Eugene McCool (Substituted as Plaintiff for McCool Controls and Engineering Ltd by Order of the Master Made on 8th November 2017) v Honeywell Control Systems Ltd

JurisdictionIreland
JudgeMr. Justice Robert Haughton
Judgment Date11 March 2022
Neutral Citation[2022] IECA 56
CourtCourt of Appeal (Ireland)
Docket NumberRecord Number: 2018/213 Record Number: 2019/505 High Court Record No.: 2005/2747P
Between/
Eugene McCool (Substituted as Plaintiff for McCool Controls and Engineering Limited by Order of the Master Made on 8th November 2017)
Plaintiff/Appellant
and
Honeywell Control Systems Limited
Defendant/Respondent
Between/
McCool Controls and Engineering Limited
Plaintiff
and
Honeywell Controls Systems Limited
Defendant/Respondent

and

Eugene McCool
Appellant

[2022] IECA 56

Costello J.

Haughton J.

Power J.

Record Number: 2018/213

High Court Record No.: 2005/2747P

Record Number: 2019/505

High Court Record No.: 2005/2747P

THE COURT OF APPEAL

Substitution – Fair and reasonable publication – Costs – Appellant appealing from High Court orders – Whether costs should be solicitor and own client costs

Facts: Both of these appeals came within the High Court proceedings bearing Record No. 2005/2747P. In the first appeal, the appellant, Mr McCool, appealed from the judgment of Noonan J delivered on 10 April 2018 and order perfected on 24 April 2018 whereby it was ordered that: (a) the Order of the Master of the High Court made on 8 November 2017 substituting Mr McCool for McCool Controls and Engineering Ltd (the Company) be discharged; (b) that the application brought by Mr McCool pursuant to Notice of Motion dated 18 July 2017 (the first substitution application), seeking an order allowing Mr McCool, as founder, managing director and 100% shareholder of the Company to be joined as co-plaintiff, be dismissed; (c) that the application brought by Mr McCool pursuant to Notice of Motion dated 22 December 2017 seeking an order striking out the pleadings of the respondent, Honeywell Control Systems Ltd (Honeywell), be dismissed; and (d) that Mr McCool do pay Honeywell’s costs of the said applications, to be taxed in default of agreement on a “solicitor and own client” basis. In the second appeal, Mr McCool appealed from the judgment of Simons J delivered on 25 October 2019 and the order perfected on 13 November 2019 whereby it was ordered that the application of Mr McCool pursuant to Notice of Motion issued on 2 July 2018 seeking that he be substituted as plaintiff for the Company (the second substitution application) be refused and that Honeywell do recover its costs as against Mr McCool personally on a “party and party” basis. In relation to the second substitution application, Simons J delivered a supplemental judgment on 11 November, 2019 rejecting Honeywell’s application for costs on a “solicitor and own client” basis, and he awarded Honeywell costs on a “party and party” basis. Honeywell cross appealed that costs order.

Held by the Court of Appeal (Egan J) that the order of the High Court discharging the order of the Master made on 8 November 2017 substituting Mr McCool for the Company would be affirmed. Egan J also affirmed the order of the High Court dismissing the application brought by Mr McCool pursuant to notice of motion dated 18 July 2017 seeking an order allowing Mr McCool to be joined as co-plaintiff. Egan J held that Mr McCool did not have locus standi to pursue the notice of motion dated 22 December 2017 in which he sought an order striking out Honeywell’s pleadings. Egan J affirmed the order of the High Court dismissing that application. He held that Noonan J was entitled, in his discretion, to mark his displeasure at the conduct of the proceedings by Mr McCool by directing that the costs be solicitor and own client costs. Egan J affirmed the order of Noonan J in all respects. Egan J was satisfied that there was ample evidence before the court on which Simons J could conclude that the issue which arose for determination on the second substitution application was not materially different from that which had been determined by Noonan J. Egan J dismissed the second appeal. He held that when it came to considering Honeywell’s application for costs on the higher scale, Simons J took into account all relevant matters; he exercised his discretion judicially, and it cannot be said that he erred in principle or in any way in the exercise of that discretion in rejecting Honeywell’s application, and instead granting costs on the normal party and party basis. Egan J affirmed Simons J’s order on costs.

Egan J held that in relation to the first and second appeals, Honeywell should be awarded its costs against Mr McCool personally, to be adjudicated by a legal costs adjudicator on a party and party basis. Egan J proposed that ‘no order’ be made in relation to the costs and expenses of the cross appeal.

Appeals dismissed.

JUDGMENT delivered by Mr. Justice Robert Haughton on the 11th day of March 2022

Contents

Introduction

- 2 -

Background

- 4 -

The first appeal

- 5 -

The first assignment

- 6 -

The decision of Noonan J.

- 10 -

Discussion

- 19 -

Mr. McCool's further submissions and the issue of champerty

- 27 -

Conclusions on the first appeal

- 37 -

The second appeal

- 39 -

The judgment of Simons J.

- 43 -

Discussion

- 50 -

The cross appeal

- 53 -

Costs of the appeals

- 59 -

Introduction
1

. Both of these appeals come within the High Court proceedings bearing Record No. 2005/2747P. In the first appeal (“first appeal”) the appellant (“Mr. McCool”) appeals from the judgment of Noonan J. delivered on 10 April 2018 and order perfected on 24 April 2018 whereby it was ordered that –

  • (a) the Order of the Master of the High Court made on 8 November 2017 substituting Mr. McCool for McCool Controls and Engineering Limited (the “Company”) be discharged;

  • (b) that the application brought by Mr. McCool pursuant to Notice of Motion dated 18 July 2017 (“the first substitution application”), seeking an order allowing Mr. McCool, as founder, managing director and 100% shareholder of the Company to be joined as co-plaintiff, be dismissed;

  • (c) that the application brought by Mr. McCool pursuant to Notice of Motion dated 22 December 2017 seeking an order striking out the respondent's pleadings be dismissed; and

  • (d) that Mr. McCool do pay the defendant's (“Honeywell”) costs of the said applications, to be taxed in default of agreement on a “solicitor and own client” basis.

2

. In the second appeal (“second appeal”), Mr. McCool appeals from the judgment of Simons J. delivered on 25 October 2019 and the order perfected on 13 November 2019 whereby it was ordered that the application of Mr. McCool pursuant to Notice of Motion issued on 2 July 2018 seeking that he be substituted as plaintiff for the Company (“the second substitution application”) be refused and that Honeywell do recover its costs as against Mr. McCool personally on a “party and party” basis.

3

. In relation to the second substitution application Simons J delivered a supplemental judgment on 11 November, 2019 rejecting Honeywell's application for costs on a “solicitor and own client” basis, and he awarded Honeywell costs on a “party and party” basis. Honeywell cross appeals this costs order.

4

. In essence, in the first and the second substitution applications Mr. McCool seeks to rely on purported assignments of the proceedings by the Company to him to enable him to continue the proceedings in circumstances where the Company can no longer afford a legal team. In relying on the assignments Mr. McCool seeks to avoid so-called ‘rule in Battle’ viz. the rule in Battle & anor v Irish Art Promotion Centre Limited [1968] IR 252 in which the Supreme Court held that a managing director and major shareholder of the defendant company was not entitled to continue the defence of the proceedings on the company's behalf. In the High Court in the first substitution application Noonan J. found that the assignment to Mr. McCool was entered into solely for the purpose of circumventing the rule in Battle and that it was an abuse of process and invalid. He further held that even if the assignment was not invalid as an abuse of process, it savours of champerty and is thus contrary to public policy and invalid. In the second substitution application Mr. McCool sought to rely on a second purported assignment, in slightly different terms. Simons J. rejected the second substitution application on the basis that it was an attempt to re-agitate an issue which had previously been decided against Mr. McCool by Noonan J.

Background
5

. Mr. McCool is a director and majority shareholder in the Company which was the sole plaintiff in these proceedings when the plenary summons issued on 9 August 2005.

6

. The Company is involved in the provision of building management systems, including electronic control systems for building services such as heating and air conditioning. Honeywell is an English registered company, which is part of a multinational conglomerate, which manufactures and distributes such systems, amongst others.

7

. In its original statement of claim the Company allege that an agreement reached between it and Honeywell in 1988 gave the Company exclusive distribution and installation rights to Honeywell products in Ireland, subject to certain exceptions.

8

. In or about the year 2000, the Wyeth Pharmaceutical Company was engaged in a project involving construction of a very large state of the art plant in Clondalkin County Dublin.

9

. The Company alleges that the project engineers invited it to become involved in what is suggested to have been a very lucrative project. The Company alleges that it introduced Honeywell to the opportunity, in a cooperative venture. The essential claim is that Honeywell itself successfully tendered for the project by cutting the Company out, in breach of the 1998 agreement, and that this has resulted in substantial losses, estimated by Mr. McCool at some €11 million.

10

. In its defence Honeywell denies the claim in full and pleads that any work done by it on the Wyeth project was either not covered by the 1998 agreement or came within express exceptions therein provided for. Honeywell further...

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2 cases
  • McCool Controls and Engineering Ltd v Honeywell Controls Systems Ltd
    • Ireland
    • Supreme Court
    • 27 February 2024
    ...J Woulfe J Hogan J Murray J Supreme Court appeal number: S:AP:IE:2022:0000064 Court of Appeal record number: 2018/213 and 2019/0505 [2022] IECA 56 High Court record number: 2005/2747P [2019] IEHC 695 and [2019] IEHC 749 An Chúirt Uachtarach The Supreme Court Substitution – Abuse of process ......
  • Fannon v Ulster Bank Ireland DAC and Others
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    • Court of Appeal (Ireland)
    • 6 March 2024
    ...the court considered the document and concluded that the assignment was not “absolute” is McCool v. Honeywell Control Systems Limited [2022] IECA 56. The decision of the Court of Appeal was very recently overturned by the Supreme Court on a different point (judgment delivered on 28 th Febru......

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