The High Court will rule next week on who is to pay up to €18 million in costs as a result of the marathon and ultimately unsuccessful legal action by Fyffes against fellow listed company DCC.
The case alleged insider dealing by DCC regarding the €106 million sale of the DCC stake in Fyffes in February 2000.
DCC argued yesterday that, having won the case, it was entitled to all the costs of the action, including reserved costs.
However, lawyers for Fyffes submitted that the fruit distributor should not have to pay the costs of challenging the denial by DCC and its chief executive Jim Flavin that Mr Flavin had "dealt" in the shares. DCC and Mr Flavin had maintained this denial to the end of the case but it was rejected as "absurd" by Ms Justice Mary Laffoy in her judgment last December.
Fyffes claimed that up to 30 days of the 87-day action were take up with addressing the denials by Mr Flavin and DCC's and that it was in the interests of justice and fairness that Fyffes should not have to pay DCC's costs regarding that issue.
Paul Gallagher SC, for Fyffes, said his client accepted it had lost the case and was not resisting a costs order except insofar as it related to the costs of proving that Mr Flavin and the DCC defendants dealt in the shares.
Kevin Feeney SC, for DCC, argued Fyffes had lost the core issue in the case as the court had found that Mr Flavin did not have price-sensitive information when he dealt in the shares and therefore did not deal unlawfully.
This action should never have been brought at all, counsel said. Fyffes had told a disgruntled shareholder in May 2000 that it did not consider it had any information regarding the company's performance in the first quarter of financial year 2000 to merit issuing a profit warning but almost two years later it had initiated its case against DCC.
Michael Cush SC, also for DCC, said the dealing issue was interconnected with the other issues in the case and the court should not visit on legal cost accountants the task of disentangling those issues. DCC also did not accept the breakdown of time spent on dealing issues which had been advanced by Fyffes.
Fyffes was saying that DCC should have admitted dealing from the start but, if Fyffes had faced up from the start to the facts on the issue of price-sensitive information, it would have conceded that issue and there would have been no trial and consequently no costs, Mr Cush said.
At the close of submissions, the judge said she would give her decision in the latter half of next week.
Following the costs judgment, Fyffes will have 21 days in which to decide whether it intends to appeal Ms Justice Laffoy's rejection of its action to the Supreme Court.
Fyffes brought the proceedings seeking some €85 million compensation for the share deals of February 2000 which, it claimed, breached "insider dealing" provisions of the Companies Acts. The action was against DCC plc and S&L investments, of DCC House, Stillorgan, Co Dublin; Mr Flavin, of Shankill, Co Dublin; and Lotus Green Ltd, of Fitzwilton House, Wilton Place, Dublin, a subsidiary of DCC to which beneficial ownership of the Fyffes stake was transferred in 1995 to avoid payment of capital gains tax in the event of any future disposal of the shares.
In her judgment last month, Ms Justice Laffoy found Mr Flavin did "deal" in Fyffes shares in relation to the February 2000 share sales but did not do so unlawfully.
She held the "only reasonable conclusion" from the evidence, particularly from tapes of phone conversations between stockbrokers and Mr Flavin, was that Mr Flavin had "controlled the whole process".
What was being said and done by Fyffes executives did not reveal any awareness by them in February 2000 that the information in their November and December trading reports was price sensitive, the judge found.
