Graham O'Neill (plaintiff/ respondent) v Canada Life Assurance (Ireland) Limited and Lloyds Abbey Life plc (defendants/ appellants).

Practice and Procedure - Pleadings - Statement of claim - Late amendment - Function of the court.

Labour Law - Contract of employment - Implied terms.

The Supreme Court (Mr Justice Murphy, Mr Justice Lynch and Mr Justice Barron); judgment delivered 27 January 1999.

Pleadings are a matter for the parties and if a proposed allegation had been made by the plaintiff in the first instance, the court would have had no function in the matter. The only function of the court is to see that the matters in issue between the parties are before the court, insofar as this can be done without injustice to the defendant.

The Supreme Court so held in dismissing an appeal from a decision of the High Court allowing the plaintiff to make a late amendment to his statement of claim.

Frank Clarke SC and Frank Callanan SC for the appellants; Ercus Stewart SC and Roderick Horan BL for the respondent.

Mr Justice Murphy set out the facts of the case stating that this was an appeal from a decision of Mr Justice Geoghegan in the High Court, on 12 March 1998, allowing the plaintiff to amend his statement of claim.

The plaintiff had been employed by the first defendant as an investment fund manager, apparently under the terms of a written contract, dated the 29 January 1992, which terms included a provision that his employment might be terminated on six months notice. On 23 March 1992 the first defendant terminated the plaintiff's employment by notice expiring on 23 September 1992. On the following 5 October the plaintiff instituted proceedings against the first defendant for wrongful dismissal and against the second defendant for damages for slander.

It was, inter alia, the plaintiff's case that, notwithstanding the provisions of the contract relating to termination, express representations had been made to him to induce him to enter into the contract and representations were subsequently made during the course of the contract that his employment would be for life or words to that effect. The action, as originally instituted, was on the basis that the contract was for life, notwithstanding the terms upon which the first defendant purported to rely, for the termination of the employment.

The pleadings were delivered, particulars were sought and given, discovery was made and the matter was ultimately set down for, but did not come on for, hearing. An application was made, seeking leave to amend the statement of claim. Effectively the amendment sought was to allege that under the plaintiff's contract of employment the first defendant had an implied obligation to conduct its business in a proper fashion and in particular to conduct it in such a way as it would not unfairly or improperly damage the reputation of its employees and in particular the reputation of the plaintiff. It was then sought to allege that the first defendant had failed in its obligation in pursuance of that implied term.

The reason for, and timing of, the plaintiff's application was explained by the evolution of English law in relation to the obligations of employers. The House of Lords held, in Malick v Bank of Credit and Commerce International [1998] AC 20, that in the very dramatic circumstances of that case there was an implied term that employers would not act fraudulently and that redundant employees of that banking company might have an action for compensation not only for loss of employment but also for the stigma, as was it was described, attaching to them as a result of the breach by their employers of their implicit obligation to conduct their business in a proper and honourable fashion.

Mr Justice Murphy stated that he was not suggesting or accepting that this was necessarily the law in this country but that it was that evolution which explained, in part at any rate, the delay of the plaintiff in seeking to make this case.

The first defendant contended that that an amendment at this stage was late, that there had been an inordinate delay and that the proposed amendment was an embarrassment to it. Further, it was contended that the nature of the case which was being made would create difficulties for the first defendant, having regard to failures of recollection which necessarily occurred with the passage of time.

Mr Justice Murphy stated that undoubtedly this was so, but that it had not been suggested that there were any particular witnesses who were no longer available. What was suggested was that there might be difficulty in securing their attendance and that there would be some problems in relation to recollection. However counsel for the plaintiff pointed out that much of the case which the plaintiff sought to make, would relate to documentation in the possession of the first defendant and that this should still be available, and would be available on discovery, to the plaintiff and available to the defendant to enable witnesses, wherever they might be, to refresh their memories on events which might be in contention.

Mr Justice Murphy held that in the circumstances of the case it did not seem that an amendment would be so embarrassing or so unfair as to be unjust to the first defendant. Undoubtedly the case which the plaintiff sought to make was one which, if sustained, would reflect very seriously on the credit and reputation of the first defendant. In allowing an application for an amendment the court would not be lending credence to the allegation which the plaintiff sought to make. Pleadings were a matter for the parties and if the proposed allegation had been made in the first instance, the court would have had no function in the matter. The only function of the court was to see that the matters in issue between the parties were before the court, insofar as this could be done without injustice to the defendants. Mr Justice Murphy stated that, allowing the amendment, even after a lapse of some years, did not represent any real injustice to the defendant and that the justice of the case required that the amendment should be allowed on the terms indicated by the High Court. Accordingly, he dismissed the appeal.

Mr Justice Lynch and Mr Justice Barron concurred with the judgment of Mr Justice Murphy.

Solicitors: B. C. M. Hanby Wallace (Dublin) for the appellants; Fawsitt & Co (Dublin) for the respondent.