AG to act for Fyffes in court appeal

The new Attorney General, Paul Gallagher SC, will represent Fyffes in a Supreme Court appeal due to open on Monday. Colm Keena, Public Affairs Correspondent, reports.

Before he was appointed as Attorney General, Mr Gallagher advised the Taoiseach that he had a professional obligation in relation to one matter that would finish by the end of next week.

"The Attorney General does not intend to engage in private practice," a Government spokesman told The Irish Times.

"However, he has a professional obligation, which he disclosed prior to his appointment, to conclude one particular matter which will finish within the next week."

The case, an appeal against a decision in favour of DCC plc in a marathon insider dealing case in 2005, is expected to last a week.

Mr Gallagher was lead counsel for Fyffes in the hugely costly High Court hearing.

DCC's lead counsel in the High Court hearing, Kevin Feeney, has since been appointed a High Court judge. Persons appointed as judges must immediately cease all private work but the position is different with attorneys general.

DCC's legal team in the Supreme Court appeal will be led by Michael Cush SC, who played a major role on DCC's side in the High Court hearing.

Fyffes is expected to argue that Ms Justice Mary Laffoy erred in three aspects of her 367-page judgment at the end of the long and extremely costly civil case.

In her judgment, Ms Justice Laffoy found that confidential information available to DCC chief executive and then Fyffes non-executive director Jim Flavin "was unquestionably bad news about Fyffes' trading and earnings performance" at a time when DCC offloaded Fyffes shares worth €106 million.

However, she ruled that the information was not price sensitive and, therefore, there was no insider dealing.

She rejected DCC's argument that Mr Flavin had not dealt in the shares but, as she had ruled that the information he possessed was not price sensitive, this did not matter.

When Fyffes announced its decision to appeal last year, DCC said it was confident there were no good grounds of appeal and said it would challenge the appeal "vigorously and comprehensively".

Fyffes will argue in the Supreme Court that Ms Justice Laffoy failed to draw the correct inference from a number of critical facts found by her.

It will also argue that the judge applied the wrong test to determine the materiality of the information in Mr Flavin's possession at the time of the share sales and that this wrong test was itself applied incorrectly.

The 87-day clash in the High Court is believed to have cost approximately €20 million in legal fees and the Supreme Court appeal will add to that figure.

In her ruling, Ms Justice Laffoy ruled that Fyffes should pay the costs of the hearing, bar 20 per cent of DCC's own costs.

This latter aspect of her ruling was in view of her finding that Mr Flavin had dealt in the Fyffes' shares, contrary to what had been claimed by DCC and Mr Flavin.

The court did not accept evidence that Lotus Green, a subsidiary based in the Netherlands, had dealt in the shares.

Lotus Green was set up as part of a tax structure established by DCC and aimed at avoiding capital gains tax arising from the profits made from the sale of the Fyffes shares.

The share sales occurred on three dates in February 2000, just one month before Fyffes issued a profit warning. The profit warning led to a drop in the Fyffes share price.