McGrath v Minister for Defence

• Jurisdiction: Ireland
• Judge: Mr. Justice Fennelly,Mr. Justice Geoghegan
• Judgment Date: 28 July 2009
• Neutral Citation: [2009] IESC 62
• Court: Supreme Court
• Docket Number: [S.C. Nos. 239 &
• Date: 28 July 2009

[2009] IESC 62

THE SUPREME COURT

Geoghegan J.

Fennelly J.

Kearns J.

Appeal No: 239 & 349/2006

Appeal No: 239/2006

McGrath v Minister for Defence & Ors

[2009] IESC 62

Between/

JAMES McGRATH

Plaintiff/Respondent

- and -

THE MINISTER FOR DEFENCE, IRELAND AND THE ATTORNEY GENERAL

Defendants/Appellants

Respondents/Plaintiffs

GLEESON, STATE v MIN FOR DEFENCE 1976 IR 280

GLOVER v BLN LTD & ORS 1973 IR 388

DEFENCE ACT 1954 S65

DEFENCE ACT 1954 S65(2)

GILHEANEY & MEEHAN v REVENUE CMRS 1998 4 IR 150 1996 ELR 25

CIVIL SERVICE REGULATION ACT 1956 S5

DEFENCE ACT 1954 S53

BYRNE v IRELAND & AG 1972 IR 241

DEFENCE ACT 1954 S53(1)(A)

DEFENCE (AMDT) (NO 2) ACT 1979

DEFENCE FORCE REGS A12

WEBB v IRELAND & AG 1988 IR 353 1988 ILRM 565

AMALGAMATED INVESTMENT & PROPERTY CO LTD (IN LIQUIDATION) v TEXAS COMMERCE INTERNATIONAL BANK LTD 1982 QB 84 1981 3 WLR 565 1981 3 AER 577

GLENCAR EXPLORATIONS PLC & ANDAMAN RESOURCES PLC v MAYO CO COUNCIL (NO 2) 2002 1 IR 84

EMPLOYMENT

Legitimate expectation

Period of service - Extension - Change of policy - Whether plaintiff had legitimate expectation he would be permitted to complete period of service - Whether actionable legitimate expectation - Office holder - Defence forces - Contract - Change of policy - Physical injury - Discharge - Whether contractual relationship in existence between plaintiff and defendants - State (Gleeson) v Minister for Defence [1976] IR 280 and Byrne v Ireland [1972] IR 241 considered; Glencar Exploration plc v Mayo County Council (No 2) [2002] 1 IR 84 approved; Glover v BLN Limited [1973] IR 388 applied - Defence Act 1954 (No 18), ss 53 & 65 - Defendants' appeal dismissed (239 & 349/2006 - SC - 28/7/2009) [2009] IESC 62

McGrath v Minister for Defence

Facts: The defendants appealed from the judgment of the High Court which awarded a sum of €36,395.77 with interest to the plaintiff for breach of contract arising from the plaintiff's discharge from the Defense Forces. The plaintiff served for more than 26 years prior to his discharge. In 1977 he sustained an injury to his knee and in 1988 he was classified in Medical Category C and was excused from regimental duties. In 1994, as the plaintiff's period of engagement was nearing an end he made a formal application to continue in service pursuant to s. 65 of the Defense Act, 1954 for a period of two years so as to enable him render 27 years qualifying service towards pension. The plaintiff was duly medically examined and assigned to Medical Category C and his continuance in service for the period of two years from 28/10/94 to 20/10/96 was approved. Following a change of policy, the plaintiff was medically examined and was classified as Category E. The plaintiff was recommended for discharge and consequently was ineligible to apply for early retirement under a new Voluntary Retirement Scheme.

Held by Fennelly (Kearns J concurring) & Geoghegan J. (on a different basis) in dismissing the appeal and upholding the award of damages made: That the learned trial judge made an error in law in concluding that there was a contractual relationship between the plaintiff and the first named defendant. It was well established that an employee of the State was not a servant of the Minister. The defendant was entitled pursuant to the Regulations to discharge the plaintiff by reason of his medical condition. However, the plaintiff had a legitimate expectation to be allowed continue in service to 29 October 2006. The plaintiff had been kept on in the Army for more than sixteen years during which he suffered from a significant disability and was expressly continued in Medical Category C at the time of his application for an extension. A representation was therefore made to the plaintiff that he would be retained in service for two years even with his medical classification. The discharge of the applicant resulted from a change of policy as opposed to the normal application of the Regulations. The respondent failed to take account of the plaintiff's exceptional situation. The amount of damages awarded was based on the agreed amount the plaintiff would have received if he had been admitted to the VER scheme in 1996 and the learned judge was entitled to find that it was probable the plaintiff's application under that scheme would have been successful.

Reporter: L.O'S.

1 JUDGMENT of Mr. Justice Geoghegan delivered the 28th day of July 2009

2 Judgments delivered by Geoghegan J Fennelly J

3 The respondent in this appeal was a member of the Defence Forces for 26½ years. He was discharged from the army on the 12th May, 1996 and these proceedings arise from that discharge. In 1977, the respondent sustained an injury to his right knee as a consequence of which he was excused from "regimental duties" which essentially meant duties that included carrying weaponry. The evidence in the High Court established that there were various medical grades assigned to soldiers depending on their fitness. The highest of these grades was A1 which the respondent enjoyed before his injury and the lowest was Category E which almost invariably meant discharge. Following on the injury, the respondent was classified at Category C but permitted to carry out all duties except regimental duties. As it turned out, this included a tour of duty abroad. As the learned trial judge (Laffoy J.) points out in her judgment, the respondent, in the period from 1987 to 1996 in fact performed a wide range of duties. In 1992, the respondent required an extension of his service and he was duly granted a two-year service extension from October, 1992 to October, 1994. There was no material change in his medical condition. Again, in April, 1994, he sought a further extension of two years from October, 1994. Whenever an extension of service was under consideration there was a routine medical examination and he underwent that examination on the 27th April, 1994. He was again graded Category C and there was a recommendation that he be continued in service and his conduct was assessed as very good. There was no material change in medical or in any other circumstances from the time of his previous extension or indeed from the period right back to his injury. The respondent was granted the two-year extension terminating on the 29th October, 1996.

4 In consequence of what the learned High Court judge correctly characterised as a policy change which followed a report commissioned from Mr. Dermot Gleeson, S.C. on various matters including numbers in the army, the respondent was given a separate special medical examination and he was downgraded to category E even though it was accepted in evidence that there was no material change in his medical condition. A policy change, however, required that all soldiers in Category C should be able to carry out regimental duties.

5 The respondent, faced with a choice of appealing against the regrading or applying for an extension of time before discharge so that he would qualify for a new voluntary retirement scheme, opted on advice, for the latter. The extension was refused.

6 The respondent instituted these proceedings in which he sought invalidation of the discharge on what might loosely be described as judicial review grounds and also damages "for breach of duty, breach of contract and unlawful interference with the plaintiff's rights."

7 As the case was argued in the High Court, it was submitted ( inter alia) that the respondent was entitled to damages for breach of his legitimate expectation. This concept would seem to me to come within the general heading of "Unlawful Interference with the Plaintiff's Rights".

8 In the event, the learned trial judge found in favour of the respondent on the sole ground of breach of contract and awarded damages accordingly. The judge did not find it necessary to deal with the other issues.

9 My position on this appeal is quite simple. I am in agreement with almost the entire of the judgment of Laffoy J. and I will return in due course to the salient aspects of her judgment. I have had the benefit, however, of reading the judgment proposed to be delivered by Fennelly J. and he takes a different view, not as to the correct outcome of the appeal but as to the basis on which the appeal should succeed. Fennelly J., in his judgment, has taken the view that as the respondent was an "officer" in the legal as distinct from military sense, he did not have a contract of employment with the Minister and that therefore no breach of contract claim could lie. On the other hand, he believes that the respondent is entitled to succeed on the basis of legitimate expectation.

10 I also believe, that if I am wrong in my view that the respondent is entitled to succeed on a contractual basis, which was the view of the trial judge, I would certainly agree with Fennelly J. that the respondent is entitled to succeed in his claim for damages for breach of legitimate expectation. In other words, I consider that both causes of action are valid. Although Laffoy J. declined to decide the issue of legitimate expectation, I believe that it would be costly and unnecessary to send the case back to the High Court for trial on that issue, as, for all practical purposes, the arguments have been made in this court.

11 I intend now to address the contractual issue. Before I do so, I would make this preliminary comment. Legitimate expectation is a relatively newly established cause of action especially in the context of substantive law as distinct from procedure. If that is the only basis on which the respondent is entitled to succeed, it means that prior to that concept being known to the courts, the respondent would have had to fail. Despite a crystal clear agreement that his service in the army could be extended for...