Supreme Court Disregards Motive For Company's Assignment Of Cause Of Action

• Published date: 13 March 2024
• Law Firm: William Fry
• Author: Ms Laura Murdock, Deirdre O'Donovan and Gail Nohilly

McCool Controls and Engineering Ltd v Honeywell Control Systems Limited[2024] IESC 5.

The Supreme Court, by majority decision, has found that an assignee of a company's interest in litigation may in principle be permitted to pursue the action by being substituted as plaintiff in place of that company even though the motive for that assignment is to avoid falling foul of a rule from 1968, known as the "rule in Battle" (from Battle v Irish Art Promotions Centre Ltd). Under the rule in Battle, a company can only be represented in court proceedings by a lawyer, not by its directors or shareholders.

The facts

McCool Controls and Engineering Limited (Company) was the original plaintiff in proceedings against Honeywell Control Systems Ltd (Honeywell) for alleged breaches of an agreement between the parties. The proceedings were commenced in 2005. Mr McCool was the Company's managing director and majority shareholder, and he brought an application to substitute himself for the Company as the plaintiff in the proceedings because the Company could no longer afford legal representation. The application was based on an assignment between the Company and Mr McCool, whereby the...