The Supreme Court has allowed Eugene McCool’s appeal on a narrow legal question about whether a person assigned a company’s interest in litigation can be substituted as plaintiff. It held that substitution may in principle be permitted even if the assignment was intended to avoid the rule that a company must be represented in court by a lawyer.
The judgment, delivered by Mr Justice Woulfe on 27 February 2024, does not determine the underlying commercial dispute or establish that any particular assignment is valid. That depends on compliance with statutory conditions and applicable rules on public policy, champerty and company law.
The proceedings began in 2005, with McCool Controls and Engineering Limited as plaintiff. The company alleged that a 1998 agreement gave it exclusive distribution and installation rights for Honeywell Control Systems products in Ireland, subject to exceptions. It claimed Honeywell cut it out of work on a major pharmaceutical plant project in County Dublin, causing losses McCool estimated at about €11 million. Honeywell denied the claim, said its work was outside the agreement or within its exceptions, and relied on a 2002 compromise agreement. It also counterclaimed for goods sold and delivered. Those claims have not been decided in this appeal.
In 2017, the company assigned its interest in the proceedings to McCool for €1. He was substituted as plaintiff by order of the High Court Master. The High Court later held that assignment invalid and an abuse of process, finding it was not absolute and was an attempt to bypass the rule in Battle v Irish Art Promotions Centre. A second substitution application, based on a 2018 assignment, was refused on issue estoppel grounds. The Court of Appeal dismissed appeals against both decisions.
The Supreme Court had granted leave only on whether an assignee may be substituted regardless of the assignment’s purpose. Justice Woulfe concluded that, once an individual is substituted, the company is no longer a party needing representation. The individual also takes on personal litigation risks, including the risk of an adverse costs order. In his view, the Battle rule therefore did not justify invalidating an assignment on that basis alone.
The Court said the statutory requirements for an assignment include an absolute written assignment of a legal chose in action and written notice to the debtor. It also stressed that public policy may invalidate an assignment, and that any future assignment must comply with company law. The court said it could not decide in advance whether a future assignment would amount to a disposal of company assets at an undervalue; that would depend on its precise terms.
The appeal was allowed on the narrow ground. The judgment does not resolve the underlying claim, validate the earlier assignments or specify a further order concerning the proceedings.