Flanagan v. Kelly [1999] IEHC 116 (26th February, 1999)

Flanagan v. Kelly [1999] IEHC 116 (26th February, 1999)

The plaintiff's claim, even if amended, only asserts losses suffered by the company, not personal losses. The law does not permit a shareholder to sue for such reflective loss. There is no evidence of a sufficient relationship of proximity or reliance to create a personal duty of care owed by the defendant to the plaintiff. The statement of claim discloses no reasonable cause of action and must be struck out.

Citation
[1999] IEHC 116
Parties
Plaintiff: Plaintiff (Mr Flanagan); Defendant: Defendant (Chartered Accountant)
Jurisdiction
Ireland
Procedural Posture
Civil / Application to Strike Out Claim at Interlocutory Stage
Outcome
Claim struck out; proceedings dismissed
Legal Topics
Strike Out Application, Shareholder Rights, Negligence, Fiduciary Duty, Rule in Foss V. Harbottle, Personal Cause of Action, Proximity in Negligence
Company Law Civil Procedure Tort Law Strike Out Application Shareholder Rights Negligence Fiduciary Duty Rule in Foss V. Harbottle +2 more

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 7 Party arguments 2
Sign in to unlock

Parties

Plaintiff (Mr Flanagan)

Plaintiff

Defendant (Chartered Accountant)

Defendant

Procedural Posture

Civil / Application to Strike Out Claim at Interlocutory Stage

Legal Issues

  1. 1 Whether the plaintiff, as a shareholder and/or creditor, has a personal cause of action against the defendant for losses suffered by the company
  2. 2 Whether the statement of claim discloses a reasonable cause of action or is frivolous/vexatious
  3. 3 Whether the defendant owed a duty of care to the plaintiff personally

Ratio Decidendi

The plaintiff's claim, even if amended, only asserts losses suffered by the company, not personal losses. The law does not permit a shareholder to sue for such reflective loss. There is no evidence of a sufficient relationship of proximity or reliance to create a personal duty of care owed by the defendant to the plaintiff. The statement of claim discloses no reasonable cause of action and must be struck out.

Court Disposition

Claim struck out; proceedings dismissed

Orders

  • Order striking out the statement of claim and the entire proceedings