McCool Controls and Engineering Ltd v Honeywell Controls Systems Ltd (Approved) [2024] IESC 5 (27 February 2024)

McCool Controls and Engineering Ltd v Honeywell Controls Systems Ltd (Approved) [2024] IESC 5 (27 February 2024)

The assignment of the company's cause of action to Mr. McCool, who was the principal shareholder at the time the cause of action accrued, is not contrary to public policy or champertous, as he had a legitimate commercial interest in the claim and would be personally liable for costs. The rationale for the Battle rule does not apply once the assignee is personally exposed to adverse costs. The appeal is allowed.

Citation
[2024] IESC 5
Parties
Plaintiff/appellant: Eugene McCool (substituted as plaintiff for McCool Controls and Engineering Limited); Defendant/respondent: Honeywell Control Systems Limited
Jurisdiction
Ireland
Judgment Date
27 February 2024
Procedural Posture
Civil Appeal / Supreme Court Judgment on Appeal From Court of Appeal
Outcome
Appeal allowed
Legal Topics
Assignment of Causes of Action, Corporate Personality, Piercing the Corporate Veil, Champerty, Public Policy in Litigation, Right of Audience for Companies
Company Law Civil Procedure Assignment of Causes of Action Corporate Personality Piercing the Corporate Veil Champerty Public Policy in Litigation Right of Audience for Companies

Case Brief

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Parties

Eugene McCool (substituted as plaintiff for McCool Controls and Engineering Limited)

Plaintiff/appellant

Honeywell Control Systems Limited

Defendant/respondent

Procedural Posture

Civil Appeal / Supreme Court Judgment on Appeal From Court of Appeal

Legal Issues

  1. 1 Whether the assignment of a company's cause of action to its principal shareholder is lawful or contrary to public policy
  2. 2 Whether such assignment is champertous or savours of champerty
  3. 3 Whether the rule in Battle v. Irish Art Promotion Centre precludes such assignment

Ratio Decidendi

The assignment of the company's cause of action to Mr. McCool, who was the principal shareholder at the time the cause of action accrued, is not contrary to public policy or champertous, as he had a legitimate commercial interest in the claim and would be personally liable for costs. The rationale for the Battle rule does not apply once the assignee is personally exposed to adverse costs. The appeal is allowed.

Court Disposition

Appeal allowed

Orders

  • The appeal is allowed.