A dispute broke out at the High Court yesterday over whether lawyers for Fyffes plc should have produced certain documents which DCC claims are crucial to and supportive of its denial of allegations that it breached "insider dealing" provisions of the Companies Act regarding a €106 million sale of the DCC stake in Fyffes in February 2000.

In its defence of the proceedings brought against it by Fyffes, DCC contends that Fyffes' own board did not itself believe in the first half of 2000 that information about the company's trading performance in the first quarter of the fiscal year 2000 (beginning November 1999) was price-sensitive.

DCC claims that Fyffes is only now making that claim to support its legal claim that DCC chief executive Mr Jim Flavin had price-sensitive information in January 2000 (which information showed a poor trading performance by Fyffes in the first quarter) prior to the sale of the DCC stake in Fyffes.

DCC contends that the documents read in court yesterday - which were made available by Fyffes to its lawyers but which the lawyers judged were not discoverable under categories agreed between the sides - support its defence.

The discovery dispute arose from cross-examination of Fyffes chairman Mr Carl McCann last week about shareholders' dissatisfaction from March 2000 with the falling Fyffes share price.

Mr McCann was asked whether there were any written records of complaints by shareholders and he said he was sure there were. Lawyers for Fyffes then produced a number of documents and DCC complained that these should have been produced prior to the case opening and that they were very relevant to its defence.

The documents in question include an exchange of letters from March 21st, 2000, between Fyffes' then chairman, Mr Neil McCann, and an unnamed shareholder arising from the shareholder's concerns about Fyffes' decision to issue a profit warning on March 20th, 2000, and querying whether all of the Fyffes board were aware of trading problems in the first quarter of the fiscal year 2000.

In his reply of May 11th, 2000, to the shareholder, Mr Neil McCann said it was Fyffes' experience that performance in November and December "has not proved to be a particularly accurate indicator of likely trading patterns for the remainder of the financial year, and a poor performance in those months in the past has not in itself resulted in a shortfall in the first half".

In her ruling yesterday on the documents issue, Ms Justice Laffoy said that, while the existence of the documents had only come to DCC's knowledge by accident last week during cross-examination of Mr Carl McCann, it was her view that Fyffes had responded promptly and bona fide to the matter, and it was unfair of counsel for DCC to criticise Mr Conor McDonnell, solicitor for Fyffes, regarding his explanation of the issue.

The judge upheld arguments by Mr Michael Cush SC, for DCC, that the documents fell within a certain category for discovery. That category related to documents dealing with whether an Irish Stock Exchange announcement might be required about Fyffes' trading performance.

Counsel for Fyffes had argued that they had understood such documents were time-limited and related to any consideration by Fyffes, at the time of the issuing of a profit warning on March 20th, 2000, of the timing of such an announcement. DCC argued that such documents were not time-limited.

The judge agreed that such documents were not time-limited and she said that DCC was entitled to have Mr Carl McCann recalled to be cross-examined on the documents in question. She noted that Mr Paul Gallagher SC, for Fyffes, had already offered to recall Mr McCann.

She added that it would be "prudent" for Fyffes to review discovery in the case, as Mr Gallagher had also offered. She would direct Fyffes to do so. DCC could also reserve its position on whether it required to recall other witnesses to cross-examine them about the documents.

Earlier, Mr Cush argued that much of his side's cross-examination of Fyffes' witnesses had been with a view to suggesting Fyffes' first-quarter results for 2000 were relatively insignificant and that Fyffes' witnesses were putting undue emphasis on the month of January. Had DCC had the documents in question when cross-examining, the documents would have supported DCC's case, he argued.

Mr Gallagher, for Fyffes, said his client's solicitors had made a judgment that the documents did not fall within the categories of discovery. In the course of the cross-examination of Mr Carl McCann, it emerged the documents were relevant, and they were produced forthwith, he said. He rejected Mr Cush's suggestion that his side was "fine-tuning" the discovery categories.

Yesterday was the 27th day of the proceedings, in which Fyffes claims that DCC and Mr Flavin organised three share sales in February 2000 which breached "insider dealing" provisions of the Companies Act 1990. The action is against DCC, Mr Flavin and two DCC subsidiaries.

The defendants deny the claims and plead that the sales, which yielded a profit of €85 million, were properly organised by DCC subsidiary Lotus Green Ltd.

Earlier yesterday, Mr Gerry Scanlan, a non-executive director of Fyffes and former chairman of AIB and the stock exchange, concluded his evidence. In cross-examination, he said he believed a December 14th, 1999 statement by Fyffes, which predicted that 2000 would be another year of growth for Fyffes, was a fair reflection of how the company felt at that time.

Mr Philip Halpenny, Fyffes' company secretary, began his evidence later yesterday afternoon. Mr Halpenny said the Fyffes board was told on December 9th, 1999, that the company was then behind budget and also behind the previous year's figures. He said that Fyffes' financial director, Mr Frank Gernon, had said the company could be €6.5 million behind budget by the end of December 1999 (part of fiscal year 2000) and €9 million behind the same period for 1999. He could not recall whether Mr Gernon made any reference to an outlook for January.

Mr Halpenny said he had drafted a preliminary results outlook statement which included a prediction that 2000 would be a year of "excellent" growth for Fyffes. He had not discussed that draft with anyone else before bringing it to the December 9th meeting. The board took the view that given what it had heard about trading, the statement was perhaps too optimistic, and the final wording was left for management to complete.

Mr Halpenny said he had no recollection that Mr Flavin had sought or received any assurances at the December 9th meeting that Fyffes would meet market expectations for 2000.

He said information received by board members in January 2000 about Fyffes' poor trading performance to the end of December 1999, with a forecast of likely poor trading for January 2000, was confidential and not generally available.

The case continues today.