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)

An assignment of a bare cause of action by a company to a shareholder or director is not invalid solely because it is intended to avoid the rule in Battle v. Irish Art Promotion Centre. Such an assignment is unenforceable unless the assignee has a substantial, genuine commercial interest in the claim that pre-exists and is independent of the assignment. The assignment in this case was unenforceable for other reasons already determined by the lower courts, and the appeal fails.

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
Appeal / Supreme Court Judgment on Appeal From Court of Appeal
Outcome
Appeal dismissed
Legal Topics
Assignment of Causes of Action, Champerty and Maintenance, Legal Representation of Companies, Public Policy in Litigation
Company Law Civil Procedure Assignment of Causes of Action Champerty and Maintenance Legal Representation of Companies Public Policy in Litigation

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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

Appeal / Supreme Court Judgment on Appeal From Court of Appeal

Legal Issues

  1. 1 Whether an assignment of a company's legal claim to a shareholder/director to avoid the rule in Battle v. Irish Art Promotion Centre is invalid as an abuse of process or contrary to public policy
  2. 2 Whether such an assignment is unenforceable as champertous or for lack of a genuine commercial interest

Ratio Decidendi

An assignment of a bare cause of action by a company to a shareholder or director is not invalid solely because it is intended to avoid the rule in Battle v. Irish Art Promotion Centre. Such an assignment is unenforceable unless the assignee has a substantial, genuine commercial interest in the claim that pre-exists and is independent of the assignment. The assignment in this case was unenforceable for other reasons already determined by the lower courts, and the appeal fails.

Court Disposition

Appeal dismissed