Declan Hynes v Kilkenny County Council

• Jurisdiction: Ireland
• Judge: Mr. Justice Garrett Simons
• Judgment Date: 27 April 2022
• Neutral Citation: [2022] IEHC 227
• Court: High Court
• Docket Number: 2015 No. 4250 P

Between

Declan Hynes

Plaintiff

and

Kilkenny County Council

Leo Hogan

Defendants

[2022] IEHC 227

2015 No. 4250 P

THE HIGH COURT

Personal injuries – Road traffic accident – Special damages – Plaintiff seeking special damages – Whether the plaintiff was entitled to recover by way of damages against the defendants a sum equivalent to that received by the plaintiff from his employer in respect of sick pay

Facts: The plaintiff, Mr Hynes, suffered personal injuries in a road traffic accident. The plaintiff had been driving to work on 5 December 2011 when his car was struck on the passenger side by a road sweeper truck. The truck had been driven by the second defendant, Mr Hogan, an employee of the first defendant, Kilkenny County Council. Liability was admitted on behalf of the defendants. The principal judgment in the personal injuries proceedings addressed the amount of general damages payable to the plaintiff: [2022] IEHC 226. A supplemental judgment addressed a net issue in respect of special damages. The issue was whether the plaintiff was entitled to recover, by way of damages against the defendants, a sum equivalent to that received by the plaintiff from his employer in respect of sick pay; if recoverable, that sum would be reimbursed to the employer. The crux of the dispute between the parties centred on whether the plaintiff was legally obliged to reimburse his employer. The parties concurred that no such obligation arose under the contract of employment itself; the contractual entitlement to receive sick pay was not contingent on the injured party seeking to recover the amount received in the context of any personal injuries action. It was submitted on behalf of the plaintiff that a right to recover the value of the sick pay arose by virtue of the injured party having supposedly given an undertaking, through his solicitor, to refund the sum of €40,833.02. The undertaking was said to be contained in a letter dated 26 September 2013. It was further submitted on behalf of the plaintiff that the determinative factor was that an undertaking had been given. It was said that it does not matter whether the injured party had been under a contractual obligation to reimburse the sick pay, nor whether the undertaking had to be given as a precondition to receipt of the sick pay. The other side’s characterisation of the undertaking as having been given retrospectively was refuted. It was submitted that the question of an undertaking will only ever fall into place after an accident has occurred and the payment of sick pay arises. Attention was also drawn to the fact that the undertaking found to be effective in Hogan v Steele & Company Ltd [2000] 1 I.L.R.M. 330 had been given some weeks after the accident.

Held by the High Court (Simons J) that monies paid to an injured party by their employer during their absence from work due to personal injuries suffered as a result of the wrongdoing of a third party will only be recoverable against the wrongdoer where the injured party is under a legal obligation to reimburse those monies to their employer. Simons J held that an injured party, who enjoys an unconditional contractual right to sick pay, cannot convert what is an otherwise unrecoverable item into a recoverable one by waiving their contractual rights post-accident.

Simons J held that the cost of €40,833.02 (gross) incurred by VHI Healthcare, as employer, in the provision of sick pay to the plaintiff pursuant to his contract of employment was not recoverable as against the defendants; nor was the plaintiff personally under any obligation to reimburse that cost. Simons J held that the chain of correspondence did not give rise to an enforceable undertaking.

Cost of provision of contractual sick pay not recoverable in personal injuries action.

Appearances

Patrick Treacy, SC, John Shortt, SC and Colette Egan for the Plaintiff instructed by Byrne Carolan Cunningham LLP

Stephen Lanigan-O'Keeffe, SC and Paul McKeon for the Defendants instructed by Harrison O'Dowd

JUDGMENT ofMr. Justice Garrett Simonsdelivered on 27 April 2022

INTRODUCTION

1 The principal judgment in these personal injuries proceedings addresses the amount of general damages payable to the Plaintiff: Hynes v. Kilkenny County Council (No. 1)[2022] IEHC 226. This supplemental judgment addresses a net issue in respect of special damages. The issue is whether the Plaintiff is entitled to recover, by way of damages against the Defendants, a sum equivalent to that received by the Plaintiff from his employer in respect of sick pay. If recoverable, this sum would be reimbursed to the employer. Put otherwise, does the fact that the Plaintiff had a contractual right to sick pay under his terms and conditions of employment have the consequence of reducing the amount of damages which the party causing the personal injuries would otherwise be required to pay by way of damages.

2 It should be emphasised that the compass of the dispute between the parties on this issue is very narrow. The parties accept that—absent an enforceable obligation on behalf of an injured party to reimburse their employer—any amount received by an injured party from their employer by way of sick pay must be deducted from the claim for loss of earnings against a third-party wrongdoer. The controversy between the parties centres on whether the Plaintiff in the present case is under an obligation to reimburse the cost of the provision of sick pay to his employer.

OVERVIEW OF RECOVERABILITY OF COLLATERAL BENEFITS

3 It may be of assistance to the reader in understanding the discussion which follows to pause briefly, and to frame the dispute in its wider context. An injured party, who has been unable to work for a period of time as a result of their injuries, will generally be entitled to recover loss of earnings as part of their personal injuries action. The extent of the loss of earnings will, of course, depend on whether the injured party is entitled to sick pay under their terms and conditions of employment. The actual loss suffered will be the difference, if any, between (i) the amount of earnings which the injured party would have received had they been able to work and (ii) the amount of the sick pay received. Where, as in the present case, generous provision is made for sick pay in the relevant contract of employment, this has the potential to reduce, by a significant sum, the amount of damages which the respondent to the personal injuries action is required to pay. On the facts, the employer had paid a sum of €40,833.02 (gross) in respect of sick pay.

4 Approaching the matter from first principles, a respectable argument might be made that the employer should not have to subsidise the wrongdoer by bearing the economic cost of the injured party being unable to work as a result of personal injuries caused by the wrongdoer. In particular, it can be argued that the wrongdoer should not be able to rely on the happenstance of the existence of a contractual right to sick pay to avoid having to compensate for one of the direct effects of its wrongdoing, i.e. the inability of the injured party to work for a period of time because of his injuries. (Different considerations will apply in the case of a workplace accident where the employer is the wrongdoer).

5 The principle that a wrongdoer should reimburse the cost of collateral benefits paid to an injured person by an innocent party underlies the approach now taken, following legislative intervention, to the recoverability of social welfare payments. More specifically, sums paid in respect of certain benefits and assistance to an injured person may be recoverable from the person liable in respect of that personal injury. See Part 11B of the Social Welfare Consolidation Act 2005 (as inserted by section 13 of the Social Welfare and Pensions Act 2013). The rationale underlying these statutory provisions appears to be that the economic cost of making social welfare payments to a person who has suffered personal injuries as the result of a civil wrong should be borne by the wrongdoer. This is achieved by allowing the Department of Social Protection to recover an equivalent amount from any award of compensation ultimately paid to the injured person.

6 To date, a more conservative approach has been taken in the case law. The primary purpose of tortious damages is regarded as being compensatory rather than punitive. The purpose is to compensate the injured party for the losses actually suffered by them as a result of the wrongdoing, rather than to punish the wrongdoer. Importantly, the emphasis is on the position of the injured party: a tortfeasor ordinarily is only responsible in damages for the direct injury which he has caused to the person against whom the tort has been committed, and not for indirect injuries to a third person who may suffer loss indirectly as a result of the injury to the first person ( Attorney General v. Ryan's Car Hire Ltd[1965] I.R. 642 (at 666)). This principle has been applied in the specific context of private sector employment by the Supreme Court in Hogan v. Steele & Company Ltd[2000] 4 I.R. 587; [2001] 2 I.L.R.M. 321. Keane C.J., delivering the unanimous judgment, rejected a policy-based argument to the effect that justice required that—in a case involving a wrongdoer, injured party and an innocent employer—the loss should fall on the wrongdoer rather than the blameless parties.

7 It follows, therefore, that in calculating a claim for loss of earnings, it will be appropriate to deduct any sums paid to the injured party pursuant to a contractual right to sick pay. The actual loss suffered by the injured party is the shortfall, if any, between the amount received by way of sick pay and the amount which the injured party would have expected to earn but for his inability to work.

8 Different considerations apply where the injured party is legally...