Before: The Hon. Mr. Justice Murphy
 
 

B E T W E E N

JUDGMENT
 
DATED: 31 July, 1991

Mr. Justice Murphy:

This is a claim for damages for negligence, negligent mis-statement and breach of contract, arising out of the negotiations, agreements and actions of the above parties or some of them in relation to the drainage of the Ballyfinboy river, Tipperary in the years 1983 to 1986.

The drainage works were carried out by the Defendants (other than the Minister for Agriculture, Ireland and the Attorney General) who own or occupy farms on or near the Ballyfinboy river and who might expect to benefit from the drainage thereof. Those Defendants were in the pleadings and are in this Judgment referred to as "the Farmers". The work was undertaken with the benefit of that part of the Farm Modernisation Scheme which became applicable to joint works as from the 10 February, 1976. The Farm Modernisation Scheme itself was introduced on the 1 February, 1974 in implementation of certain directives of the EEC though it would appear that the joint works aspect of that scheme did not fall within the framework of the EEC directive or at any rate was not funded by monies provided in pursuance of that scheme. The Farm Modernisation Scheme was operated by the Department of Agriculture and Fisheries and in particular a section of that Department known as the "Farm Development Services" which was in the pleadings and which will be in this Judgment referred to as "the FDS". The Farm Development Services itself is a significant section of the Department which has Officers and Representatives throughout the country and in particular an Office and Representative at Nenagh, Co Tipperary.

The evidence did not make clear how far the Farm Modernisation Scheme was publicised or even made available to the public or interested journalists. It was beyond dispute, however, that the farming community in general and the Farmers in particular were aware of the scheme insofar as they applied to individual farmers and many of the Farmers in the present case had benefited from such schemes. In simple cases a proposal would be made to the Farm Development Services by a farmer for the construction of say a cattle shed and the proposal in that behalf would be investigated by a field officer of the Department and if the proposal was approved the Farm Development Services would pay a significant percentage of the cost of the construction thereof. The individual farmer would arrange to carry out the work and would be responsible himself for the cost thereof but would qualify for the appropriate grant payable under the Farm Modernisation Scheme.

As far back as the 1920's some drainage works were carried out to the Ballyfinboy river but by 1970 there was some agitation with a view to having further works done.

Apparently the farmers and their neighbours were advised that it would be many years before the Board of Works would be in a position to carry out drainage works on the river. It is clear too that the farmers and other interested persons became aware of the fact that drainage works could be carried out under or with the benefit of a grant payable by the Department pursuant to the Land Project Scheme. The Land Project Scheme was the forerunner of and similar to the Farm Modernisation Scheme and it too had a joint works aspect as well as providing for individual farmers. I am satisfied that all or most of the farmers and many of their neighbours and interested persons signed forms in the year 1975 applying for a grant under the Land Project Scheme for the drainage of the Ballyfinboy river. Before these applications were dealt with the Land Project Scheme was replaced by the Farm Modernisation Scheme and in accordance with the directions attached to a circular dispatched by the Department to its various offices throughout the country and dated the 10 February, 1986 the applicants were informed that the Land Project Scheme was being terminated and that their applications would be treated instead as being made under the Farm Modernisation Scheme unless the Department was notified to the contrary. Apparently the joint works under the Farm Modernisation Scheme are dealt with by the Farm Development Services under the circular dated the 10 February, 1976. That circular identifies three categories of joint works, one of which is described as follows:-

"(a) The common outfall water courses to facilitate the drainage and reclamation of the land".

The circular then goes on to provide the rate of grant applicable to category (a) work should be 50% of the estimated cost as approved. In relation to the actual procedures the circular provides as follows:-

"Joint Drainage Works:

The procedures established, including the full examination of the case from the cost/benefit point of view and the processing of applications under the former Land Project will be retained in relation to Joint Works applications handled under the Farm Modernisation Scheme, except that the forms in use will now be designated FJI (application form); FJ2 (contract agreement form); FJ3 (letter of approval) and FJ4(R) (Report form)"

The Land Project procedures were not put in evidence nor was it suggested that any aspect of the those procedures was material to the present case.

It is beyond debate that the drainage works in the present case were carried out by the Farmers and in particular by the Contractor, that is to say the Plaintiff, employed by them. It is equally clear that the Department committed itself, subject to certain conditions, to grant aid the scheme in accordance with the joint works programme of the Farm Modernisation Scheme. What the Plaintiff and the farmers say is that the role of the Department and in particular the Farm Development Services was not a matter of fact or law confined to that of Banker or financier (however benevolent) but went much further. It was contended that the Farm Development Services would be better described as the promoters of the drainage scheme as it was they who had advised the farmers, and directly or indirectly the Plaintiff -- in relation to the advisability and feasibility of the scheme as well as it's implementation.

Perhaps the most surprising aspect of the present case is the basic concept of a number of neighbouring farmers, albeit with the support of the Department and the acquiescence of their neighbours attempting to carry out a drainage project extending over 9 miles of countryside and under five public bridges from Borrisokane to Lough Derg. It is not necessary for the purposes of this action for Counsel to open to the Court the Arterial Drainage Act 1945 or the earlier Act of 1925 or indeed any of the numerous Irish Drainage and Improvement of Land Acts passed in the nineteenth century. That legislation has no bearing on the present case but it is instructive to see the structures which were put in place to enable statutory drainage schemes to be carried out and the problems which legislators had foreseen for more than a century in relation to such schemes. Frequently Courts must be on guard to prevent themselves criticising or judging with the benefit of hind sight. The legislative history in relation to drainage would demonstrate that the appropriate wisdom was not gained by the unfortunate circumstances of the present case but had been freely available for very many years previously.

In 1981 it did seem that progress was about to be made towards the realisation of the plans to drain the Ballyfinboy river. Early in that year a public meeting was convened and a number of interested farmers attended. They elected a committee of 14 members. The Chairman was Patrick Fogarty, the Secretary Mr Donal O'Meara and the Treasurer Mr Rory Dunne. It is probable that Mr Patrick Mallon was present at this meeting. Mr Mallon was the Senior Officer of the Farm Development Services branch in Nenagh, Co Tipperary for a number of years prior to his retirement on the 1 March, 1982. He was known to and respected by the farmers and their colleagues in Tipperary. He was known to and respected by the farmers and their colleagues in Tipperary. He was the civil servant most intimately connected with the drainage works but having regard to the scope of the scheme final approval had to be obtained from head office in Dublin. Mr Mallon's immediate superior was Mr Cashen whose office was situated in Thurles, Co Tipperary. Another civil servant of great importance in the present case is Mr Hickey who is an Engineer by profession. The actual plans for the drainage works were prepared by him or under his authority. He also prepared a more controversial document estimating in accordance with certain figures accepted by the Department the total cost of carrying out the proposed work. These costings were for internal purposes only and were in that sense confidential. They were not at any time during the course of negotiations known to any of the other parties but their contents were subsequently revealed without proper authority to the Plaintiff. Mr Mallon was succeeded briefly by Mr Finlay and subsequently by Mr Dillon.

It was 1982 before further progress was made. Whilst there is disagreement or at any rate confusion with regard to the material events of this and the following year it can be said with some measure of certainty that Mr Hickey's costings were prepared and completed in January, 1982; but the letter from Mr Patrick Mallon addressed to Mr Donal O'Meara conveying the Ministerial approval to the carrying out of the joint works was dated the 1 March, 1982 and that the committee opened on the 19 March, 1982 the five tenders which they had received for the carrying out of the proposed drainage works. It was stated in opening the case on behalf of the farmers that in fact five tenders were received ranging from £155,000 to £250,000. There were two tenders at £200,000 one from Mr James Sheehan and another from the late Nicholas Cotter. The lowest tender had been submitted by a local man named Peter Downey. It appears that the majority of the interested parties were anxious to accept the lowest tender but this proposal was effectively vetoed by one of the farmers who is the most substantial contributor and who threatened to pull out of the transaction if that tender were accepted. If the works could have been carried out properly at the lowest tender that indeed would have been extremely attractive seeing that the Ministerial approval conveyed the news that the Departmental grant would amount to £122,651.00, a figure which was subsequently increased to £132,972.00. In any event this dispute led to further delays and the matter was postponed for a further year.

The late Nicholas Cotter died on the 13 April, 1983. He had been a Contractor with long experience of land reclamation and river drainage. Nicholas Cotter, the Plaintiff herein was related to the deceased but not involved in any way in the business carried on by him. The Plaintiff is and was at all material times a civil servant. He had emigrated as a young man and gained experience in a variety of occupations before returning to Ireland in 1979 when he secured his appointment as personal assistant to a Government Minister. He concedes himself that he had no practical or professional expertise in the building or land reclamation industries. He did, however, assemble or retain some of the employees and advisors who had worked for his namesake. In particular he retained Mr Kevin O'Callaghan as his consulting Engineer. Mr O'Callaghan had, among other things, advised the deceased in relation to the preparation of the original tender to drain the Ballyfinboy river. It is, I think, proper in these unusual circumstances to make it clear that there is no suggestion whatsoever that the Plaintiff misled the Farmers in anyway as to his identity. The uncontradicted evidence is that it was Mr Cotter, the Plaintiff herein, who was approached by one of the Farmers at the funeral of the late Nicholas Cotter and invited to tender for the works which the Farmers were still anxious to have executed.

The Plaintiff herein did submit a tender in the sum of £200,000 -- the same sum as had been proposed by the deceased -- on the 2 May, 1983. Among other things that tender was expressed to be "subject to a detailed investigation of the river proving satisfactory". As the contract for the execution of the works is dated the 15 June, 1983 and sets out the contract price at £190,500.00 the period within which controversy appears to have arisen is essentially the six weeks from the 2 May, 1983 to the 15 June, 1983. Indeed it would seem that the more controversial meetings or discussions took place in the week preceding the date of the contract.

The Plaintiff explained how he and Mr O'Callaghan, the consulting Engineer walked the river bank and discussed the nature of the river bed and adjoining land with some adjoining farmers and a fisherman who was particularly familiar with the river. The Plaintiff and Mr O'Callaghan explained that farmers generally were in a position to give information as to the presence or absence of rock under the lands and that the inspection of the river and the flow of the water indicates whether or not rock is present in particular parts thereof. On the other hand it was recognised that without undertaking a detailed investigation and survey of the river bed that nobody could be certain as to the precise extent or nature of the rock which might be encountered.

The Plaintiff was pressed by the Farmers to reduce his quotation for the works. He agreed to do so. The figure was reduced to £190,500 on terms that certain works would be omitted or undertaken by the Farmers themselves. This adjustment in the price took place at a meeting with the Farmers or some of them. Mr Cotter places that meeting in the Talbot Hotel in Nenagh while the Farmers say that it took place at the Pavilion in Ballinderry. However there is no dispute between the parties as to the fact of the reduction or the reason for it. More important is the evidence to the effect that the Plaintiff says that Mr Rory Dunne asked him why would he not do the work -- particularly the work in an area known as the Canal -- and that Mr Dunne had told him that the Farm Development Services could pay for the rock to which he, Mr Cotter, replied "why did you not tell me". The evidence was that Mr Dunne invited one Plaintiff to go down to Mr Tom Dillon, the then head the Farm Development Services in Nenagh and obtain confirmation of this information.

Mr Cotter did go to Mr Dillon's office in Nenagh and it is his evidence that he told Mr Dillon that Mr Dunne had told him that the Farm Development Services would pay for rock. It was Mr Cotter's evidence that Mr Dillon agreed with that statement. However, Mr Dillon said that Mr Ken Hickey would know about it. Mr Dillon then arranged for Mr Cotter to speak to Mr Hickey on the telephone and in the course of 'that conversation it is Mr Cotter's evidence that he told Mr Hickey that the Farmers had agreed that the Department would pay for rock and Mr Hickey agreed with this. Mr Cotter further gave evidence that Mr Hickey said that there was very little rock along the river and that the rock under the bridge at Ballyhooney was brittle and that he, Mr Hickey, had taken the rock into account and in his estimate the amount of rock was insignificant. Mr Hickey was quoted by Mr Cotter as saying "there is no rock worth talking about and you will be paid for it". It is agreed by Mr Cotter that the rate for payment was not discussed nor was "the small amount of rock" quantified in anyway. Before leaving Mr Dillon's office the final words attributed to Mr Dillon were "would you not take his, Mr Hickey's, word for it".

As I understood the evidence of Mr Cotter, his conversation with Mr Dunne took place at the meeting at which the tender price was reduced to £190,500 whereas undoubtedly Mr Dunne's evidence was to he effect that the conversation with Mr Cotter took place on the telephone. This discrepancy may be due to a faulty recollection by one or other of the persons concerned (or indeed to an error of my hurried note of the evidence) because the reality of the matter is that both Mr Cotter and Mr Dunne are agreed that such a discussion did take place.

One must then go back to ascertain where Mr Dunne obtained the information which he claims to have given to Mr Cotter. It is the Farmers case that a variety of officers of the Department of Agriculture made statements which led the Farmers to believe that the Department would pay in full the cost of extracting all rock or at any rate all "extra" rock encountered by any contractor carrying out the drainage works. The history of these representations according to the evidence of the Farmers appears to be as follows:-

1. In early 1981 Mr Rory Dunne enquired from Mr Mallon what would happen about extra rock and Mr Mallon assured him that extra rock would be paid for. The extraordinary feature of that evidence is that the debate took place before the scheme for the drainage of the Ballyfinboy river had even been drafted and at a time when Mr Dunne did not know what significance the words "extra rock" might have. He had, as he explained, heard the words used in connection with a drainage scheme carried out in the Terryglass area of Co Tipperary. Mr Mallon denies that he made any such statement.

2. Mr Kennedy and Mr O'Meara gave evidence to the effect that at the meeting held in early March, 1982 (on either the 1 or the 4 day of that month) Mr Mallon was asked about "extra rock" and those present were told or led to believe that the Department would pay for it.

3. At a meeting held in early June, 1983 in the house of Mr Patrick Cotter (no relation of the Plaintiff) Mr William Cashen informed the farmers who were present with him discussing a particular problem in relation to the intended works in response to the question "what if there is a lot of rock" were told by Mr Cashen "anything unforeseen coming up will be paid for". Messr Mallon, Cashen, Dillon and Hickey denied that they ever told or represented to the farmers that the Department or the Farm Development Services would pay in full for any rock whether it be described as original or extra and whether foreseen or unforeseen.

I accept that the farmers who gave evidence before me were men of integrity and, although they were reluctant to concede it, were men of ability and sound common sense even though some of them may have terminated their formal education at an early age. Indeed the integrity of the farmers was not seriously challenged in cross-examination nor indeed was the credibility of the civil servants attacked. So far from it, the farmers paid tribute in particular to Mr Mallon and Mr Dillon as men who had rendered dedicated service to the farming community in the area over many years. In the nature of their position as civil servants they had no financial interest in the outcome of the transaction, moreover by the time the case came to hearing the key witnesses had retired from the service and accordingly it could not be suggested that their prospects for promotion or their status within the service might be affected by any admission which they might properly make in the course of the hearing. The reality of the situation as I see it is that it is extremely unlikely that any of the civil servants whom I have named and each of whom were familiar with and operated a farm modernisation scheme would have said or consciously implied that the State would pay the full cost of carrying out any of the drainage works. It is to my mind inconceivable that four different officials would have made the same erroneous representation over a period of a number of years. On the other hand I think that the Department must concede that its officers never warned the farmers of the possibility of an over run in costs or the consequences of that happening. The officials concerned did not address their minds to that problem at all even though the Department must have known that its own estimate of the cost was based on a superficial inspection of the river so that a cost over run was not a improbable contingency.

In the circumstances I can accept that in the course of some meeting or some meetings that one or other of the farmers may have adverted to some aspect of the problem. I believe that one or other of the officers concerned must have given some reassurance with regard to the prospect of the Department making payment in respect of the unforeseen problems. However, I cannot believe that the officers concerned intended to convey anything more than the fact that further grants would probably be available in such circumstances. The statements may not have been worded with sufficient care by the officials or understood correctly by the farmers but I suspect that the real difficulty is that the farmers in reviewing the misfortunes that have occurred and discussing the matter among themselves in an effort to identify how the problems arose have, unintentionally, seized upon isolated words or expressions used from time to time in a somewhat different context from that in which they were presented to the Court. The very phrase "extra" rock suggests that this is so. As I have pointed out when Mr Dunne claimed to have posed the question concerning extra rock in early 1981 he had no concept of what those words involved. Even in 1983 the words "extra rock" were meaningless except by reference to the costings prepared by Mr Hickey showing the quantity of rock which he estimated as being involved in the works. As that document was not available to the farmers at the time the representations were alleged to have been made it was impossible to obtain any explanation as to what the word "extra" was intended to convey.

If there is a difficulty in understanding how or why experienced civil servants should have implied that the Department would pay in full for works which were merely grant aided it is perhaps equally difficult to understand why the Farmers should have inferred that this was the case. Whilst there was no direct evidence as to how far the joint works schemes were publicised it is clear that all of the farmers understood in general terms that the concept of the Farm Modernisation Scheme was that approved works were carried out by applicant farmers or their agents and merely grant aided by the Department. The farmers were aware that under the Farm Modernisation Scheme the Department did not themselves undertake any works and did not in any case subvent the full cost thereof.

The farmers were further embarrassed by the fact that a document (or series of documents) exists which purports to be an agreement between the Farmers (together with other owners of farms in the same locality) and the Minister for Agriculture under which the Minister agreed to pay the sum not exceeding £122,651.00 by way of grant and the Farmers (together with the other owners) agreed to carry out the works described in the specification prepared by Mr Hickey before March, 1985. That agreement or the schedule to it was signed by every one of the farmers between the 4 and the 6 March, 1982 and their signatures were (or so the document would suggest) witnessed by Mr Donal O'Meara. It would seem that the document was posted to the Department on the 10 March, 1982 but returned to Mr O'Meara by Mr William Murphy, an official in the Department -- and signed by Mr O'Meara in Mr Murphy's presence on the 30 March, 1982. It seems to me that that document makes it abundantly clear that it was the Farmers who were committing themselves to doing the work and that the only obligation of the Minister was an obligation, if it can be so described, to make a limited grant towards the completion of those works. In fact the Farmers denied that they had ever executed any such agreement with the Minister. What the witnesses say is that the schedule to the agreement which they (and others) signed was represented to them by Mr Mallon (and by them to others) as being a way-leave agreement enabling the works to be carried out. There is no doubt but that the agreement and schedule were delivered to Mr O'Meara who is not merely the Secretary of the Committee but also the designated representative of those involved in the scheme. He says that he received those documents in separate envelopes at a meeting of the interested parties with Mr Mallon on the 4 March, 1982 at the Pavilion in Ballyinderry. Mr Mallon says that he was never at such a meeting and that the documents were given to Mr O'Meara at his house on the day as of which they are dated, namely, the l March, 1982 which was in fact the day on which Mr Mallon retired as a civil servant. Whilst it is surprising that this controversy arises it does seem that a series of documents were given to Mr O'Meara early in March, 1982 and that this contained the vital information for which the farmers had been waiting for some considerable time, namely, the Minister's approval of the scheme and the amount of the grant which he was prepared to make towards its implementation. I accept that Mr Mallon properly advised Mr O'Meara against disclosing the amount of the grant until all of the tenders had been received. I do not believe that he attempted to place any embargo on an envelope being opened but merely recognised that information as to the grant was confidential to the farmers -- not the Department -- and that its premature disclosure might deter contractors from making the best tenders. Again I would readily accept that Mr Mallon at some stage must have explained to the Farmers that it would be essential to obtain the concurrence of all persons owning or occupying land adjoining the river. In the absence of compulsory powers of acquisition such agreements would be necessary to enable the works to be completed.

However of the 41 farmers who signed the schedule to the Ministerial agreement, 36 had completed and signed application forms for a grant under the original Land Project Scheme for the works in 1975. Two more, namely, John Kennedy and Patrick Browne appeared to have signed similar application forms subsequent to 1975 and that appears to be the form to which Mr O'Meara referred in his letter dated the 10 March, 1982 to the Nenagh Office of the Farm Development Services. Three more signed the agreement in March, 1D82, namely, Oliver O'Meara, Martin Costelloe and Joseph Slavin but there is no record apparently of their ever having completed an application for the grant. The matter was not dealt with in evidence but I might be justified in inferring that they are the three owners of the council houses referred to in Mr O'Meara's letter of the 10 March, 1982 and in respect of whom he promised to get forms completed. It is difficult to accept that in signing those applications the farmers could have believed that they were merely granting a way-leave.

It is common case that all of the documentation was open to the committee and available at the meeting on the 19 March, 1982 when the tenders were received. The evidence is that the members of the committee interested themselves in the amount of the grant to be provided by the Minister and that none of the witnesses had any recollection of reading or having read to them the contents of the Minister's letter or the body of the agreement which was referred to in the document which they had signed. It was not 1982 but 1983 when the acceptable tender of the Plaintiff was received so that more than a year elapsed during which the Ministerial approval was available to Mr Donal O'Meara and through him to all of the members of the committee. In these circumstances it is difficult to accept as a matter of fact or law that the parties did not have full knowledge of this agreement.

I have no doubt but that Mr Cotter was concerned as to the problems which he might face in carrying out the works. I accept that he went to see Mr Dillon and spoke to Mr Hickey. Whilst Mr Cotter was ignorant of the general procedure concerning the operation of the Farm Modernisation Scheme it is unlikely that the information which he got from either Mr Dunne, Mr Dillon or Mr Hickey was of decisive importance to him in proceeding with the transaction. It would be difficult to believe that a man involved in such a substantial business venture would rely to any significant extent on the casual and unprofessional advice of one of the persons who is seeking to engage his services and that at a reduced price.

Insofar as Mr Cotter was put onto and sought information from M/s Dillon and Hickey I have already expressed the view that it is unlikely that either and less still both of those civil servants would be so incompetent or dishonest as to mislead Mr Cotter with regard to the contribution which the Minister would make to a scheme of this nature. It is improbable that Mr Hickey, for example, would have said or implied that the State would pay in full for rock extracted from the river bed when it was Mr Hickey himself who had taken out the figures, estimated the amount of rock and calculated the Ministerial contribution as a percentage of the cost of extracting rock and other material. If the question was posed of the statement made that "extra" rock was to be paid for in full by the State I would have thought that the first reaction of any civil servant would be to explain that any further payment of any description would require the sanction of higher authority as was the case. It seems inconceivable that a subordinate would confirm the availability of 100% payment of extras or unforeseen problems without any sanction knowing that the only payments theretofore sanctioned had been a fraction of the notional cost of carrying out the works. In addition I have had the advantage of hearing Mr Hickey giving evidence and he struck me as being a cautious officer who would not be given to making confident statements and certainly would not have given an assurance based on anticipating a Ministerial consent. I believe that Mr Cotter, like the farmers has misled himself in relation to the details of the conversations which he had with Mr Dillon and Mr Hickey. The likelihood is that some reference was made to the cost of rock and the involvement of the Department but I cannot believe that the officials went further than confirming that the Department did pay for rock in the sense that the Department contributed to the cost of extracting the same. With regard to the quantity of rock estimated to be in the river again I find it impossible to accept that Mr Hickey gave an unqualified assurance as to the quantity of rock. His own costings show such a variety of materials and gradings of excavation that it would be amazing if he would participate in any serious conversation regarding the river bed without making some such distinction. On the other hand it is clear from Mr Hickey's costings that he described as "rock excavation" only 1,132 cubic yards out of the 162,000 cubic yards to be excavated. This is a considerably less that 1% of the material involved. Even if one included as rock the 11,200 cubic yards of "hard gravel and rock excavations" the amount of rock to be excavated would be well below 10% of the materials to be encountered. In those circumstances Mr Hickey might well be prepared to express the view that the rock should not be encountered in significant quantities and would not be a problem for the contractor but I do not believe that any Engineer, least of all a cautious man like Mr Hickey would give any confident assurance or express any authoritative view as to the nature or composition of the river bed when he knew that no borings had been made and no detailed survey undertaken. Accordingly, whilst I accept that Mr Cotter spoke to Mr Hickey on the telephone and I accept that some discussion took place with regard to the composition of the river bed I believe that Mr Hickey did no more than express his view as to the quantity of rock likely to be found therein and that it was clear to both parties that this view was like Mr Cotter's own view based upon a visual inspection of the river only. I do not believe that Mr Hickey or Mr Dillon made any statement intending to represent that the Department would in any circumstances pay 100% of any part of the excavation works or that the Department would even necessarily pay a grant in addition to that already expressly provided for.

Both the Plaintiff and the Farmers gave evidence as to their purpose and intention in executing the agreement dated the 15 June, 1983. It is the Farmers case that they at all times sought and intended what they described as "a lump sum contract". They emphasised that they had only very limited resources available to them and they said, no doubt correctly, that they had no means of levying further contributions from the particular Farmers or their neighbours. Accordingly the Farmers were at all times determined and intent upon ensuring that there were no "extras" and no liability beyond the precise sum already collected by them. Indeed the Farmers emphasised again and again that they saw the position and that Mr Mallon confirmed that the obligation of the Farmers to "fill the gap" between the contract price and the amount of the Ministerial grant.

Mr Cotter's stand point was that he was apprehensive about the presence of rock in the river and that he would not accept the proposed lump sum contract. It was his evidence that he was invited to execute a contract which had been prepared by the Solicitors on behalf of the Farmers and that he declined to do so on the advice of his consulting Engineer Mr O'Callaghan. In fact Mr O'Callaghan's evidence was rather to the effect that the proposed contract was rejected because it was not in the standard form. Mr O'Callaghan was not concerned about the price payable under the contract but about the general form thereof. It was his view that 99% of engineering works were carried out under and in accordance with a standard form of Civil Engineering Contract and that to depart from that precedent would be to invite trouble. Mr O'Callaghan's objection was accepted and it was Mr Eric Cotter (one of the Farmers) who procured a copy of the requisite precedent and brought it to the Farmers' Solicitors. It was the same Mr Eric Cotter who conveyed the instructions of the committee to the Solicitors with regard to the terms to be included in the contract. The Farmers' position is that they made it clear to Mr Cotter and, they say he accepted, that they the Farmers had no monies and would not pay a penny more than the figures stipulated in the contract. Mr Cotter says that he rejected the concept of a fixed price contract and this was borne out by his refusal to execute the contract originally produced to him by the Farmers.

The views, the intentions and the state of mind of the two parties to the contract might be material if it were found that the officials of the Farm Development Services had misrepresented material facts to the parties or one or other of them. Undoubtedly their state of mind and intentions would be relevant if there was, which there is not, a claim for rescission or rectification of the contract. Whether the intentions of the parties and their stated positions is material in construing the contract was a matter on which Counsel for the Contractor and Counsel for the Farmers made conflicting submissions.

The first problem in relation to the written contract is to determine its meaning in accordance with the construction of the actual terms contained therein. The particular clauses of the contract which are crucial to these proceedings are 11(1), 12(1), 12(4) and 52(4)(b). Those clauses provide as follows:-

"11(1) The Contractor should be deemed to have inspected and examined the site and its surroundings to have satisfied himself before submitting his tender as to the nature of the ground and sub-soil (so far as is practicable and having taken into account any information in connection therewith which may have been provided by or on behalf of the Employer) the form and nature of the site, the extent and nature of the work and materials necessary for the completion of the works, the means of communication with and access to the site, the accommodation he may require and in general to have obtained for himself all necessary information (subject to above mentioned) as to risks, contingencies and all other circumstances influencing or affecting his tender.

12(1) If during the execution of the works the Contractor shall encounter physical conditions (other than weather conditions or conditions due to weather conditions) or artificial obstructions which conditions or obstructions he considered could not reasonably have been foreseen by an experienced contractor and the Contractor is of opinion that additional cost would be incurred which would not have been incurred if the physical conditions or artificial obstructions had not been encountered he shall if he intends to make any claim for additional payment give notice to the Engineer pursuant to claim 52(4) and shall specify in such notice the physical conditions and/or artificial obstructions encountered and with the notice if practicable or as soon as possible thereafter give details of the anticipated effects thereof, the measures he is taking or proposing to take and the extent of the anticipated delays in or interference with the execution of the works.

12(4) If the Engineer shall decide that the physical conditions or artificial obstructions could in whole or in part could have been reasonably foreseen by an experienced contractor he shall so inform the Contractor in writing as soon as he shall have reached that decision but the value of any variation previously ordered by him pursuant to the sub-clause 2(d) of this clause shall be ascertained in accordance with clause 52 and included in the contract price.

52(4)(b) If the Contractor intends to claim any additional payment pursuant to any clause of these conditions other than sub-clauses (1)(2) of this clause he shall give notice in writing of his intention to the Engineer as soon as reasonably possible (and in the case of clause 12 claims within a maximum period of 30 working days) after the commencement of the events giving rise to the claim. Upon the happening of such events the Contractor shall keep such contemporary records as may reasonably be necessary to support any claim he may subsequently wish to make".

The Plaintiff himself consistently made the case that his claim was against the Farmers on foot of the contract and in particular on the basis that the rock encountered in the excavation works constituted physical conditions "which could not reasonably have been foreseen by an experienced contractor" and accordingly he was entitled to be paid the extra cost of extracting the same in accordance with clause 12(3) which provides as follows:-

"12(3) To the extent that the Engineer shall decide the whole or some part of the physical conditions or artificial obstructions could not reasonably have been foreseen by an experienced contractor the Engineer shall take any delay suffered by the Contractor as a result of such conditions or obstructions into account in determining any extension of time to which a contractor is entitled under clause 44 and the Contractor shall subject to clause 52(4) (notwithstanding that the Engineer may not have given any instructions or order pursuant to sub-clause 2 of this clause) be paid in accordance with clause 60 such sum as represents the reasonable cost of carrying out any additional work and additional construction plant used which would not otherwise have been done or used had such conditions or obstructions or such part thereof as the case may be not being encountered together with a reasonable percentage addition thereto in respect of profit and the reasonable cost incurred by the Contractor by reason of any unavoidable delay or disruption of working suffered as a consequence of encountering the said conditions or obstructions or such part thereof".

The mode of payment is dealt with in clause 60 under the heading of "Certificates and Payments" in the following terms:-

"60(1) The Contractor shall submit to the Engineer after the end of each month a statement (in such form as may be prescribed in the specification) showing ... (d) the estimated amounts to which the Contractor considers himself entitled in connection with all other matters for which provision is made under the contract including any temporary works or construction plant for which separate amounts are included in the bill of quantities".

There is in fact great difficulty applying the foregoing provisions, whatever their true construction, to the facts of the present case because of the failure of the parties to adapt the contract to the facts as they existed or alternatively to adopt the procedures required by the standard form of contract. No bill of quantities was prepared or priced. Nor does it appear that the Contractor or his Engineer had available to him material from which to produce an analysis of the rates and prices used in the preparation of the tender and whilst the Contractor did inform the Farmers that he had encountered rock he gave no details of the measures he proposed to take in respect of it or the consequences which it would have in the performance of the contract. However the complete disaster was that no person accepted the responsibility as or was prepared to discharge the duties of Engineer under and for the purposes of the contract.

As the contract is in the standard ICE form the parties were able to refer to the leading text book Hudson on Building and Engineering Contracts 10th Edition in which clause 12 aforesaid is reviewed at page 569. The editors of that edition recognised the problems inherent in allowing extra remuneration for unforeseen or unforeseeable events. The cautious contractor, it was pointed out, would tender on the basis that if a particular risk in fact matures that the Engineer would not accept that it was unforeseeable. On the other hand the more adventurous contractor would more readily anticipate that the worst fears would not be realised and that even if they were that the Engineer would take a sympathetic view. There is, therefore, an element of gamble and, as Mr O'Callaghan pointed out in evidence, the employer himself loses the benefit of truly competitive tendering. Apart from recognising that difficulty the learned authors seemed reluctant to express any definitive view as to the proper interpretation of clause 12. They pointed out the attitude adopted by arbitrators, however, in the following terms:-

"The exceptionally sympathetic attitude of some Engineering Arbitrators (who, unlike Architects, have often passed at least a part of their working lives "on the other side" as contractors) encourages this tendency, which can drive honest and efficient contractors out of business and provokes wholly unmerited litigation".

The authors go on, page 570, to point out, however, that clauses such as clause 12 are usually and rightly subject to stringent provisions limiting their operation and that such clauses must be complied with fully.

In principle I find difficulty in accepting that rock in the bed of a river could not have been reasonably foreseen. The bed of the river must consist of something and it is common case that the means and materials exist by which that substance can be identified. However the fact that the present case established that Mr Cotter himself but more particularly his Engineer Mr O'Callaghan had not foreseen that there was rock in the river in anything like the quantities which were in fact encountered. That evidence coupled with the detailed estimate by Mr Hickey as to what he found and what he anticipated based on his own inspection and such information as he would have obtained from the field officers who drew the maps and took the measurements on which his costings were based is to my mind of decisive importance in concluding for practicable purposes and in the context in which the contract was made that the rock which was encountered was indeed a physical feature which could not reasonably have been foreseen within the meaning and for the purposes of section 12 aforesaid.

Prima facie this interpretation of the contract will entitle the Plaintiff to additional remuneration or damages in respect of the difficulties encountered subject to the performance of the contractual conditions precedent.

Perhaps the nearest the contractor came to complying with the conditions of clause 12 was by letter dated the 6 October, 1983 when Mr Dillon of the Farm Development Services was informed in writing as follows:-

"We would like to inform you that we have met with a large amount of rock in the area of Ballyhooney bridge. A rough measurement has shown that there could be anything from 4,600 to 5,000 cubic meters of rock present. As this is a greater amount than was envisaged we would like to schedule a meeting with you to discuss same".

Whilst various demands and claims were made both from the Farm Development Services and the Farmers and a variety of formal and informal meetings held neither party to the contract invoked or applied the procedures laid down therein. The failure to do so raises a separate and equally troublesome issue as to whether the Farm Development Services were indeed the Engineers appointed under the contract.

In the executed contract the Farm Development Services is specified as being the Engineer for the purpose thereof. Counsel on behalf of the Department of Agriculture argued that such an appointment would be an absurdity and Counsel pointed out that the Farm Development Services is an amorphous substantial body of civil servants operating throughout the State the composition of which varies from month to month as civil servants retire or are appointed or transferred to other positions. It is inconceivable Counsel argued that the local officers of the Farm Development Services could have agreed on their own behalf on behalf of some section of the Department of Agriculture to accept the position of Engineers for the purposes of the contract. On the other hand the evidence that Mr Dillon and Mr Cashen were asked to accept the position of Engineers and agreed to do so is quite remarkable. It is undisputed that Messrs Kennedy, Dunne and Eric Cotter attended on Messrs Dillon and Cashen at the Farm Development Services Office in Nenagh in early June, 1983 when the position of Engineer for the purpose of the contract was discussed. The evidence on behalf of the Farmers was to the effect that Mr Kennedy as their spokesman enquired whether the Department would accept and act on a certificate by an Engineer appointed by the Farmers certifying, in due course, that the works had been duly completed and they were told by Mr Dillon "No" that the Department required to have the final say in the matter. It was Mr Kennedy's evidence that he then said "would you agree to be Engineers". The response from Messrs Dillon and Cashen is that such an arrangement would be most unusual and that they or more particularly Mr Dillon went on to say that it would involve a lot more visits to the site and that there would be a charge of £20.00 per visit.

There are differences of emphasis between the five witnesses concerned in relation to this meeting but as I understand it, neither Mr Dillon nor Mr Cashen would claim that they rejected the proposal. Certainly they did not point out that it was impossible or absurd or impracticable. They agree that they did advert to the cost of £20 per visit which had been recently introduced by the Department and it does seem that all three farmers left the meeting under the impression that the Farm Development Services, was somehow going to fulfil the dual role of being Engineers under the Contract and Advisers to the Minister. The understanding of the farmers is supported by subsequent correspondence, the first of which is dated the 28 June 1983 and headed "To Whom It May Concern". It states as follows:-

"This is to state that the approval dated the 1st day of March 1982 relating to the Ballyfinboy Drainage Scheme is being supervised by Officers of the Farm Development Service".

Then in a letter dated the 28 July 1983 from the Tipperary (NR) County Council to the Farm Development Services, it is stated (among other things) as follows:-

"We have also on file a letter from your office signed by Mr T Dillon dated the 28th day of June 1983 stating quite clearly that the scheme is being supervised by Officers of the Farm Development Service".

It was contended by the Farmers and by the Contractor that the Farm Development Services did in fact act as Engineers under the Contract. This is an even more questionable proposition. Undoubtedly, the Farm Development Services supervised the work as they were bound to do on behalf of the Minister so as to ensure that the work qualified for the grant payable under the joint works scheme. They did not certify for payment by the Farmers as employers on foot of the Contract and most assuredly they did not exercise the quasi judicial functions of an Engineer in determining technical disputes between the Employer and the Contractor. I can only conclude that the Farm Development Services, did not intend to accept the position as engineers on foot of the Contract but unfortunately rejected the proposal put to them in a very ambiguous manner. At the end of the day, it seems to me that the Plaintiff cannot be faulted for failing to invoke procedures prescribed by the Contract which involved the co-operation or at least the existence of an Engineer appointed on foot of the Contract when either no such Engineer existed or alternatively, he was declining to fulfil his functions thereunder. What the Plaintiff says is that the Agreement, as I have construed, expresses and records correctly the bargain between the parties and relies on the parol evidence rule to preclude reference to other alleged agreements between the parties so as to vary the bargain as recorded in the written instrument. In particular, reliance was placed upon Chitty on Contracts 26th Edition paragraph 846 where a passage from a leading authority was cited as follows:-

"If there be a Contract which has been reduced to writing, verbal evidence is not allowed to be given -- so as to add to or abstract from, or in any way to vary or qualify the written Contract. Indeed, in 1897, Lord Morris accepted that "Parol testimony" cannot be received to contradict, vary, add to or subtract from the terms of a written Contract, or the terms in which the parties have deliberately agreed to record any part of their Contract".

It is true, as Counsel on behalf of the Farmers pointed out, that the parol evidence rule is subject to numerous exceptions. Certainly it is open to either party to establish the existence of an independent or collateral agreement. Indeed insofar as it is an independent agreement, it is hardly an exception to the rule at all. Again it is possible in certain cases to establish the existence of an agreement or representation which would be so inequitable for one or other of the parties to rely upon the written term as to estop them from so doing. However, the problem facing the Farmers in the present case is the radical difference between the terms of the contract which they are seeking to establish and that which was recorded in the writing over their signatures and indeed drafted by their own Solicitors. It was the Farmers contention that the Plaintiff is and was entitled to recover what was generally referred to as "extras" but that the Contractors right to recover any such amounts was as against the Department of Agriculture and not against the Farmers. The Farmers had, it was submitted, no contractual obligation to pay any sum of money above the amount specified in the Contract document, less the amount representing certain works subsequently abandoned.

Such an interpretation is wholly inconsistent with the terms of the written Contract. Furthermore, it is impossible to construe the agreement so as to impose a liability on a person who is not a party thereto. Again it is clear that Clause 12 of the Agreement of the 15 June 1983 is the only machinery which could have been invoked to enable the Contractor to recover monies from anybody and clearly the only persons liable on foot of that provision are the Farmers.

In these circumstances it seems to me that the position with regard to the rights and obligations of the party in contract may be summarised as follows:-

1. The contractual rights and obligations of the parties are enshrined in the written Agreement dated the 15 June 1983.

2. Under that Agreement, the Farmers are bound to remunerate the Contractor in respect of the rock encountered and excavated which had not been foreseen by the Contractor.

3. The Defendants (other than the Farmers) have no liability to the Contractor on foot of the Agreement dated the 15th June 1983 or any alleged modification of it.

Both the Contractor and the Farmers claim damages against the other Defendants for misrepresentation and negligence generally. 'As the case of the Farmers must necessarily be stronger than that of the Contractor, having regard to the relationship between the Farm Development Services, and the Farmers, it may be more helpful to consider this aspect of the matter from the point of view of that relationship.

The analysis in a number of Irish authorities of the principle established in Hedley Byrne & Co Ltd v. Heller & Partners Ltd [1964] AC 465 has established the proposition that where a person gives professional or technical advice in circumstances where he ought reasonably to have foreseen that it would be relied upon, he has a duty to exercise reasonable care in the giving of such advice even where it is given gratuitously, unsolicited and independently of any contractual obligation in that behalf. If and to the extent that the specifications, mapping and other engineering detail provided by the Department to the Farmers for the purpose of the drainage work were prepared without the appropriate degree of care and skill, then prima facie the Department would be liable for any damages caused by such negligence. Indeed in that respect it was alleged that the engineering advice implicit in the scheme was defective insofar as it related to that part of the work described as "the canal" and that the execution of the proposed works in that area would have deprived the riparian owners of their legal right to a supply of water. As that part of the works was abandoned, the issue in that regard was never fully resolved. However, it is common case that a serious and unfortunate error was made in the specification. The longitudinal section of the river from which the quantities to be excavated were calculated showed the drainage to be measured in yards. This was an error as the unit measurement used on the drawings was in fact metric. This meant that costings based on those measurements would be understated by approximately 10%. The accuracy of the specifications insofar as they related to the work to be carried out on the five public bridges which traversed the river was also a matter of controversy. The engineers employed by the Tipperary (North Riding) County Council appear to have been wholly dissatisfied with both of the specification proposed by the Department and the workmanship of the Contractor. However, by February 1984 the original specification had been amended to meet the standards required by the County Council and it does not appear that the amended specification was open to challenge.

Negligence in the preparation of the documents and advice implicit therein is not the main plank of the Plaintiff's case. Apart from the allegation, which I have rejected, to the effect that representations were made by Officers of the Department to the effect that rock or extra rock would be paid for in full by the Department, it is contended first that subordinate Officers of the Department were negligent in not procuring a detailed survey and investigation of the bed of the river before sanctioning the scheme for grant purposes and secondly that the Department, through it's senior officers, was negligent in drafting a grant aid scheme which did not provide for such a survey and investigation to be carried out and thirdly, that the Defendants (other than the Farmers) were negligent in failing to warn the Farmers of the financial implications which might arise if there was an over-run due to circumstances which were not in fact foreseen on the visual inspection of the river but would have been known if a detailed examination had been carried out.

Understandably, the Farmers (and the Contractor) rely heavily on the decision of the Supreme Court in Ward v. McMaster [1989] ILRM 400 in support of these arguments. In Ward v. McMaster Louth County Council as a Housing Authority for the purposes of the Housing Act, 1966 agreed to make a loan pursuant to Section 39 of the Housing Act 1966 of £12,000 to enable the Plaintiff in that case to buy a house on the outskirts of Dundalk, Co Louth for a sum of £24,000. Louth County Council arranged for an Auctioneer to inspect the premises and reported to them on the value thereof. He gave it as his opinion that the house was a reasonable risk for a loan over 30 years and expressed his view that the value of the house was approximately £25,000. In fact the house was so riddled with concealed structural defects that it had to be abandoned. There is the parallel with the present case therefore that a technical as opposed to a visual inspection of the locus in quo would have averted the disaster. The other significant similarity is that in both cases the investigations of which the Plaintiff complained were designed primarily (and, it was argued, exclusively) to safeguard the interest of the party providing the finance. The issue in Ward v. McMaster was whether the relationship between the intended house buyer as Mortgagor and the Council as Mortgagee together with the foreseeability of damage resulting from the failure to make an adequate examination of the premises converted the public duty imposed on the Housing Authority to a private duty to the person affected by the particular manner in which the statutory duty was exercised. Indeed, Mr Justice Henchy delivering the principle Judgment of the Court expressed the view that the special relationship between the Plaintiff in that case and the Council was of itself and apart from the public duty of the Council sufficient to impose on the Housing Authority the duty to ensure by a proper valuation that the house would be a good security for the loan. Whilst these similarities exist between the two cases, it seems to me that there is a fundamental and decisive distinction to be drawn between them. The essence of the wrong doing by Louth County Council was that they implicitly represented to the Plaintiff that the house in question was habitable. As Mr Justice Henchy said at page 402:-

"It has to be remembered that one of the primary duties imposed on the Council by the Act was the elimination of all uninhabitable dwellings in their area. It falls that they should have realised that it would be in breach of their statutory functions if they granted a loan for the purchase of a house which turned out to be uninhabitable".

Mr Justice Henchy went on at the end of the same paragraph to say:-

"The Council must be taken to have impliedly assured the Plaintiff that the house would be a good security for the loan".

Mr Justice McCarthy expressed the same view (at page 411) in the following terms:-

"A purchaser -- may well think, as the first Plaintiff thought, that the very circumstances of the Housing Authority investigates money in the house was a badge of quality".

It was, therefore, the purpose of the Housing Act, 1966 and the statutory and other conditions regulating the circumstances in which a Housing Authority could make loans for the purchase of dwellings that induced Mr Ward to believe that the house in question was a habitable dwelling and represented good security for a loan of £12,000 neither of which was true.

The payments of grants under the Farm Modernisation Scheme are not regulated by Statute and the machinery, such as exists, with regard to the evaluation of any proposed drainage works is materially different in its nature and purpose from that provided by the Housing Act, 1966 and the Regulations made thereunder. No doubt the approval of the scheme or the sanctioning of a grant by the Minister could be interpreted as conferring upon the proposal "a badge of quality" to the extent that it is implied that the drawings made and any advice given has been done so competently and without negligence, this would add nothing to the obligations imposed upon the Minister and his Officials by the ordinary principles of negligence. The question is whether the decision to pay a particular grant carries with it some implication as to the total cost of the scheme or the extent of the employers liability in respect thereof.

The joint works programme is a Ministerial scheme and for the purposes of that scheme the Minister set up procedures to determine the cost/benefit of any proposed scheme and also a method of determining for internal purposes the cost of the scheme based on costings provided by the Board of Works. As we know from the evidence of Mr Mallon, the cost/benefit exercised related to the acreage of land affected by the proposed drainage works and not merely the acreage of land occupied by those proposing the scheme and the cost/benefit was calculated by spreading the grant and any further costs to the Exchequer in relation to other subsidiary schemes over all of the lands affected. There is also the complication that the grant determined upon by the Minister included the sum which his Officials believed would meet in full of the market cost of carrying out any consequential works to the five bridges affected by the works.

In the light of those circumstances, a question must be posed as to what inferences the Farmers could properly draw from the fact and the amount of the grant. That the Contract works would be approximately twice that of the grant? or would it be inferred that no grant would have been authorised unless and until a thorough investigation of the site had been made. I do not believe as a matter of fact that the Farmers drew such inferences nor do I believe that the Minister could reasonably have foreseen that the Farmers would make or rely on any such judgment. The financial circumstances of the Farmers was not explored in any detail before the Court but while I accept in general that they are not wealthy men and certainly could not look with equanimity on the cost of the drainage works and they ultimately emerged, they are and were in a totally different position from Mr Denis Ward in his claim against the Louth County Council. As Mr Justice Henchy pointed out in Ward v. McMaster [1989] IRLM 400, Mr Ward in order to qualify for a loan from the Housing Authority, had to show that he was unable to obtain the loan from a Commercial Agency and that his circumstances were such that he would otherwise need to be rehoused by the Council. It was that degree of indigency which lead the Court to the conclusion that Mr Ward could not be expected to incur the further expense of obtaining a structural survey of the house.

In the present case there was never any question of the Farmers adopting a purely passive role. It was clear that they would have to do, as they did, engage a Solicitor and seek tenders from Contractors and make difficult commercial decisions in relation to a variety of problems as they emerged. Indeed it is clear that they were conscious of the fact that it was they who would select the Contractor and determine which tender would be accepted and, as it subsequently emerged, the most significant fact of all negotiate the terms in which the works would be carried out. I can see the desirability of the Minister arranging to have a comprehensive survey made of any river which it is proposed to drain. By doing so he could assure himself in the interest of the Exchequer as well as the interest of the community that the proposed works would be carried out on beneficial terms. But if that conclusion is valid it would have been even more obvious that in the contractual relationship between an employer and a contractor excavating a river bed that one or other of them should procure an appropriate investigation to be carried out. If it is not done, one or other of the parties must gamble as to the nature of the material to be excavated and which party takes the risk would be determined by the terms of the Contract into which they enter. Whilst the Minister may incur liability in respect of any advice given or work undertaken which was not given or done with the appropriate degree of care and skill, the fact of authorising or paying a grant to facilitate work being carried out does not in general or in the particular circumstances of the present case constitute a representation that the works could be carried out at a particular price or that the liability of the persons undertaking the works will be limited to a particular sum. In my view, the Minister has not incurred any liability to the Plaintiff in Tort. The Plaintiff's claim to be paid substantially larger sums than those already received by him on foot of the Contract was not seriously disputed in the course of the action or in the years before it came on for hearing. The issue between the parties related to the identity of the person liable to the payment; the amount due and the legal basis for the claim.

I am satisfied that the Farmers are liable in Contract to the Plaintiff in respect of the rock encountered in the course of the works to the extent to which the same was "unforeseen" in the sense that that word was used in Clause 12 of the Contract. Again I am satisfied that the Plaintiff cannot be denied his right to payment for the works done in respect of those unforeseen circumstances solely by reason of his failure to comply with the conditions which were rendered impossible due to the absence of any person acting as Engineer for the purposes of the Contract. On the other hand, it is not practicable at this stage to appoint an Engineer to carry out the functions which should have been exercised several years ago. It seems to me that all that can be done at the present stage is to compensate the Plaintiff on a quantum meruit basis for the extra work which he did as a result of the unforeseen conditions. The liability under this heading is one of Contract or Quasi Contract falling on the Farmers.

I agree with Mr Hickey, however, that the bill as presented by the Plaintiff was "much too high". When the Plaintiff originally tendered for the works the quantities to be excavated, as they appeared in Mr Hickey's estimate of cost, amounted to approximately 162,000 square yards. If one deducts from the amount of the tender £30,000 in respect of the bridges and a further £8,000 being the estimated cost of providing certain piping, it would appear that the average excavation rate worked out at £1 per cubic yard. That average charge would have to cover all grades of material to be found in the river together with removing scrub and spreading spoil. The reduced contract price as adjusted to cover the works completed, that is to say, the works other than the canal -- would have allowed a figure of £130,000 to complete an excavation of 148,000 cubic yards with the ancillary works, that is to say, about 87p per cubic yard. These figures give a fair indication, as I see it, of the Plaintiff's own approach to the works involved in the Contract. It seemed to me that much of the detail in respect of which claims are now made by the Plaintiff are in respect of works which of their nature would have to be carried out in one form or another as part of the Contract. Working in deep water or moderately deep water, diverting the river or creating dams seemed to be part of the problems which were necessarily envisaged by any contractor tendering for the job. These problems were no doubt magnified by the altered specification but the alteration does not in my view justify the extravagant claims that have been made.

In my view the fair, if somewhat rough and ready approach to assessing damages in this case is to determine the amount of rock in fact extracted from the river and to allow a commercial price to cover the additional cost and profit of removing all that rock. The price as I see it, should envisage all of the work ancillary to the removal of the rock and again it seems to me that the price determined must in fact cover all grades of rock varying perhaps from boulders to friable rock to a hard rock. In the final analysis the Plaintiff claims that he excavated 16,841 cubic yards of rock, the State Agencies accept that 10,883 cubic yards of rock was excavated and that a further 4,989 cubic yards of hard digging was encountered. The State will put the cost of the "hard digging" at something like half the cost of rock excavation. It seems to me that I should resolve this dispute in favour of the Plaintiff and I accept that what he extracted may be described as rock so that something over 10% of the materials extracted from the bed of the river consisted of that material.

Turning then to price. In his estimated costing Mr Hickey took the price of rock at £11 per square yard. However he allowed a sum of £13 per cubic yard for rock in the area described as the Canal as that involved working in deep water from high banks. The figures used by Mr Hickey were notional only in the sense that they were not obtained from commercial contractors but represented an amalgam of figures compiled by the Board of Works. This indeed should have produced a fairly realistic guide subject only to the fact that the figures may have been published or circulated by the Board a year or two earlier and that in a time of very high inflation. It does seem to me that the cost of excavating rock could vary greatly depending on its precise nature and location. But I believe that the figure of £13 did represent the commercial cost in general of removing rock and that to allow that figure in respect of all the grades or forms of rock which the Plaintiff claims to have excavated and where ever it was found would it meet the justice of the case. In this regard too it must be appreciated that the £13 is in addition to the basic cost of excavation claimed by the Plaintiff as part of the contract sum. Obviously this cost will result in a significant profit in those areas where the rock was quickly and effectively extracted and less profit or even a loss in more difficult areas. I am convinced that the basis of any tender in a case of this nature, would be, as the evidence suggested on the basis of a bill of quantities which would take a particular sum for rock recognising that some part of the rock works would have to subsidise others. However, having allowed that figure there is in my view no room for any extras or additions based on time sheets for labour employed or machinery provided. The sum appropriated to the excavation of rock and so allowed is intended to cover all of the matters incidental to the works done.

On this basis I calculated the damages attributable to "extra" rock at £212,433.00. That is the full amount as claimed by the Plaintiff under this particular heading.

Next after the "extra" rock the most troublesome aspect of the drainage works related to the cost of underpinning and preserving the five public bridges which crossed the Ballyfinboy river. With hind sight it is known that Mr Hickey costed the work at £29,7561.00. It would appear from the account ultimately furnished by Mr Cotter that he costed the same work at almost exactly the same figure, namely, £29,000.00.

The position with regard to the bridges was, as Mr Mallon explained, that prior to the approval of the scheme the consent of the local authority had been obtained in principle. The Tipperary (NR) County Council felt itself unable to carry out the necessary work to the bridges but were willing to have it carried out by a competent contractor subject to their supervision. The result was that instead of the work being carried out on commercial terms by the County Council at the expense of the Department of Agriculture, the Farm Development Services included as a particular sum within the grant (though not identified as such) what they computed as the full commercial cost of carrying out the works which they anticipated would be required on the public bridges. Effectively, therefore, the contractor ultimately engaged by the Farmers was to carry out the necessary underpinning works on the bridges and the full cost of those works was intended to be recouped to the Farmers by means of this addition to the grant.

Shortly after the commencement of the works in June, 1983 the County Council became alarmed by the manner in which the works were being carried out and the specifications and drawings (or lack of them) relating to those works. As a result of the intervention of the Local Authority work on the first and second bridges from the Lough Derg side, that is to say, Drominagh and Ballinderry was not completed and instead the Contractor proceeded with the excavation works upstream of those bridges. At that stage there was considerable disagreement and confusion involving the Local Authority, the Farm Development Services, the Farmers and the contractor. It was September before the Local Authority Engineers were satisfied with the terms of a revised specification for the work to be done and even then there were disputes as to the manner in which it should be carried out. The Farmers sought to obtain a solution to the problem by engaging the services of another engineer Mr Gill and apparently it was he who made certain drawings which were subsequently adopted by Mr Hickey and approved by the Local Authority in or about January or February, 1984. There is no doubt but that the revised specification increased the cost of the works to be carried out. Again it is obvious that the disagreements and misunderstandings would have resulted in some delays. One difficulty in this regard is, however, the fact that parallel with the disagreement in regard to the bridges was the delay by the Contractor in producing an Insurance Bond as required by the contract, to the satisfaction of the Local Authority. This was not completed until January, 1984 so that the Contractor was not in fact entitled to proceed with the works until that date in any event.

In these circumstances it seems to me that the Contractor was entitled to be paid or compensated for the additional works required by the revised specification but not for the delay up to January, 1984 in proceeding with the work as the revision of the specifications was not the only cause of that delay.

The State Agencies accept that they are liable for the proper cost of the additional work to the bridges.

The Plaintiff claims that the additional cost amounts to £62,000. The Minister puts the additional cost at a figure of approximately £21,000.00. Insofar as the figure claimed by the Plaintiff includes the extraction of rock -- in particular rock at Ballyhooney and other bridges -- this part of the claim is already covered by the £13 which I have allowed in respect of the excavation of unforeseen rock. I believe that by allowing a figure of £75,000 in total in respect of the bridges it would meet the justice of the case and that on the basis that the figure includes all incidental works in relation to the superintending and protecting of the bridges and to carrying out of emergency works.

There was a considerable dispute between the parties as to the nature and extent of the work done on what was described as the Canal before that part of the project was abandoned. Apparently the works done were of a preparatory nature and did not result in any permanent alteration of the site. It seems to me that the figure claimed at £17,000 is grossly excessive having regard to the fact that the plaintiff himself estimated the cost of doing all of the work on the Canal at £30,000. I believe that the maximum figure allowable under this heading is £5,000.00

Another heading of damage concerned the understatement of the works to be done as a result of the misdescription of the nature of the measurements. This addition to the bill would seem to fall again in the first instance on the Farmers but to be recoverable by them in full from the State on the basis of Tort. Again I understand from the running of the action that the liability of the State under this heading is not in dispute. The amount of the claim is agreed at £12,168.00.

Another heading of the damages is delay. This heading has two aspects. First the Plaintiff complains that the completion of the works was delayed by reason of the unforeseen conditions and the additional works with the result that extra cost was incurred under the heading of "Labour Variations" and secondly that the Plaintiff has been deprived for several years of the monies to which he was entitled. In my view the delay was in part in any rate the fault of the Plaintiff. I am convinced by the evidence of the Farmers and by the circumstances of the Plaintiff himself that the contract works were not at all times under effective management. More particularly there was extraordinary delay on the part of the Plaintiff in producing what has been described as the Final Account. It seems that he submitted no accounts at all from the end of 1985 to the end of 1988. Clearly that delay has made it very difficult for any of the Defendants to check the many items in the bill.

The circumstances have to be borne in mind in considering the claim based on delay.

In relation to the claim based on the Labour Variation clause firstly it would seem that clause 82 of the contract precluded any claim under this heading in respect of any period before the 1st October, 1984. The Plaintiff's own calculations in relation to wages variations are set out in page 104 of the Volume containing his final revised account. The total of the sums claimed under this heading is £27,220.00 but unfortunately it would appear that that figure is based on arithmetical miscalculation. It seems to me that the actual total of the six periods set out in the computation is £19,507.65. From the figure then must be deducted the sum of £5,611.00 which is appropriated to the period before the 1 October, 1984. It follows that the maximum amount of the claim under this heading is something less than £14,000.00. It seems to me that if I allowed £10,000 under this heading it would meet the justice of the case.

With regard to the delay in payment it seems to me that interest should be allowed but regard should be had to the delay in producing the final account and that the Defendants should have been allowed a reasonable opportunity for considering the bill from the date of presentation. I would allow interest at the rate prescribed pursuant to the Courts Act, 1981 on the total amount of the Judgment as from the 1 June, 1989.

There was one other particular and significant heading of claim, namely, loss of future profits.

Whilst I accept in principle that a person in the position of the Plaintiff might be able to recover loss suffered indirectly as a result of his membership of a company through which the contract had been carried out see Lee v. Sheard [1956] 1 QB 192 I am not satisfied in the present case that such loss was incurred. In that regard it must be remembered that the Plaintiff had no tradition in or experience of the contracting work and that the company in respect of which the loss is alleged to have been suffered was not formed until after the commencement of the contract the subject matter of this action. As Counsel on behalf of the State Agencies pointed out the alleged loss is highly speculative in its nature. Furthermore, Mr Byrne the Accountant who gave evidence in relation to the accounts of the Company conceded that the projected profit did not take into account any remuneration for a competent executive to be employed by the company. It seems to me that the present case demonstrates the vital importance of such an executive in day to day control of the affairs of a company such as this and to assume that a profit could be earned and maintained without such an executive would be unreal. In the circumstances I am not satisfied on the balance of probabilities that the Plaintiff has (or will) suffer any loss under this heading.

I would summarise the Plaintiff's loss as follows:-

1. Contract price --£130,000.00.

2. Error in linear measurement --£ 12,168.00.

3. Extra rock --£212,432.00.

4. Bridges --£ 75,000.00.

5. Work on abandoned Canal -- £ 5,000.00.

6. Price variation clause --£ 10,000.00.

Total ... £440,600.00.

Less paid on account ... £267,048.00.

Balance ... £177,552.00.