The Supreme Court has reserved judgment on an appeal by Fyffes plc against the High Court's refusal to allow the fruit distributor inspect expert reports submitted by DCC to the Irish Stock Exchange, the DPP and the Garda arising from claims of insider dealing by DCC in Fyffes shares.
Fyffes had sought to inspect the reports in preparation for its legal proceedings, alleging that the sale of DCC's shares in Fyffes in early February 2000 breached insider dealing provisions of the Companies Acts. Those proceedings began last month and are expected to last for several more months before Ms Justice Laffoy.
Later in 2000, the stock exchange reported the sale of the shares to the DPP, who directed that a criminal investigation take place. It is ongoing.
After the stock exchange referred the matter to the DPP, DCC forwarded reports to the DPP which asserted that price-sensitive information was not used by DCC at the time of the controversial share sales.
When Fyffes sought to inspect the reports, DCC claimed they were privileged documents. That claim was upheld by Mr Justice Smyth in the High Court last November. Fyffes had argued that DCC had lost the right to claim privilege because they had already disclosed the documents to the stock exchange, the DPP and Garda. It appealed the ruling to the Supreme Court.
In submissions to the Supreme Court yesterday, DCC said it was concerned by the stock exchange's referral of the matter to the DPP because it raised the possibility of a criminal prosecution.
The company also expressed concern at "the cursory and unfair manner in which the investigation had been conducted" by the exchange and said its concerns were heightened by the fact that DCC had not acted in any way illegally and had not been afforded a proper chance to make its case.
Fyffes, in its submissions, contended that DCC had deployed their experts' reports to secure benefit for themselves and so that the DPP would decide not to prosecute the company. This was done in the context where DCC believed such a decision would operate to Fyffes' detriment in its civil claim against DCC, Fyffes argued.
According to Fyffes, DCC had said it was clear that, while the privileged documents were used by the company in an attempt to obtain an advantage, they were not used to the disadvantage of Fyffes in its civil action. There was neither mystery nor secret in the purpose and intention of DCC's disclosure of the document to the stock exchange and DPP.
A DCC document of September 24th, 2002, stated that, while there might not be a legal or procedural way in which the stock exchange could withdraw its file from the DPP, "we would win a tactical and strategic battle against the DPP if the stock exchange conveyed to the DPP that, with the benefit of information that has come to light subsequent to their original referral, they were unlikely to be helpful prosecution witnesses.
"In order for them to come to this view, it is likely they would have to re-analyse the price-sensitivity issue, probably by engaging (and properly briefing) another expert witness... Coupled with the mens rea (intent) issue, the undermining of Fyffes as a credible witness for the DPP and the likely inadequacy of whatever expert opinion the stock exchange had procured, the undermining of the stock exchange as a helpful witness would be a further reason why the DPP would have difficulty prosecuting."
Five expert reports sought by DCC found that DCC had not used information alleged to be price-sensitive when selling its shareholding in Fyffes.
Fyffes claimed that, on February 11th, 2003, Mr Peter Crowley of IBI Corporate Finance and Mr Donal O'Connor of PricewaterhouseCoopers wrote a joint letter to the stock exchange chairman, Mr David Kingston, stating they had advised DCC that it should "engage directly with the Exchange... and make available" its five independent expert reports for confidential review by the Exchange board.
On February 27th, 2003, Mr Kingston replied that the legal advice it had received, supported by the board's own conclusion, was that once the the case had been referred to the DPP, the stock exchange had no function in this case.
On January 27th, 2004, DCC chief executive Mr Jim Flavin recorded a memo of having called Mr Brian Healy of the stock exchange. It stated that Mr Healy confirmed both he and Mr Tom Healy, chief executive of the stock exchange, had had contact with the Garda.
Mr Flavin's memo read: "In response to my question as to whether he had any inkling as to the guards' disposition, Brian said that both he and Tom had gained the impression that they regarded the (expert) reports as being 'very conclusive' in our favour.
"I then asked whether there was any danger that the guards could have misinterpreted the Exchange's interest in the matter as in some way conveying a view that the Exchange wanted to see a prosecution brought about. Brian said there was no danger of this as the whole context of their contact had been all about getting a positive result for DCC."
Subsequently, DCC's solicitor wrote to the DPP stating that the material forwarded to the DPP was not privileged in so far as the DPP's office was concerned but was privileged as against any other third party.
DCC in its submissions said that the company had listed 14 documents for which it was claiming privilege. These were prepared solely for the current civil litigation and were protected by "litigation privilege". They consisted of expert reports and associated documents and memos.
DCC had argued before the High Court that not only were the documents privileged but that the limited disclosure to the stock exchange and DPP did not amount to a general waiver of the litigation privilege.
DCC argued in the Supreme Court yesterday that it never intended to waive privilege on the disputed documents by forwarding them to the stock exchange and DPP.
DCC "submit openly that they sought to use this privileged material for their advantage. They wanted to see an end to the criminal investigation/prosecution".
The company claimed the Exchange had an obligation under legislation "if it appears" that any person has committed an offence to report the matter to the DPP.
On September 1st, 2000, the Exchange said it was investigating the share sales and wrote to DCC, who gave what it believed were preliminary answers. DCC heard, through a newspaper report on November 20th, 2000, that the matter had been referred to the DPP. DCC had not been given an opportunity to make any representations.
