Supreme Court of Ireland Decisions

Judgment Title: Collins -v- J. Ray McDermott SA

Neutral Citation: [2007] IESC 14

Supreme Court Record Number: 16/05

High Court Record Number: 1997 14179 p

Date of Delivery: 29 March 2007

Court: Supreme Court

8

The Supreme Court


Murray C.J.
Kearns J.
Finnegan J.

Between

denis collins

JUDGMENT of Mr. Justice Kearns delivered the 29th day of March, 2007
These proceedings arise out of an accident which occurred on 17 August, 1996 on board the vessel ‘Pacific Constructor’ while the same was berthed in Dubai. The plaintiff was a commercial diver on contract from 1983 onwards, mainly with the defendant. His work involved saturation diving and laying pipes and involved the use of a compression chamber. In July, 1996 he was on a six week contract in Dubai on the Pacific Constructor which had been chartered by the defendant. On the 17 August, 1996 he was due to fly home to Ireland and was preparing to leave the boat when he fell down an internal staircase as a result of which he suffered significant personal injuries. He spent nine days in a local hospital and was airlifted home on the 1st September, 1996. As a result of his fall he suffered a cerebral contusion, a loss of hearing in the right ear with tinnitus and a separation of the acromio-clavicular joint in each shoulder.
It is agreed between both sides to this appeal that among the risks or sequela arising from the plaintiff’s head injury was a risk of epilepsy. It was further agreed between the parties that in this case the medical evidence at trial established that this risk would decrease progressively from 40 - 50% over a period of five years to zero, or to that very low level common to the general population who have suffered no head injury.
The plaintiff’s claim for damages arising out of the said accident was dismissed in the High Court (Murphy J.) in a judgment delivered on 18 December, 2003. On the 21 February, 2007 this Court dismissed the plaintiff’s appeal from the dismissal of his claim in the High Court, but reserved its judgment on a cross appeal which had been brought by the defendant in the following circumstances.
While the defendant’s employment contract purported to apply the law of Dubai, or alternatively the law of Panama, to the contract of employment, the plaintiff was unable to give any evidence at trial in relation to the terms of such contract, particularly in so far as the same provided for payments by way of occupational injury benefit or disability.
However, by letter dated 9 September, 1996 which was written subsequent to the accident by agents on behalf of the defendant, the following representation was made with regard to the plaintiffs entitlements:-
“Dear Mr. Collins,
This letter is in follow up to our conversation of September 6, 1996. Based on your employment contract, you are to receive $150 per day in workers compensation disability pay (maintenance). After two months you will receive ½ pay of $75 per day for up to an additional ten months or until you are at maximum medical improvement.
By now you should have received your first maintenance wire transfer in the amount of $2,100 for the disability period of 8-18-96 to 8-31-96. Wire transfers will be made every two weeks.”

It is agreed between the parties that this letter contains the relevant terms of the contract between the appellant and the respondent. At trial, the plaintiff pursued a claim for damages for breach of this contractual undertaking by the defendant because the defendants ceased to make payments to the plaintiff on foot of the said letter in 1998.
In relation to this claim the learned trial judge found as follows:-
“In relation to the contractual claim and, notwithstanding the terms of the letter from Southern Risk Services, on behalf of the defendant, restricting compensation to a further two months in relation to the weekly compensation, the defendant did, in fact, compensate the plaintiff beyond the terms of that letter by paying, through SRS, a sum of $46,200. In so doing the defendant acceded to an obligation to compensate for a period up to maximum improvement.
The Court, based on the medical evidence, absent meningitis, must take the evidence of maximum medical improvement as being at October, 1998.
It follows that, from a contractual point of view, and having accepted that the contractual terms were not limited to two months' full compensation and ten months' half compensation, the plaintiff is entitled to the sum calculated by the actuary in such circumstances.
The plaintiff's actuary calculates a total figure due of $13,650 on the assumption that payments had ceased on the 7th April, 1998.
The plaintiff accordingly succeeds with his contractual claim and fails in his claim for negligence”
The reference by the learned trail judge to meningitis requires explanation. In April, 1998, some 18 months after the accident the plaintiff developed meningitis and had an epileptic fit. He was put on medication and was in the Mercy Hospital in Cork for 12 days. On the hearing of the appeal brought by the defendant in respect of the award made to the plaintiff on foot of his contractual claim, Mr. Colm Ó hOisín, Senior Counsel for the plaintiff, conceded that the meningitis and epilepsy could not be shown to have been caused by the head injury in Dubai in 1996. He had to accept, as was found by the learned trial judge, that the episode in 1998 was a completely unrelated supervening event, which had the effect of rendering the plaintiff permanently incapable thereafter of returning to his employment as a diver with the defendants.

Mr. Ó hOisín contended, however, that the plaintiff was entitled to continuing disability payments as per the terms of the letter of 9 September, 1996 in respect of the occupational injury in Dubai until “maximum medical improvement”. As we have seen, the learned trial judge inferred from the medical evidence that the date of maximum medical improvement was October, 1998 and calculated the plaintiff’s entitlements accordingly. Mr. Ó hOisín argued, however, that as the plaintiff was at risk from epilepsy from the original head injury which was measurable on a sliding scale decreasing from 40 - 50% in 1996 down to zero over a period of five years, the time of maximum medical improvement should have been August, 2001, because the medical evidence established that any ongoing risk of epilepsy from the original head injury would have only by then have disappeared.

Mr. Paul Gardiner, Senior Counsel for the defendants, argued that the supervening meningitis and epilepsy which occurred in April, 1998 effectively discharged any obligations of the defendant under the employment contract or the said letter, because from that time onwards the plaintiff was never going to be capable of returning to work as a diver.

The issue on the cross appeal, therefore, is to determine, firstly, the obligations (if any) of the defendant on foot of the said letter from SRS of 6 September, 1996; secondly, the Court must determine the appropriate construction to be placed on the terms of the said letter. Thirdly, if on a proper construction of the said letter, the liability of the defendants could be seen as extending beyond 12 months, to determine whether, in the circumstances, any ongoing liability of the defendants on foot thereof ceased in April 1998 when the plaintiff contracted meningitis/epilepsy for reasons unrelated to the accident.

In this regard, Mr. Ó hOisín on behalf of the plaintiff conceded that the maximum period in respect of which he could recover payments on foot of the contract and letter was a period of five years, given that the medical evidence clearly established that there was a decreasing risk of epilepsy over a five year period to the point when it could be said of the plaintiff that he would be in the same position as any other member of the general population insofar as any risk of epilepsy was concerned.

In short, therefore, the Court must determine whether the onset of meningitis and epilepsy in 1998 had the effect of frustrating the contractual arrangements or nullifying same, or whether the obligation on the part of the defendant to continue making the payments continued, notwithstanding the plaintiff’s illness for reasons unconnected with his employment or the accident he sustained in Dubai.

Decision

The letter dated 9 September, 1996 was written by the respondent’s agent and it follows that the same must be construed contra proferentum. This means that any ambiguity in the letter must be resolved in favour of the appellant and against the respondent. The letter is undoubtedly ambiguous, because on one interpretation it could mean that the obligation of the respondent will cease at the expiration of twelve months. However, by applying the contra proferentum rule, the alternative interpretation, namely, that payments will continue until the appellant is at maximum medical improvement must be preferred. Mr. Ó hOisín accepts that the term ‘maximum medical improvement’ must be taken as meaning improvement from the occupational injury alone – it does not and could not be deemed to include illness or incapacity otherwise arising.

In my view the liability thus arising imposes an obligation on the respondent to make payments over the said period of five years. However that does not dispose of the matter. The respondent claims that any obligations he might have were ‘snuffed out’ because of supervening events which, in this case, consisted of meningitis causing an epileptic fit in April, 1998. It is suggested that this event permanently incapacitated the plaintiff from returning to work so that any obligation to make continuing payments from that time onwards was discharged.

In trying to resolve this point, the first thing to be said is that the onus is clearly on the employer to prove that the undertaking becomes a nullity for this reason. No authorities were cited in support of the proposition that the undertaking (as distinct from the contract of employment) was discharged. It must be borne in mind that the letter was written subsequent to the date of the accident when it was clearly in the contemplation of the parties that the plaintiff’s recovery might take some considerable time.

It seems to me that following the meningitis and consequent epileptic seizure in April, 1998, the appellant had two separate and distinct risks of incurring further epileptic seizures, one being a post traumatic risk consequent upon his accident and a further risk consequent upon the meningitis. The latter added an additional risk to that caused by the accident but did not replace the same. Neither risk necessarily was going to fall in and, as a matter of factual history, neither did.

The respondent’s argument presupposes that payments should only continue while the appellant remains unfit to work as a diver. There is nothing in the wording of the letter of 9 September, 1996 to justify the importation of such a term. By way of example, if the appellant had sustained a physical injury which entailed recovery over a twelve month period but nonetheless although maximum medical improvement had not been achieved he was fit to return to work after six months, he would still be entitled to be paid the sum of seventy five dollars per day until he achieved maximum medical improvement, which I understand to mean his final condition of recovery.

The respondent argues that had the appellant died rather than contracting meningitis the contract would clearly have been frustrated because the appellant could then never return to work. The short answer to that submission lies in the wording of the letter – on death the appellant would have achieved his maximum medical improvement as improvement beyond the point of death is, of course, impossible. The nature of the undertaking in the instant case, entered into with full knowledge of the plaintiff’s injuries sustained in Dubai, involved the assumption of a binding obligation to make continuing payments until such time as the plaintiff made maximum recovery from those injuries. Despite the intervention of some other complicating medical condition, the medical evidence was clear in this case and it was to the effect that that recovery would be complete, or the risk eliminated, after five years. I see no reason in these circumstances why the respondents should obtain some windfall bonus because the plaintiff contracted meningitis and epilepsy for unrelated reasons. If anything, these matters can, on one view, be seen as pushing further away the point of ‘maximum physical recovery’ from the occupational injury though that case has not been pursued.

I conclude therefore that the plaintiff is entitled to payments under the terms of the letter for the period of five years from the date thereof and would accordingly allow the cross-appeal.