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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Charlton v. Aga Khan's Studs Societe Civile [1998] IEHC 186 (22nd December, 1998) URL: http://www.bailii.org/ie/cases/IEHC/1998/186.html Cite as: [1998] IEHC 186 |
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1. In
these proceedings, which were instituted by Plenary Summons which issued on
28th August, 1998, the Plaintiff seeks, inter alia, various declarations and
injunctions in relation to her position as an employee of the Defendant. On
this application, which was initiated by a Notice of Motion which was
contemporaneous with the Plenary Summons, the Plaintiff seeks eight
interlocutory injunctions in the terms of the injunctive relief sought in the
Plenary Summons. In reality, however, two matters only arise for consideration
on this application, namely, whether pending the trial of the action:-
2. In
July 1998 the Plaintiff had been in the employment of the Defendant for 27
years as secretary to the Manager of the Defendant's Studs in Ireland. From
1975 until in or about June 1998 the Manager of the Studs was a Mr. Drion, and
throughout that period the Plaintiff acted as Mr. Drion's secretary and took
her instructions from him. In July 1998 her gross salary was £1,286.13
per month. She was also paid an annual bonus in line with other equivalent
employees. The sum of £68.64 per month was deducted from her salary to
fund a pension. It is not in controversy that the Plaintiff applied herself
diligently on the Defendant's behalf over the years and can point to a work and
attendance record which bears favourable comparison with any of her co-workers.
3. On
the afternoon of 28th July, 1998 Mr. Faughnan handed a letter written by him to
the Plaintiff. Earlier on the same afternoon there was a brief discussion
between Mr. Faughnan and the Plaintiff in relation to the matter which was
covered by the letter. There is some conflict as to what transpired during
that discussion. In any event, in the letter which was headed, "Enquiry into
disciplinary matters", Mr. Faughnan confirmed that he was holding an enquiry
"into matters relating to your involvement in the improper use of HH the Aga
Khan's Studs' resources and/or property". It was stated that an enquiry,
conducted by Mr. Faughnan, would take place on 4th August, 1998 at 10 a.m. at
which Mr. Faughnan would be enquiring, in particular, into the Plaintiff's role
in the improper use of the Studs' resources by certain individuals, including
Mr. Drion, and certain companies and institutions. The Plaintiff was told that
she might attend with a representative, if she wished, and that she would be
presented with material bearing on the matter being enquired into and would
have an opportunity of asking questions and "of presenting a defence". The
Plaintiff was advised that the matter was "most serious" and she might wish to
take advice. Specifically she was apprised of the possible outcome of the
enquiry in the following terms:-
4. On
the following day, 29th July, 1998, the Plaintiff was furnished with a written
statement of the allegations of misconduct being enquired into, namely, at
various times during the period 1988 to 1998 being involved in the following
activities:-
5. The
various persons, companies and entities were identified and included Mr. Drion,
and the various resources were identified as the Defendant's farms in Co.
Kildare, transport owned by the Defendant, staff and computers.
6. By
letter dated 30th July, 1998 to Mr. Faughnan, the Plaintiff's solicitors sought
a postponement of the enquiry and sought "material bearing on the matter being
enquired into" which had been promised. By letter dated 31st July, 1998 both
requests were refused and the commencement of the enquiry on 4th August, 1998,
the Tuesday after the August Bank Holiday, was confirmed. By further letter of
31st July, 1998 the Plaintiff's solicitors sought particulars in relation to
the enquiry and this elicited a faxed response dated 1st August, 1998, the
Saturday of the August Bank Holiday weekend, indicating that Mr. Faughnan would
deal with the Plaintiff's requests at the hearing on the following Tuesday in
the course of setting out the procedural aspects of the enquiry and requiring
that the Plaintiff attend the enquiry.
7. In
the events, the Plaintiff did not attend on 4th August, 1998. On that date her
solicitors informed Mr. Faughnan that the Plaintiff was then not in a position
to attend the enquiry, that she was under the care of her doctor and that
verifying medical certification would be furnished.
8. By
letter dated 4th August, 1998 Mr. Faughnan apprised the Plaintiff that the
enquiry would be held on Friday, 7th August, 1998 and that the Plaintiff was
required to attend at that time. Mr. Faughnan furnished to the Plaintiff's
solicitors certain documentation, including an outline of the procedures which
would be followed at the enquiry, five pages of questions which it was intended
to put to the Plaintiff and a list of fifteen documents relating to the
enquiry, including copies of the documents in question. As to the conduct of
the enquiry, the documentation indicated that Mr. Faughnan intended that his
decision would be made without any undue delay and that, as soon as he had come
to a view on the allegations, he would inform the Plaintiff and arrange a
meeting at which she could be represented. If he she were to make "a
determination of misconduct", the Plaintiff or a representative might make
submissions on her behalf before "any question of consequences or punishment
are considered". Subsequently, the Plaintiff presented a medical certificate
from her General Practitioner certifying that she was unfit for work and her
solicitors informed Mr. Faughnan that she would not be attending the enquiry on
7th August, 1998.
9. The
enquiry was subsequently postponed until 14th August, then until 25th August
and, finally, to 3rd September, 1998. In the interim some very fraught
correspondence passed between the Plaintiff's solicitors, on the one hand, and
Mr. Faughnan on the other hand, which I need not outline save to state that the
Plaintiff's solicitors were threatened with an action for defamation by Mr.
Faughnan.
10. The
case made by the Plaintiff in the affidavit sworn by her on 28th August, 1998
in support of her claim for interlocutory relief was, first, that she was not
being afforded basic fairness of procedures, in that Mr. Faughnan was
proceeding with indecent haste and was compelling her into a situation where
she would have to face serious allegations without being fully prepared and,
secondly, that Mr. Faughnan, who had been head of security while Mr. Drion was
the Manager of the Defendant's studs, was "at the very least complicit" in the
activities he purported to enquire into and that he was not an appropriate
person to conduct the enquiry, and that there was at best a real risk of an
inference of bias or pre-judgment on his part.
11. In
his replying affidavit sworn on 9th October, 1998, Mr. Faughnan averred that it
was his impression that the Plaintiff had no intention of making herself
available for questioning and this placed the Defendant in an extremely
difficult position. He described the Plaintiff's contention that he was
complicit in the activities he was seeking to enquire into as scurrilous and
untrue. He contended that it was only in the event of the Plaintiff failing to
provide satisfactory explanations in response to his queries that the question
of disciplinary sanction would fall for consideration and that he would not be
the decision maker in such a contingency, since his sole function was to carry
out an investigation and to prepare a report, which he would in turn furnish to
his employer. He denied any bias or pre-judgment on his part and he asserted
that the Plaintiff had not been denied natural justice at any stage,
particularly since she was not as then involved "in a disciplinary process".
Finally, Mr. Faughnan alleged serious misconduct on the part of the Defendant
in having obtained the services of the Defendant's stallions for her own brood
mares without paying the requisite stud fees over a period of years.
12. The
Plaintiff and Mr. Faughnan have each filed two further affidavits on this
application in which the very serious allegations made by each against the
other are reiterated and amplified. There is only one matter arising on these
affidavits which I propose to allude too. In November 1998 the Plaintiff
discovered that she had been removed as an authorised signatory for cheques
drawn on the Defendant's account at Bank of Ireland, Kilcullen Branch. Mr.
Faughnan has averred that the Plaintiff was so removed upon his ascertaining
the particular matters which he is anxious to pursue with her and which were
raised on 28th July, 1998. However, Mr. Faughnan averred that the Plaintiff's
assertion that this is indicative of pre-judgment or a decision to dismiss her
is untrue and that her removal as signatory was "a necessary precaution in
circumstances where the Defendant has been the victim of an elaborate fraud and
has been occasioned serious losses as the Plaintiff acknowledged in the
generality of her affidavits".
13. On
this interlocutory application, what the Plaintiff has to establish in relation
to each of the two matters which arise for the consideration of the Court is
that there is a fair issue to be tried between the parties, that damages would
not be an adequate remedy, and that the balance of convenience favours the
grant rather than the refusal of the injunctive relief claimed.
14. In
my view, there is a fair issue to be tried on the Plaintiff's challenge to the
continuance of the enquiry initiated by the letter of 28th July, 1998. There
is undoubtedly a fair issue to be tried as to the true nature of the enquiry,
whether it is merely an investigation or is a disciplinary process. There is
also a fair issue to be tried as to whether, if the enquiry is conducted by Mr.
Faughnan, the Plaintiff can be assured of a hearing in accordance with the
principles of natural and constitutional justice, which is her entitlement,
and, in particular, whether Mr. Faughnan could conduct the enquiry without
infringing the audi alteram partem principle and the principle nemo iudex in
causa sua. The Plaintiff contends that it is crucial to her defence that she
should be in a position to examine or cross examine Mr. Faughnan, having regard
to his day to day involvement in the matters at issue in the enquiry. On this
ground alone, it seems to me that there is a fair issue to be tried as to
whether Mr. Faughnan should step aside and let somebody else conduct the enquiry.
15. Having
regard to the seriousness of the allegations made by the Defendant against the
Plaintiff and the possible gravity of the outcome of the enquiry for the
Plaintiff, dismissal from her employment having been signalled as a possible
outcome from the outset, damages would not be an adequate remedy for the
Plaintiff, if she was subjected to an enquiry which was subsequently found to
have contravened the principles of natural and constitutional justice.
Moreover, the balance of convenience clearly favours granting an injunction to
restrain the prosecution of the enquiry until the issues between the parties in
relation to the conduct of the enquiry have been determined at the trial of the
action.
16. It
was contended on behalf of the Defendant that the Plaintiff has not come to
Court with clean hands and that she should be refused equitable relief. In
support of this contention it was submitted that the Plaintiff has made a
wholly unnecessary case in asserting that the conduct of the enquiry by Mr.
Faughnan would breach the principle nemo iudex in causa sua. It was submitted
that the Plaintiff's assertion is extraordinary and that Mr. Faughnan had been
vilified and excoriated by the Plaintiff and had been branded as a fraud or
worse. The Court was invited to draw the conclusion that the allegations made
by the Plaintiff against Mr. Faughnan were made deliberately to ensure either
that he would be removed from his employment or he would never have any
conceivable role in the enquiry. The Defendant relied on the decision of the
Court of Appeal on
Hubbard
-v- Vosper
(1972) 1 All E.R. 1023.
17. I
can see no parallel between this case and
Hubbard
-v- Vosper
.
In this case, serious allegations have been made by each side against the
other and they have been made with extraordinary vehemence. The allegations
have been made on affidavit under the cloak of privilege in the context of an
interlocutory application on which the conflicts of evidence cannot be
resolved. It is regrettable that more restraint was not exercised by each
side. It will be for the trial judge, at the oral hearing of the action, to
resolve the conflicts of evidence and to determine in relation to each
allegation whether it is well founded and, if not, whether it was motivated by
malice or lack of bona fides and, if so, how that should impact on the decision
of the Court. It think it is only fair, however, to emphasise that on this
interlocutory application the probative threshold which the Plaintiff has to
reach to establish a prima facie entitlement to an interlocutory injunction,
namely, that there are fair issues to be tried between the Plaintiff and the
Defendant, is a low threshold and that no finding whatsoever has been made on
the allegations and the counter-allegations made by the parties.
18. I
will turn now to the second matter which arises for consideration on this
application, the matter of the Plaintiff's entitlement to sick pay. As I have
outlined above, the Plaintiff's solicitors in their letter of 4th August, 1998
advised the Defendant that, for medical reasons, the Plaintiff was not in a
position at that time to attend the enquiry. Immediately following that
letter, the Plaintiff submitted a medical certificate from her General
Practitioner certifying her unfitness for work for one week from 4th August,
1998. In a letter dated 4th August, 1998 to the Plaintiff herself, Mr.
Faughnan advised her to initiate a claim for "sickness benefit through the
Social Welfare Scheme" and to keep him informed of the payments. He also
stated that if her illness was prolonged, arrangements would have to be made
for getting the Plaintiff's salary to her. On 7th August, 1998, Mr. Faughnan
on behalf of the Defendant, furnished the Plaintiff with a copy of a notice
issued by the Labour Court of the making of an Employment Regulation Order
fixing the statutory minimum remuneration and statutory conditions of
employment of workers in relation to whom the Agricultural Workers Joint Labour
Committee operates. That Order, which the Defendant contends applies to the
Plaintiff, was dated 10th July, 1998 and provided for three weeks sick pay for
full time agricultural workers after one years' service. The expression
"agricultural worker" was defined in the Order as meaning "a person employed
under a contract of service or apprenticeship whose work under the contract is
or includes work in agriculture, but does not mean a person whose work under
such a contract is mainly domestic service".
19. By
letter dated 25th August, 1998 from the Defendant, the Plaintiff was advised
that, in the event of her continued absence from work due to illness, she would
be paid up to 31st August, 1998. Thereafter, she would not receive payment
until she resumed work.
20. The
Plaintiff has been out of work for certified medical reasons since August 1998.
An affidavit sworn by Dr. Michael Mulcahy, Consultant Psychiatrist, was filed
in these proceedings in which Dr. Mulcahy averred that he has diagnosed that
the Plaintiff is suffering from acute stress disorder and that symptoms of a
more general anxiety disorder have appeared and have been exacerbated directly
by virtue of the matters the Plaintiff complains of in relation to her job and
financial situation. Since 1st September 1998 the Plaintiff has not been paid
her salary. She has been in receipt of disability benefit from the Department
of Social Welfare in the sum of about £70 per week. She is a married
woman but contends that her husband is currently incapacitated and that she and
her husband are almost totally dependant on her income. There is a factual
dispute on the affidavits as to the precise level of the Plaintiff's dependence
on her income from her employment with the Defendant, given that her husband
owns a farm and she and her husband own some blood stock. There is also a
dispute as to the Plaintiff's entitlement to sick pay, which is a mixed issue
of fact and law.
21. It
is common case that the terms of the Plaintiff's employment with the Defendant
are not contained in a written contract. It is also common case that it is not
an express term of the Plaintiff's employment with the Defendant that she is
entitled to be paid her salary while absent from work due to illness or
incapacity. The Plaintiff's contention is that her entitlement to sick pay is
an implied term of her contract of employment. Her case is that it has always
been the position in the Defendant's studs that long-standing employees were
paid their salary in full when they were absent through illness and that this
custom is part of her terms of employment. This is disputed by the Defendant.
22. On
behalf of the Defendant, Mr. Horan referred to the following passage from
Halsbury's law of England, 4th Edition, Volume 16 at paragraph 24 as a correct
statement of the entitlement of an employee to non statutory sick pay:-
23. The
first issue which arises on the sick pay matter is whether the Plaintiff has
established that there is a fair issue to be tried that she is entitled to sick
pay while absent from work on medical grounds. In my view, she has established
that there is a fair issue to be tried that it is an implied term of her
contract of employment that she is entitled to be paid her salary, after
allowing for disability benefit which she receives, for a reasonable period
while absent from work on medical grounds and that the Defendant is not
entitled to rely on the provisions of the Employment Regulation Order made by
the Labour Court on 10th July, 1998 in relation to her employment.
24. On
the question of the balance of convenience, I propose following the line of
authorities which commenced with the decision of Costello J., as he then was, in
Fennelly
-v- Assicurizoni Generali Spa
(1985) 3 I.L.T.R. 73, in holding that damages would not be an adequate remedy
for the Plaintiff if it were to be found at the trial of the action that she
has the entitlement she contends for to sick pay, and that, having regard to
the circumstances of the matter, justice requires that the Defendant should be
ordered to discharge her sick pay and preserve her pension entitlements pending
the trial of the action, subject to the Defendant's reasonable requirements in
relation to verification of the Plaintiff's incapacity for work on medical
grounds being adhered to. The Plaintiff has given the usual undertaking as to
damages and I am satisfied that, although the Plaintiff's liquidity is in
issue, she has sufficient assets to support the undertaking as to damages.
25. If
the Plaintiff becomes fit for work before the trial of the action, her
entitlement to sick pay will cease. The Defendant acknowledges that the
Plaintiff's contract of employment still subsists and, if the Plaintiff's
incapacity ceases and she presents for work, it would be for the Defendant then
to decide what steps to take.
26. Having
regard to the degree of conflict between the parties and the seriousness of the
allegations and counter allegations which have been ventilated on this
Application, I consider that it is of the utmost importance that the trial of
the action should be expedited. I propose fixing a date for the trial and
making any orders in relation to pleadings, discovery and such like as are
necessary on hearing Counsel's submissions.
28. A. An
Order restraining the Defendant, its servants or agents from prosecuting the
enquiry into disciplinary matters notice of which was given to the Plaintiff in
the Defendant's letter of 28th July, 1998;
29. B. An
Order that the Defendant pay to the Plaintiff a weekly a sum equivalent to her
net salary less such sum as the Plaintiff is entitled to by way of disability
benefit or other benefit from the State, provided that the Plaintiff furnishes
to the Defendant on a weekly basis evidence in the form of a certificate from a
medical practitioner of her unfitness for work and that the Plaintiff complies
with the reasonable requirements of the Defendant that the Plaintiff be
examined by a medical practitioner nominated by the Defendant; and
30. C. That
the Defendant maintain the Plaintiff's pension/superannuation and other
benefits by paying the premiums in respect thereof.