OMERS Administration Corporation & Ors v Tesco Plc
Manning & Napier Fund, Inc. & Anr v Tesco Plc
In a judgment delivered earlier this week ([2019] EWHC 3312 (Ch)), Mr Justice Hildyard rejected Tesco’s application to withdraw an admission that its 29 August 2014 trading update to the market (the “August Trading Update”) was an untrue or misleading statement within the meaning of s.90A FSMA 2000.
The application was made in high-profile Financial List proceedings in which two groups of investors claim losses of over £700m allegedly caused by reliance on Tesco’s periodic financial reporting over a number of years. The trial of the claims is due to take place from June to October next year.
Tesco admitted in its Defence filed some 32 months previously that the August Trading Update - the latest in time of the statements relied on by the Claimants - was untrue or misleading. Earlier this year Tesco sought permission to withdraw that admission and contend that, as a matter of construction, its statement was neither untrue nor misleading.
The Claimants said that Tesco’s new construction argument had no real prospect of success, there was no good reason for its belated change of position, and they would be prejudiced. They also argued that permitting withdrawal would be contrary to the interests of justice, because the argument Tesco now wished to run was inconsistent with the position it (and its UK subsidiary) had adopted in agreeing findings of market abuse with the FCA and a Deferred Prosecution Agreement with the SFO.
At the hearing on 1 October 2019, Tesco’s position was that its application and its new position were consistent with its public acceptance of the findings of the FCA and SFO, but that if the Court were to find otherwise, Tesco would not pursue the application.
Hildyard J concluded that the argument Tesco sought to run was inconsistent with its admissions in the regulatory and criminal proceedings regarding the untrue or misleading nature of the August Trading Update. This finding was dispositive of the application in view of Tesco’s stated position, but the Judge went on to consider the other objections raised by the Claimants and concluded that these led to the same conclusion that Tesco should not be permitted to pursue its proposed new argument in any form.
The judgment is available here.
Neil Kitchener QC, Richard Mott and Simon Gilson appeared for the SL Claimants (instructed by Stewarts)