Sweeney v Duggan

JurisdictionIreland
CourtHigh Court
Judgment Date31 July 1991
Date31 July 1991
Docket Number[1989 No. 2602P]

High Court

[1989 No. 2602P]
Sweeney v. Duggan
Daniel Sweeney
Plaintiff
and
Denis Duggan
Defendant

Cases mentioned in this report:—

Ackbar v. C.F. Green and Company Ltd.ELRWLRUNK [1975] Q.B. 582; [1975] 2 W.L.R. 773; [1975] 2 All E.R. 66.

Anns v. Merton London Borough CouncilELRWLRUNK [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 2 All E.R. 492.

Banque Keyser Ullman S.A. v. Skandia (U.K.) Insurance Co. Ltd.ELRWLRUNK [1990] Q.B. 665; [1989] 3 W.L.R. 25; [1989] 2 All E.R. 952.

Caparo Industries plc v. DickmanELRWLRUNK [1989] Q.B. 653; [1989] 2 W.L.R. 316; [1989] 1 All E.R. 798.

McGahie v. Union of Shop Distributors and Allied WorkersUNK [1966] S.L.T. 74.

Paterson v. ChadwickWLRUNK [1974] 1 W.L.R. 890; [1974] 2 All E.R. 772.

Reid v. Rush and Tompkins Group plcWLRUNK [1990] 1 W.L.R. 212; [1989] 3 All E.R. 228.

Siney v. Corporation of DublinIR [1980] I.R. 400.

Van Oppen v. The Clerk to the Bedford Charity TrusteesWLRUNK [1990] 1 W.L.R. 235; [1989] 3 All E.R. 389.

Ward v. McMasterIRDLRM [1988] I.R. 337; [1989] I.L.R.M. 400.

Negligence - Duty of care - Scope of duty - Factors to be considered in determining existence and scope of duty of care - Whether duly to prevent economic loss or protect economic welfare - Whether duty to insure - Duty of quarry manager - Mines and Quarries Act, 1965 (No. 7), s. 23

Company law - Company employee obtaining judgment against company in respect of accident at work - Company in liquidation - Failure by company to obtain employer's liability insurance - Whether manager and major shareholder of company personally liable for employee's economic loss.

Constitution - Personal rights - Guarantee by State to protect and vindicate citizens' personal rights - Relevance of guarantee to action against private defendant - Guarantee of just law of negligence - Constitution of Ireland, 1937, Article 40, s. 3, sub-s. 2.

Limitation of actions - Negligence - Plaintiff unable to enforce judgment obtained in respect of accident at work - Judgment obtained against company which was insolvent - Present proceedings against manager and shareholder personally - Whether action one for damages consisting of or including damages in respect of personal injuries - Whether claim barred - Statute of Limitations, 1957 (No. 6), s. 11, sub-s. 2 (b).

Plenary Summons.

The facts are summarised in the headnote and fully set out in the judgment of Barron J., post.

By plenary summons dated the 1st March, 1989, and amended statement of claim dated 15th February, 1990, the plaintiff claimed damages (including interest) for loss of judgment caused by the negligence, breach of duty and breach of contract of the defendant. By amended defence dated the 13th February, 1991, the defendant traversed the plaintiff's claim and also pleaded that the plaintiff's claim was statute barred.

Section 23 of the Mines and Quarries Act, 1965, provides as follows:—

"(1) Subject to this Part, no quarry shall be worked unless there is a sole manager of the quarry, being an individual.

(2) The manager shall be appointed by the owner who, if an individual, may appoint himself."

The plaintiff was an employee of K.L. Ltd. a company whose shares were almost wholly owned by the defendant. The plaintiff worked at a quarry the property of the company, of which the defendant was the quarry manager within the meaning of s. 23 of the Mines and Quarries Act, 1965. In February, 1984, the plaintiff had a serious accident at work as a result of which he issued proceedings claiming damages for negligence against the company. The proceedings were initially defended but when the company went into voluntary liquidation in August, 1987, the defence ceased and the plaintiff obtained judgment against the company in October, 1987. However, because of the liquidation and the non-existence of any policy of employer's liability insurance, the judgment remained unsatisfied and it appeared that the plaintiff as a preferential creditor of the company would receive only 15% of his award.

In the instant proceedings, commenced in March, 1989, the plaintiff claimed as against the defendant for economic loss consequent upon the loss of his judgment against the company. He contended that the defendant, as statutory quarry manager and as the effective owner and operator of the company's business, owed him a special duty of care or, in the alternative, a duty, express or implied, arising from the plaintiff's contract of employment. Having regard to the allegedly hazardous nature of the plaintiff's employment, it was contended that this duty obliged the defendant to take reasonable steps to ensure that the company would be capable of paying compensation to employees injured at work and it was alleged that the defendant was in breach of that duty, in particular by failing to effect an appropriate policy of employer's liability insurance. Alternatively, the plaintiff contended that the defendant must have been aware of the company's parlous financial position and therefore had a duty to warn the plaintiff that the company might not be able to compensate him for any injuries he might suffer as a result of an accident at work. The plaintiff further alleged that the defendant was in breach of the duty imposed by Article 40, s. 3, sub-s. 2 of the Constitution, to safeguard the bodily integrity of the plaintiff.

The defendant denied that he owed any such duty of care to the plaintiff and in particular denied that he had any duty, whether arising from a contract of employment or at common law, to insure the plaintiff in respect of accidents at work. He further argued that the plaintiff's claim was a claim for damages which did "consist of or include damages in respect of personal injuries", and, accordingly, the relevant limitation period was three years from the date of the accident and in the circumstances the plaintiff's claim was barred by virtue of the provisions of s. 11, sub-s. 2 (b) of the Statute of Limitations, 1957.

Held by Barron J., in dismissing the plaintiff's claim, 1, that liability in negligence extended both to personal injury and to economic loss and, in determining whether the defendant was negligent, the nature of the loss was not material. The determining elements were proximity, foreseeability and public policy.

Siney v. Corporation of DublinIR [1980] I.R. 400 and Ward v. McMasterIR[1988] I.R. 337 followed;Anns v. Merton London Borough CouncilELR[1978] A.C. 728 considered.

2. That the losses suffered by the plaintiff were foreseeable. However, in the absence of special circumstances, the relationship between the parties was not in itself sufficiently proximate to justify imposing a duty of care on the defendant wide enough to cover the plaintiff's claim. The fact that the defendant was quarry manager and that he owned the majority of the shares in the company were not grounds for imposing liability on him personally as the company was a distinct legal person. The plaintiff had failed to establish that his employment was extra hazardous and neither had he established the reasonably perceived financial position of the company on the date of the accident. The plaintiff had therefore failed to establish the necessary special circumstances.

3. That the ordinary master and servant relationship, involving a duty of care by one party for the physical well-being of the other, did not ordinarily extend to a duty to prevent economic loss to, or to protect the economic well-being of, the other party which is a duty of a different kind and such a duty could arise, if at all, only from special circumstances or from a contractual term, whether express or implied on the particular facts, by which the master assumed a duty to his servant in respect of such loss. In particular, the common law could not devise or impose a duty to effect employer's liability insurance which the Oireachtas had not thought fit to impose.

Reid v. Rush and Tomkins Group plcWLR [1990] 1 W.L.R. 212 approved; Van Oppen v. Clerk to the Bedford Charity TrusteesWLR[1990] 1 W.L.R. 235, Caparo Industries plc v. DickmanELR[1989] Q.B. 653and Banque Keyser Ullman S.A. v. Skandia (U.K.) Insurance Co. Ltd.WLR[1989] 3 W.L.R. 25considered.

4. That the statutory duty imposed on the defendant by s. 23 of the Mines and Quarries Act, 1965, related only to safety and imposed no general statutory duty of care of the type which the plaintiff sought to establish.

5. That the terms, whether express or implied, of the plaintiff's contract of employment were not material as the contract was made with the company and not with the defendant.

6. That the plaintiff's claim, if allowed, would have the effect of depriving the defendant of his protection under company law and of nullifying the essential principles of that law. The defendant and the company were in law distinct and separate legal persons and there were no circumstances from which it could be inferred that the company was a sham or should be treated as an instrument of fraud.

7. That Article 40, s. 3, sub-s. 2 of the Constitution did no more than give the plaintiff a guarantee of a just law of negligence which in the circumstances existed and the provision was therefore of no assistance to him.

8. That the plaintiff's action was one where the damages claimed consisted of or included damages in respect of personal injuries and was therefore one to which s. 11, sub-s. 2 (b) of the Act of 1957 applied. Having regard to the date on which...

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