The Supreme Court allowed Eugene McCool’s appeal on a narrow point about whether public policy associated with the rule in Battle v. Irish Art Promotion Centre barred him from taking an assignment of McCool Controls and Engineering Ltd.’s claim against Honeywell Control Systems Ltd.
The judgment, delivered by Gerard Hogan on 27 February 2024, said that an assignment to a principal shareholder was not in principle prohibited by the Battle rule. That rule generally prevents a company from being represented in court by a director or shareholder who is not a legal professional. Hogan J. reasoned that an assignee pursuing the claim personally would be exposed to any adverse costs order, removing the concern that the shareholder could shelter behind the company’s separate legal personality.
The underlying claim is that Honeywell wrongfully excluded McCool Controls from a major construction project, breaching an alleged exclusive distribution agreement. The company’s claim is for about €11 million. Those are allegations, not findings on the merits of the contractual dispute.
McCool Controls began the proceedings in 2005. In 2017, it purported to assign its interest in the proceedings to McCool, who had been its managing director and majority shareholder. An order substituting him as plaintiff was overturned on Honeywell’s appeal. A second assignment and substitution application were rejected by the High Court in 2019 as res judicata; the Court of Appeal dismissed McCool’s appeal in 2022.
The Supreme Court’s grant of leave concerned only whether the Battle rule’s public policy rationale prevented an assignment of this kind. Hogan J. said the appeal should be allowed on that limited issue. The Court did not decide the contractual claim or establish that the assignments were legally effective overall.
In particular, the assignments had also been held invalid because they did not meet section 28(6) of the Supreme Court of Judicature Act (Ireland) 1877. No appeal was allowed on that ground, and Hogan J. said that obstacle remained. He also discussed champerty, although he noted that the issue was outside the leave granted and that relevant factual findings had not been made. He observed that a fresh assignment could present further difficulties if McCool was no longer a shareholder, as he had reportedly relinquished his shares and directorship to his son in 2020.