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High Court of Ireland Decisions


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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Charlton v. Aga Khan's Studs Société Civile [1998] IEHC 186 (22nd December, 1998)

THE HIGH COURT
1998 No. 9515 P
BETWEEN

MARY CHARLTON
PLAINTIFF
AND
H. H. THE AGA KHAN'S STUDS SOCIÉTÉ CIVILE
DEFENDANT

Judgment of Ms. Justice Laffoy delivered on the 22nd day of December, 1998

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:-

(a) the Defendant should be restrained from continuing an enquiry into disciplinary matters of which the Plaintiff was first notified by letter dated 28th July, 1998 from the Defendant's Personnel Manager, Frank Faughnan (Mr. Faughnan); and
(b) the Defendant should be obliged to pay to the Plaintiff sick pay during her absence from work on medical grounds and the other perquisites of her employment.

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:-


"If it is determined that you were involved in assisting any of the above in the improper use of the studs' resources, disciplinary action may be taken against you up to and including your dismissal".

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:-


(1) Using the Defendant's resources in the production of invoices and/or instructions on behalf of persons or companies or entities whose operations were damaging to the interests of the Defendant;
(2) Assisting in the administration on behalf of various persons or companies or entities, such companies' and entities', operations and activities being damaging to the interests of the Defendant; and
(3) Assisting in the administration on behalf of various persons or companies or entities involved in the fraudulent use of the Defendant's property or resources.

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:-


"Whether any such private sick pay is payable, its amount, its duration, and its relationship with statutory sick pay or any other benefit depend entirely on the terms of the individual employee's contract, since there is no rule of law that it either is or is not payable. The relevant term may be expressed in the contract and this is common; if not so expressed, a term may be implied. In the absence of an express term there is, however, no presumption that a term is to be implied. It is rather a case of considering all the evidence in the particular case, including the normal method of remuneration, custom and practice, and any pronouncement by the employer. Where a term is implied it is likely to provide for deduction of state benefit, particularly statutory sick pay, and for the employer's liability to pay to be restricted to a reasonable period".

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.

27. Pending the trial of the Action, the following Orders will be in force:-


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.


31. Each party will have liberty to apply.


© 1998 Irish High Court


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