High Court Awards Damages for Breach of Oral Contract

In Hennigan v Roadstone Wood Ltd [2015] IEHC 326, the High Court awarded a Plaintiff damages for breach of contract and misrepresentation despite the fact that the contract was not recorded in writing.  The case illustrates the importance of producing strong corroborative evidence in proving the existence of an oral agreement.

Facts

The plaintiff started work in the defendant's quarry in 1995 and became an independent contractor in 2000.   The Plaintiff claimed that in 2007, A approached him and asked him would he consider buying a new loading shovel. The Plaintiff claimed that he agreed to do so provided that they could agree favourable terms. There was a discussion as to the rate of pay and a figure of €41 per hour was reached. The Plaintiff also claimed that A agreed that he would be retained as a contractor for the duration of the finance agreement for the equipment (five years).

The Plaintiff claimed that he had also met with H and O’D when they discussed the purchasing of the equipment and he again raised the issues of the necessity of the 5 years guaranteed work in order to comply with his financial obligations relating to the machine and H suggested a rate of pay of €39 per hour. The Plaintiff claimed that H told him that there would be no difficulty with the availability of work and to purchase the machine. Following further discussions between the Plaintiff and A the rate was again agreed at €41 per hour. 

The Plaintiff entered into a leasing agreement with ACC in respect of a loading shovel for a period of five years.  

In December 2009 the Plaintiff was informed that there would be no further work for him due to the downturn in the economy. That day he attended at his solicitors who wrote to the defendants stating that his client was induced based on representations and promises by both A and H to purchase a new loading shovel on the basis that he would receive, at a minimum, five years' work on a full-time basis on at a rate of €41 plus VAT per hour.

ACC repossessed the machine and sold it leaving a sum outstanding of €60,000. It was also suggested by the Plaintiff that the stress of being out of work caused the break-up of his marriage.

The Defendant denied encouraging the Plaintiff to purchase the machine and further denied any agreement for a five year period of work at €41 per hour.

Decision

While A gave evidence denying the existence of any agreement H was no longer with the Defendant and was not called to give evidence.  The Judge indicated that he preferred the evidence of the Plaintiff who he found to be a careful man who wanted to ensure that, before he committed himself to purchasing new equipment he had to have some guarantee that he would continue to be used as a contractor for the period that he was going to repay the purchase. The fact that the Plaintiff had received an increase of an hourly rate to €41 per hour was consistent with the evidence given by him.

In awarding damaged the Court granted the Plaintiff €60,000 in respect of the balance of the monies owed on the equipment together with the sum of €200,000 for the remaining two and a half years of the agreement. The Judge declined to make an award of general damages despite the claim by the Plaintiff that the breach of contract gave rise to such pressure that his marriage ended.

For more information please contact Paula Mullooly at pmullooly@algoodbody.com

Date Published: 7 July 2015