High Court of Ireland Decisions

1. This matter comes before the Court by way of appeal from a decision of the Circuit Court dated the 29th day of November 1996.

2. The Plaintiff is an experienced Project Engineer. In 1992 while working in Nigeria he was contacted by N.E.S., a recruitment agency based in the United Kingdom, concerning a job in Middleton with the second named Defendant. In April 1992 while home on holidays, the Plaintiff met Mr. North of the second named Defendant. Some time after that meeting, N.E.S. made an offer to the Plaintiff of work with the second named Defendant. He did not accept it. When the Plaintiff returned to Nigeria, he received a telephone call from Mr. Cauldwell, the first named Defendant, on behalf of Recruitment and Engineering Design Services (which will hereinafter be referred to as REDS). Mr. Cauldwell said he had been instructed by Mr. North to telephone him with an offer of a contract for one year, the hourly rate, and the number of hours per week as per the written contract produced in the Court. The Plaintiff told Mr. Cauldwell that the offer was acceptable, if he received a written contract. He received an offer by letter dated the 25th May, 1992, which he signed on the 29th May, 1992. He made two minor amendments (one being the commencement date, and the other being the addition of the words "except V.A.T"). He sent the letter forming the contract back with a covering letter. The letter of offer was headed Recruitment and Engineering Design Services and read as follows:-

3. When sending back the letter forming the contract, he enclosed a covering fax. The Plaintiff commenced working with the second named Defendant. In either mid or late November he was told that there would be no more work for him after he took his holidays in December. He then contacted Mr. Cauldwell by telephone and sent a fax dated the 31st December, 1992 which read as follows:-

4. This was followed up by a letter from the Plaintiff's Solicitors to Mr. Cauldwell dated the 15th February, 1993, which reads:-

5. The Plaintiff was next offered employment in August, 1993. He stated in evidence that a duration of one year was a requirement of his and that without it, he would not have accepted the offer. He maintained that in his interview with Mr. North he had made it clear that he would not leave Lagos for a contract of less than one year and maintained that he was guaranteed a year definite by Mr. North. He denied that he had ever said to Mr. O'Sullivan of the second named Defendant, in December 1992 that " REDS were responsible and that they would be made pay or words to that effect" . He said that, from his first interview with Mr. North, he regarded his contract as being with Mr. North's company. Later, however, he modified that contention. In cross-examination he stated that the contract which had been offered to him would not have been offered unless Mr. North was behind it, and that his contract resulted from the details of his requirements that he had discussed with Mr. North, and not with Mr. Cauldwell. The Plaintiff said that the fifty hours minimum per week mentioned in the agreement with Mr. Cauldwell had not been brought up by Mr. North. It was, however, contained in the letter sent to the Plaintiff by Mr. Cauldwell. Mr. O'Rourke was also questioned about the document between Mr. North and Mr. Cauldwell.

6. That document is headed Recruitment and Engineering Design Services and it gives their name, telephone and fax number and says:-

7. Mr. Cauldwell was the next witness. He was working at the time for REDS on a freelance/contract basis. He was contacted by Mr. North and told that Mr. North wanted to employ Mr. O'Rourke. Mr. O'Rourke asked REDS to act in this particular instance as a " paying agent" . He said that the contract duration of one year, and a term of a minimum fifty hours per week was stipulated by Mr. North, as was the rate of overtime pay. Other than the negotiation between £29 and £27 per hour between REDS and the Plaintiff, REDS had no input into the terms of the contract. The document containing the words " expected contract duration " was put to Mr. Cauldwell. He said it meant that he contacted Mr. North and asked him how long he intended to have Mr. O'Rourke employed for. In cross-examination he admitted that he had never heard the phrase " paying agent " before this case came up. He also agreed that the deal whereby Mr. O'Rourke was to get his money was a deal between him, Mr. O'Rourke, and Mr. Cauldwell. He said that the arrangement whereby he was to be paid was an arrangement between himself and Mr. North. He said that they were separate but connected agreements. Mr Cauldwell stoutly maintained that Mr. North told him that the contract was to be for a year, and that that is why he put it into the document he sent to the Plaintiff. When asked by Mr. Tynan "you are saying you got a one year certain instruction", he answered as follows: " With respect, in the business nothing is certain ". Mr. Cauldwell, however, maintains that the entitlement of both parties to terminate at one week's notice was clearly understood as between himself and the Plaintiff. He maintained that the fifty hour minimum week came on Mr. North's instruction. He said that the document came in standard form. Under the words "contract duration" already written in, they typed "one year". The words " expected contract duration" in the document between himself and Mr. North contained those words because it was on a standard form. Mr. Cauldwell did not feel that Mr. North had gone back on his word to Mr. O'Rourke, the Plaintiff, in letting him go when the work dried up because that was the standard practice in the business. Significantly, Mr. Cauldwell stated that he knew that the work could be stopped at any time. He added, however, that he probably did not pass on this information (which I consider of vital importance) to Mr. O'Rourke.

8. The next witness called was Mr. North on behalf of the second named Defendant. He said that he did not guarantee a year certain to Mr. O'Rourke. He said that a year was the expectation only, and that the fact it was merely such, was conveyed to Mr. O'Rourke. If it was a contract for a year certain, Mr. North said that the document would be much lengthier. Neither did the fifty hours minimum per week emanate from him. The first formal complaint against the second named Defendant was by letter in September 1993. Mr. North was also of the view that alternative work would have been readily available to the Plaintiff had he wished to have availed of it. Not only did he himself not promise Mr. O'Rourke a full year at interview, he never authorised Mr. Cauldwell to do so. He did not discuss the notice period with Mr. Cauldwell. Mr. North denied that REDS was merely a ' paying agent ', and stated that the contract in this case was similar to several others that he had with REDS. Under cross-examination by Mr. Meenan, Mr. North agreed that he had put the Plaintiff in touch with REDS, rather than REDS putting the Plaintiff in touch with him. He denied, however, that he had already done a deal with Mr. O'Rourke by the time Mr. O'Rourke came into contact with REDS.

9. On day three of the case the first witness was Mr. O'Sullivan. His evidence was to the effect that in December 1992 the Plaintiff told him that he was going to Venezuela on his holidays and that REDS were paying for it. When he asked the Plaintiff to explain, the Plaintiff told him that the contract he had with REDS was for a fixed term, and that if they could not find him work then they were going to have to continue paying him while he was on holidays in Venezuela. Mr. O'Rourke also told him that the second named Defendant should not be concerned, because the contract was solely between Mr. O'Rourke and REDS.

10. The final witness in the case was Mr. Michael Collins, a person with about thirty years experience in the recruitment agency business. In his experience, a fixed contract for one year with no right of termination, such as one week notice, would be unheard off. His agency got the C.V. of Mr. O'Rourke on the 6th November, 1992. In his experience he never issued a contract that was silent as to the notice which the employer had to give. He agreed with Mr. Finnegan, however, that the term is specifically included in the written contract and he has, as far as he knows, never entered a contract without a specific provision for the employee to determine it by notice. If he was told by a client of his that the company needed the services of an engineer for a year, he would understand that to mean the expected duration would be one year.

11. I have been referred by Counsel to the following cases: Construction Industry Training Board -v- Labour Force Limited (1970 3 A.E.R at page 220), Ironmonger -v- Movefield Limited t/a Deerings Appointments 1998 I.R.L.R. page 461, The Minister for Labour -v- P.M.P.A. Insurance Company (under Administration) 1986 5 J.I. SLL and Phelan v- Coilte & Ors. 1993 I.R. page 8 as well as a passage from Robert Clarke's book on Contract 3rd Ed. page 128.

12. The learned Judge at page 216 of the report said:-

13. Barron J. did not regard the facts in that case as establishing any contract, express or implied, between the defendant and the employee, and stated that he was supported in his conclusion by the English decision in the case of Construction Industry Training Board -v- Labour Force Limited .

14. From the foregoing it is apparent that the case rests very much on its own facts.

15. The questions to be decided in this case seem to me as follows:-

16. Having carefully considered the evidence the following are my conclusions:-

17. At the stage when Mr. North of the second named Defendant, had discussion with Mr. O'Rourke in April, 1992 no binding agreement was made. Mr. North was working through NES, and although he was aware that Mr. O'Rourke wanted a contract for a full year, I do not accept, and the evidence does not disclose that there was any binding agreement. The fact that Mr. North put REDS in contact with the Plaintiff, rather than REDS introducing the Plaintiff to Mr. North's company, is a factor to be taken into account. It is not, however, conclusive evidence of the existence of a contract between that company and the Plaintiff.

18. There was indeed an agreement between Mr. Cauldwell, trading as REDS, and the second named Defendant. In that agreement REDS undertook to provide the engineering services of Mr. O'Rourke for a rate of £29 per hour for an estimated contract duration of one year. They were to be paid £29 per hour, and it was up to them to conclude whatever deal they wished or they could with Mr. O'Rourke. While the background to that particular contract was the meeting between Mr. O'Rourke and Mr. North, the terms of their conversation were not automatically incorporated into the contract between Mr. Cauldwell and Mr. O'Rourke. Neither were they automatically incorporated into the separate contract between REDS and the second named Defendant, to which Mr. O'Rourke was not a party. I do not accept the contention of Mr. Cauldwell that he was merely a "a paying agent" in the contract between Mr. North and the Plaintiff. There was no contract between the Plaintiff and the second named Defendant.

19. There is a conflict in the evidence in this regard. Mr. Cauldwell says that he was instructed to offer Mr. O'Rourke a specific year long contract and Mr. North denies this. Although he, Mr. North may have mentioned that he wished Mr. O'Rourke to work for a year, I do not accept that his instructions to Mr. Cauldwell were to offer a definite one year contract to Mr. O'Rourke. Furthermore, Mr. Cauldwell did not understand him so to do. His evidence was that he did not think that Mr. North behaved badly towards Mr. O'Rourke in giving him one week's notice when the work ran out, because his right to do so was to be understood in the contract according to the custom of the trade. Mr. Cauldwell was not, therefore, under the impression that there was to be a contract of one year's certain duration. Unfortunately, Mr. Cauldwell in his letter to the Plaintiff, failed to incorporate his understanding that the contract was subject to one week's notice of termination. Since (as I have found) Mr. Cauldwell understood the contract to be subject to termination at one week's notice, it seems clear to me that he was not led into making the

20. As I have already indicated, there were two entirely different though interconnected contracts involved. I cannot accept the contention of Mr. O'Rourke that his conversation with Mr. North formed part of his agreement with Mr. Cauldwell . The contract between Mr. North's company and Mr Cauldwell was a separate agreement with its own terms. While, indeed Mr. North had introduced Mr. Cauldwell to Mr. O'Rourke, Mr Cauldwell and Mr O'Rourke made their own agreement. Likewise Mr. Cauldwell and Mr North made their own agreement.

21. Mr. Cauldwell maintains that it was his understanding that such a term was to be implied in his contract with Mr. O'Rourke. Mr. Collins says that such term should be implied in such contracts because it is normal. He added, however, that he always stipulates such a term in writing.

22. I do not think that the evidence justifies the Court in importing a term in a written contract which is not contained therein, and which is in dispute between the parties. It was open to Mr. Cauldwell to insert such a term in the contract had he so wished. The Plaintiff is entitled to rely on the written terms of the contract . While I accept the statement in Clarke on Contract 3rd Ed. at page 128 that ' it is possible for terms to be implied into contracts because of the commercial or local backcloth against which the contract is to take effect ', I am not satisfied that the evidence in the present case is sufficient to warrant the importation of a term into the contract between the Plaintiff and Mr. Cauldwell.

23. I find, therefore, that Mr. Cauldwell is responsible for the contract that he made with the Plaintiff. He is also responsible for the different contract he made with the second named Defendant. He was not induced to enter this contract by any misrepresentation by or on behalf of the second named Defendants. The problem arose by virtue of his failure to incorporate into his agreement with Mr. O'Rourke, a term which he believed was implied, namely, that the matter could be terminated by one week's notice. In those circumstances I would allow the appeal and find as follows:

24. I will discuss with Counsel what consequential Orders are appropriate.