O'Neill v Ryan

Judgment Date01 January 1990
Date01 January 1990
Docket Number[1988 No. 8774P]
CourtHigh Court
O'Neill v. Ryan
Eugene P. O'Neill
Thomas Anthony Ryan, Ryanair Ltd., Aer Lingus plc., David Kennedy, Guinness Peat Aviation Ltd. and Transport Analysis Inc.
[1988 No. 8774P]

High Court

Company - Member - Action - Locus standi - Airline - Competitors - Conspiracy to break competition rules alleged - Injury to company - Whether action maintainable by shareholder rather than company - Rule in Foss v. Harbottle - Whether compatible with direct enforceability of law of European Communities - European Economic Community Treaty, 1957, Articles 85 and 86.

The plaintiff owned 7.2% of the shares of and was chief executive of the second defendant, an airline company. In proceedings in the High Court following his dismissal as chief executive he alleged as against the third, fourth, fifth and sixth defendants that they had engaged in divers practices and conspiracies in breach of the competition law of Articles 85 and 86 of the European Economic Community Treaty, 1957, with the intention and effect of damaging the second defendant and that the value of his shareholding had been thereby reduced. The third, fourth, fifth and sixth defendants applied by motion to dismiss or stay the plaintiff's action as against them on the grounds that such an action was maintainable, if at all, solely by the second defendant company and that the plaintiff as a mere shareholder lacked locus standi therefor. The plaintiff argued that any rules of national law restricting his right of action ought to be interpreted so as to comply with the requirements of direct applicability and enforceability of the competition rules of Articles 85 and 86 of the Treaty of Rome.

Held by Lynch J., in dismissing the plaintiff's claim as against the third, fourth, fifth and sixth defendants, that the rule of Irish law known as the rule in Foss v. Harbottle, viz. that the proper plaintiff in an action against a third party for injury to a company was the company itself, and not its shareholders, would be applied where the facts so warranted (as in this case), and the rule, which had the merit of avoiding multiplicity of litigation, did not substantially negative the effectiveness or enforceability of Articles 85 and 86 of the Treaty of Rome since such could be enforced by action of the company.

Foss v. HarbottleENR (1843) 2 Hare 461 applied; Rewe Handelsgesellschaft Nord mbH v. Hauptzollamt KielECASUNK (Case 158/80) [1981] E.C.R. 1805 considered.

Cases mentioned in this report:—

Ahmed Saaed Flugreisen v. Zentrale zur Bekämpfung unlauteren WettbewerbsECASUNKTLR(Case 66/86) [1989] E.C.R. 803; The Times, 13th April, 1989.

Amministrazione delle Finanze dello Stato v. MIRECOECASUNK (Case 826/79) [1980] E.C.R. 2259.

An Bord Bainne Co-operative Ltd. v. Milk Marketing BoardUNK [1984] 2 C.M.L.R. 584.

Bourgoin S.A. v. Ministry of AgricultureELRWLR [1986] Q.B. 716; [1985] 3 W.L.R. 1027; [1985] 3 All E .R. 585.

B.R.T. v. SabamECASUNKUNK (Case 127/73) [1974] E.C.R. 51; [1974] C.M.L.R. 77.

Cadbury Ireland Ltd. v. Kerry Co-op Creameries Ltd.DLRM [1982] I.L.R.M. 77.

Duggan v. Bank of Ireland (Unreported, High Court, 30th May, 1986, Costello J.).

Edwards v. HalliwellUNK [1950] 2 All E.R. 1064.

Foss v. HarbottleENR (1843) 2 Hare 461.

Garden Cottage Ltd. v. Milk Marketing BoardELRWLRUNKUNK [1984] A.C. 130; [1983] 3 W.L.R. 143; [1983] 2 All E.R. 770 (H.L.); [1983] 3 C.M.L.R. 1027 (C.A.).

Meskell v. Coras Iompair Éireann éireannIR [1973] I.R. 121.

Ministère Public v. AsjesECASUNK (Cases 209 - 213/84) [1986] E.C.R. 1425; [1986] 3 C.M.L.R. 173.

Pavlides v. JensenELRWLRUNK [1956] Ch. 565; [1956] 3 W.L.R. 224; [1956] 2 All E.R. 518.

Prudential Assurance v. Newman Industries (No. 2)ELRWLRUNK [1982] Ch. 204; [1982] 2 W.L.R. 31; [1982] 1 All E.R. 354.

R. v. Attorney-General, ex parte I. C.I. plcUNK [1987] 1 C.M.L.R. 72.

Rewe Handelsgesellschaft Nord mbH v. Hauptzollamt KielECASUNKUNK (Case 158/80) [1981] E.C.R. 1805; [1982] 1 C.M.L.R. 449.

Rewe-Zentralfinanzamt v. Landwirtschaftskammer SaarlandECASUNKUNK (Case 33/76) [1976] E.C.R. 1989; [1977] 1 C.M.L.R. 533.

Smith v. Croft (No. 2)ELRWLRUNK [1988] Ch. 114; [1987] 3 W.L.R. 405; [1987] 3 All E.R. 909.

Thorne R.D.C. v. BuntingELRWLRUNK [1972] Ch. 470; [1972] 2 W.L.R. 517; [1972] 1 All E.R. 439.

Transport Salaried Staffs' Association v. Coras iompair Éireann éireannSC [1965] 1. R. 180.

Motion on Notice.

The facts are set out in the judgment of Lynch J., post. At an earlier stage in the proceedings, on the 2nd May, 1989, the Supreme Court, reversing the High Court, ruled that the proceedings be heard in public rather than in camera: see In re R. Ltd.IR [1989] I.R. 126.

Cur. adv. vult.

Lynch J.

Introduction and facts

This is a motion brought by the last four defendants that the plaintiff's action as against the said defendants be dismissed or stayed under the inherent jurisdiction of the court and under O. 28 of the Rules of the Superior Courts on the grounds that the plenary summons and statement of claim disclose no reasonable cause of action against the said defendants and that such action (if any) as is disclosed by the pleadings is not maintainable at the suit of the plaintiff personally and is bound to fail.

On such a motion it seems to me that the proper approach is to study carefully the statement of claim in order to see exactly what is alleged and what is claimed therein and to assume that all allegations made therein will be established. Then, having made that assumption, I must decide whether or not the statement of claim discloses any reasonable cause of action vested in the plaintiff against the last four defendants.

The statement of claim makes two separate and distinct claims. The first is a claim for damages and other relief for breach of contract and wrongful dismissal of the plaintiff from his office as chief executive of the second defendant. That claim is made only against the first and second defendants: the other defendants, being the last four defendants (the moving parties in this motion) are not concerned with it at all.

The statement of claim makes claims against the last four defendants singly, collectively, and collectively with the first defendant, for alleged breaches of Articles 85 and 86 of the European Economic Community Treaty and for alleged conspiracy causing damage to the plaintiff. It is these claims which are the subject of the last four defendants' motion to dismiss or stay and the terms of the statement of claim in relation to them must therefore be considered in detail.

No allegation of any wrongdoing is made against any of the last four defendants in the first 16 paragraphs of the statement of claim. Those paragraphs contain descriptions of all the parties to the action and also, in the case of the...

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