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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Carey v. Independent Newspapers (Ireland) Ltd. [2003] IEHC 67 (7 August 2003) URL: http://www.bailii.org/ie/cases/IEHC/2003/67.html Cite as: [2003] IEHC 67 |
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Carey v. Independent Newspapers (Ireland) Ltd. [2003] IEHC 67 (7 August 2003)
2000/9237P
Between
Plaintiff
Defendants
JUDGMENT of Mr. Justice Gilligan delivered on the 7th day of August 2003.
The plaintiff in these proceedings is a journalist by occupation and a married lady. She appears to have been a very distinguished journalist joining Ireland on Sunday in September, 1997 and rising to be the political editor correspondent earning approximately £35,000 (€44,440.00) per annum on a contractual basis in February, 1999. While with Ireland on Sunday she worked Tuesday through Saturday, commencing at 10 a.m. in the morning and concluding on Saturday with the 4 p.m. deadline for the following day's edition and this arrangement dovetailed perfectly with the plaintiff's domestic responsibilities in respect of her son, Eamon, who was born on the 20th November, 1998.
The Facts
The plaintiff was contacted by Paul Drury who was then the editor of the Evening Herald newspaper at some time in late September, 1999, with a view to ascertaining if she would be interested in taking up a position as political correspondent with the Evening Herald. A meeting was arranged at the Palace Bar. The plaintiff says she made it clear to Mr. Drury that it would be impossible for her to
work in the early mornings at the offices of the Evening Herald by reason of the fact that she could not get a child minder and that she would have to work from home for the first edition. The proposed salary was also discussed. Mr. Drury indicated to her that he would have to go back to discuss the matter with Mr. Carlisle, Mr. Dunne and Mr. Roche.
From his perspective, Paul Drury gave evidence that the previous political correspondent with the Evening Herald had resigned and the paper was being relaunched and in his professional opinion it was essential to get a senior responsible journalist to fill the vacancy as political correspondent as quickly as possible. He had known the plaintiff who had worked on occasion for him on a free-lance basis and knew that she was a self-starter. He referred to the fact that she had been responsible for the breaking of some major stories such as the child organ retention scandal and he saw her as particularly suitable for the proposed new agenda for the Evening Herald. When he went to the first meeting with the plaintiff at the Palace Bar he was of the mind that the paper had a serious weakness without a political correspondent and he wanted to know if Mairead Carey, the plaintiff, was interested in the proposed position. At first she appeared to him to be a little hesitant and she referred to the fact that her job was going well with Ireland on Sunday. This appears to be an important factor because there is no suggestion whatsoever that prior to this meeting, the plaintiff had any plans to leave her existing well paid position. Mr. Drury says that he outlined the plan for the Evening Herald to the plaintiff and that they were going to aim at the mid-market as he wanted a heavyweight political correspondent with a Dublin focus. He accepts that she raised the issue of not being able to work in the early hours in the office as it was not practical for her and she would have to cover the morning session from her home.
He accepts that there was a discussion as regards salary and that it was the plaintiff who suggested a figure and when this initial meeting concluded there were two issues to be clarified, one being salary and the other being the plaintiff working from home in the early hours. He accepts that he indicated that he would have to talk to his colleagues, Mr. Dunne, Mr. Roche and possibly Mr. Carlisle but he is not sure if he ever actually discussed the situation with the latter. His concern was that he wanted a candidate found as quickly as possible and if necessary he was going to recommend that the additional money as required be forthcoming. He also wanted
approval for the slightly unusual arrangement of the plaintiff working from home for the first edition shift.
The subsequent events appear to me to be of significant importance. Mr. Drury did go back and he discussed the matter with Mr. Michael Roche who was the Group Managing Editor of the Independent Group Newspapers. It is of particular significance that when Mr. Drury discussed the matter with Mr. Roche he had serious reservations as regards the plaintiff working from home. He was aware that the plaintiff had some difficulty but he took the view that if it suited Mr. Drury and his team and if he believed it workable, he was happy to go along with it.
However, Mr. Roche was reluctant to confirm the issue of working from home in writing as he indicated to Mr. Drury that the group may want to review this issue in the future and I am left with the distinct impression that Mr. Roche was not at all happy about the arrangement and in this regard I am satisfied that Mr. Drury never advised Ms. Carey that Mr. Roche had a serious concern about the proposed working arrangements.
Mr. Drury also had a previous conversation with Mr. Dunne in his capacity as Group News Editor for the Evening Herald and the Irish Independent and Mr. Dunne did not have any reservations about the agreed working arrangements, provided they worked out. He did become aware of Mr. Roche's reservations and he took the view that if the system as arranged worked, it would be okay but that it was a matter for the editor and it was his responsibility to make it work.
There were apparently a number of other candidates but the plaintiff was the desired corn candidate and Mr. Drury discussed the matter with Mr. Paul Dunne and got good reports in relation to the plaintiff.
Mr. Drury also obtained approval for the plaintiff's salary arrangements in the sum of IR£45,000 (€57,138.21) and there were then a number of telephone calls between the plaintiff and Mr. Drury in which the two central matters pertaining to the plaintiff's salary and working from home for the first edition were agreed and, insofar as the plaintiff could not obtain confirmation in writing as regards the working arrangements, she took Mr. Drury's word for it against the background where she was aware that he had discussed the matter with senior management.
At the second meeting between Mr. Drury, Mr. Dunne and the plaintiff, other than there having previously been a mention that Mr. Brennan, the
News Desk Editor, may not have been that happy with the arrangement proposed, neither Mr. Drury nor Mr. Dunne put the plaintiff on notice that in the background serious reservations had been expressed by Mr. Roche group editor about the proposed working arrangements.
In my view, this amounted to a significant breakdown in communication, principally between Mr. Drury and the plaintiff. He had the unique knowledge and insight into the plaintiff's position that she could not work for the Evening Herald if she was required to attend at their offices for the first edition. She was not interested in any private arrangements, or ad hoc agreements. From her point of view, she made it plain that she could not take the job if she had to go into work in the early mornings and Mr. Drury was fully aware of this fact. I am satisfied on the evidence that Mr. Drury never advised Mr. Roche and Mr. Dunne that the plaintiff could only take up the position she was being offered provided she did not have to work from the office in the early mornings.
Accordingly, insofar as an agreement was reached between the plaintiff and Mr. Drury, there was no room for the situation being left to see how it worked out or, impliedly, that if it did not work out, the plaintiff would then have to come into work in the early mornings to the office of the Evening Herald which, quite simply, she could not do.
In my view, on the evidence, Mr. Drury had full authority to negotiate the agreement with the plaintiff on the defendant's behalf and by representing to the plaintiff that her requirement that she would work from home for the first edition in the mornings would be acceded to in the light of the knowledge that he possessed, this was in my view an inducement to the plaintiff to give up her contractual relationship with Ireland on Sunday so as to take up employment as Political Correspondent with the Evening Herald.
I accept Mr. Drury's evidence that following the second meeting, the plaintiff was told she had the job and that the matters subsequent to that arrangement were formalities, namely the medical which the plaintiff passed, the application for the job and the subsequent interview. I am fortified in the view which I have arrived at in relation to the agreement having been reached at the second meeting by the evidence of Mr. Carlisle where he says that by the time of the interview which took place on the 9th November 1999, it was very clear to him that the deal was done.
Mr. Drury entered the arrangement on behalf of the company and offered the plaintiff employment in good faith and he could not envisage the employee being told of major changes in employment and any changes during his period of control would be by agreement.
As I have previously indicated I do not believe that events which took place subsequent to the plaintiff being told she had the job are of any great relevance to the legal issue that arises in this case. Clearly with Mr. Drury's departure from the position of editor, a number of people were concerned that the arrangement as agreed with the plaintiff would not work out. I accept Mr. Roche's evidence that he was not aware of the fact that Mr. Drury's position was in jeopardy until at best a few days before his employment ended. I accept the submission of counsel for the defendant that it would be unrealistic to penalise the defendant company in some way because of the fact that Senior Management may have been discussing the termination of Mr. Drury's employment and management at a lower level were not made aware of this fact.
I fully accept that Independent Newspaper Group were well intentioned to Ms. Carey and that in a different set of circumstances, the arrangement would probably have worked very well. Because of Ms. Carey's experience, Independent Newspapers were clearly keen to take her on as Political Correspondent and she was equally keen to take up the position and advance herself within the Group but unfortunately events conspired to overtake both the plaintiff and Mr. Drury with the inevitable conclusion that because the plaintiff could not work the 7 a.m. - 9.30 a.m. shift at the offices of the Evening Herald, her employment came to an end in April 2000.
I accept Mr. O'Regan's evidence that if it had been his decision, he would never had taken on the plaintiff as Political Correspondent on the basis that she was not going to be able to attend in the offices for the first edition shift. He said the arrangements for the plaintiff were unworkable and the plaintiff could see no difficulties why she could not have been allowed work from home.
In this regard I am satisfied that Mr. O'Regan was bona fide in the views that he holds and he is entitled to have his professional opinion respected. In the particular circumstances, the difficulty that arises is that Mr. Drury had already put the arrangement in place against the background which I have previously outlined and the reality of the situation was that the plaintiff could not adhere to Mr. O'Regan's
proposed regime so that in effect, on a bona fide basis, the new editor required the plaintiff to be in attendance from 7 a.m. onwards and equally on a bona fide basis the plaintiff could not comply with this request and indeed never could have because of her domestic circumstances.
It is quite clear from the manner in which this case is presented to the Court by the Independent Newspaper Group that no aspersion is cast on the plaintiff's capacity and integrity as a journalist and in particular as to her role as Political Correspondent.
Post Termination.
Following the termination of her employment, the plaintiff attempted to obtain alternative work of a similar nature. In this regard, I accept her evidence that jobs in the nature of a political correspondent do not come up very often and she had no alternative but to return to freelancing, working for alternative media sources and she also worked for a text messaging agency. Her accountant has given evidence as regards her actual financial loss. The plaintiff has studied for the degree of Barrister-at-Law at the King's Inns and has recently qualified and is hoping to commence practice. Counsel for the plaintiff in opening the case submits that one year's notice would have been reasonable in the circumstances of this case. The evidence given on behalf of the plaintiff by Seamus Dooley, the Irish Organiser of the N.U.J. was to the effect that the current N.U.J. has agreement with the Defendant provides for a one month notice period for an employee such as the plaintiff and this agreement came into place in or about May, 2001, the plaintiff's employment having been terminated in April, 2000. He accepted that there was no particular custom or practice in place at the time of the termination of the plaintiff's employment and he considered that the one month notice period provided for in the current N.U.J. agreement was reasonable.
Ryan Dowling, a Senior Political Correspondent, gave evidence that the current notice period applicable to his employment with the Defendant, was one month and that when he moved from the Defendant Group to the Sunday Times Newspaper he entered into a contract which provided expressly for a three months notice period in 2001. Mr. Dowling indicated that when he left The Independent Newspaper Group to take up employment with the Sunday Times, he gave them one month's notice of termination of his employment.
Submissions of the plaintiff
The plaintiff's first claim is for damages for breach of contract and/ or for wrongful dismissal (paragraph 5, Statement of Claim), and her second claim is for general damages for negligent misstatement/ misrepresentation (paragraph 6, Statement of Claim). The central allegation of the plaintiff in these respects is that the defendant represented to her during the negotiations leading up to her contract of employment that she would be employed under the conditions pleaded in paragraph 4 of the Statement of Claim, the most important of which in the context of this claim is the matter set out at paragraph 4(b) in the Statement of Claim, i.e. "That the plaintiff would work from home from 7.00am until the first edition deadline and from thereafter would work from the Dail for the remainder of the working day." The plaintiff further alleges that the defendants knew or ought to have known that this was not true. The plaintiff claims that she relied on the representations and was induced by them to enter into the contract of employment with the defendant and suffered loss as a result.
The plaintiff submits that the summary termination of her contract by the defendant on 17th April 2000 without cause was in breach of the terms and conditions of her contract with the defendant, in particular the agreed working arrangement whereby she would work from home from 7am until the first edition deadline which, it is submitted, is a fundamental term of the plaintiff's contract and accordingly cannot be varied except by consent.
The plaintiff contends that the defendant represented to the plaintiff during the negotiations for her contract of employment that if she were to be employed by the defendant as the political correspondent of the Evening Herald that she could work from home from 7am until the first edition deadline and as such was a statement of fact. The plaintiff submits that the parties intended that the statement would constitute a binding promise on the defendant and as such was a binding collateral warranty which the defendant breached.
With regard to the question of whether the plaintiff is entitled to additional damages where the dismissal caused injury to her reputation (as is contended by the plaintiff), the plaintiff submits that the position in the United Kingdom that such an entitlement does not exist has not yet been accepted in Ireland and has been rejected by the rest of the common law world and in any event that additional damages have always been recoverable under the remoteness test laid down in Hadley v. Baxendale.
Submissions of the defendant
The defendant contends that if the court finds that the plaintiff did have a contract of employment with the defendant in accordance with the alleged representations, then by definition there was no misrepresentation and the plaintiff can only succeed in her claim for breach of contract/ wrongful dismissal.
In the alternative, the defendant submits that if the court finds that representations were made about the nature of the contract of employment that would be entered into and that these representations did not accord with the actual contract of employment, the court will have to determine the issue of whether such representations were made negligently and what loss arose. It is submitted that the loss complained of was that the plaintiff changed job and that she would not have done this had the representation not been made.
The defendant contends that the plaintiff's contract did not contain a term to the effect that she was entitled to work from home from 7am until the first edition deadline and thereafter to work from the Dail for the remainder of the working day. The defendant contends it was a work practice and not a term of the contract of employment and therefore subject to change by the defendant when done bona fide in pursuit of the business interests of the defendant newspaper group. Further, it is submitted that the work practice was contingent on Mr. Drury and/ or the arrangement working to the satisfaction of both parties.
Making the assumption that the contract of employment does not contain the term to the effect that the plaintiff was entitled to work from home from 7am until the first edition deadline and thereafter to work from the Dail for the remainder of the working day, the defendant concedes that if the court finds that a representation was made to the plaintiff that she would be employed on the basis of this term, the plaintiff's contract of employment did contain such a term.
The defendant contends that the plaintiff is not entitled to make separate claims for breach of contract/ wrongful dismissal on the one hand and misrepresentation on the other hand, given the differing purposes of damages for these differing claims. The defendant contends that the purpose of damages for breach of contract/ wrongful dismissal is to place a plaintiff in the same position as if the contract had been properly performed. In light of this, the defendant contends that in the circumstances of this case the application of this principle means that damages must be awarded on the basis that the plaintiff had been given reasonable notice that the contract would be terminated- in other words, damages for breach of contract/ wrongful dismissal should be confined to the notice period.
With regard to the claim for negligent misrepresentation/misstatement, the defendant submits that the basis for assessing damages for alleged negligent misrepresentation is placing the plaintiff back in the position he/she would have been had the alleged misrepresentation not occurred. The defendant contends that in the circumstances of this case, this would mean awarding damages to the plaintiff on the basis that had the alleged negligent misrepresentations not been made, she would have remained in her post as political correspondent with Ireland on Sunday. Accordingly, the defendant contends that the court cannot award damages both on the basis that the plaintiff should have had her contract terminated in accordance with a period of reasonable notice and on the basis that the plaintiff would have remained with Ireland on Sunday had the representations not been made
A claim for damages for injury to the plaintiff's reputation as a journalist was made in paragraph 6 of the Statement of Claim. The defendant contends that damages for this part of the plaintiff's claim are not recoverable given the general rule at common law that in an action for wrongful dismissal, a plaintiff is not entitled to claim damages for the injury to reputation flowing from the dismissal.
With regard to the question of reasonable notice, the defendant concedes that there was an implied term in the plaintiff's contract that reasonable notice had to be given as there was no express agreement regarding notice periods between the parties.
Referring to the evidence of Seamus Dooley, the Irish Organiser of the NUJ, Brian Dowling and the evidence of the plaintiff (the defendant contends that the effect
of the plaintiff's evidence is that there is no custom or practice with regard to notice and that this contention is supported by the evidence of Mr. Dowling), the defendant submits that the evidence before the court clearly establishes that a one-month notice period is reasonable and that there is absolutely no evidential basis for the plaintiff's contention that a reasonable notice period in the circumstances would be not less than one year.
The law of warranty
Not every statement or representation of fact made by parties in pre-contractual negotiations will form part of any concluded contract: such statements may be made in the interests of extracting the best possible bargain from the give and take nature of negotiations. Further, any potential for contractual effect such statements may have could be negated by the express intentions of the parties. However, there is a tension between such situations and situations where (for one party at least) the contractual incorporation of a matter ventilated in negotiations may be of fundamental importance: circumstances could leave a question mark hovering over whether such matters were in fact mutually understood as having contractual effect. Given the need to define the boundaries of any contractual arrangement, the common law has drawn a distinction between representations having no contractual effect and those having such contractual effect: the textbooks classify the former as "mere representations" and the latter as "warranties" (for example, see McDermott, Contract Law, p.269).
Broadly, "warranty" means a term having contractual effect: more narrowly, it denotes a contractual term any breach of which will give rise to an entitlement to damages.
The manner in which the courts will approach the question of whether a representation constitutes a warranty or a matter having no contractual effect is outlined in Scales v. Scanlan (1843) 6 ILRCL 432 by Lefroy B at p.457 of the report:
"To make a warranty it is not necessary that the word "warrant" or "warranty" should be used. There was a time in law when it was otherwise... but it has long since been well settled, that words of affirmation, affirming a matter of fact, on the faith of
which the party contracts, are as competent to make a warranty as any strict technical term."
It is well established that the significance of the representation to the eventual entry into the contract on the part of either or other of the parties is a relevant factor in ascertaining the existence of a warranty: see Murphy v. Hennessey (1897) 31 ILT 404 and Gill v. Cape Contracts Ltd [1985] ILR 49.
In Dick Bentley Productions Ltd v. Harold Smith [1965] 2 All ER 65 at 67, Lord Denning MR stated:
"Looking at the cases once more, as we have done so often, it seems to me that if a representation is made in the course of dealings for a contract at the very purpose of inducing the other party to act on it, and it actually induces him to act on it by entering into the contract, that is a prima facie ground for inferring that the representation was intended as a warranty. It is not necessary to speak of it as being collateral. Suffice it that the representation was intended to be acted on and was in fact acted on. But the maker of the representation can rebut this inference if he can show that it really was an innocent misrepresentation, in that he was in fact innocent of fault in making it, and that it would not be reasonable in the circumstances for him to be bound by it."
This statement of principle was approved and applied in the employment context by the Queen's Bench Division of Northern Ireland in Gill v. Cape Contracts Ltd. [1985] ILR 49. In that case, the defendant company required around 40 insulation engineers to complete a contract in the Shetland Islands. The defendant company contacted their representatives in Northern Ireland who passed word among the insulation engineers employed by Harland and Wolff (which included the plaintiffs). The plaintiffs, who were married men in the main, were informed that they would receive a much higher wage than they were earning at Harland and Wolff to compensate for the difficult conditions working in the Shetlands would entail. They were told that the job would last for at least six months: as a result of the assurances they received, the plaintiffs applied for employment with the defendants. When the plaintiffs were informed that they were acceptable, they gave notice to Harland and
Wolff which, irked at losing workers in this way, told the plaintiffs that they would not be employed there again. The opportunity in the Shetlands fell through due to industrial relations problems and the plaintiffs sued for damages. O'Donnell LJ held that the plaintiffs were entitled to damages for breach of a warranty by the defendants as the defendants failed to honour a representation to the plaintiffs forming a collateral contract that if they gave up their existing employment, they would be employed by the defendant company in the Shetlands for approximately six months at wages considerably in excess of their existing earnings. The court again reaffirmed the basic principle that if a representation is made in the knowledge and intention that the representee will act on it, it constitutes a warranty. In Gill, the court characterised the representations made by the defendants as representations which the defendant intended the plaintiff to act upon and upon which the plaintiffs did act. With regard to the role of the representations in the plaintiffs' decision to switch their employment from Harland and Wolff to the defendant, the court remarked at p.51:
"The plaintiffs were in the main married men, in steady employment. To give up such employment on the mere expectation of obtaining employment at Sullum Voe, albeit with vastly increased wages, would have been foolhardy in the extreme. Both parties were aware of this and it appears to me that negotiations never proceeded on this basis. I do not believe that the plaintiffs would have terminated their employment with Messrs Harland & Wolff, had they been offered no more than a reasonable expectation of obtaining employment." Accordingly, the court awarded damages for loss of bargain.
Negligent misrepresentation/ misstatement
The nature of misrepresentation required- will silence constitute a representation?
In Stafford v. Mahony, Smith and Palmer [1980] ILRM 53 at 64, Doyle J laid down the criteria for the action of negligent misrepresentation as follows:
"In order to establish the liability for negligent or non-fraudulent misrepresentation giving rise to action there must first of all be a person conveying the information or the representation relied upon; secondly, that there must be a person to whom that information is intended to be conveyed or to whom it might reasonably be expected that the information would be conveyed; thirdly, that the person must act upon such information or representation to his detriment so s to show that he is entitled to damages."
In principle, the Irish courts have accepted that silence or non-disclosure regarding facts or changes in circumstance not known to the other party can give rise to an obligation to disclose such facts and circumstances and such failure to disclose will constitute a misrepresentation. In Pat O'Donnell and Co v. Truck and Machinery Sales Ltd. [1998] 4 I.R. 191 at 202, O'Flaherty J remarked:
"In general, mere silence will not be held to constitute a misrepresentation. Thus, a person about to enter into a contract is not, in general, under a duty to disclose facts that are known to him but not to the other party. However, in certain circumstances, such a party may be under a duty to disclose such facts. A duty of disclosure will arise, for example, where silence would negate or distort a positive representation that has been made, or where material facts come to the notice of the party which falsify a representation previously made."
The duty of care and contractual negligent misrepresentation
The substance of the plaintiff's claim in this respect is that she was induced to enter the contract by the representation made by Mr. Drury that she would be allowed to work from home from lam until the first edition deadline: thereafter, she would work from the Dail.
In Securities Trust Ltd. v. Hugh Moore & Alexander Ltd. [1964] I.R. 417. 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..."
In Esso Petroleum v. Mardon [1976] QB 801, Lord Denning MR formulated the duty of care in the following manner at p. 820:-
"... if a man, who has or professes to have special knowledge or skill, makes a representation by virtue thereof to another - be it advice, information or opinion - with the intention of inducing him to enter into a contract with him, he is under a duty to use reasonable care to see that the representation is correct, and that the advice, information or opinion is reliable. If he negligently gives unsound advice or misleading information or expresses an erroneous opinion, and thereby induces the other side to enter into a contract with him, he is liable in damages."
Irish law reflects this line of thinking. In Forshall v. Walsh (unreported, High Court, Shanley J, 18th June, 1997), Shanley J stated at p.64 of the transcript:
"A party seeking damages for negligent misrepresentation must establish that the representative failed to exercise due care in making the representation as a result of which representation the person to whom it was made was induced to enter into the particular agreement and suffered damage in consequence of the inaccurate representation. Closely aligned to the claim of negligent misrepresentation is the wider tort of negligent misstatement. In relation to negligent misstatement the first matter a plaintiff must establish is that the defendant owed him a duty of care."
The most recent affirmation of these principles in Irish law is King v. Aer Lingus plc [2002] 3 I.R. 481. So far as apposite to the present context, the facts and issues in this case were as follows. In 1989, Aer Lingus transferred its service and maintenance engineering component into a new subsidiary company, a process which involved lengthy and detailed negotiations between management and trade unions. The workforce felt that the only option was a secondment type arrangement where employees would retain their employment relationship with Aer Lingus while working in the subsidiary. As part of the negotiation process, the defendant company
wrote similar letters to the plaintiffs, containing statements to the effect that in the event of TEAM (i.e. the subsidiary to which the service and engineering component was transferred) getting into financial difficulties, existing employees would continue to maintain the Aer Lingus fleet at a minimum. The agreement also contained a clause that the company would not cause or permit a lockout during the lifetime of the agreement. The plaintiffs transferred to TEAM, which ran into financial difficulty in 1993 and was eventually sold in 1997. 97% of the workforce transferred to the purchasing company: however, the plaintiffs were among those who instead decided to return to Aer Lingus. The plaintiffs failed to secure the fleet maintenance jobs they were assured they would retain in any circumstance in the 1989 letters and were working on clerical or operative positions on their return. They claimed that they were entitled to do the same kind of work that they had always done and claimed that insofar as Aer Lingus had failed to provide such work, the plaintiffs were entitled to damages for breach of the assurances given to them in 1990.
At p. 48 of the report, Kearns J held:
"The commitment contained in the letter... can only be seen, be it a representation or term of the agreement, as conveying that fleet maintenance work would be available 'at a minimum' with the defendant at the point of return for those workers who, having transferred to TEAM in 1990, opted to return to the parent company in 1998 against the backdrop of difficulties described in evidence. For the avoidance of any doubt, however, I find that the assurance contained in Mr. O'Neill's' letter of the 30th April, 1990, was both a representation and a term of the agreement and that, insofar as it may be regarded as a representation, the defendants, in making it, were under the duty of care alluded to in Hagen & ors. v. ICI Chemicals and Polymers Limited [2002] IRLR 31. It is proper to record that the defendants did not deny the existence of such a duty in a transfer of undertaking situation, which for all practical purposes existed in this case, but rather sought to argue that the plaintiffs had failed to plead any specific misrepresentations. The duty of care, it seems to me, it self-evident and no more than basic common sense, and a general plea of misrepresentation is sufficient in the circumstances."
With regard to the question of damages, Kearns J held at p.489 of the report:-
"... the plaintiffs are entitled to be treated as though they had never transferred to TEAM, that they are entitled to all appropriate increments or benefits on the basis that they earned and achieved the same seniority by 1998, as those Aer Lingus employees who did not transfer, that they were, on returning, entitled to such recognition and are now entitled to compensation in lieu thereof if they have suffered financial loss as a consequence of not getting such recognition."
This case re-affirms two propositions. First, there is a duty of care to avoid making negligent representations or statements in pre-contractual, negotiation stages which have the effect of inducing a plaintiff to act to his/ her detriment. The case took place in a "transfer of undertaking" context, but there is nothing in the language of the judgment to suggest that the duty of care is confined to this situation. Where a new contract and terms of employment are being negotiated with prospective employees, there is a duty of care on the part of the prospective employer to avoid making negligent misrepresentations/ statements which are intended or have the effect of inducing an employee to leave his present position and which results in detriment to the employee. As regards the question of damages, Kearns J treated the employees as though the inducement to transfer to TEAM never took place: this is consistent with the basis on which damages for negligent misrepresentation are awarded in tort.
Is there any duty on the representee to ascertain the truth of the position before he acts on the representation?
The cases are uncertain in the context of claims for misrepresentation where the representation complained of induced a plaintiff to enter into a contract. In several cases, it has been suggested that when the representee is, or in the circumstances should be, informed or better informed of matters relating to the misrepresentation, any carelessness in reliance upon the misrepresentation will not deprive the misrepresentee of a remedy.
In Redgrave v. Hurd (1881) 20 ChD 1 at 13, it was held that it was not a "sufficient answer" to an action to rescind the contract between two solicitors for the
purchase of a practice that the representee had the means of discovering and might, with reasonable diligence, have discovered the truth. In Nocton v. Ashburton [1914] AC 932, Lord Dunedin stated at p.962:
"No one is entitled to make a statement which on the face of it conveys a false impression and then excuse himself on the ground that the person to whom he made it had available the means of correction."
In Strover v. Harrington [1988] Ch. 390, Sir Nicholas Browne-Wilkinson VC stated at p.410-
"... if it is once shown that a misrepresentation has been made, it is no answer for the representor to say that the representee has been negligent and could have found out the true facts if he had acted otherwise. The representee is under no duty of care to the representor to check on the accuracy of the representation. The representor is bound by his representations, however careless the representee may have been."
At p.596 of Butterworth's' The Law of Contract, it is stated that "In Scotland, in contrast, Walker asserts a general rule to the contrary that there is no recission (reduction) if the error was attributable to the negligence of the plaintiff (pursuer). The true state of the law may lie between these positions. Courts engage in what has been described as 'balancing the equities'."
However, in the broader tort action of negligent misstatement, the court will enquire whether it was reasonable for the former to rely on the statements of the representor in the circumstances of the case: see Smith v. Eric S Bush [1990] 1 AC 831.
Degree of inducement necessary
The next question is the degree of inducement necessary to satisfy the requirement of inducement. There are four possible scenarios. In the first situation, the significance of the truth to the plaintiff of what turns out to be a misrepresentation may be such that, if the plaintiff representee appreciated the true position, they would not have entered the contract at all (see Horry v. Tate and Lyle Refineries Ltd [1982] 2
Lloyd's Rep 416 at 422, per Peter Pain J). This obviously meets the standard required for a legally effective inducement. The second situation is where, depending on the circumstances, a representation may be material to the decision of the plaintiff representee to enter into the contract without being decisive: if the representee had known the truth, the representee would still have been willing to conclude the contract, but perhaps on different terms. This will also suffice to meet the requirement of inducement: the best example of this in Irish law is Donnellan v. Dungoyne Ltd. [199511 ILRM 388.
The third situation is where, despite the relevance of the misrepresentation to the eventual contract, if the plaintiff representee had known the truth, the plaintiff would still have concluded the contract. This will not meet the standard of an operative inducement. The fourth possibility lies somewhere between the second and third possibilities: it cannot be said for certain whether the misrepresentation induced the plaintiff to enter the contract or not, but it might be said that the misrepresentation might have been material, if not decisive, to the decision to enter the contract.
In an action for negligent misstatement, the law requires that any loss be caused by the misstatement or misrepresentation. In other words, the effect of the misrepresentation (which constituted the inducement) must be causal in the sense of decisive (see Edgington v. Fitzmaurice (1885) 29 ChD 459 at 483, per Bowen LJ). The plaintiff who has been misled by the representation must have relied upon the representation in the sense that but for the misrepresentation, the plaintiff would not have made the contract at all, or at least not in the same terms: in short, the first and second situations of inducement outlined above.
Quantum of damages for negligent misrepresentation
The measure of damages applicable in the tort of deceit (i.e. where a fraudulent misrepresentation has been made) is also applicable to negligent misrepresentation. In Forshall v. Walsh (unreported, High Court, Shanley J, 18th June, 1997), Shanley J adopted the following passage from the judgment of Henchy J in Northern Bank Finance v. Charlton [1979] IR 149 at 199 (which occurred in the context of an action for fraudulent misrepresentation) and held that it was an accurate statement of the measure of damages in actions for negligent misrepresentation also:
"As far as the tort of fraud or deceit is concerned, it is well settled that the measure of damages is based on the actual damage directly flowing from the fraudulent inducement, and that the award may include, in an appropriate case... consequential damages representing what was reasonably and necessarily expended as a result of acting on the inducement."
Basis of Assessing Damages
An action for wrongful dismissal is an action for breach of contract: in essence, the breach complained of in such an action is that the plaintiff's employment has not been terminated in accordance with his/ her contract or, where no such procedures exist, that the contract has not been terminated in accordance with fair procedures and the common law. The normal measure of damages in a wrongful dismissal action is the amount of salary the employee would have earned had he/ she been allowed to remain working for the balance of his contract, or for the period for which notice of termination should have been given in accordance with the contract. The same principle applies where no notice period as such has been incorporated into the contract: in such cases the common law implies a term into the contract that the employee may only be dismissed on giving reasonable notice and damages will be confined to the measure of the salary the plaintiff would have earned for the period of notice found reasonable in all the circumstances by the court. This has been the rule since Addis v. Gramophone Co. Ltd. [1909] AC 488.
However, the plaintiff has also made separate claims for breach of warranty and/ or negligent misrepresentation/ misstatement. The basis of awarding damages in these two contexts differs considerably from the attenuated scope for awarding damages in wrongful dismissal claims per se and is potentially far more remunerative: accordingly, it is necessary to outline the basis upon which the court will award damages in these contexts in some detail.
The common law courts have drawn a firm distinction between contract and tort in terms of awarding damages upon a finding of liability.
In tort, the plaintiff is entitled to be put in the same position, as far as money can do so, as he would have been in had the tort not been committed. This has been established since Livingstone v. Rawyards Coal Co. (1880) 5 App. Cas. 25 at 39, per Lord Blackburn. This principle is the basis of awarding damages in tort in Irish law: subject to the application of the test of remoteness of damages laid down in Hadley v. Baxendale, the general purpose of an award of damages in a tort claim is to place the plaintiff in the same position as they had been before the commission of the tort in question: damages cannot be awarded for loss of bargain. In Foley v. Thermocement Products Ltd. (1954) 90 ILTR 92 at 98, the Supreme Court referred to restitutio in integrum as "the underlying principle by which courts are guided in awarding damages."
In contract, however, the compensatable wrong consists not in the making but in the breach of the contract and accordingly the plaintiff is entitled to be placed in the position he would have been had the contract been performed. In other words, the plaintiff is entitled to recover damages for loss of bargain.
Experience has shown that the distinction between the principles upon which contract damages and tort damages are awarded outlined above tends to blur in cases involving misrepresentations of fact inducing entrance into contractual relations, which is the type of case at issue in the present proceedings: in such cases there is inevitable scope for pleading that the representation was a term of the contract entered into and that the misrepresentation leading to the non-observance of contractual obligations is an actionable tort. Where a plaintiff has been induced to enter into a contract by a misrepresentation of fact on the part of a defendant or his agent, if the representation forms part of the concluded contract (whether the representation constitutes a condition or a warranty is immaterial in this context), the plaintiff may sue for breach of contract and loss of bargain, which entitles the plaintiff to be placed in the same position as he/ she would have been had the representation of fact been true and obligations consequent upon the representation been performed by the defendant. However, if the representation is not a term of the contract, there is by definition no breach of contract and the plaintiff's only remedy will lie in tort: the plaintiff will have a remedy in deceit where the misrepresentation is fraudulently made, and there will be a remedy in negligent misrepresentation where the
misrepresentation was made negligently in the context of a duty of care owed by the representor to the plaintiff.
This vital distinction is established in Irish law. O'Hanlon J contrasted the basis upon which damages for misrepresentation in tort are awarded and the basis upon which damages for breach of warranty are awarded in McAnarney v. Hanrahan [1993] 3 I.R. 492 at 498 as follows-
"What now falls for consideration is the correct way in which damages should be assessed in a case of negligent misrepresentation. Damages in such cases are assessed by analogy with claims for damages for deceit. Where damages are claimed for fraudulent misrepresentation then they are assessed so as to put the plaintiff in the position he would have been in if the representation had not been made to him. This is different to the case where damages are being assessed in the case of a claim based on breach of warranty - then damages are assessed on the basis that the warranty was true. So, in the case of a sale of shares induced by fraudulent misrepresentation the normal measure of damages is the purchase price of the shares less their actual value at the time of acquisition (see McGregor, Damages, 15th Ed., paras. 17.18, 17.24 and 19.39) and in a case like the present one, where a plaintiff has been induced to enter into a contract for the purchase of land by a misrepresentation negligently made, the normal measure of damages is the price paid for the land less its actual value at the time of sale."
O'Hanlon J followed his approach in McAnarney v. Hanrahan in Donnellan v. Dungoyne Ltd. [1995] 1 ILRM 388.
In this case, the plaintiff has made claims for breach of contract (at paragraph 5 of her Statement of Claim) and negligent misrepresentation (at paragraph 6 of her Statement of Claim). Applying the analysis above, if the plaintiff is entitled to succeed in her claim for negligent misrepresentation, the damages she is entitled to will be assessed on the assumption that she would not have left her position as political correspondent with Ireland on Sunday but for the misrepresentation that she would be permitted to work from home from lam until the first edition deadline and thereafter would work from the Dail for the remainder of the working day. In short,
the plaintiff will not be entitled to damages based on the remuneration she would have earned had her contractual obligations with the Evening Herald been met.
If it is found that the representation with which the plaintiff takes most significant issue, i.e. that she would be allowed to work from home until the first edition deadline, is a term of the contract entered into by her and the defendant and that such term has been breached, the plaintiff will be entitled to damages awarded on the basis that the defendant would have observed the contract: in other words, the plaintiff will be entitled to damages based on the net pay she would have earned had the defendant allowed her to remain in her position at the Evening Herald.
The factual scenario in this case is but one illustration of the obvious possibility of the existence of a set of facts which conceivably give rise to concurrent liability in contract and tort. Given the differing principles upon which damages for contract and tort are awarded, should the defendant newspaper group be found liable for negligent misrepresentation and breach of warranty, the defendant will in effect be required to pay damages on the basis that the plaintiff both would have stayed in her position at Ireland on Sunday but for the misrepresentation and would still be with the Evening Herald had the defendant honoured its contractual obligation to allow the plaintiff to work from home until the first edition deadline every morning. In view of the possibility of concurrent liability (which in principle amounts to double compensation for the plaintiff), and the fact that the defendant has submitted that it is not open to the plaintiff to maintain an action in both contract and tort, the following appears to be the position in Irish law regarding concurrent liability in contract and tort.
Approaching the matter from first principles, the boundaries of contract and tort actions suggest that there is no conceptual objection to imposing liability in both contract and tort provided the facts as found meet the criteria of liability of the type of tort and contract action taken. Going back to first principles, the obvious condition precedent to an action for breach of contract is the existence of a contractual obligation: an action in tort has never required a contractual relationship between the parties, although the circumstances of a contractual obligation may give rise to a duty of care in tort over and above the normal "duty of care" (so to speak) to observe the
terms of the agreement in the contractual context. To take the causes of action in tort and contract at issue in the present proceedings, it is not a requirement of an action for negligent misrepresentation that the parties enter into the contract, even if this is the effect of the representation. Secondly- again going back to first principles- in order to bring an action for negligent misrepresentation, it must be proved that the party making the representation owed a duty of care to the representee (Hedley Byrne v. Heller [1964] AC 465: see the first instance decision of O'Donnell v. Truck and Machinery Sales [1997] 1 ILRM 466 at 473, per Moriarty J. His decision was overturned on the facts by the Supreme Court but the Court did not question Moriarty J's interpretation of the law). For an action for breach of warranty, the existence of the warranty as a contractual obligation is the only condition precedent to the finding of a compensatable breach: no duty of care of the standard required in tort is required.
The Irish courts have accepted that a defendant may be liable in both contract and tort: the law does not require a plaintiff to elect between the remedies and he may plead either or both. In Kennedy v. Allied Irish Banks plc [1998] 2 IR 48- at p.56 Hamilton CJ stated:
"...where a duty of care exists, whether such duty is tortious or created by contract, the claimant is entitled to take advantage of the remedy which is most advantageous to him subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that, in accordance with ordinary principle the parties must be taken to have agreed that the tortious remedy is to be limited or excluded."
In O'Donnell & Co. Ltd. v. Truck and Machinery Sales Ltd. [1998] 4 I.R. 191 at 198-99, O'Flaherty J remarked of the effect of the decision in Kennedy as follows:
"In the light of the decision of this Court in Kennedy v. Allied Irish Banks plc. [1998] 2 IR 48, it is clear that the law in this jurisdiction permits concurrent remedies. Indeed, the common law world would appear to be united in this regard: see, e.g., Henderson v. Merrett Syndicates Ltd. [1995] 2 AC 145 (The House of Lords); Central Trust Co. v. Rafuse (1986) 31 D.L.R. (4th) 481 (The Supreme Court of Canada); Bryan v. Maloney (1995) 182 C.L.R. 609 (The High Court of Australia); Aluminium Products (Qld.) Pty Ltd v. Hill [1981] Qd.R. 33 (a decision of the full
Court of the Supreme Court of Queensland) and Macpherson & Kelley v. Kevin J. Prunty & Associates [1983] 1 V.R. 573 (a decision of the full Court of the Supreme Court of Victoria); Rowlands v. Collow [1992] 1 N.Z.L.R. 178 (The High Court of New Zealand). In relation to the American position, see Fleming, The Law of Torts, 8th ed. (1992) p.187; Prosser and Keeton on the Law of Torts, W. Keeton. Gen. Ed., (1984) page 444.
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."
O'Hanlon J saw no obstacle to awarding damages for breach of warranty and negligent misrepresentation in Donnellan v. Dungoyne [1995] 1 ILRM 385. In that case, a plaintiff was interested in setting up his son in a shoe retailing business in Laois Shopping Centre, Portlaoise and engaged in negotiations from February 1991 with the letting agents of the defendant company, which owned the shopping centre in question, to lease a unit in the centre. In November 1991, the letting agents represented to the plaintiff that virtually all the units of the centre had been leased to tenants and would be occupied and trading by Christmas 1991. The defendant company executed a 35 year lease of a unit in the shopping centre to the plaintiff's son. In January 1992, the plaintiffs realised that the centre had not been fully let and along with other tenants sought further rent-free periods from the defendants as compensation for the poor performance of the plaintiff's son's shoe retailing business: they argued that the centre attracted insufficient numbers of customers and that this caused the failure of the plaintiff's son's shoe business. Inter alia, on the facts of the case, O'Hanlon J found that the representation that the units in the shopping centre had been fully let was a contributing factor in the decision of the plaintiff and his son to embark upon the lease, but not decisive. However, the importance of the case in the present context is the tacit suggestion of O'Hanlon J that the remedies of breach of warranty and negligent misrepresentation are not mutually exclusive: at p.397 of the report, he remarked:
"... I am of opinion that a case has not been made out for recission of the lease, as sought in the civil bill, but merely for damages for breach of warranty and negligent misrepresentation, as happened in the case of Esso Petroleum v. Mardon [1976] QB 801, and McAnarney v. Hanrahan [1993] 3 IR 492 to which I have been referred by counsel, and which I propose to follow."
Reasonable notice
Where a termination procedure has been agreed and incorporated into the contract of employment, the courts are disinclined to substitute their own view of what is otherwise required to lawfully terminate the contract for the agreed termination procedure: accordingly, even where such a termination procedure does not specify that the employee in question may be dismissed on reasonable notice, the courts will not imply a term to this effect into the contract on the basis that the express agreement regarding termination is inconsistent with the implication of any other terms: see Grehan v. North Eastern Health Board [1989] IR 422.
However, in the converse situation- i.e. that where no termination procedure or notice period has been agreed between the parties- the law implies a term into every contract of employment where a notice period has not been expressly stipulated that reasonable notice must be given to terminate the contract. What constitutes "reasonable notice" is a matter of fact for the court to determine in light of all the circumstances. How the court will approach the question of what constitutes "reasonable notice" in any given context was set out by Tucker J in Warren v. Super Drug Markets Ltd. (1965) 54 DLR (2d) 183 as follows:
"The rules for determining what is a reasonable notice were set out by the full court in Speakman v. Calgary (City) (1908) 9 WLR 264, at 265, 1 Alta LIZ 454, by Beck, J. ... viz.:
`... the question, what is a reasonable notice, depends upon the capacity in which the employee is engaged, the general standing in the community of the class of persons, having regard to their profession, to which the employee belongs, the probable facility or difficulty the employee would have in procuring other employment in case of
dismissal, having regard to the demand for persons of that profession, and the general character of the services which the engagement contemplates."
The plaintiff and defendant have cited a significant number of cases in Irish and English law concerning newspaper employees. However (leaving aside those employees whose terms and conditions of employment are dealt with under statute or where a termination procedure and notice period have been agreed and incorporated into a contract) no profession, job or category of employee is treated differently or favourably in the context of the rules used in determining what a reasonable notice period is: the cases are merely specific illustrations of generally applicable rules.
One common thread running through the cases is that "persons in well paid and prestigious jobs are entitled to relatively lengthy notices." (Forde, Employment Law (2nd edition, p.166). In Lyons v. M.F. Kent & Co. (International) Ltd [1996] ELR 103, an accountant employed by a large construction company who spent much of his time on foreign assignment was held entitled to one year's notice. In McDonald v. Minister for Education [1940] IR 316, a teacher was held entitled to six months' notice. It seems the status and position of the employee in question has been the most significant factor in deciding notice entitlements in recent Irish case law. Among the most significant examples of such are: Carvill v. Irish Industrial Bank [1968] IR 325 (where a managing director of a small bank was held entitled to one years' notice); Tierney v. Irish Meat Packers (1989) ILT 5 (where a group credit controller of a meat company was held entitled to six months notice); Robinson v. Corneil (unreported, High Court, Keane J, 10th April 1992) (where the responsibilities attached to a managerial position were held to justify six months' notice).
Of interest in the context of the plaintiff's situation in this case is Lowe v. Walter (1892) 8 TLR 358, which offers the nearest analogy to the plaintiff's own situation in terms of the position of the person whose notice entitlements were being decided. The foreign correspondent to the Times was held to be entitled to six months' notice.
A typical example of the length of period the courts are inclined to stipulate for positions of responsibility in the print media is Bowman v. Holten Press Ltd. [1952] 2 All ER 1121. A journalist and photographer were held entitled to six
months. Much of the report of the case was taken up with the question of whether the plaintiff was employed under a contract of service or a contract for services and there is no guidance on the issue of reasonable notice: the report briefly recounts how, after finding that the plaintiff was employed under a contract of service the court determined that a reasonable notice period was six months and held that giving the plaintiff two week's notice to leave was a breach of contract. However, it seems that this decision was based upon the status of the employee more than any other factor.
A good illustration of the relevance of the responsibilities of a position to the question of entitlement to reasonable notice is O'Reilly v. Irish Press (1937) 71 ILTR 194. The plaintiff was the chief subeditor of the Irish Press. He failed to prove a wage custom entitling him to six months' notice, but the court gave him six months based on the responsibilities attaching to his role: the Court noted that on the evidence before it the success or failure of a newspaper depends to a great extent upon the competence, judgment and the taste of the chief subeditor. The plaintiff had 15 subeditors below him and in addition to being chief subeditor, the plaintiff was the night editor.
It seems proof of a custom regarding notice periods in a particular industry or sector is a significant factor for the court to weigh in deciding the matter and will appreciably influence the court's thought processes: a reading of some of the cases on reasonable notice suggests that customs prevalent in the industry were of central significance to the court's decision. However, the customs of a particular industry, if such are proved to exist upon the evidence, will not be decisive of the question of what amounts to reasonable notice: it is but one of the factors identified in Warren v. Superdrug Markets Ltd. to be taken into account in assessing the circumstances of the plaintiff's employment and the notice period that such circumstances warrant.
One case where a custom of the particular industry proved significant in the court's decision as to reasonable notice is O'Connell v. The Gaelic Echo Ltd. (1958) 92 ILTR 156. A member of the editorial staff of a monthly magazine was held to be entitled to at least one month's notice and evidence was given on behalf of the plaintiff by a representative of the NUJ that the customary period for notice in the absence of express agreement in the Dublin area was one month for reporters, three months for sub-editors and six months for chief sub-editor. Another case emphasising the importance of custom is George Edwardes (Daly's Theatre) Ltd. v. Comber (1926) 42 TLR 247. In that case, an actor had an option agreement with Daly's
Theatre whereby the theatre could require the actor to play the part of the Ambassador in the play Katja the Dancer in a West End theatre by giving the actor two weeks' notice before the end of the season. The option was duly exercised, and the concluded agreement contained a clause that the actor would not perform for any other company or production for the run of the play. The actor subsequently tried to take up an acting engagement with another company before the end of the play's run. An application by the plaintiff theatre company to restrain the defendant actor from taking this offer up was successful: the court rejected a submission that the agreement was terminable by fourteen days' notice. Had the agreement been indefinite, this submission would have been accepted: however, the court accepted evidence that "so well known and established is the custom in the profession that a mere engagement of a person to play a part in a certain play in London or the provinces constitutes a contract for such engagement for the run of the play in London or the provinces constitutes a contract for such engagement for the run of the play in London or for the tour, as the case may be, and there is no power on either side to determine the contract during the said run." Another such case is Grundy v. Sun Printing and Publishing Association (1916) 33 TLR 77, where the court accepted that the custom for a newspaper editor was a twelve-month notice period and that a sub-editor was entitled to a six-month notice period and determined the period of reasonable notice these persons were entitled to accordingly. Yet another example is Fox-Bourne v. Vernon and Co. (1894) 10 TLR 647 where a six-month notice period for an editor was found to be reasonable by reference to the established custom for editors: in the same vein, see also Chamberlain v. Bennett (1892) 8 TLR 234 (where a subeditor of newspaper was held to be entitled to six months based on evidence of a custom).
Claim for damages for injury to reputation
At paragraph 6 of her Statement of Claim, the plaintiff claims that she "... has suffered and continues to suffer loss, damage, expense and distress and in particular, has suffered injury to her reputation as a journalist. Further, the plaintiff has been damaged by reason of the misrepresentation and/ or negligent misstatement of the defendant company, its servants or agents."
At common law, the general rule for many years was that damages for the manner or unfortunate circumstances of the dismissal were not recoverable in a common law action for wrongful dismissal. This was laid down in Addis v. Gramophone Company Ltd. [1909] AC 488, where a plaintiff was awarded a sum of money in excess of the outstanding salary due to him for the notice period: the implication of this award was that the extra sum was compensation for the humiliating manner in which he had been dismissed. The House of Lords held that the plaintiff was only entitled to the salary he would have earned during the notice period, but the stressful and humiliating nature of the circumstances surrounding his dismissal could not be permitted to influence the court's jurisdiction to award damages. Lord Loreburn LC commented:
"If there be a dismissal without notice the employer must pay an indemnity, but that indemnity cannot include compensation either for the injured feelings of the servant or for the loss that he may sustain from the fact that his having been dismissed of itself makes it more difficult for him to obtain fresh employment."
It was held that the employee may have a separate action in tort for defamation or nervous shock, but damages in the wrongful dismissal context remained limited to the notice period. Early Irish authority suggested that Irish law would develop along the lines of the position in Addis: in Kinlen v. Ulster Bank Ltd. [1928] IR 171 at 184, Kennedy CJ stated:
"The plaintiff has relied on two matters for the purpose of aggravating the damages to which he is entitled. In the first place, he said that the bank manager not only refused him the money to which he was entitled, but refused it contemptuously, and with contumely. Indeed, I have no doubt that the plaintiff was very badly treated indeed by the bank. In the second place, he urged that by reason of the first refusal he was subjected to great humiliation in raising money to pay his workmen. He had to pawn some of his personal belongings to raise part of the money, and he had to borrow part of it from a friend. These matters were greatly pressed upon us, and they evoke much sympathy with the plaintiff, but they are not matters which can be considered as elements of damages. It is very clearly settled, both in this country and in England, and affirmed in many cases, that in actions for breach of contract damages may not be given for such matters as disappointment of mind, humiliation, vexation, or the like, nor may exemplary or vindictive damages be awarded. See Breen v. Cooper IR 3 CL 621;
Hamlin v. Great Northern Railway 1 H & N 8; Addis v. Gramophone Co., Ltd. [1909] AC 488"
In Malik v. BCCI [1998] AC 20 (HL), the plaintiffs successfully claimed what are colloquially known as "stigma damages", their dismissal occurring in the wake of their employer's involvement in fraudulent banking practices. The plaintiffs issued proceedings on the basis of their difficulty in finding alternative employment stemming from their association with BCCI. The House of Lords held that, as a result of the bank's fraudulent activities, the bank had breached the implied term of trust and confidence in the employment relationship and this breach was sufficient to make the employer liable for the financial loss suffered by the plaintiffs: such losses were not limited to any notice period. However, Malik does not seem to have altered the Addis principle: the award of damages in Malik was based upon the breach of the implied term of trust and confidence and in any event the basis upon which the award of damages was made was purely financial. Nevertheless, the case is authority for a limited right of recovery where an employee's future job prospects have been damaged by the employer.
The High Court in England departed from the Addis position in Cox v. Phillips Industries Ltd. [1976] 1 WLR 638, but in 1985 the Court of Appeal reaffirmed the position in Addis in Bliss v. South East Thames Regional Health Authority [1987] 1 ICR 700. In Johnson v. Unisys Ltd. [2001] 2 All ER 801, the House of Lords endorsed its decision in Addis. In Johnson, the plaintiff had been summarily dismissed and had already been awarded damages for unfair dismissal by an industrial tribunal. He sought further damages to compensate him for the losses he suffered due to the manner in which he was treated and dismissed. The plaintiff tried to invoke the decision in Malik by claiming that he was entitled to such damages on the basis of breach of the implied term of trust and confidence in that the employer failed to afford him a proper opportunity to defend himself in disciplinary proceedings and failure to abide by the company's disciplinary code. The lower courts struck out his proceedings and the House of Lords dismissed the appeal, holding that where an employee was wrongfully dismissed, any damages awarded could not take account of the manner of the dismissal or any adverse consequences thereof for the plaintiff. The decision appears to have been based upon policy considerations: Lord Hoffmann considered that the plaintiff's claim was tantamount to an invitation to the court to
create a right to unfair dismissal at common law parallel to the statutory regime. He held at p.821 of the report that "...for the judiciary to construct a general common law remedy for unfair circumstances attending dismissal would be to go contrary to the evident intention of parliament that there should be such a remedy but that it should be limited in its application and extent."
Lord Hoffmann also considered whether the implied term as to trust and confidence could have any application or relevance at the dismissal stage. He concluded that the term had always been concerned with the preservation of the employment relationship and not its termination and to extend its scope to dismissal contexts would have been "inappropriate and unnatural." He held that at common law there was no obligation on an employer who had decided to end the employment relationship only for good cause: this was a matter for unfair dismissals legislation. This analysis regarding the scope of the implied term as to trust and confidence was subsequently applied by the Court of Appeal in Boardman v. Copeland County Council (unreported, Court of Appeal, 13th June 2002).
It is of interest to note that other common law jurisdictions have rejected Addis. In Stuart v. Armourguard Security [1996] 1 NZLR 484, the New Zealand High Court held that it was an implied term of the employment contract that an employee should not be dismissed in a manner likely to cause distress or loss of reputation, without proper cause. In that case, a regional manager who was peremptorily dismissed after he declined to tender his "non-negotiable resignation" was awarded general damages not limited by the Addis principle.
Conclusions:
I am satisfied that the plaintiff made it perfectly plain to Mr. Drury that she could not work the morning shift for the first edition from the offices of the Evening Herald: accordingly, Mr. Drury knew that if such an arrangement was not in place, the plaintiff could not undertake the job. I am satisfied that Mr. Drury did not express the serious reservations that were held by Senior Management as regards the proposed working arrangements and equally that he did not advise Senior Management that the plaintiff could not take up the position if the proposed morning working arrangements were not agreed or proved unworkable. In my view, this is the crucial point in the
case. I am satisfied that Mr. Drury was anxious to retain the services of the plaintiff and never foresaw that there would be any difficulty in the matter.
I take the view that the agreement as regards the morning working conditions was a fundamental term of the agreement reached between Mr. Drury and the plaintiff and that it constituted a warranty and an inducement to the plaintiff to give up her contractual arrangement with Ireland on Sunday. Furthermore, I am satisfied that the plaintiff left her job with Ireland on Sunday to join the Evening Herald as a result of the representation made by Mr. Drury that the plaintiff could work from home for the first edition of the Evening Herald. I am also satisfied on the evidence as a matter of probability that without the assurance on the morning working arrangements, the plaintiff would not have taken up employment with the defendants.
I fully accept that due to unforeseen circumstances, namely the departure of Mr. Drury as editor of the Evening Herald the agreed working conditions were immediately in jeopardy, leading to the termination of the plaintiff's employment on 17th April, 2000.
I take the view that no blame attaches in this regard to the plaintiff and in any event there does not appear to me to have been any way open to the plaintiff to check on the accuracy of the representation which was made to her by Mr. Drury and she simply trusted him and relied on what he said. Accordingly, I come to the conclusion that the plaintiff is entitled to damages for breach of warranty as against the defendants.
I am satisfied that Mr. Drury owed the plaintiff a duty of care to avoid making a negligent representation in the precontractual negotiation stages which had the effect of inducing the plaintiff to act to her detriment in the circumstances that arose.
I accept that Mr. Drury may not have anticipated a problem and that he may have mentioned the fact of Mr. Brennan not being particularly happy with the proposed arrangements: in my view, however, Mr. Drury's silence about the serious reservations expressed to him by senior management should have been communicated by him to the plaintiff, in compliance with the duty of care which he owed to her to enable her to fully assess the position, especially since Mr. Doyle was not prepared to reduce the terms of the plaintiff's morning working arrangements to writing.
I take the view that Mr. Drury failed in the duty of care he owed to the plaintiff and made a negligent representation to her by positively affirming the morning working arrangements and failing to advise the plaintiff by his silence of the
fact that senior management had serious reservations about the position regarding the early morning working arrangements.
Following on the decision of Doyle J. in Stafford v Mahony, Smith and Palmer [1980] I.L.R.M. 53, at 64, I am satisfied that there was, in the particular circumstances of this case, a person (Mr. Drury) conveying the information and representation relied upon and further that the relevant information was conveyed to the plaintiff and that she acted to her detriment upon the information and representation made to her.
Insofar as the misrepresentation in the particular circumstances of this case relates to a failure to disclose a material fact, it is quite clear to me that a duty of disclosure did arise because Mr. Drury's silence in effect negated and distorted the positive representation that he made that the working arrangements were agreed to, he having discussed the matter with senior management. I accept that there is an argument to be made on the defendants' behalf that the serious reservations on the part of senior management may not have falsified the representation previously made, but the reality of the situation is that Mr. Drury knew that the plaintiff could not take up the position if the morning working arrangements were not agreed to and he also knew that senior management were expressing serious reservations about the morning working arrangements, so that in effect, in my view, he was conveying to the plaintiff an inaccurate representation as to the true background position.
In my view, Mr. Drury owed the plaintiff a duty of care: he failed in this regard and accordingly I am satisfied that the defendants are guilty of a negligent misrepresentation in these circumstances and that the plaintiff is entitled to damages arising there from.
On the issue of reasonable termination of the plaintiff's contract of employment, I take the view that both the N.U.J. current agreement and the situation that pertained to Mr. Dowling when he left the defendant company to join the Sunday Times are different from the situation that faced the plaintiff when she was approached by the defendant company because she had in place a contractual arrangement and if a termination period had been discussed, undoubtedly it would have been an important factor for her consideration. In any event, it was never discussed or indeed touched on in any way and there was no provision in place as to an agreed period of notice of termination.
In all the circumstances of this case, including the factual background as to how the plaintiff came to be employed by the Defendant, the importance which Mr. Paul Drury attached to the plaintiff's employment, her esteemed professional ability, the fact that she was moving from a job to take up this position and most importantly the difficulty that she would undoubtedly face as a Political Correspondent in achieving a similar position in the greater Dublin area lead me to the conclusion that a reasonable period of notice of termination of the plaintiff's employment with the Defendant Group would be six months or alternatively six months' net loss of earnings in lieu of notice.
Insofar as the plaintiff has advanced a claim for damages for injury to reputation, I do not consider that in the particular circumstances of this case the plaintiff has made out such a case for loss of reputation against a background where no aspersion was cast on the plaintiff's capacity and integrity as a journalist and, in particular, as to her role as political correspondent. The reality of the situation, I believe, is that the defendants were well intentioned to the plaintiff and, as I have already stated, in a different set of circumstances the arrangement would probably have worked very well. Furthermore, if it were possible for the plaintiff to have worked for the first edition from the offices of the Evening Herald, it is quite clear that the arrangement would have continued. Accordingly, I conclude that there is no basis for any claim for injury to the plaintiff's reputation and, in these circumstances, it is not necessary for me to consider the legal issue as to whether or not there is a remedy in Irish law in respect of a valid claim for damages for loss of reputation arising from a termination of a contract of employment.
My findings bring about a situation where I have to assess damages both for breach of warranty and for negligent misrepresentation. I am satisfied following the judgment of Hamilton C.J. in Kennedy v Allied Irish Banks PLC [1998] 2 IR 48 at p. 56, that the claimant in these proceedings is entitled to take advantage of the remedy which is most advantageous to her, subject only to ascertaining whether the tortious duty is so inconsistent with the applicable contract that in accordance with ordinary principles the parties must be taken to have agreed that the tortious remedy is to be limited or excluded. In the particular circumstances of this case I am satisfied that the plaintiff is entitled to seek damages for concurrent remedies both in respect of breach of warranty and negligent misrepresentation.
I am further satisfied following the decision of O'Hanlon J. in McAnarney v Hanrahan [1993] 3 I.R. at 498 that damages to which the plaintiff is entitled for negligent misrepresentation are to be assessed on the basis that the plaintiff would not have left her position as political correspondent with Ireland on Sunday but for the misrepresentation and these damages will be based on the plaintiff's net loss of earnings and dependent on the remuneration she would have earned if she had remained on with Ireland on Sunday.
Insofar as the plaintiff is entitled to damages for breach of warranty, she is entitled to damages based on net loss of earnings and dependent on the remuneration she would have earned had she remained on in her position at the Evening Herald.
In assessing the appropriate level of damages for negligent misrepresentation, and breach of warranty I conclude that the appropriate measure is two years' net loss of earnings less the net remuneration as earned by the plaintiff from alternative sources during this period.
Insofar as there is an element of dispute as regards the appropriate taxation levels relating to the plaintiffs earnings I propose to reply on the figures as produced by Mr. Russell because from the taxation perspective he has been for a number of years the plaintiffs accountant and has been responsible for her tax returns and I consider it probable that he is more familiar with the taxation situation than the person who produced the figures on behalf of the defendants.
Furthermore while I accept that on or about the 24th day of March, 2000 the plaintiffs salary was reduced by the exclusion of the fifth day due to the intervention of the Trade Union the plaintiffs contract with the defendants was for a salary of IR£45,000 and having regard to the unusual circumstances that brought about the change I propose for the purpose of assessing damages herein to disregard that change of circumstances and to rely on the original contract.
The plaintiff is entitled to six months' notice of termination of her employment with the Evening Herald or, alternatively, six months' net pay in lieu thereof, which I calculate to be a sum of €18,637.06.
In respect of the plaintiff's claim for negligent misrepresentation, I assess damages in the sum of €33,227.61 being two years' net loss of earnings from the plaintiff's position with Ireland on Sunday less remuneration derived from alternative sources.
In respect of the plaintiff's claim for damages for breach of warranty, I assess damages in the sum of €52,266.00, being two years' net loss of earnings from the plaintiff's position with the Evening Herald less remuneration derived from alternative sources.
Accordingly, while the plaintiff is entitled to succeed in her claim as against the defendants under a number of headings, she is not entitled to recover damages under all of the headings because the claim arises out of the same set of circumstances and cause of action. The plaintiff is only entitled to recover damages under one heading of claim but she is entitled to recover damages from her optimum position which in the particular circumstances is in respect of her claim for breach of warranty and accordingly I award the plaintiff €52,266.00 damages.
