Glynn & Anor -v- Owen & Ors [2007] IEHC 328 (05 October 2007)

Glynn & Anor -v- Owen & Ors [2007] IEHC 328 (05 October 2007)

Derivative actions may only proceed where the alleged wrongdoers are in control of the company and have benefited at the company's expense; as the first and second defendants were not in control and no benefit was alleged against the third defendant, the plaintiffs are not entitled to pursue the derivative claims.

Citation
[2007] IEHC 328
Parties
Plaintiff: James Glynn; Plaintiff: Kevin McCabe; Defendant: Johnathan Owen; Defendant: Allan Owen; Defendant: Stephen Leyland; Defendant: Fatstrippa Holdings Company; Defendant: Fatstrippa Corporation Limited
Jurisdiction
Ireland
Judgment Date
05 October 2007
Procedural Posture
Commercial / Preliminary Issue Determination on Entitlement to Pursue Derivative Claims
Outcome
Plaintiffs not entitled to pursue derivative claims against any defendant; preliminary issue decided against plaintiffs.
Legal Topics
Derivative Actions, Rule in Foss V. Harbottle, Fraud on the Minority, Corporate Governance, Shareholder Rights
Company Law Derivative Actions Rule in Foss V. Harbottle Fraud on the Minority Corporate Governance Shareholder Rights

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 3 Authorities cited 10 Party arguments 2
Sign in to unlock

Parties

James Glynn

Plaintiff

Kevin McCabe

Plaintiff

Johnathan Owen

Defendant

Allan Owen

Defendant

Stephen Leyland

Defendant

Fatstrippa Holdings Company

Defendant

Fatstrippa Corporation Limited

Defendant

Procedural Posture

Commercial / Preliminary Issue Determination on Entitlement to Pursue Derivative Claims

Legal Issues

  1. 1 Whether plaintiffs are entitled to pursue derivative claims on behalf of the companies against the first, second, and third defendants under exceptions to the rule in Foss v. Harbottle
  2. 2 Whether the alleged wrongs constitute 'fraud on the minority' or fall within any other exception permitting derivative action
  3. 3 Whether the alleged wrongdoers are in control of the companies

Ratio Decidendi

Derivative actions may only proceed where the alleged wrongdoers are in control of the company and have benefited at the company's expense; as the first and second defendants were not in control and no benefit was alleged against the third defendant, the plaintiffs are not entitled to pursue the derivative claims.

Court Disposition

Plaintiffs not entitled to pursue derivative claims against any defendant; preliminary issue decided against plaintiffs.