McLoughlin v Setanta Insurance Services Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 08 November 2011
• Neutral Citation: [2011] IEHC 410
• Court: High Court
• Date: 08 November 2011

[2011] IEHC 410

THE HIGH COURT

[No. 8211P/2011]

McLoughlin v Setanta Insurance Services Ltd

BETWEEN

DEIRDRE MCLOUGHLIN

PLAINTIFF

AND

SETANTA INSURANCE SERVICES LIMITED

DEFENDANT

COMPANIES ACT 1990 S28

CRITERION PROPERTIES PLC v STRATFORD UK PROPERTIES LLC & ORS 2004 1 WLR 1846

ROLLED STEEL PRODUCTS (HOLDING) LTD v BRITISH STEEL CORPORATION & ORS 1986 1 CH 246

AMERICAN CYANAMID v ETHICON LTD 1975 1 AER 504

MORGAN v TRINITY COLLEGE 2003 3 IR 157

O'BRIEN v AON INSURANCE MANAGERS (DUBLIN) LTD UNREP CLARKE 14.1.2005 2004/37/8572 2005 IEHC 3

MINNOCK v IRISH CASING CO. LTD & STEWART 2007 ELR 229

EMPLOYMENT LAW

Interlocutory injunctions

Disciplinary procedures - Misconduct alleged - Suspension - Investigation into alleged misconduct - Whether case for injunction restraining suspension made out - Whether fair issue to be tried that rights would be infringed if proposed investigation allowed to continue - Whether damages adequate remedy - Whether balance of convenience in favour of granting injunction - Morgan v Trinity College [2003] 3 IR 157; O'Brien v AON Insurance Managers (Dublin) Ltd [2005] IEHC 3 (Unrep, HC, Clarke J, 14/1/2005); Minnock v Irish Casing Co Ltd [2007] ELR 229 considered - Injunction restraining suspension refused, injunction restraining defendant's investigation granted (2011/8211P - Laffoy J - 8/11/2011) [2011] IEHC 410

McLoughlin v Setanta Insurance Services Ltd

Facts: The plaintiff was the General Manager at the defendant and had gone on sick leave for stress-related illness. Thereafter, a disciplinary process had been instituted against the plaintiff including suspension and an investigative process. The plaintiff sought an order directing the rescinding of the purported suspension and an order restoring her to her contractual position. The Court considered the circumstances of whether an interlocutory inunction could be granted.

Held by Laffoy J. that in the circumstances it was appropriate for the Court to intervene to restrain the defendant from carrying out the investigation in the manner proposed. Damages would not be an adequate remedy. The balance of convenience lay in favour of granting an injunction limited to restraining the defendant from continuing the investigation. It was open however to the defendant to initiate an alternative investigation in accordance with the plaintiff's contract incorporating provisions of the Employee Handbook. An order would be made restraining the defendant from continuing the investigation to be conducted.

Reporter: E.F.

1 Judgment of Miss Justice Laffoy delivered on 8th day of November, 2011.

Factual background in outline

2 1. One of the few facts which is not in issue on this application for an interlocutory injunction is that the defendant is part of a group of companies, which has been referred to in the plaintiff's affidavit as "the Setanta Group of Companies". The parent company of the defendant is a Maltese registered company, Setanta Holdings Limited. In addition to the defendant it also has a Maltese registered subsidiary, Setanta Insurance Company Limited. The Setanta Group operates in the insurance sector providing general motor insurance products. The defendant operates in the Irish market, which I understand to mean that the defendant is in the business of providing general motor insurance products in the Irish market.

3 2. At issue in these proceedings is the plaintiff's contract of employment with the defendant and, in particular, her suspension and the commencement of an investigative process which is to lead to the implementation of a disciplinary process in relation to her employment. The affidavits sworn by the plaintiff are replete with allegations against persons associated with, using that expression in its broadest sense, companies in the Setanta Group, with reference to "conflict of interest", "power struggle", "an attempt to undermine and isolate" the plaintiff in her role, "an attempt to … find a way to get rid of" the plaintiff without complying with her contractual entitlements and so forth, all of which were denied by the deponent on behalf of the defendant. On the other hand, the deponent on behalf of the defendant, Emer Jordan, the Human Resources Manager of the defendant, has averred that the specific provision of her contract of employment on which the plaintiff relies is void by reason of, inter alia, the provisions of s. 28 of the Companies Act 1990 (the Act of 1990), as there is no evidence available to the defendant that the provisions of s. 28 were complied with in relation to the plaintiff's contract of employment. At the hearing of the interlocutory application, in addition to being referred to s. 28, the Court was referred to the decision of the House of Lords in Criterion Properties Plc v. Stratford U.K. Properties LLC & Ors. [2004] 1 WLR 1846 and the decision of the Court of Appeal of England and Wales in Rolled Steel Products (Holdings) Ltd. v. British Steel Corporation and Ors. [1986] 1 Ch. 246.

4 3. It is obviously necessary to remind litigants and practitioners of what Lord Diplock stated in American Cyanamid v. Ethicon Ltd. [1975] 1 All ER 504, before outlining the criteria for the grant of an interlocutory injunction, which have been adopted in this jurisdiction. He stated (at p. 510) as follows:

"It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with at the trial."

5 Hereafter, I propose merely to outline the essential facts which seem to me to be relevant to the application of the criteria on the basis of which an interlocutory injunction is granted or refused.

6 4. The contract of employment on which the plaintiff relies was dated 1 ^st January, 2010. It stated that the plaintiff was to be employed primarily as general manager of the defendant. As regards the term and date of commencement, it was stated that the contract was concluded "for an indefinite duration" and the start date was 1 ^st July, 2007. Clause 12 dealt with notice and provided that the plaintiff should be entitled to receive the appropriate period of notice set down in the Minimum Notice and Terms of Employment Acts, 1973 - 2001. However, it stipulated that the defendant, at its discretion, might elect to pay the plaintiff in lieu of notice. Further, it contained the allegedly void provision, which the plaintiff has characterised as a "generous" provision, which states as follows:

"In case of loss of office, unless the [defendant] has cause to terminate, the [defendant] will pay you four times the remuneration package as outlined in clauses 7 and 8."

7 Clause 13 provided that, notwithstanding the notice period provided for in Clause 12, the defendant might, by written notice, terminate the plaintiff's employment immediately and without compensation, except for salary and holiday pay accrued due but unpaid, in the circumstances outlined. Those circumstances, inter alia, include "serious or repeated default by [the plaintiff] of [her] obligations of employment", and "gross or persistent misconduct, dishonesty or conduct tending to bring [the defendant] into disrepute". The defendant's grievance and disciplinary procedure was referred to in Clause 16. It is interesting to note that that clause stated that the plaintiff was not entitled to be accompanied by a legal representative to internal investigatory and/or disciplinary proceedings, although, as I understand the current position, the defendant would not enforce that restriction against the plaintiff. It was further stated that the company's disciplinary policy was set out in the "Employee Handbook". Clause 27 further provided that the plaintiff was subject to the procedures and rules laid out in the Employee Handbook. In fact, the Employee Handbook was not exhibited on affidavit until the day the application came on for hearing, 25 ^th October, 2011, and at that stage counsel for the defendant objected to it being put in evidence. Obviously, the Court allowed it to be put in evidence because it is a crucial document, in that it deals with the procedures within the defendant's operations in relation to summary dismissal following investigation and a disciplinary process. It also deals with suspension.

8 5. While concerns were raised by the plaintiff with the defendant as to the manner in which she was being treated in her role as general manager from early 2011 onwards, her solicitors first became involved in late May 2011. At that stage, the plaintiff had gone out on sick leave, her illness having been certified as "stress related illness" by her general practitioner. Her sick leave commenced on the 13 ^th May, 2011. Her solicitors wrote to the defendant's solicitors on 30 ^th May, 2011. In that letter the plaintiff's solicitors set out what her concerns were and they pointed out that she had attempted to raise her grievances in e-mails of 19 ^th April, 2011, 21 ^st April, 2011 and a reminder of 11 ^th May, 2011, but the defendant had not responded to her genuine concerns. The plaintiff's solicitors requested that the defendant immediately address the grievances set out by the plaintiff. Despite a further letter of 21 ^st June, 2011 from the plaintiff's solicitors to the defendant's solicitors, no response was forthcoming.

9 6. The plaintiff remained out of work on sick leave through May, June, July and August, 2011. On 12 ^th August, 2011 at the request of the defendant, she attended the defendant's nominated medical practitioner for a medical evaluation. While the medical report which issued following that evaluation has not...