The High Court awarded former soldier James McGrath €36,395.77, plus interest at 8% a year, after finding his discharge from the Defence Forces breached his two-year service extension. The judgment did not invalidate the discharge order or award exemplary damages.
McGrath had been granted an extension running to 29 October 1996. He had a long-standing right knee injury and was medically graded category C, indicating chronic disability. A Defence Forces review of category C personnel unable to perform 24-hour armed security duty led to his referral to a Medical Board in November 1995. The board recommended his discharge and reclassification to category E, below the minimum medical standard for service.
McGrath appealed to the Adjutant General, asking to remain in service until the end of his existing engagement. His commanding officers supported the request, but it was refused. He was discharged with effect from 12 May 1996. He argued that this deprived him of the chance to apply for the voluntary early retirement scheme (VER), which included category C personnel among those eligible in 1996. The scheme was discretionary, and eligibility did not guarantee retirement.
Justice Laffoy found that the extension created a contractual relationship between McGrath and the Minister for Defence. The court concluded that his medical condition had not materially changed since the 1994 examination associated with the extension, and that the reclassification resulted from a policy change. As nothing else had occurred to justify ending his service early under the applicable rules, the discharge before 29 October 1996 breached the contract.
The court found it probable that McGrath would have succeeded in an individual application to the VER Board, and treated the lost gratuity as the measure of his loss. Its amount, €36,395.77, had been agreed. The court awarded that sum with 8% annual interest from 12 May 1996.
The judgment rejected McGrath’s argument that failures to complete an accident report form and convene a Court of Inquiry made his discharge invalid. It also declined exemplary damages, finding the State’s conduct did not justify them. The case had previously survived a preliminary challenge based on delay, but that 2004 ruling concerned whether the claim could proceed, not its merits.