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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Browne -v- Iarnród Éireann - Irish Rail (No. 2) [2014] IEHC 117 (05 March 2014)
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Cite as: [2014] IEHC 117
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Judgment Title: Browne -v- Iarnród Éireann - Irish Rail (No. 2) Neutral Citation: [2014] IEHC 117 High Court Record Number: 2008 379 S Date of Delivery: 05/03/2014 Court: High Court Composition of Court: Judgment by: Hogan J. Status of Judgment: Approved |
Neutral Citation Number: [2014] IEHC 117 THE HIGH COURT [2008 No. 379 S] BETWEEN MICHAEL BROWNE PLAINTIFF AND
IARNRÓD ÉIREANN – IRISH RAIL (No.2) DEFENDANTS JUDGMENT of Mr. Justice Hogan delivered on the 5th day of March, 2014 1. In my first judgment in this matter, Browne v. Iarnród Éireann [2013] IEHC 620, I held that the defendant, Iarnród Éireann, was guilty of a breach of contract inasmuch as it had wrongfully refused to honour an early retirement package which it had offered to the plaintiff, Mr. Browne, a long standing employee of the company, in September, 2006 and which he had then accepted. In that judgment I pointed out that the plaintiff (who was then aged 62) found himself compelled by economic circumstances to return to work. He continued in that position until September, 2009 when he retired having reached the compulsory retirement age. 2. Had Mr. Browne retired in September, 2006 as part of the early retirement package he would have received a voluntary severance offer of €148,157, together with a monthly annuity of €2,174 per month. The plaintiff now claims that latter sum plus the voluntary severance payment for a period of three years up to retirement (this being €78,249), together with interest as a contract debt. 3. It is important to stress that the plaintiff did well financially during the final three years of employment, as he earned just over €300,000 in total over these three years. His capital sum was increased by €10,000 and his annual annuity was increased by a figure of €2,800 4. The fundamental question now is whether the plaintiff should be permitted to recover the contract debt to which he says he is entitled as the full measure of his compensation. The defendants object on the basis that this would amount to a form of double recovery, given that the plaintiff did in fact work for a further three years and his retirement package was, in fact, enhanced by reason of the fact that he worked these extra years. The issue thus presented is a difficult one in terms of the assessment of damages for breach of contract. 5. It is true that the literature is in entire agreement that debt is to be treated differently from the question of damages for breach of contract. Thus, for example, the editors of Chitty on Contracts (29th ed.), Vol. 1 at para. 26-009 summarise the distinction thus:
7. Counsel for the plaintiff, Mr. Conlon S.C., relied heavily on the leading decision of the House of Lords in White and Carter (Councils) Ltd. v. McGregor [1962] AC 413. In that case the defendant’s representative had signed a contract on behalf of a garage proprietor whereby he had agreed to have his services advertised on plates which were mounted on litter bins in then local area. On the same day the defendant himself wrote to the plaintiffs, who were advertising agents, repudiating the contract on the ground that his agent had misunderstood his wishes. The plaintiffs nonetheless ignored the repudiation and proceeded to advertise the defendant’s services. The defendant had, however, refused to have anything to do with this advertising project and refused to pay the plaintiff for the sums otherwise required under the contract. 8. The House of Lords held by a majority that the plaintiffs were entitled to the sum due under the contract. Even though the majority judgment was given by Lord Reid – an acknowledged master of the common law in general and of private law in particular – I confess that I nonetheless find myself unpersuaded by its reasoning. Even if the reasoning may be correct as a matter of strict logic, it nonetheless leads to results which are distinctly unpalatable and, in truth, unacceptable. As Lord Keith observed in his dissenting judgment ([1962] AC 413, 442):
10. As, moreover, the editors of Cheshire, Fifoot and Furmston’s Law of Contract (16th ed.) have observed (at 785), it might just as readily be said that even if (as they suggest) the plaintiffs in White and Carter were under no duty to mitigate their loss, nevertheless:
14. It was at that point that Mr. Browne had an option, namely, to accept the repudiation and to sue for damages for breach of contract or, alternatively, to refuse to accept it and, if necessary, to sue to enforce the (subsisting) contract. As applied to the facts of this case it meant that he could accept the repudiation and return to work, while later suing for damages. Or, alternatively, he could refuse to return to work and insist that the early retirement contract was still in full force and effect. This would not have been an easy choice to make. Specifically, as I noted in the first judgment, it would probably have been financially unrealistic for the plaintiff to elect to ignore the wrongful repudiation of the early retirement contract by Iarnród Éireann. This would have left him bereft of any income while he sued to enforce the September, 2006 agreement. 15. In these circumstances, it can scarcely be a surprise that Mr. Browne elected to carry on working despite his most profound misgivings. This may thus be regarded as another example of where, in the words of Lord Reid in White and Carter, by refusing co-operation (i.e., namely to pay out on the early retirement agreement) the party in breach “can compel the innocent party to restrict his claim to damages.” This is effectively what happened here since, for all the practical reasons I have just mentioned, Mr. Browne must be regarded as having accepted the repudiation by then returning to work and, indeed, continuing to work for another three years. 16. It is by reason of those facts that Mr. Browne forfeited his right to sue in debt for the liquidated sum promised by the early retirement package. Having being compelled by force of circumstances to accept the repudiation, his remedy now is confined to damages for breach of contract. What, then, was his loss? 17. Mr. Browne did not suffer any direct financial loss as a result of working the three extra years. Indeed, his lump sum and final retirement pension were all enhanced by virtue of the fact that he did, indeed, work a further three years. His loss was, therefore, a different loss, namely, being deprived of his right to take early retirement after long years as an exemplary employee. The defendant’s breach of contract effectively forced him to work for a further three years instead of being entitled to take retirement at an age in life (62 years of age) when he was best placed fully to enjoy that retirement. 18. Just as the law endeavours to compensate for the disappointment associated with an unsatisfactory holiday (Jarvis v. Swan Tours Ltd. [1973] 2 Q.B. 233) or the inconvenience suffered by the homeowner resulting from the defective construction of a residential dwelling (see, e.g., Johnson v. Longleat Properties Ltd. [1976-77] I.L.R.M. 93, Quinn v. Quality Homes Ltd. [1976-77] I.L.R.M. 314, Leahy v. Rawson [2004] 3 I.R. 1 and Mitchell v. Mulvey Developments Ltd. [2014] IEHC 37), the same can certainly be said by analogy in respect of the disappointment which Mr. Browne suffered in September 2006 when he was compelled to return to work. 19. As McMahon J. put it in Johnson ([1976-77] I.L.R.M. 93, 105):
Conclusions 22. In these circumstances I propose to award Mr. Browne a sum of €20,000 for each of the three years he was obliged to work by way of damages for breach of contract, thus making a total award of some €60,000.
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