Fyffes Plc v Dcc Plc & Ors

Factual and Procedural Background

This opinion concerns the issue of costs arising from litigation between Plaintiff and Defendants, relating to claims of unlawful dealing in shares. The proceedings involved complex factual and legal issues, including whether the Defendants engaged in unlawful dealing and whether certain Defendants possessed price-sensitive information at relevant times. The Plaintiff brought claims against the Defendants, who contested liability and raised multiple issues of fact and law. The court had previously determined the event in favour of the Defendants overall, but the Plaintiff sought to exclude costs related to a discrete issue—the dealing issue—on which the Defendants did not succeed. This judgment addresses the parties’ submissions on costs following the trial.

Legal Issues Presented

1. Whether the normal rule that costs follow the event, as governed by Order 99 of the Rules of the Superior Courts 1986, should be applied in full in this case.
2. Whether the court should exercise its discretion to exclude from the Defendants’ costs award the costs related to the dealing issue, which was decided against the Defendants.
3. The extent to which substantive factors and conduct of the parties may justify departing from the general rule that costs follow the event under Rule 1(4) of Order 99.
4. The appropriate form of order relating to costs if the court decides to partially disallow costs claimed by the successful Defendants.

Arguments of the Parties

Defendants' Arguments

• The normal rule that costs follow the event should apply, entitling the Defendants to full costs, including reserved costs, as they were successful overall.
• The dealing issue was a legitimate defence on liability, involving complex legal principles and factual inferences, and was not a frivolous or dishonest position.
• The Defendants acted honestly and with a genuine belief in their case, as evidenced by witness testimony and pre-trial correspondence.
• Any departure from awarding full costs would require exceptional circumstances, such as clear findings of dishonesty or special cause, which are absent here.
• Logistical difficulties would arise from excluding costs relating only to the dealing issue, so if any reduction is made, it should be by disallowing costs for a number of hearing days rather than percentage reductions or segregated costs.
• Litigation at this level inevitably involves unrecoverable costs such as management time and reputational damage, which do not affect the costs award.

Plaintiff's Arguments

• While the Defendants won overall, the dealing issue was a discrete and separate issue decided against them, and costs relating to it should be excluded from the Defendants’ costs award.
• The dealing issue was based on facts internal to the Defendants and known only to them, and they deliberately adopted a stance that prolonged the proceedings and caused unnecessary expense.
• The third Defendant was a director of the Plaintiff at relevant times and should have provided a complete and accurate account, particularly after receiving relevant transcripts, but failed to do so.
• It would be fundamentally unjust for the Plaintiff to bear the costs of the Defendants’ approach on the dealing issue, which was an artificial construct designed to confuse the reality.
• The exceptional length and complexity of the case, and the discrete nature of the dealing issue, justify exercising the court’s discretion to depart from the normal rule.
• If costs are to be disallowed, the Plaintiff proposed either excluding all costs related to the dealing issue or disallowing a percentage of the costs or costs for certain hearing days.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by acknowledging that the right to costs is governed by Order 99 of the Rules of the Superior Courts 1986, specifically Rule 1(4) which provides that costs of every issue of fact or law shall follow the event unless otherwise ordered. The general rule is that costs follow the successful party. The court noted the burden lies on the party seeking to displace this rule to show special cause based on the facts of the case.

The court examined relevant authorities, particularly the Supreme Court decision in Grimes v. Punchestown Developments Co. Ltd., which confirmed that while costs generally follow the event, the court’s discretion may be exercised to depart from that rule based on substantive factors and conduct related to the case. The court interpreted this discretion as encompassing all facts relevant to the case, including the parties’ conduct during litigation.

The Defendants’ reliance on Cooper-Flynn was found inapposite because it concerned jury trials governed by a different rule. The Australian case Byrns v. Davie was considered but distinguished due to differing statutory provisions and factual context.

On the facts, the court found the dealing issue to be a discrete and separate issue, decided against the Defendants, and based on facts internal to the Defendants. The Defendants had adopted a stance on this issue that increased the complexity and duration of the trial. The third Defendant’s position as a director of the Plaintiff at the material time imposed an expectation of full and accurate disclosure, which was not met, contributing to unnecessary prolongation and expense.

The court acknowledged the Defendants’ argument that they acted honestly and with a genuine belief in their case, and that the litigation was commercial and high-level, which generally demands adherence to the normal rule. Nonetheless, the court found the exceptional factual circumstances justified a limited departure from the general rule.

In balancing fairness and justice, the court concluded that the Defendants should be awarded costs of the proceedings except for the costs related to the dealing issue. To avoid the difficulties of segregating costs precisely, the court chose to disallow 80% of the costs of making discovery related to the dealing issue and the costs of 25 hearing days attributable to that issue.

Holding and Implications

The court’s final decision is that the Defendants are entitled to the costs of the proceedings except for specified exclusions related to the dealing issue. Specifically, the court ordered:

• 80% of the costs of making discovery related to the dealing issue are disallowed.
• The costs of 25 hearing days related to the dealing issue are disallowed.

This ruling represents a limited departure from the general rule that costs follow the event, justified by the exceptional circumstances of the case and the discrete nature of the dealing issue. The decision does not establish a new precedent but applies established principles of judicial discretion in costs to the particular facts. The direct effect is to reduce the Defendants’ recoverable costs accordingly, reflecting the complexity and conduct surrounding the dealing issue.