Meaning Of 'Wilful Act Or Gross Negligence' Considered By Irish Supreme Court

Author:Mr Mark Alsop
Profession:Charles Russell LLP
 
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The High Court decision was reported in Commercial Bulletin 80.

ECDLF, an Irish company, granted ICDL a licence of a computer training package in Saudi Arabia. The licence contained an obligation on ICDL to obtain all licences etc necessary to carry on its business in Saudi Arabia. The ECDLF's liability was limited to €50,000, except for damage caused by "a wilful act or gross negligence".

The Saudi governmental body responsible for vocational training, TVTC, wished to take over much of the training from ICDL. It entered into negotiations directly with ECDLF. Eventually, TVTC told the sub licensee in Saudi Arabia to stop providing training, saying that it was no longer lawful for it to do so – contrary to advice from a local firm shown to ECDLF. Nonetheless, ECDLF terminated the licence and began to contract with TVTC. This led to litigation in Saudi Arabia and Ireland. The High Court in Ireland had to decide whether ICDL was in breach of contract in failing to get the necessary permissions in Saudi Arabia and, if it was not, whether ECDLF's behaviour amounted to gross negligence.

The High Court of Ireland held that "gross negligence" meant "a degree of negligence where whatever duty of care may be involved has not been met by a significant margin". On the facts, the actions of ECDLF did amount to gross negligence and so its liability was not capped. ECDLF appealed.

The Supreme Court of Ireland upheld the High Court's decision:

It agreed that gross negligence involved "a significant degree of carelessness". A difficulty here was that this was a contractual claim, where there is no duty of care. ICDL had to prove that "the negligence amounted to a significant degree to a breach of the party's duty to the other party under the contract." On the facts the court found this proven. The court also looked at "wilful act", something which the High Court had not focused on. The authorities showed that, for an act to be wilful, it should be done deliberately. It was not necessary that it be committed with the intention to injure or that the person who committed it knew that it was unlawful. On the evidence, the Supreme Court considered that ECDLF had committed a wilful act. Mr Justice O'Donnell gave a dissenting judgment: He considered the phrase "wilful act or gross negligence" as a whole. It was clear that the distinction made was one of culpability. The wilful act must give rise to a cause of action. What must be intended is a breach of...

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