The Supreme Court allowed Fyffes plc’s appeal on whether its November and December 1999 trading information was price-sensitive. It found that if the information had been generally available on the dates of the share sales in February 2000, it would likely have materially affected Fyffes shares. The judgment identifies that issue as the sole issue on appeal; it does not state a final order on Fyffes’ claim for an account of profits.
Fyffes had sued DCC plc, S & L Investments Limited, James Flavin and Lotus Green Limited over the sale of more than 31 million Fyffes shares between 3 and 15 February 2000. It sought a declaration that the sales were unlawful under Part V of the Companies Act 1990 and an order requiring the defendants to account for profits. The High Court had dismissed the claim after an 88-day hearing, finding that the information was not price-sensitive. Fyffes appealed that conclusion.
The November and December management reports recorded losses and trading shortfalls, particularly in the banana business. The trial judge considered the reports authoritative, detailed and precise, and accepted that they were “unquestionably bad news” about first-quarter trading. She found a real risk the company would miss its own and analysts’ expectations for the first half and full year. But she concluded that a reasonable investor would not expect the reports to affect the share price substantially, given the early stage of the financial year, interest in Fyffes’ internet venture and the company’s lack of a market announcement.
Justice Fennelly, delivering the Supreme Court judgment, held that the statutory question was whether disclosure would likely materially affect the market price. The test did not require the court to posit a “reasonable investor.” He also found that the trial judge should have considered the market’s response to Fyffes’ 20 March 2000 trading statement. That statement led to an immediate share-price fall of about 15%; in the Supreme Court’s view, it conveyed broadly similar, though less detailed, trading information, and the intervening market changes did not justify excluding it entirely.
The judgment rejected the view that enthusiasm for the worldoffruit.com venture necessarily neutralised the trading news. Even if that enthusiasm counterbalanced the bad news, the report could still have materially affected the share price; the statutory test did not require a price fall. The Court also held that Fyffes’ failure to announce the information did not defeat the statutory test. The finding of price sensitivity resolved the issue on appeal. The judgment does not set out a final disposition of the requested declaration or account of profits.