Manning & Napier Fund, Inc & Anor v Tesco Plc

Applications concerning disclosure and late evidence are governed by reasonableness, proportionality and the overriding objective. Under the Disclosure Pilot, an existing disclosure order may be treated as an order for Extended Disclosure, and may be varied where the proposed exercise is reasonable and proportionate. An application to rely on very late evidence is subject to the relief-from-sanctions approach in Denton v TH White Limited [2014] 1 WLR 3926: seriousness and significance of the breach, good reason, and all the circumstances. An honest mistake about a clear case-management order may be understandable but is not necessarily a good reason. Relief should not be granted if the resulting disclosure would cause material prejudice or require expert evidence that would disrupt the trial timetable.

The court determined two applications at a pre-trial review in substantial claims by investment funds against Tesco. Tesco sought specific disclosure concerning the trustee’s supervision of its investment adviser, relevant to agency, reliance and causation. The claimants sought permission to rely on late supplemental evidence supporting a pleaded lost-profits claim of approximately $58 million.

The lost-profits claim had always been pleaded, but evidence and disclosure had not been served. The claimants had misunderstood case-management orders which reserved only quantum-calculation issues for a later trial. The central issues were whether the additional disclosure was necessary and proportionate, and whether relief from sanctions and permission to rely on the evidence should be granted shortly before trial.

1. Specific disclosure. The application was substantially resolved by an order requiring disclosure concerning the trustee’s supervision of the adviser and the relevant Tesco investments. The alleged agency relationship was potentially determinative because the claimants relied on investment decisions said to have been made by the adviser. The Investment Advisory Agreement was not necessarily definitive of the legal characterisation of the relationship. Its provisions concerning supervision, investment guidelines, compliance records and annual meetings justified further disclosure. A key-word search was not required for this exercise.
2. Late evidence. The failure to serve evidence concerning a claim exceeding $58 million was serious and significant. The claimants’ misunderstanding of clear orders was understandable but did not amount to a good reason. The further delay after the omission was identified, the imminence of trial and the consequences for Tesco’s preparation weighed against relief.
3. The court applied the three-stage approach explained in Denton v TH White Limited [2014] 1 WLR 3926. Failure at the first two stages was not automatically decisive, but it had to be weighed with all the circumstances, including the possible loss of an otherwise pleaded claim, prejudice to Tesco and diversion of judicial resources.
4. The court declined to amend the earlier orders merely to rescue the claimants from their mistake. Instead, it adopted a cautious, incremental procedure. The claimants were to provide sufficient, digestible disclosure by 14 August 2020. Tesco was then to identify any further disclosure or expert-evidence requirements. No relief from sanctions was granted at this stage; the application was to be restored for final determination after that exercise.

First-instance decision. No appellate history is stated in the judgment.