Termination on Notice and the Limits of Tort Duties in Commercial Consultancy Contracts: Commentary on Tracey t/a Engineering Design and Management v Burton & Ors [2025] IEHC 689

1. Introduction

This High Court decision (MacGrath J, 21 November 2024; neutral citation [2025] IEHC 689) is a long‑running and fact‑heavy dispute arising from the breakdown of a short‑lived consultancy relationship between a senior consulting engineer, Mr Kevin Tracey (trading as Engineering Design and Management – EDM), and the quantity surveying practice of Burton & O’Connor.

The case is significant because it:

• Clarifies how a “contract for services” between sophisticated professionals, containing a 16‑week termination clause “regardless of any circumstances”, operates in practice.
• Reaffirms the absence of any general duty of good faith in Irish contract law, and the very limited circumstances in which such notions can affect termination powers.
• Confirms that, in a commercial contract context, there is no free‑standing duty of care in negligence:
  • to protect a contracting counterparty from psychiatric injury, outside the established Kelly v Hennessy nervous‑shock framework or bullying‑type cases; or
  • to protect a counterparty’s reputation (as distinct from the law of defamation).
• Illustrates a rigorous approach to causation and proof where a plaintiff is simultaneously advancing very large loss‑of‑career and psychiatric claims in multiple sets of proceedings.

Mr Tracey, an experienced and well‑regarded engineer, sued (i) the two individual principals Michael Burton and the late Charles O’Connor (via his personal representative Anne O’Connor), (ii) their company Burton & O’Connor Ltd, and (iii) the business name FPQ Consulting Engineers. He claimed breach of contract, negligence, conversion, nuisance and breach of duty of care, seeking in excess of €3 million, including large claims for psychiatric injury (depression, anxiety and alleged PTSD), reputational harm and lifelong loss of earnings.

The underlying factual core was:

• A written “contract for services” (and side letters) under which Mr Tracey provided consulting engineering services to the newly‑acquired FPQ practice, with a 16‑week mutual termination clause.
• On 4 October 2004, the defendants served a 16‑week termination notice.
• On 19 October 2004, amidst mounting tensions, they told Mr Tracey to leave the premises within an hour; when he did not promptly do so, they consulted their solicitor and then requested Garda assistance and changed the locks. Mr and Mrs Tracey left around 9.15 pm.

Mr Tracey, who represented himself throughout, alleged that:

• the termination was really triggered by newspaper reports of his unrelated assault prosecution;
• the 16‑week notice was unlawfully curtailed on 19 October; and
• the humiliating circumstances – involving Gardaí and locksmiths in view of junior engineers and others – destroyed his professional reputation and career, and caused serious psychiatric harm.

(Procedural history: paras 7–11; factual background: paras 1–6, 12–80; medical evidence: paras 91–108.)

2. Summary of the Judgment

2.1 Core contractual findings

• The operative agreement was the contract for services of 24 February 2004, together with:
  • a side letter of 24 February 2004 (benefits, profit‑share, professional involvement); and
  • the “overtime letter” of 27 February 2004.
  The earlier “contract of employment” of 30 January 2004 was superseded. (paras 112–115)
• The true contracting party was the company, Burton & O’Connor Ltd. The business name FPQ Consulting Engineers was not a separate legal person. The individual directors were not personally liable in contract. (para 111)
• The clause providing that the contract could be terminated on 16 weeks’ notice “regardless of any circumstances” meant:
  • either party could terminate the contract for any reason or no reason; and
  • no reason or explanation had to be given. (paras 148–150)
• The notice of 4 October 2004 was valid and effectively terminated the contract. The events of 19 October did not retrospectively invalidate that notice. (paras 158, 177)
• Mr Tracey was entitled, upon termination, either to work out his 16‑week notice or to receive payment in lieu at the agreed rates. What he was not entitled to was a right to work out that notice on the defendants’ premises if they no longer required his presence there. (paras 169–176)

2.2 Overtime and notice payments

• The overtime letter (requiring prior approval) did form part of the contract, but the requirement for prior written approval of overtime was effectively waived by conduct. Overtime worked up to 16 September 2004 was recoverable. (paras 116–117)
• The phrase “up to 35 hours per week, if required” did not permit the company to avoid paying for the 35‑hour week once the relationship was operating on that basis. In fact, Mr Tracey worked (and the company expected) a 35‑hour week. For notice purposes, he was entitled to be paid on that basis. (paras 117, 219–223)

2.3 Negligence, psychiatric injury and reputation

• No separate duty of care in negligence was recognised:
  • to avoid psychiatric injury in the circumstances of this commercial consultancy arrangement; or
  • to avoid reputational damage, which is the province of the law of defamation.
  (paras 187–201, 194–198)
• Even if a duty of care existed, the defendants’ conduct – including seeking legal advice, calling Gardaí and changing locks – did not fall below the standard of reasonable care in the fraught circumstances of 19 October 2004. (paras 199–200)
• The psychiatric injury claim failed:
  • the Kelly v Hennessy “nervous shock” conditions were not met – there was no sudden shock‑inducing event in the legal sense, nor immediate collapse or treatment; and
  • on causation – Mr Tracey had multiple other stressors and multiple overlapping cases where similar losses were claimed; the alleged destruction of his whole career by this single incident was not causally or evidentially made out. (paras 191–193, 145–146, 201–210)
• As a matter of law, damages for distress and reputational harm were not recoverable in contract on these facts. (paras 178–186)

2.4 Conversion and intellectual property

• The conversion claim (for allegedly retained intellectual property, documents and data) was not proven with the necessary specificity. The court did not find sufficient evidence to quantify any such loss. (para 212)

2.5 Quantum and interest

• The court held that the company owed Mr Tracey, as of termination on 19 October 2004, the following (all figures including VAT where applicable): (para 225–227)
  • FPQ‑15 – arrears (May–Aug 2004): €21,007.97
  • FPQ‑16 – arrears (Mar–Apr 2004): €1,455.10
  • FPQ‑17 – overtime (1 March – 16 September 2004): €20,086.61
  • FPQ‑18 – four months’ notice (35 hours/week at €75 + VAT): €50,928.42
  • FPQ‑19 – four months’ standing charge: €9,680.00
  • Holiday pay: €6,411.52
  • Expenses (magazine subscription): €60.00
  Total: €109,629.62.
• Claims under FPQ‑21 and FPQ‑22 represented double‑counting for October work and were rejected. The claim to profit‑share also failed, as the company made no profits and the contractual entitlement had not yet arisen. (paras 226–228)
• No interest was awarded. A payment of €91,528.82 had been validly offered and lodged with Mr Tracey’s then solicitors in 2005 and rejected. The residual disputed sum related chiefly to overtime, a matter the judge considered “not clear cut”. In those circumstances, it was not appropriate to penalise the defendants with interest. (paras 229–230)

2.6 Overall disposition

• All claims in contract against the individual defendants (Mr Burton and the late Mr O’Connor via Mrs O’Connor) were dismissed.
• All tort claims (negligence, psychiatric injury, reputational damage) were dismissed.
• The claim against FPQ Consulting Engineers (a business name) was struck out.
• The only successful claim lay in debt under the contract against Burton & O’Connor Ltd in the sum of €109,629.62, with no interest. (para 236)

3. Contractual Framework and Key Findings

3.1 Who was the contracting party?

The judge carefully disentangled the corporate structure:

• Burton & O’Connor Ltd was incorporated on 5 February 2004 and acquired F&P Quigley Ltd (trading as Frank P Quigley, Consulting Engineers) on 1 March 2004.
• FPQ Consulting Engineers was registered on 21 June 2004 as a business name of Burton & O’Connor Ltd, not a separate legal entity.
• Both the contract of employment and the contract for services were signed by Burton and O’Connor in their capacities as directors.
• Invoices and correspondence were addressed to “FPQ Consulting Engineers”, but the underlying legal person was Burton & O’Connor Ltd.

MacGrath J held that:

• Only Burton & O’Connor Ltd was the employer/contracting party; the first and second defendants were acting entirely as directors and incurred no personal contractual liability.
• FPQ Consulting Engineers, being merely a business name, could not be sued as a separate party.

(para 111)

3.2 Which contract governed the relationship?

Two sets of written terms existed:

• A “contract of employment” (30 January 2004) naming Mr Tracey as an “employee”, with a €12,000 monthly salary, set hours and overtime at €85/hr.
• A later “contract for services” (24 February 2004), omitting “employer/employee” language, paying:
  • €2,000/month + VAT as a “standing charge” for the right to use Mr Tracey’s name and qualifications on company stationery as an “associate”; and
  • €75/hr (standard) and €119/hr (overtime) for “up to 35 hours per week, if required”.

Mr Tracey’s own pleadings had expressly stated that the contract for services “superceded the contract of employment”. In evidence he again described the contract of employment as having been superseded, explaining that the services structure suited the defendants because he was operating as a consulting engineering business.

The court therefore held:

• The contract of employment was superseded and had no continuing legal effect, save perhaps as factual background as to the parties’ intentions.
• The binding agreement was:
  • the contract for services (24 February 2004);
  • the side letter of 24 February 2004 (holidays, parking, profit‑share, professional activities); and
  • the overtime letter of 27 February 2004.

(paras 112–115)

3.3 The “overtime letter” and “if required” wording

The overtime letter required that any overtime “must have the prior approval of both Michael Burton and Charles O’Connor before payment will be made”.

Mr Tracey argued:

• the letter was not part of the bargain; and
• in any event he regularly flagged overtime verbally and that practice should suffice.

The court found that:

• on balance Mr Tracey had received the letter and had not objected, so it was part of the contractual package; but
• in practice, everyone knew he was working substantial overtime from the outset and there was no consistent insistence on the formal prior‑approval mechanism.

MacGrath J concluded that:

• the prior‑approval requirement had been waived by conduct – the defendants could not rely on it to defeat his overtime claim up to mid‑September 2004; and
• Mr Tracey did in fact work at least the 35 baseline hours per week – the “if required” phrase could not be used to retrospectively deny payment for those hours. (paras 116–117, 219–223)

3.4 Termination clause and good faith

Clause 11 of the contract for services provided:

“The agreed minimum notice required for termination of this contract for services, regardless of any circumstances, by either party will be 16 weeks.”

Both sides accepted that:

• either party could terminate on 16 weeks’ notice; and
• this was negotiated as a realistic period for a senior professional to find equivalent work.

Mr Tracey nonetheless argued that a reason for termination had to be given, and that the clause should be read in light of a general principle of good faith (relying on Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433 and general notions of fairness).

The court held:

• The natural and ordinary meaning of “regardless of any circumstances” meant that the contract could be terminated for any or no reason.
• Irish law recognises:
  • no general principle of good faith in contracts (following Flynn v Breccia [2017] IECA 74);
  • only narrow, context‑specific good‑faith obligations (e.g. uberrima fides in insurance, partnership duties, certain discretionary powers in particular contracts).
• No such special category applied here: this was a commercial arm’s‑length contract between professional equals.
• There was no factual basis (e.g. unconscionability, inequality of bargaining power) to imply any additional good‑faith duty or a requirement to state reasons, particularly where the plaintiff himself accepted on the evidence that termination could occur “for any reason or for none” provided 16 weeks’ notice was given. (paras 148–157)

Thus, the validity of the notice of 4 October 2004 did not depend on the presence or absence of a stated reason, or the correctness of Mr Tracey’s belief that the termination was linked to media coverage of his assault case.

4. Termination, Notice and the Right to Work: Legal Analysis

4.1 Validity of the 4 October 2004 notice

The judge accepted that:

• the decision to terminate was taken while Mr Tracey was on holidays, after months of concern about the lack of new business and tensions over working culture and transparency;
• the newspaper reports of the criminal case were not the triggering factor, even if the timing gave Mr Tracey understandable grounds for suspicion; and
• there was no evidence of any wider conspiracy or of the defendants being “got at” by others.

More importantly, even if the motivation had included reputational concerns about the criminal case, the contract allowed termination on notice “regardless of any circumstances”. The court found the notice of 4 October 2004 was legally effective and:

• brought the contract for services to an end as of that date, subject to the 16‑week notice period; and
• did not require an accompanying explanation or performance review process. (paras 122–128, 158)

4.2 Could Mr Tracey insist on working out his notice on the premises?

Mr Tracey’s contractual theory was twofold:

1. The defendants breached the contract by cutting off his 16‑week notice on 19 October 2004, giving him only an hour to vacate.
2. Because of this breach, the contractual end‑date was displaced and the contract should be treated as continuing until at least 1 March 2005, when he would have become entitled to a directorship and profit‑share.

The court distinguished:

• the right to pay for the notice period; from
• any alleged right to be physically present on the premises for that period.

Key points:

• This was not an employment contract governed by the Minimum Notice and Terms of Employment Acts; those statutes did not directly apply.
• In a commercial consultancy:
  • the client (here, the company) may not wish the consultant to be on-site once the relationship has broken down; but
  • the consultant remains entitled to the contractual payments, whether or not required to provide further day‑to‑day services.
• The contract for services did not specify the place of work in the same way the earlier employment contract had done. There was therefore no express right to insist on using the defendants’ premises.
• Implying a term forcing the company to host a consultant with whom the relationship had become untenable would be neither “necessary” nor “so obvious it goes without saying” in the Moorcock/Shirlaw sense. (paras 164–173)

The judge therefore held:

• Mr Tracey’s contractual entitlement after 4 October 2004 was to be put in the financial position he would have been in had he worked his 16 weeks – not to insist on physically attending and performing work on the premises against the defendants’ wishes.
• Any “breach” on 19 October 2004 went only to the manner of the practical severance, not to the validity of the 4 October notice or the duration of the contractual rights. (paras 169–177)

4.3 Use of Gardaí and locksmiths – negligence or justified precaution?

The court accepted that:

• giving Mr Tracey only one hour to leave, in the middle of ongoing project work, was “unwise, if not unreasonable” as a matter of common sense; and
• the events of the afternoon and evening were “stressful for all”, and understandably humiliating for Mr and Mrs Tracey. (paras 133, 136, 200)

However, on the evidence the judge found (paras 129–140):

• Tensions had escalated significantly between 4 and 19 October, particularly over:
  • Mr Tracey’s erratic attendance; and
  • the disappearance and mysterious stamping of the FPQ diary (“APPROVED 12/10/04”), which the court found was most likely done by Mr Tracey as a reaction to being monitored.
• When told to leave, Mr Tracey effectively refused, asserted a right to remain, and indicated he would return with a solicitor the following morning.
• Burton and O’Connor were genuinely distressed and unsure how to respond; they appropriately sought legal advice.
• On that advice, they:
  • told Mr Tracey they would involve Gardaí if he would not leave; and
  • ultimately requested Garda attendance and arranged for locksmiths to change the locks to secure the premises against a further unilateral re‑entry.
• The Gardaí did not manhandle Mr Tracey; the temporary seizure of his personal phone appears to have been an honest mistake and it was returned before he left.

On these facts, the judge held:

• Seeking legal advice and following it; and
• Involving Gardaí where a person in occupation is refusing to leave and the relationship has clearly broken down,

did not amount to negligence, even if, in hindsight, it felt like a “sledgehammer” to the plaintiff. Reasonableness is judged objectively, in context, and the defendants’ conduct did not cross the threshold into actionable carelessness. (paras 199–200)

5. Damages in Contract: Distress, Reputation and Legal Limits

5.1 General rule: no damages for injured feelings in contract

Irish law follows the long‑standing Addis v Gramophone Co Ltd [1909] AC 488 rule: a plaintiff suing in contract is ordinarily entitled only to monetary compensation for the loss of the bargain (the economic position he would have been in had the contract been performed), not for injured feelings, loss of dignity, or damage to reputation.

MacGrath J, relying on Murray v Budds [2017] IESC 4, reiterated that the Supreme Court has:

• re‑endorsed the Addis principle; and
• confirmed that damages for mental distress are generally not recoverable in contract, absent recognised exceptions (e.g. holidays, entertainment contracts, certain domestic building contracts, or where the “very object” of the contract is to provide peace of mind).

The court engaged with Watts v Morrow [1991] 1 WLR 1421 (surveyors’ negligence) and the English line of “holiday cases” (Jarvis v Swan Tours; Jackson v Horizon Holidays) to explain that those decisions:

• do permit modest awards for physical inconvenience and resulting distress where the contract is to provide relaxation or enjoyment; but
• do not justify broad awards for upset arising from ordinary commercial contracts such as a consultancy arrangement. (paras 181–183, 184–186)

5.2 Application to Mr Tracey’s contract claims

Even if the events of 19 October 2004 could be characterised as a breach of contract (by curtailing notice on the premises), any damages in contract had to be confined to:

• the unpaid sums due under the contract (arrears, notice pay, overtime, holidays etc.); and
• not non‑pecuniary losses such as:
  • embarrassment and humiliation in front of junior staff;
  • shock at the involvement of Gardaí;
  • loss of reputation in the industry; or
  • alleged psychiatric injury.

In other words:

• The law of contract does not provide a remedy for the manner of dismissal of a consultant in terms of emotional fallout or reputational damage, however deeply felt, in situations like this.
• The only contractual remedy here was a debt claim for unpaid contractual remuneration. (paras 178–186)

6. The Negligence Claims: Psychiatric Injury and Reputation

6.1 Nervous shock and psychiatric injury: Kelly v Hennessy

Irish law on “nervous shock” is set out in Kelly v Hennessy [1995] 3 IR 253, where Hamilton CJ laid down five essential elements, including:

1. A recognisable psychiatric illness.
2. “Shock induced” – the psychiatric illness must result from a sudden, horrifying event (or its immediate aftermath), not from slow‑burn stress or grief.
3. Causation by the defendant’s act or omission.
4. The shock must arise from actual or apprehended physical injury to the plaintiff or another person.
5. Foreseeability of such psychiatric injury in the circumstances.

The High Court in this case accepted, on the evidence of Mr Tracey’s long‑standing GP (Dr Lombard) and psychotherapist (Ms Dennison), that:

• Mr Tracey developed a moderate depressive episode that led to GP consultations from March 2005 and anti‑depressant treatment starting November 2005.
• He had elevated anxiety scores and significant subjective distress.

However:

• There was no immediate medical treatment on or shortly after 19 October 2004.
• The first GP attendance specifically linked to the loss of his job was five months later (8 March 2005).
• His depressive symptoms fully resolved by about early 2007; there was no ongoing psychiatric disorder at the time of the medicolegal assessment in 2019.
• There was no evidence of a “shock‑inducing” event in the technical sense used in nervous‑shock jurisprudence (such as sudden violent death or catastrophic accident). (paras 142–143, 191–193)

Accordingly, the claim did not fall within the narrow Kelly v Hennessy category and no duty of care in respect of nervous shock arose.

6.2 No general duty to avoid psychiatric harm in this context

Beyond the nervous‑shock model, Irish courts have recognised limited duties to avoid causing psychiatric harm in:

• employment cases involving bullying/harassment and work‑related stress; and
• certain special relationships where vulnerability is clear and the risk of psychiatric harm is foreseeable.

The present case involved:

• a commercial consultancy contract between experienced professionals; and
• a dispute over termination and access to premises, not over long‑term harassment or systemic bullying.

The court found that:

• extending a duty of care to avoid psychiatric injury in this sort of commercial termination would be a radical and unjustified expansion;
• the law of negligence is not to be used to circumvent the limits of other torts (e.g. defamation) or undermine contractual allocation of risks; and
• even if such a duty existed, the defendants’ conduct was objectively reasonable in the circumstances, so no breach was shown. (paras 187–193, 199–201)

6.3 Reputational damage: no negligence duty; defamation is the remedy

The court was explicit that:

• There is no recognised tort of “negligent damage to reputation” in Irish law.
• The proper remedy for unlawful reputational harm is the law of defamation, which has its own carefully calibrated elements, defences, limitation periods and policy balances.

Citing the Supreme Court in Cromane Seafoods Ltd v Minister for Agriculture [2016] IESC 6, the judge emphasised that negligence should not be used as a back door to dodge the boundaries placed around other torts:

• Clarke J warned that negligence cannot “readily be used to get round the limitations which the law has carefully put in place in respect of other torts”; and
• Charleton J observed pointedly that:

  “Negligence is not all encompassing. It has not swamped every other tort. If ill is broadcast of a person, the remedy is defamation…” (para. 29)

The High Court applied this reasoning and also referred to Lonrho plc v Fayed [1994] 1 All ER 188, which confirmed under English law that reputational and feelings‑based harms are primarily the domain of defamation.

Given:

• the Supreme Court’s earlier ruling (MacMenamin J, 2016) that Mr Tracey’s causes of action in this case did not include defamation and that a jury trial was therefore not available; and
• the clear policy against expanding negligence to cover reputational injury,

the judge held that:

• no duty of care in negligence arose to protect Mr Tracey’s professional reputation; and
• his claims framed as negligence for reputational loss must fail as a matter of law. (paras 194–198)

6.4 Causation and overlapping proceedings

A striking feature of the judgment is the detailed schedule of at least 13 other sets of proceedings brought by Mr Tracey (sometimes with his wife), covering:

• alleged malicious prosecutions;
• assaults and false imprisonment by Gardaí;
• misfeasance in public office;
• defamation arising from media reports of his criminal case; and
• planning‑related grievances.

In a number of those actions, Mr Tracey claimed:

• substantial damages for severe emotional and psychological distress, anxiety and PTSD; and
• multi‑million euro loss‑of‑earnings claims.

The High Court did not comment on the merits of those other actions, but stressed that:

• the overlap of claims means causation “simply cannot be ignored”;
  • if the same alleged loss (e.g. destruction of career, lifelong PTSD) is claimed against multiple sets of defendants for different wrongs, any court asked to award such damages must be cautious; and
  • it becomes impossible to say that the Burton & O’Connor events alone caused the entirety of the alleged sequelae.
• There was no evidence from vocational experts, industry witnesses or treating psychiatrists to support the assertion that Mr Tracey was permanently unemployable as an engineer because of this particular incident.
• His depressive episode was time‑limited, had resolved by around 2007, and he had not sought psychiatric or psychological treatment in many years.

Accordingly, even if a duty of care and breach had been established (which they were not), the factual and evidential basis for the claimed multi‑million euro future losses was wholly lacking. (paras 145–146, 201–210)

7. Quantum: Sums Due, Interest and Conversion

7.1 Contract sums allowed

The court accepted, based on invoices and correspondence, that as at 19 October 2004 the company owed:

Item	Description	Amount (€)
FPQ‑15	Underpayment May–Aug 2004	21,007.97
FPQ‑16	Underpayment Mar–Apr 2004	1,455.10
FPQ‑17	Overtime 1 Mar–16 Sep 2004	20,086.61
FPQ‑18	16 weeks’ notice (35 hrs/week at €75 + VAT)	50,928.42
FPQ‑19	Standing charge for 4 months	9,680.00
Holiday pay	Accrued holidays	6,411.52
Expenses	Architects’ journal subscription	60.00
Total		109,629.62

(derived from paras 225–227)

Claims for:

• part‑October fees and standing charge (FPQ‑21 and FPQ‑22) were rejected as double‑counted; and
• profit‑share (5/18 of profits to 1 March 2005) failed because:
  • no profits were actually made; and
  • the profit‑share entitlement had not yet crystallised by the time the contract was terminated. (paras 226–228)

7.2 No interest

The company’s solicitors had, in September 2005, sent a cheque for €91,528.82 to Mr Tracey’s then solicitors, representing:

• all the items the company accepted as due under the invoices, excluding overtime; and
• indeed including amounts the court later held were double‑counted.

The cheque was initially lodged by the solicitors but was ultimately returned in January 2006 after Mr Tracey rejected the offer as insufficient (he wanted full payment of his entire claim, including overtime and profit‑share).

Applying Reaney v Interlink Ireland [2018] IESC 13, the judge held:

• Interest is not automatic; it is an equitable, discretionary remedy designed to compensate for unjustifiable withholding of money.
• Here:
  • the defendants had made a substantial offer at an early stage;
  • the only major residual head of dispute was overtime, which was not entirely clear‑cut; and
  • Mr Tracey consciously rejected that payment and prolonged the dispute in pursuit of a far larger claim.

In those circumstances, there was no injustice in refusing interest on the €109,629.62 now awarded. (paras 229–230)

7.3 Conversion and intellectual property

Mr Tracey alleged that the defendants had wrongfully retained or destroyed:

• engineering design guides, data sheets and costing files;
• specifications, procedures and templates developed by EDM; and
• other intellectual property embedded in files and computer systems.

However:

• The pleadings contained no specific valuation (“TBD” only) and sparse particulars.
• Evidence at trial did not clearly identify what items remained with the defendants, what their value was, or how their retention had actually prejudiced Mr Tracey.
• The defendants’ witnesses denied using EDM’s property for their subsequent benefit, and pointed out that many materials had been generated in the ordinary course of the FPQ engagement, and were paid for as part of that engagement.

On that limited and diffuse evidence, the court was not in a position to:

• find wrongful conversion; or
• quantify any recoverable loss.

(para 212)

8. Precedents and Doctrinal Context

8.1 Contract interpretation and implied terms

• ICS v West Bromwich Building Society [1997] 1 WLR 896, as adopted in Analog Devices v Zurich Insurance [2005] 1 IR 274 and ICDL GCC Foundation v ECDL Foundation [2012] 3 IR 327, sets out the modern approach:
  • look at the words in their documentary, factual and commercial context, from the standpoint of a reasonable person with the parties’ background knowledge.
• Law Society v Motor Insurers’ Bureau of Ireland [2017] IESC 31 (O’Donnell J) emphasised:
  • the need to consider the “specific context, the broader context, the background law… and the commercial logic” of an agreement.
• The Moorcock (1889) 14 PD 64 and Shirlaw v Southern Foundries [1939] 2 KB 206 establish the classic test for implied terms:
  • a term may be implied if it is necessary to give business efficacy to the contract, or is so obvious it goes without saying (“officious bystander” test), but not if it contradicts express terms.

MacGrath J applied these principles to:

• reject any implied right to insist on working out notice on the premises; and
• accept an implied expectation (and in practice, a factual finding) that 35 hours per week would normally be provided and paid for, including during the notice period. (paras 163–165, 219–223)

8.2 Good faith

• Interfoto Picture Library v Stiletto Visual Programmes [1989] QB 433:
  • recognised a “principle of fair and open dealing” in the context of onerous or unusual terms which are not properly drawn to the other party’s attention;
  • but did not establish a general duty of good faith across all contracts.
• Flynn v Breccia [2017] IECA 74:
  • the Court of Appeal expressly held there is no general doctrine of good faith in Irish contract law, save for specific categories (partnership, insurance, etc.).

These authorities underpinned the High Court’s refusal to recast the clear “regardless of any circumstances” notice clause as containing a hidden good‑faith obligation to provide reasons or to refrain from terminating for reputational concerns. (paras 151–157)

8.3 Damages for distress in contract

• Addis v Gramophone [1909] AC 488:
  • no damages for injured feelings or loss of reputation in breach of employment contract; only financial loss of salary/commissions etc.
• Watts v Morrow [1991] 1 WLR 1421 (Bingham LJ):
  • no general right to damages for “distress, frustration, anxiety, displeasure” in contract; exceptions where very object of contract is enjoyment/peace of mind;
  • moderate damages available for physical inconvenience and directly related mental suffering (e.g. living in defective house).
• Murray v Budds [2017] IESC 4:
  • Supreme Court reaffirmed Addis; emphasised that contract law primarily protects economic expectations, not feelings or reputation.

MacGrath J followed this line and held that Mr Tracey’s complaints of humiliation, distress and reputational hurt were not compensable in contract. (paras 179–186)

8.4 Negligence boundaries: Glencar and Cromane

• Glencar Exploration plc v Mayo County Council [2002] 1 IR 84:
  • set the three‑stage approach to duty of care: foreseeability, proximity and whether it is “just and reasonable” to impose a duty, taking into account policy considerations.
• Cromane Seafoods Ltd v Minister for Agriculture [2016] IESC 6:
  • cautioned strongly against using negligence to circumvent the carefully limited scope of other torts, such as misfeasance or defamation.

The High Court applied these principles to:

• refuse to impose a duty of care in negligence:
  • to protect reputation (because defamation is the proper tort); or
  • to avoid psychiatric injury in a commercial termination context;
• conclude that, given these policy considerations, it would not be “just and reasonable” to extend negligence in the manner urged by Mr Tracey. (paras 187–198)

8.5 Psychiatric injury: Kelly v Hennessy and Jaensch v Coffey

• Kelly v Hennessy [1995] 3 IR 253:
  • sets the Irish conditions for recovery in nervous shock claims, including “shock induced” psychiatric illness and proximity to physical injury events.
• Jaensch v Coffey (1984) 155 CLR 549 (High Court of Australia):
  • influential authority on “shock‑induced” psychiatric injury and the limits of recovery where distress arises over time from caring for injured relatives.

MacGrath J, echoing these authorities, held that Mr Tracey’s depressive episode did not fit within the recognised nervous‑shock framework and that no such duty arose. (paras 191–193)

9. Clarifying Complex Concepts

9.1 Contract of employment v contract for services

• Contract of employment:
  • employee status; employer control of work; statutory employment rights (unfair dismissal, redundancy, minimum notice, etc.).
• Contract for services:
  • independent contractor; relationship primarily governed by contract terms; no automatic employment‑law protections.

Here, the original contract used “employment” language, but was swiftly replaced with a consultancy model. That change had major consequences:

• no statutory unfair dismissal claim;
• termination governed solely by contract (16 weeks’ notice);
• no statutory right to insist on working out notice on the premises.

9.2 Business name v juristic person

A business name (e.g. “FPQ Consulting Engineers”) is simply a trading style. It is not a legal person. The juristic person is the company (here, Burton & O’Connor Ltd). Only the company:

• can sue and be sued;
• can enter contracts; and
• owns assets and liabilities.

Suing a business name alone is generally a procedural error; the underlying legal entity must be identified.

9.3 Nervous shock / psychiatric injury

To recover in negligence for psychiatric injury (nervous shock), a plaintiff must show more than:

• stress, upset or unhappiness; or
• feeling understandably aggrieved.

They must show:

• a medically recognised psychiatric disorder (e.g. clinical depression, PTSD);
• caused by a sudden shocking event (or immediate aftermath) within the narrow Kelly v Hennessy parameters;
• foreseeable by the defendant in the specific form of psychiatric harm.

Long‑term stress from litigation, dismissal, or interpersonal conflict, however real, is generally not enough on its own to ground a nervous‑shock claim.

9.4 Damages for loss of reputation

Non‑pecuniary harm to reputation is normally addressed by:

• defamation (libel or slander); and
• exceptionally, misfeasance in public office or malicious falsehood, with strict elements.

By design, these torts:

• require proof of publication to third parties;
• permit specific defences (truth, honest opinion, qualified privilege, etc.); and
• have limitation periods and statutory frameworks (Defamation Act 2009).

Allowing reputation to be litigated indirectly via negligence would:

• bypass those safeguards; and
• risk “double‑counting” or inconsistent findings across different forums.

10. Broader Impact and Practical Lessons

10.1 For professional service firms and consultants

• Termination clauses matter:
  • Clear “termination on notice regardless of circumstances” clauses between sophisticated parties will be given effect; and
  • courts will be reluctant to imply additional requirements such as reasons, hearings or good‑faith constraints, absent special features.
• Right to pay v right to work:
  • Consultants should understand that their primary protection is financial;
  • a right to continued access to premises is not automatic where a relationship has broken down, provided contractual notice/pay is honoured.
• Overtime practice:
  • If a firm routinely accepts and pays overtime without insisting on formal approvals, it may later be held to have waived strict procedural conditions.

10.2 For litigants and advisers

• Pleading and procedural choices:
  • Failure to plead defamation in time cannot be cured by re‑labelling reputational complaints as negligence or breach of contract.
• Multiple proceedings and causation:
  • Where similar psychiatric and loss‑of‑career claims are advanced in multiple actions, courts will scrutinise causation intensely and may treat such overlap as undermining large global loss claims.
• Evidence of inability to work:
  • Large future loss claims require independent vocational/occupational evidence and industry testimony, not just self‑reporting and historic GP notes.
  • Where medical conditions have resolved and no treatment is ongoing, claims of permanent incapacity will face a high evidential hurdle.

10.3 For the development of Irish law

• This decision:
  • consolidates the line of authority limiting non‑pecuniary damages in contract (Addis, Murray);
  • supports the conservative approach to expanding negligence into areas covered by other torts (Cromane, Glencar); and
  • reaffirms the absence of a general duty of good faith in commercial contracting (Flynn v Breccia).
• On psychiatric injury, the judgment shows continued adherence to the narrow Kelly v Hennessy model and a reluctance to recognise more open‑textured, stress‑based duties in non‑employment commercial settings.

11. Conclusion

The High Court’s decision in Tracey t/a Engineering Design and Management v Burton & Ors is a careful, fact‑driven application of settled principles to a complex and long‑running dispute. Its key messages can be stated succinctly:

• A professionally drafted contract for services with a 16‑week termination clause “regardless of any circumstances” will generally be enforced as written. No general good‑faith overlay will be implied to require reasons or to limit termination motives.
• In such a commercial consultancy context, the law protects the consultant’s financial expectations (arrears, overtime, notice pay), but not his feelings or reputation. Psychiatric and reputational harms are tightly circumscribed by the doctrines of nervous shock and defamation, respectively.
• Negligence is not a universal solvent. It cannot be used to expand protection for reputation or to secure damages for stress where established doctrinal gateways are not satisfied.
• Where large, lifelong loss‑of‑earnings and psychiatric claims are made, especially against multiple sets of defendants, courts will insist on robust, specific evidence of causation, residual incapacity and vocational impact.

In practical terms, Mr Tracey’s litigation ultimately yielded an award limited to what was, in substance, a debt action for unpaid contractual sums that had largely been offered to him years earlier. The decision stands as a reminder both of the strength of well‑drafted termination clauses in commercial contracts and of the firm boundaries that Irish law continues to draw between contract, negligence and defamation.