DCC plc Board Affidavit
DCC PLC
13 November 2007
Affidavit on behalf of the Board of DCC plc
The Board of DCC plc notes the application to the Irish Supreme Court by the
Director of Corporate Enforcement ('DCE') in Ireland, made on notice to Fyffes
plc and DCC plc, to be joined as a party in the civil proceedings between Fyffes
plc and DCC plc and others for the purpose of alerting the Courts to their
statutory powers to disqualify a person from acting as a company director or
officer where a Court sees fit in the course of any proceedings.
The Supreme Court today dismissed the DCE's application saying that this was a
matter for the High Court.
The Board of DCC and the other respondents vigorously challenged the grounds on
which the DCE based his application, as set out in the attached affidavit by
Michael Buckley, DCC's senior independent director, on behalf of the entire
DCC plc Board.
For Reference:
Gerard Whyte
Company Secretary
DCC plc
Tel: +353 1 2799400
Jim Milton
Murray Consultants
Tel: +353 1 498 0300
+353 86 255 8400
--------------------------------------------------------------------------------
144/06
THE SUPREME COURT
-----------------
BETWEEN:
FYFFES PLC
Plaintiff/Appellant
- and -
DCC PLC, S&L INVESTMENTS LIMITED, JAMES FLAVIN
AND LOTUS GREEN LIMITED
Defendants/Respondents
AFFIDAVIT OF MICHAEL BUCKLEY
----------------------------
WILLIAM FRY
Solicitors
Fitzwilton House
Wilton Place
Dublin 2
002439.021.OOS/GPS
--------------------------------------------------------------------------------
Record No. 144/06
THE SUPREME COURT
-----------------
BETWEEN:
FYFFES PLC
Plaintiff/Appellant
- and -
DCC PLC, S&L INVESTMENTS LIMITED, JAMES FLAVIN
AND LOTUS GREEN LIMITED
Defendants/Respondents
AFFIDAVIT OF MICHAEL BUCKLEY
----------------------------
I, Michael Buckley, of DCC House, Brewery Road, Stillorgan, Co Dublin, aged
eighteen years and upwards, Make Oath and say as follows:-
1. I am the senior independent director of DCC Plc and I make this Affidavit on
behalf of all of the Respondents with their authority and consent from facts
within my own knowledge save where otherwise appears and whereso appearing
I believe the same to be true.
2. I swear this Affidavit in respect of the application issued by the Office of
the Director of Corporate Enforcement dated 5 November 2007, and in reply to
the Affidavit sworn by the Director of Corporate Enforcement (hereinafter
referred to as 'the Director') on 2 November 2007.
3. The Director's application seeks an Order from the Supreme Court
joining him to the proceedings herein as a notice party for the purpose of
adverting to the power, both of the High Court and the Supreme Court, of
their own motion, to make disqualification orders pursuant to Section 160(2)
Companies Act 1990. As was stated in the letter sent to the Director by the
Respondents' solicitors on 26 October 2007 (Exhibit 'PA2' of the Director's
Affidavit), the Respondents believe that the jurisdiction of both courts
under Section 160(2) would not and could not be ousted by any order of the
Supreme Court remitting these proceedings to the High Court.
4. The Respondents wish to draw to the attention of the Court serious factual
inaccuracies and mis-characterisations of conclusions of the High and
Supreme Courts that are contained within the Affidavit of the Director,
which, in part, reflect public comments that have been made since the
Supreme Court Judgment and which are unfairly damaging to the Respondents.
In a number of paragraphs in his grounding affidavit, the Director
characterises the Respondents' actions as constituting insider dealing which
involved the Respondents using or exploiting inside information for their
own profitable benefit. This is a mis-characterisation of what was found by
the Courts. It is fair to say that insider dealing in a general context is
understood to involve the exploitation of inside information to gain an
undeserved profit and indeed in paragraph 16 of his Affidavit the Director
describes insider dealing in those terms. Nothing of that nature occurred in
the share dealings to which these proceedings relate. As was recognised by
the High Court in a finding that was unaffected by this Honourable Court,
there was absolutely no evidence that the price sensitive information was
used by any of the Respondents or had any bearing on the Respondents in
effecting the three share sales. The High Court noted that 'on any view of
the evidence that information simply had no bearing on the share sales'.
5. The breach of Part V of the Companies Act, 1990 contended for by the
Plaintiffs arose because the Third Named Respondent was in possession of
information which this Honourable Court has now determined was
price-sensitive at the time of the three share sales in February 2000.
I believe that everyone would agree that it would be a fraud on the market
for a person to exploit his access to inside information. However, I believe
it is wholly inaccurate, and indeed unfair, of the Director to seek to
categorise the dealings of the Respondents as constituting insider dealing
involving the exploitation, as distinct from the possession, of price
sensitive information. In the High Court, Judge Laffoy made a number of
important findings of fact, which were uncontested before this Honourable
Court. In his Judgment in the Supreme Court Mr Justice Fennelly stated
that in that regard 'it is a tribute to the extraordinary patience and care
of the learned trial judge that none of her findings of primary fact are
challenged on this appeal. Nor does either party question her conclusions
on several major legal and factual issues.'
Among Judge Laffoy's important findings of fact were the following:-
' In my view, in this case, the evidence is not open to the interpretation
that Mr. Flavin used the information contained in the November and
December Trading Reports which is alleged to have been confidential and
price sensitive, the negative information in relation to Fyffes' trading
and earnings performance in the first quarter of financial year 2000 so
as to enable the DCC Group to exit from Fyffes in a manner which would
avoid any share price impact which would ensue from the disclosure of
that information. In my view, on the evidence, it is clear that what
motivated Mr. Flavin in his involvement in the Share Sales and what
motivated the almost total exit of the DCC Group from Fyffes in
February, 2000 was the opportunity to make a substantial profit because
of the increase of the share price on the back of wof.com. The plaintiff
has not established any evidential nexus between the profit which the
share sales generated for the DCC Group and the use by Mr. Flavin or
the use by any of the boards of the corporate defendants, of the
confidential information contained in the November and December
Trading Reports. On any view of the evidence, that information simply
had no bearing on the share sales.'
' I did not understand the plaintiff to assert dishonesty on the part
of any of the defendants. In any event, I find that dishonesty was
not established on the evidence.'
' .... the plaintiff has failed to establish a breach of fiduciary duty
on the part of Mr Flavin.'
These findings, together with the fact that neither Mr. Flavin nor any other
director or executive of Fyffes had any appreciation at the time of the
Share Sales that the information in the trading reports was price sensitive,
demonstrate the unfairness and inaccuracy of the Director's
characterisations.
6. I believe and all other members of the Board of the First Named
Defendant/Respondent have informed me that they believe that the attempted
characterisation by the Director of officers of the Respondent companies as
persons whose actions in February 2000 may have damaged the market and may
have been contrary to the public interest is unfair and is an appraisal that
is not founded in the judgments of the High or Supreme Courts. The Board of
Directors of the First Named Defendant/Respondent believes the Respondents
should not be subject to reputational damage by reason of unfair
representations of what the courts have found.
7. In conclusion, I say that the Respondents do not believe that such an Order
as is sought by the Director is justified or necessary and that the making
or not making of such an Order would not affect the powers of the courts
in any way.
SWORN by MICHAEL BUCKLEY
this 9th day of November 2007
at Wilton Park House, Wilton Place
in the City of Dublin
before me a Commissioner for Oaths
and I know the Deponent
Peter C Hayes
Commissioner for Oaths
This Affidavit is filed on behalf of the Defendants/Respondents by WILLIAM FRY,
Solicitors, Fitzwilton House, Wilton Place, Dublin 2.
Filed this 9th day of November 2007
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