aspect of the decision is the learned judge's statement that the reasons for the 1975 Agreement were, inter alia , the fact that, employees of the ESB were classed as being in the D1 class of employees for Social Welfare Act provisions. The learned judge referred to the terms of paragraph 9.9 of the 1974 Agreement. The judge held that, but for the Agreement, the Plaintiff would have recovered from the Defendant his loss of wages. The question therefore arose, he said, as to whether or not the fact that he entered into the agreement deprived him of the right to maintain such a claim. He held it did not. The learned judge accepted that the payments were correctly likened to loans made by the employer to help the employee during the period of incapacity from work. He drew attention to the fact that Clause 9.9 is a discretionary clause, and rejected the contention of the Defendant that the ESB would have paid the monies regardless of whether the Plaintiff had a good cause of action or not. The learned judge found that a contractual obligation existed in the Plaintiff to repay the monies, and stated:

40. I am not certain that in law the obligation to repay monies advanced is the true basis for a corresponding liability on the Defendant to pay the Plaintiff, but the obligation does support the Plaintiff's contention here, that the monies are mere advances and that the Plaintiff does not have a legal entitlement to the monies, regardless.

41. The next Irish case of relevance is that of Greene -v- Coleman [1998] ILRM 34. That case involved a question as to the correct treatment of monies paid under a contract of insurance, and I mention it only because it refers to some of the cases cited to me (but which concern only the question of insurance payments.) I mention it also because it considered the case of Hussain, supra, which the Court distinguished on the grounds that there, the employer had assumed a "direct contractual liability to the Plaintiff to pay partial salary in the event of incapacity".

42. The next Irish case to consider is that of McGuinness -v- O'Reilly and another unreported, 30th November, 1992 a decision of then Morris J. Again the case concerned, as here, and as in the case of Boyce, an employee of the Notice Party, the ESB. She was involved in a road traffic accident and suffered damages. The Court held the Defendant liable for the Plaintiff's accident, and then considered the Plaintiff's claim for loss of earnings. The Court stated as follows:

43. The learned judge also stated:

44. On their face, it seems to me that the learned judge's comments were both logical and correct. He accepted such evidence as was led before him, apparently by a Mr Sadlier, that the Plaintiff was entitled under the terms of her contract of employment to receive the payments which she did, and he was careful to ensure that she thereafter could not be placed under an obligation by the subsequent, although unsustainable at law, letter of undertaking. In other words, he took the view that the letter of undertaking could add not a whit to the picture, since she was, on the evidence presented to the Court, entitled under her contract of employment to have the money anyway.

45. But it is unclear from the judgment that any terms of the 1975 Agreement were in fact opened to the judge, and it is equally unclear whether there was any debate at all as to the possible meaning to be attached to Clause 9.9. The learned judge quite correctly accepted the evidence tendered him, which was apparently uncontested, as to the true nature of the Plaintiff's terms and conditions of employment. And having accepted that, he followed the cases, such as those at (a) above, which make it clear that no loss of earnings arise in these circumstances.

46. I am certain that had the learned judge had the benefit of the actual agreement of 1975, and the benefit of the analysis with which I have been furnished and the evidence tendered to me, his conclusions might have been different. And I am equally satisfied that had the decision of Costello J. been opened to him, he would also have mentioned this and, if he thought appropriate, distinguished it. I am particularly fortified in my belief that this is so, because the balance of the judgment in the McGuinness is given in such detail. And finally it seems clear from his judgment that had the payments made been outside the terms of her contract of employment, and pursuant to an undertaking to repay, that position was different.

47. While I find therefore that there is an apparent conflict between the decision in the Boyce case and the McGuinness case, on a true comparison between the two, there is I believe, no sustainable conflict, since one is not comparing like with like.

48. Having regard to the true nature of the 1975 Agreement, and having regard to the analysis of the same, as well as to the clear wording, which must be given its ordinary meaning and in addition having regard to the evidence given, both by the Plaintiff and the Notice Party, I am of the view that the Plaintiff at all times knew and accepted that he had no automatic entitlement to the payments in question under clause 9.9. He at all times knew and accepted that the monies were advanced on the basis that they would have to be repaid. I am also of the view that the Notice Party did not, at any time, agree that such payments would be made automatically to any injured party pursuant to terms of his/her employment, and paid the same only on the basis that they would be repaid. I am satisfied that a legal or other entitlement to an unconditional payment of monies equal to wages/salaries by the Notice Party to an employee whose injury involves a third party, is not part of the terms or conditions of employment of the Plaintiff.

49. Having regard to these findings, I am of the view that the Plaintiff suffered a loss of earnings, that the Defendant is obliged to pay the sums so lost to the Plaintiff, and that the Plaintiff is, in turn, obliged to repay the same to the Notice Party. They are no more than the sum which, absent the Notice Party exercising a discretion to pay, and paying, would or could have been borrowed by the Plaintiff from a local bank or from his credit union. Such borrowings, so long as they were reasonably incurred, would undoubtedly be payable by the Defendant to the Plaintiff as part of the Plaintiff's special damages.

50. I now turn to the question of the payment of tax and pay related social insurance. I am satisfied that there is nothing in the terms of the 1975 Agreement (or the undertaking signed by the Plaintiff) which refers in any way to the question of tax or pay related social insurance payments on the sums referred to in Clause 9.9 of the Agreement. As is clear from the Franklin case, supra, it is the case that the parties could have entered into an arrangement whereby there could be liability in the Plaintiff to reimburse the Notice Party for any such payments, if properly incurred. What was said in the case was:

51. A more fundamental issue arises, however. If the correct identification of payments of the type made in this case is that they are a substitution for what the Plaintiff would otherwise have to borrow, they are not automatically wages or salary for the purposes of taxation. Indeed the terms of Clause 9.9 of the 1975 Agreement makes it clear that they are "advances" equivalent to the amount which would be paid for wages but are entirely discretionary. It may well be that they are subject to tax in the usual way, but I was referred to no provision of the taxation code and to no case law on the question whether they do, in fact, in the ordinary way, attract either tax or pay related social insurance obligations. I do not have to make a determination on whether they are subject to the same, because it seems to me that there was no clear agreement between the Plaintiff and the Defendant on this aspect, and further it seems to me that it is a matter which ought to be clarified between the Notice Party and the appropriate authorities. There was some suggestion, in passing, during the course of the hearing when I raised the issue, that in the United Kingdom, monies paid under a clause such as Clause 9.9 are treated by the Revenue there as being in a different category than wages, per se, and of course there would be no question of paying tax or PRSI payments on a loan from a bank or credit union. There is, on the present facts, no basis upon which the Notice Party is entitled to recover sums paid for tax and/or PRSI payments, paid by it, without establishing to the satisfaction of the Court, that it was legally obliged to pay the same pursuant to the Revenue code of the Social Welfare code, and I am not satisfied that it was so obliged.

52. I am of the view that these sums are not recoverable from the Defendant at the hands of the Plaintiff, since there appears to be no nexus between the payment of the monies in question to the Plaintiff and the payment of what the Notice Party may have considered its obligation to the Revenue.

53. As to the precise amount due, it was suggested on behalf of the Defendant that certain credits were not given and that it should not be prejudiced accordingly. Save for the question of tax and PRSI payments, I am satisfied from the evidence tendered both by the Plaintiff and by the Notice Party, that the correct credits were given by way of contra for the Social Welfare payments made to the Plaintiff over the years.

54. Finally, it was urged upon me that the Defendant was absolved from liability by virtue of the fact that the pre-condition attaching to the Plaintiff's benefiting under Clause 9.9 had not been met, namely that the Plaintiff did not, prior to the receipt of the payments, execute the necessary undertaking in writing. I accept that this is so. He did not sign it until the 1st October, three weeks after his incident, yet he was paid for all of the period of time during which he was not at work, from the date of his accident. I do not think this can defeat the Plaintiff's claim. In the first case, the very most it could do would be to reduce the entitlement to recover from the Defendant for the first three weeks of sick leave. Thereafter, in respect of payments made under Clause 9.9, the appropriate undertaking was in place. But I think the court should not entertain the Defendant's application on this ground even for a reduction in the amount by three weekly payments because it seems to me to be perfectly proper in the context of an accident, that the Plaintiff would have a reasonable period of time within which to execute the appropriate undertaking, and a period of three weeks, having regard to the accident which the Plaintiff suffered, is wholly reasonable.

55. I therefore propose to make an order that the Plaintiff is entitled to recover from the Defendant the sum of £30,475.87 being the nett sum (giving credit for disability payments made to him by the Notice Party from the date of his accident on the 4th September, 1993 to the month of December 1996 when he took early retirement). I will further make an order that the sum is also due by the Plaintiff upon receipt of it by him to the Notice Party by way of repayment of the monies paid to him pursuant to Clause 9.9 of the 1975 Agreement and pursuant to the Letter of Undertaking executed by him on the 1st October, 1993.