Persons Identified In Schedule 1 of the Claim Form (The "SL Claimants") v Tesco Plc (Rev 1)

In these two actions, the Claimants in FL-2017-000001 (“the SL Claimants”) and the Claimants in FL-2016-000019 (“the MLB Claimants”) claim against the Defendant company (“Tesco”) under section 90A and Schedule 10A of the Financial Services and Markets Act 2000 (“section 90A”, “Schedule 10A” and “FSMA” respectively) to recover substantial losses in respect of their investment decisions in relation to shares in Tesco which they made in alleged reliance on information published by Tesco and falling within Schedule 10A.

The shares in Tesco to which the investment decisions for which the Claimants now seek compensation relate were all held in what has come to be known as “dematerialised form” through a computer-based system called CREST (which stands for “Certificateless Registry for Electronic Share Transfer”) using custodians (which in turn used sub-custodians) to acquire, hold or dispose of those shares (as the case may be).

The Uncertificated Securities Regulations 2001 [2001 No. 3755] (“the USR”), which have enabled and prescribed the basis for title to securities to be evidenced otherwise than by a certificate and transferred other than by written instrument through CREST as the “relevant system” make clear that the legal owner is the person whose name appears on the CREST register (who must be a member of CREST). It is not the CREST member’s client or anyone else in the chain of intermediaries. (Footnote: ¹)

None of the Claimants held shares in Tesco as a registered member of CREST. In the case of every Claimant in these two sets of proceedings, the shares held through CREST were registered in the name of a bank or financial institution providing custodian services, as is almost invariable in the dematerialised market. None of the Claimants, therefore, ever directly acquired, held or disposed of a legal interest in any of the shares.

Further, and again as is entirely usual, most of the shares in Tesco held by custodians are held by them, not for a claimant, but for another intermediary in what is commonly referred to as a ‘custody chain’.

In a custody chain containing only one intermediary, that is, where the custodian is the trustee of the legal title for the relevant claimant and there are no further intermediaries between the custodian and the claimant, that claimant may have a direct beneficial or equitable interest. But, as (and with the consequences) I shall come on to explain at greater length, if the custody chain is longer, the claimant at the end of it is a beneficiary not of the trust of the legal title, but of a sub-trust.

Tesco has applied to strike out both claims on the basis that in such circumstances none of the claimants in a custody chain with more than one intermediary is a person to whom as an issuer it could be liable for any untrue or misleading statement in its published information under the relevant provisions of FSMA.

More particularly, Tesco’s position is that the consequence of this is that the interests of claimants in such a custody chain is not an ‘interest in securities’ within the meaning of paragraph 8(3) of Schedule 10A. Further, Tesco contends that, in any event, none of such claimants can properly be said to have ‘acquired, continued to hold or disposed of” any interest in securities (even if, contrary to Tesco’s first submission, they had one).

The question as to the nature of the interests held in a dematerialised market thus raised is a systemic one of considerable importance. Most transactions in publicly held shares in companies listed in an exchange in the UK are in dematerialised form through CREST. The position of the Claimants is entirely typical of the dematerialised securities market. The market is very considerable indeed. The availability of remedies for untrue or misleading statements which have been the reason for investment decisions is obviously of great importance.

If Tesco is correct in its submissions as to the true construction of the relevant provisions there is a fundamental hole in FSMA: the provisions enabling investors to vindicate their rights are unfit for purpose. The SL Claimants and the MLB Claimants submit that Tesco’s submissions are misconceived.

For the purpose of this strike-out application, it is common ground that the Court must assume that (a) Tesco’s published information was false (b) Tesco knew that the information was false (c) the SL Claimants and the MLB Claimants acted in reasonable reliance on that information and (d) they have suffered loss as a result. The evidence has gone to the workings of the market in dematerialised securities, and the manner in which the various Claimants held their investments in Tesco. It may be helpful to summarise key aspects of the CREST system.

CREST went live in July 1996. Until then, most transfers of interests in registered securities in the UK were effected by transfers of paper certificates. This system came under increasing pressure as trading volumes rose and brokers and transfer agents were unable to keep pace with the administration required.

A system for title to shares and transfers of such title in a computer-based system (a ‘central securities depository’ or ‘CSD’) became essential. CREST is the only CSD in the UK approved by HM Treasury. CREST is operated by Euroclear UK & Ireland Ltd which is the “Operator” for the purposes of the USR. The shares of most listed companies in the UK are now held in dematerialised (sometimes referred to as ‘uncertificated’) form through CREST.

The operation of CREST is regulated by statute. Only securities registered in the UK, Republic of Ireland, Isle of Man, Jersey and Guernsey are eligible for registration on CREST. Since 1997 the Listing Rules have required listed securities to be eligible for electronic settlement, and thus in practice all UK-listed securities are capable of settlement via CREST. An issuer can elect to make its securities wholly dematerialised; and paper shares are due to be phased out by 2025 at the latest.

Under the CREST system, shares are registered in the name of the CREST member. There are “system-members” and “personal members”. It is possible for an investor itself to become a CREST member, and some investors do so, but that is very expensive, and so it is more usual to use a “system-member”. Thus, the principal members of CREST are custodian banks and other large financial institutions.

Every system-member must nominate a bank to be its settlement bank. It is, therefore, usual for the ownership structure to include a chain of intermediaries (as in this case), with the CREST member at one end of the chain (referred to as a custodian) holding for another intermediary (e.g. another custodian) and so on until the ultimate investor at the other end of the chain.

The chain of ownership is in another sense indirect because fungible securities such as the Tesco Shares are typically pooled at each stage/link of a custodianship chain. Each CREST member has an omnibus account with CREST in which all securities of a particular issuer (such as Tesco) are held. Those securities are allocated in the books and records of the CREST member (but not of CREST itself) to its clients.

Where the CREST member is a sub-custodian, the custodian it holds for will typically have only an omnibus account with the sub-custodian which is operated in the same way. These omnibus accounts are segregated from the custodian’s own assets and the client has the right to call for the delivery up of the legal title to the securities to it or its order. The legal analysis apparent from the case law is that where the intermediary holds the securities for its account holders in a common pool the individual investor is co-owner in equity with other investors. (Footnote: ²)

The key feature of intermediated securities held in a custody chain is that the ultimate investor (meaning the person for whose account the securities are ultimately held) is given the benefit of a right without holding the right itself. (Footnote: ³) It has a “right to a right”. An investor in intermediated securities cannot enforce the rights attached to the shares (or other securities) against the issuer, although it is entitled to expect that those rights will be exercised in accordance with its wishes as expressed through the chain of interests.

Dematerialised securities are transferred by way of computerised book-entry transfers in the accounts of different CREST members. A useful summary of the working of the CREST system may be found in paragraphs 5 and 6 of the judgment of Lewison J (as he then was) in Mills v SportsDirect [2010] EWHC 1072 (Ch)⁴.

The custodian is not a party to, or involved in, the purchase contract. It is not an actor in the investment decision. The custodian will usually only find out about the purchase contract after it has been entered into. The custodian’s role is typically limited to settlement of the trades.

Settlement is the performance of the trade. The buyer nominates a custodian to which it wishes its legal title to pass. The seller will usually pass legal title from its preexisting custodian, although that is not inevitably the case. Settlement on CREST involves matching instructions being given and received by the seller’s and buyer’s respective custodians.

Where a seller and buyer have the same custodian, the custodian / sub-custodian may settle the trade by an internal book transfer, without any need to issue instructions to or inform CREST at all. This is called “internalised settlement” and legal title will (nominally at least) not change.

Clearing occurs after trading but prior to settlement: -

It follows that whether or not legal title to shares changes as the result of a share purchase or sale is largely a matter of mathematical fortuity.

Turning to the particular case, the way in which the Tesco shares were held in the case of the SL Claimants exemplifies the “custody chains” whereby dematerialised securities are held. The 11^th witness statement of Sean Norman Upson (made on 20 September 2019), who has responsibility for the conduct of these proceedings on behalf of the SL Claimants, he explains that in the SL Claim, the SL Claimants are all institutional investors but clarifies that there is a range of investment structures in the claimant group. Quoting from that witness statement:

“In some cases, the Tesco share purchases and retentions that are the subject of the claim were made by in-house investment management teams of large pension funds. In other cases, the purchases and retentions were made by an independent investment manager pursuant to an investment mandate from an institutional client, or by independent investment managers on behalf of collective investment vehicles marketed to individual and institutional investors in the US, Europe and Asia.”

Mr Upson continues:

“As is now common across international securities markets, the Tesco shares purchased and retained on behalf of most of the SL Claimants were not held directly by the institutional client or investment vehicle but held indirectly on their behalf by a nominee shareholder or an independent custodian. Where the SL Claimants engaged independent custodians, these custodians sometimes themselves held the shares for the SL Claimants’ account indirectly by using local sub-custodians and/or nominees. The indirect holding structure via a custodian and sub-custodian gives rise to the so-called ‘custody chains’, which are a common feature of institutional investment in UK listed securities.

…

In most cases, the custodian was a third-party custodian bank, such as State Street Bank and Trust Company, JPMorgan Chase and BNY Mellon. In the case of Claimant 9, Rathbone, the shares were held by a nominee within the same corporate group, Rathbones Nominees Limited.”

In the MLB Claim, the position of the MLB Claimants is explained in a skeleton argument on their behalf as follows:

Further, by assignments dated 13 and 20 September 2019, BNY Nominees and SS Nominees as Sub-Custodians assigned their rights with respect to the Shares (including any claims they may have arising from the transactions pursuant to which they were acquired or disposed of) to the MLB Claimants (“the Assignments”). Notice of the Assignments was given to Tesco by letters dated 16 and 20 September 2019.

The question is whether in the above circumstances, the SL Claimants and the MLB Claimants are persons who have acquired, continued to hold or disposed of Tesco Shares so as to have standing to sue for compensation under section 90A and Schedule 10A of FSMA.

Section 90A of FSMA (as in force since 2010) states that Schedule 10A makes provision about the liability of issuers of securities to pay compensation to:

“persons who have suffered loss as a result of (a) a misleading statement or dishonest omission in certain published information relating to the securities.”

Para 3(1) of Schedule 10A (introduced in 2010) provides for compensation to be paid:

“to a person who acquires, continues to hold or disposes of securities in reliance on published information to which this Schedule applies”

Paragraph 8 contains rules of interpretation which apply to Schedule 10A. Of central importance to the present application is the definition given in paragraph 8(3):

“References in this Schedule to the acquisition or disposal of securities include:

(a)

acquisition or disposal of any interest in securities, or

(b)

contracting to acquire or dispose of securities or of any interest in securities,

except where what is acquired or disposed of (or contracted to be acquired or disposed of) is a depositary receipt, derivative instrument or other financial instrument representing securities.”

The provisions of s.90A and Schedule 10A quoted above have been in force since 2010. Prior to then, the first version of s.90A (enacted in 2006) was in force. For present purposes it suffices to note that the earlier iteration of s.90A provided (in s.90A(9)(b)) that:

“references to the acquisition by a person of securities include his contracting to acquire them or any interest in them.”

Initially, Tesco sought to contend that absent proof of “special circumstances” only the legal owner would have a claim. Tesco quickly had to accept, however, that the effect of paragraph 8(3) in Schedule 10A is to extend the statutory cause of action to a person with an equitable proprietary interest as well as the legal owner of the securities.

There are two limbs of Tesco’s case as to the construction of paragraph 8(3) in Schedule 10A:

I shall elaborate on these limbs later by reference to the case law cited in respect of them; but it may assist to summarise now Tesco’s principal submissions:

Tesco accepts that its construction would render Schedule 10A ineffective in relation to claims by intermediated securities; but it contends that these consequences flow from a failure of the law in this regard to keep pace with developments in the market, and a failure in the legislative drafting to address properly the legal ramifications of

Lest at first blush it be thought that these arguments are over-technical, regrettably, the possible mismatch between the market practice of intermediation and the legal rules governing it is widely recognised. (Footnote: ⁴)

As far back as 2004 the Financial Markets Law Committee (“the FMLC”) recommended legislative intervention⁶. In 2014, the Law Commission observed that ‘the law may have been left behind by the speed of recent changes’; and it has just in August 2019 issued a call for evidence pursuant to a direction by the Government to conduct a ‘scoping study of investor rights in a system of intermediated securities’ (Footnote: ⁵), noting that there is ‘uncertainty as to the legal redress available to investors in certain situations.’ (Footnote: ⁶)

Academic commentators have expressed specific concern too: Professors Benjamin and Gullifer, for example, have recently noted that a claim under section 90 FSMA “is likely to run into difficulties in practice” because “it only applies where the claimant has ‘acquired securities’” and ‘it is not at all clear that this would include the situation where the claimant acquired intermediated securities.” (Footnote: ⁷)

In short, the issues raised are serious ones of obvious systemic importance. The question whether ordinary principles of equity are sufficient to enable a comfortable co-existence between legislation originally devised for certificated securities and the special features inherent in the now preponderant market in intermediated securities is of continuing interest.

As in the case of the arguments raised by Tesco, I shall need to elaborate on the arguments on behalf of the Claimants that even if serious, the concerns as to the inadequacy of the drafting to cater for intermediated securities are misplaced, and certainly any difficulties are well within the jurisdiction of the court to cure, especially given the legislative purpose and the antecedents of the legislation in an extended process of consultation and in the need to comply with European legislation. In summary, however, these arguments are:

I turn to address these competing submissions, which were considerably elaborated, in greater detail.

As indicated above in summarising the first limb of Tesco’s case, its foundation is that the words “interest in securities” are a reference to a proprietary, as distinct from a purely contractual or economic, interest in the securities themselves. Mr Mumford elaborated on this as follows:

Most of all, however, he emphasised that it is clear from the words ‘in the securities’ that the proprietary interest he submitted was necessary must be in the securities themselves, and not in some other property. He gave, as a simple example from the facts of this case, the following: suppose that X, a sub-custodian, is the registered holder and therefore the legal owner of the Tesco shares, and holds those shares on trust for Y, a custodian, and that Y in turn holds its beneficial interest on trust for Z,

In the Lehman Rascals case, Briggs J observed at para 226 that (emphasis added): “…a trust may exist not merely between legal owner and ultimate beneficial owner, but at each stage of a chain between them, so that, for example, A may hold on trust for X, X on trust for Y and Y on trust for B. The only true trust of the property itself (i.e. of the legal rights) is that of A for X. At each lower stage in the chain, the intermediate trustee holds on trust only his interest in the property held on trust for him. That is how the holding of intermediated securities works under English law, wherever a proprietary interest is to be conferred on the ultimate investor.” [Mr Mumford’s emphasis]

As to the last phrase, Mr Mumford acknowledged that Briggs J recognised that ‘a proprietary interest’ is conferred on the ultimate investor (B, in Briggs J’s example); but he submitted that this is to miss the point, which is that though the ultimate investor does of course have a proprietary interest, it is not a proprietary interest ‘in the securities’: it is a proprietary interest in the trust property which its own trustee (Y, in Briggs J’s example) holds on trust for it. That, he submitted, is why Briggs J emphasised that the only true trust of ‘the property itself’ is that of the legal owner for its immediate client; and while that immediate client may well hold its own interest on a sub-trust for the ultimate investor, the sub-trust is not of the Tesco shares themselves.

Mr Mumford referred to what he described as the basic principle that an equitable interest is a proprietary interest ‘in the trust property’: Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, 705F (Lord Browne-Wilkinson), and relied on that as meaning that there can be a proprietary interest ‘in the securities’ only if the trust property consists of the Tesco shares themselves, rather than an interest in Tesco shares.

The lesson, he submitted, is that it is crucial to identify what as a legal matter is the trust property. In a case where the legal owner acted as custodian for the claimant directly, the legal owner/custodian is the trustee of the shares of which it is legal owner and (assuming the application of English principles of law and equity) the claimant would have the equitable proprietary interest in such shares. But where there is a chain of intermediaries, so that there is at least one intermediary between the legal owner and the claimant, the trust property held by each intermediary after the custodian is not in the shares but in the trust of the trust. Mr Mumford submitted that once the trust property held at each stage of the chain is properly appreciated, it is clear that any claimant in a custody chain involving more than one intermediary had neither a legal nor an equitable interest in the Shares, only a right to performance of the trust. Mr Mumford also cited Sir Roy Goode QC’s statement that in a custody chain “[t]he subject matter of the sub-trust is the beneficial interest that the intermediary has, rather than the underlying securities themselves.” (Footnote: ⁹)

More particularly as regards the facts in the two proceedings, he emphasised that not only is none of the Claimants in either claim the legal owner of relevant shares; but also that:

Accordingly, Mr Mumford submitted that, except in the case of SL Claimants in a like position as RIML, none of the Claimants in either claim could have had any legal or equitable interest in the Tesco Shares.

As to the argument raised by the MLB Claimants that some of its ‘custodian’ arrangements were governed by (in some cases) New York law and (in other cases) Massachusetts law and that under such laws the MLB Claimants would be treated as having a “property interest” in the Shares, Mr Mumford submitted that English law governs the issue of standing and that the question whether the package of rights which each person in a custody chain has is to be categorised as proprietary or not is to be determined by English law. Mr de Verneuil Smith appeared to accept this, since he agreed that I should not be troubled at this stage of the proceedings with any issue as to the application of foreign law for the purpose of this application and making my determination as to what interest would suffice for the purposes of a claim.

On behalf of the SL Claimants, Mr Kitchener sought to dismiss as misconceived Tesco’s analysis to the effect that the statutory remedy is not available where the shares are held through a structure including at least one sub-nominee. He submitted that this would flout the intention of the statute without any good reason; and that the words “any interest” are words of broad import, not requiring the interest to be proprietary and easily capable of extending to the interests of the ultimate investor.

As indicated above, Mr Kitchener submitted in that regard that Schedule 90A “extends beyond proprietary interests”; but that even if it did not, Tesco is wrong to suggest that the ultimate investor in intermediated securities has only economic or contractual rights. Rather, their interests have the hallmarks of, and are, proprietary interests.

The true legal analysis, according to Mr Kitchener (supported by Mr de Verneuil Smith for the MLB Claimants) is that:

This, Mr Kitchener submitted, entirely accords with the analysis of the Law Commission in the “Intermediated Securities: Call for evidence” paper relied upon by Tesco:

Mr Kitchener further submitted that Parliament would not have used the words “any interest in” (a change from the word “an” in previous legislation) had it intended to exclude sub-nomineeship: and that Tesco had identified no reason for excluding investors who hold shares through sub-nominees (and thus most non-UK based equity investors and virtually all investors in corporate bonds).

Mr de Verneuil Smith, effectively on behalf of all the Claimants (since there was sensible co-operation between the Claimants in the presentation of different aspects of submissions to which both subscribed, which I much welcomed), added to these submissions the contention that the provisions in question are part of a legislative scheme intended to transpose into or at least reflect in domestic law the (European) Transparency Directive [Directive 2004/109/EC of 15 December 2004] and must be interpreted in conformity with its objectives. Mr de Verneuil Smith drew my attention to parts of the Explanatory Notes to the Companies Act 2006, and especially to note 1636, which states that the insertion of

“sections 90A and 90B into FSMA…establishes a regime for civil liability to third parties by issuers admitted to trading on a regulated market in respect of disclosures made public in response to provisions implementing obligations imposed by the Transparency Directive.”

He reminded me that ‘Hansard’ is admissible (as Mr Mumford and Mr Kitchener agreed it was) for the purposes of establishing the context in which a statutory provision has been introduced: and it is clear from the debate in Parliament when section 90A was enacted in its original form that (a) the Transparency Directive required Member States to ensure that an appropriate liability regime was in place in respect of disclosures required by the Directive, with a view to encouraging accurate and timely disclosure by issuers and promoting investor protection; (Footnote: ¹¹) and (b) HM Government concluded that the uncertainty about the scope of issuer liability at common law was such that a statutory regime was required to ensure that the UK had fulfilled its obligation to implement the Transparency Directive.¹⁴

Mr de Verneuil Smith also put weight on the fact that the amendment of s.90A in 2010 followed a comprehensive review (by Professor Davies and HM Treasury) of the statutory issuer liability regime, and a process of consultation which included submissions from market practitioners, city law firms and, for example, the FMLC. That process and the objectives and concerns expressed may illuminate further the purpose and intention of the legislation.

With this as the background, Mr de Verneuil Smith submitted that the ‘Marleasing principle’ (see the ECJ case of Marleasing SA v La Commercial Internacional de

To that end, Mr de Verneuil Smith submitted, I should, if necessary, (a) not be constrained by conventional rules of construction and (b) adopt as broad an interpretation as the words could allow, even if that involved departure from the strict and literal application of words or expressions in the provision which the legislature has elected to use, and (c) imply any words necessary to comply with Community law: see a summary of the application of the Marleasing principle in the judgment of Sir Andrew Morritt C in Vodafone 2 v Revenue and Customs Commissioners [2010] Ch 77 at [37] (citing also Pickstone v Freemans plc [1989] AC 66).

Accordingly, Mr de Verneuil Smith submitted that any doubt as to the ambit of the meaning of the expression “any interest in securities” should be resolved in favour of a construction giving effect to the intention of the Directive and the domestic legislation enacted to implement it which would ensure that those entitled to vindicate their right to compensation in respect of untrue or misleading statements in published information should include persons having the entire economic interest in shares acquired or disposed of on the faith of the statement, albeit that such shares might (at their direction) be held by custodians and sub-custodians in accordance with developing market norms.

As to whether such a facilitative or teleological approach was indeed necessary, Mr de Verneuil Smith emphasised that his primary case was that even adopting a stricter approach the expression was still broad enough to cover the derivative interests of his clients in respect of the Shares. He submitted that the expression “interest in shares” is not a term of art; but the prefix “any” makes clear the intention of the legislature that it should be of broad embrace; and even if (as he, though not Mr Kitchener, was content that it should be) it was limited to an interest which is proprietary in nature, still it was satisfied in the case of his clients. He submitted orally that the “pretty classic conventional understanding of what a proprietary interest is…is that it is an ability to call for and possess and enjoy the thing.” In answer to my questioning, he acknowledged that the investor at the end of the custody chain would not have the right to give instructions in respect of the thing to its legal owner; he had no such “direct right”; but by instructions, as it were, up the line it could indirectly convey such instructions and that would suffice as “any interest in securities”. He drew that distinction between a right and an interest: and the latter would, he submitted, suffice.

He bolstered this submission by reliance, in effect by analogy, with cases referred to in Spry ‘The Principles of Equitable Remedies’ 9^th ed. at page 89 on the position of a sub-purchaser with a specifically enforceable interest in the purchase, and especially

Mr de Verneuil Smith also tackled the Rascals case, submitting that it had been “mischaracterised and misunderstood”. I fear I may not thereby do full justice to his quite expansive reasons for so stating; but I think that the burden of them was that all Briggs J was explaining (at the relevant part of his judgment for these purposes, being [226]) was that the only “true trust of the property itself (i.e. of the legal rights) is that of the legal holder for the immediate custodian’’, which is, of course, obviously correct, but does not signify that therefore the investor has no qualifying “interest” in the securities under the series of sub-trusts which the rest of the custody chain represents. Although Mr Mumford in reply described this as merely a “convenient shorthand”, Mr de Verneuil Smith highlighted also that Briggs J (in the same paragraph) went on to explain that:

“That is how the holding of intermediated securities works under English law, wherever a proprietary interest is to be conferred on the ultimate investor.”

Mr de Verneuil Smith relied also on the decision of the Court of Appeal in the

On that basis, Mr de Verneuil Smith, with a slightly different perspective in this regard to that of Mr Kitchener, was content to restrict the scope of “any interest in securities” to any form of proprietary interest, provided that what he termed an

“indirect” proprietary interest was included within that concept. As to the notion of an “indirect” proprietary interest, he explained that what he meant was “the right to put another person in their shoes as the holder of their exclusive rights as owner” of the securities (Footnote: ¹²). Even if that right could only be exercised via instructions repeated along the chain, or by “collapsing” the sub-trusts pursuant to the principle in Saunders v Vautier (1841) Cr. & Ph. 240, he submitted that it should be treated as proprietary, citing the major trust text books (including Lewin on Trusts 19^th ed. at 1-046, Underhill and Hayton, ‘Law of Trusts and Trustees’ 19^th ed (2006) at 2-10) and Spry, ‘Equitable Remedies’. 9^th ed. (2014) at pp.89 to 90).

Mr de Verneuil Smith submitted that further support for this approach could also be obtained from a consideration of the definition of the expression “interest in a security” in the Uncertificated Securities Regulations 2001 (SI 2001/3755) (“the USR”), the enactment of which predated the coming into force of s.90A and Schedule 10A. The USR share a very similar context with s.90A: they have as their purpose the evidencing of title to uncertificated securities, and they make provision for transactions pursuant to which such securities are acquired and disposed of. By Article 3(1) of the USR, “interest in a security” is defined to mean:

“any legal or equitable interest or right in relation to a security, including –

(a)

an absolute or contingent right to acquire a security created, allotted or issued or to be created, allotted or issued; and

(b)

the interests or rights of a person for whom a security is held on trust or by a custodian or depositary.”

Mr de Verneuil Smith submitted that where the same expression is used in two similar contexts, a statutory definition in one context may be persuasive in the other: ‘Craies On Legislation’, 11^th ed. (2017) at 20.1.38; and M v Advocate General for Scotland [2013] CSOH 169; and that accordingly it may properly be inferred that the legislature had this definition in mind when the expression “any interest in securities” was used with respect to section 90A. If the USR definition were applied by the Court here, it would enable investors with proprietary rights in securities such as the MLB Claimants to bring claims for compensation under s.90A. Such persons would satisfy the statutory requirements by virtue of their falling within the opening words of the definition, or within sub-para

However, and although Mr de Verneuil Smith thus focused on the sufficiency of any form of proprietary interest, and was plainly reticent in suggesting any wider meaning, primarily (as it seemed to me) for fear of increasing the risk of so broadening the scope as to increase the risk of multiple and possibly conflicting claimants, he did in the alternative submit that even if the language was strictly inapt, its intention to give a remedy to acquirers or disponors of interests held through subtrust in the intermediated securities market was clear and if necessary a sufficiently expansive meaning should be supplied to give the words meaning to achieve that objective accordingly.

It is unsettling that the expression providing the touchstone of standing to make a claim for compensation in respect of untrue or misleading statements or omissions in listing particulars or a prospectus should be open to such legitimate disputation and doubt in its application to market norms. The intermediated securities market is of great practical importance and huge significance to the financial strength of UK plc: uncertainty is the enemy of stability and reliability in financial markets. It may be regretted that legislation intended to modernise should adopt expressions derived from a now almost defunct way of doing business. It is quite plain that intermediated securities held through CREST, as most are and all shortly will be in the UK market, are not the same as securities held directly in certificated form, even though economically they are the same. It is in some way surprising that this was not expressly recognised and provided for in FSMA. It appears that the FMLC recognised

The problem is compounded by what I regard as mixed messages from previous legislation. I have found it as much ground for concern as ground for comfort that in the USR 2001 a very similar expression (“interest in a security”) to that in issue in respect of sections 90 and 90A and Schedule 10A of FSMA is carefully defined. Whereas the Claimants fastened on this as a guide to the intended meaning of the expression used in FSMA, Tesco quite logically relied on the conspicuous absence in FSMA of a definition already crafted in the USR as a signal that the extended meaning was not intended to be adopted in FSMA, and that there was not intended to be parity of meaning between them. Although the genius of the common law is in working and fashioning answers to the interstices in legislation, the gap in this case is an uncomfortable one. To plug the gap with too broad a definition exposes the issuer, contrary to the invariable practice of the court, to indeterminate liability to an indeterminate class and/or uncertainty as to which of multiple claimants has the better claim. Against that, a deficient plug exposes the market to abuse and inadequate vindication of commercial wrongs.

I agree with Mr Mumford on a number of steps in his helpful analysis. As will already be apparent, I readily accept that where there is a chain of intermediaries, the investor at the end of the chain does not have any direct proprietary interest in the underlying security, nor can it enforce any rights held in the chain of sub-trusts directly against the issuer. As Briggs J explained in the Rascals case, the subject-matter of each subtrust in the custody chain is the beneficial interest that the intermediary has and holds on trust, rather than the underlying securities themselves.

I also accept that the concept of an or any “interest in securities” must denote something more than a contractual right or economic interest in such securities if the ‘custody chains’, which by the time of the enactment of FSMA in its latest form had become the market norm and must have been taken to have been in the contemplation of the draftsman, are to have any legal sustainability. There are a number of reasons for this: two seem to me to be paramount. First, the custody chain would be a frail thing, liable to be broken by the insolvency of any intermediary, if the rights had not some other quality which took them out of the ‘property’ of such intermediary for insolvency purposes. Secondly, and also as indicated previously (as in argument), if any personal right or economic interest were to be sufficient to satisfy the expression “any interest in securities”, the class of complainants would be quite indeterminate, and almost inevitably competing and conflicted.

I also accept Mr Mumford’s insistent warning, especially by reference to the Westdeutsche case, that it is essential not to bandy around the notion of equitable interest or proprietary right without carefully identifying its real subject matter; and that it is similarly wrong to treat sub-trusts as if they were contrivances which could be looked through for the purposes of identifying the true interest held by the ultimate investor. (Footnote: ¹⁵)

Lastly, in this list of areas of agreement with Mr Mumford’s analysis, I accept his argument that the ‘tailpiece’ to paragraph 8(3) of Schedule 10A does not suggest any widening of the meaning of either “Securities” or “any interest in securities”. I agree with Mr Mumford that the ‘tail-piece’ or ‘carve out’ is there to ensure that the issuer should not be liable in respect of separately traded derivative instruments, which might otherwise loosely be treated as conferring an interest in the underlying securities represented by the derivative instrument, but which have not been admitted to trading on the securities market with its consent (and see paragraph 1 of Schedule 10A). I do not agree with Mr Kitchener that the carve-out of “a depositary receipt, derivative instrument or other financial instrument representing securities” signifies that something less than a proprietary interest would suffice since otherwise (to quote his skeleton argument) “if “any interest” was as narrow as Tesco contends, the interests carved out would not come close to qualifying under paragraph 8(3).” That would be to load too broad a significance on the ‘tailpiece’.

Where I part company with Mr Mumford is in the conclusion to be drawn from the above analysis. Mr Mumford submits that the interest of the investor, not being a directly enforceable trust interest in the securities, must therefore be personal or economic and not equitable and proprietary, and thus insufficient. In my judgment, the ‘right to the right’ which the investor has via the custody chain is, or can be equated to, an equitable property right in respect of the securities, and this is sufficient.

Mr Mumford, when I questioned him, chose to depict Briggs J’s description of the investor as the “ultimate beneficial owner” as being simply a “convenient shorthand”, which should not be taken to signify any view as to whether the investor in law had a proprietary interest in the securities. But I think Briggs J meant what he said, and (as one might expect) used the term advisedly to denote the proprietary interest vested in the investor through the custody chain; whether that is more properly characterised as an interest in relation to the underlying securities, rather than an interest in them, does not appear to me to matter: it is still capable of being within the embrace of the expression “any interest in the securities” within the meaning of Schedule 10A.

To my mind the analysis, and a further explanation of what Briggs J meant by describing the investor as the “ultimate beneficial owner”, is to be found in another case arising out of the Lehman administration, In the matter of Lehman Brothers International (Europe) [2012] EWHC 2997 (Ch). There at [163] Briggs J said this:

“It is an essential part of the English law analysis of the ownership of dematerialised securities that the interests of the ultimate beneficial owner is an equitable interest, held under a series of trusts and sub-trusts between it, any intermediaries and the depository in which the legal title is vested: see paragraph [226] of my judgment in the RASCALS case.”

Put another way, there seems to me to be semantically no real doubt that the investor has an “interest” in the securities; and similarly, there is legally no doubt that such interest is equitable/proprietary; those are the hallmarks of beneficial ownership, as Briggs J terms the interest of the investor; and their presence suffices to qualify as “any interest in securities” for the purpose of Schedule 10A.

It would, to my mind, be odd to deny that the ultimate investor has such an interest. No one but the investor can claim any right of ownership beneficially, nor is the property in the share available in the event of the bankruptcy of any intermediary to any of its creditors: only to the investor whose ‘property’ in reality it is.

In the result, I have concluded that the expression “any interest in securities” can, by application of established distinctions between rights which are merely economic, contractual or personal, and rights which are in equity at least ‘proprietary’, be given sufficiently certain meaning to confine the class of potential claimants so as not to expose the issuer to indeterminate liability to an indeterminate class whilst also ensuring proper vindication consistently with the admitted objectives of both the domestic legislature and the Transparency Directive.

In my judgment, the expression denotes something more than a mere personal or contractual right; the expression “ultimate beneficial owner” captures the position of the investor as the owner of “a right to a right” held through a waterfall or chain of equitable relationships which is unaffected by the insolvency of his intermediary, and enables it ultimately, even if indirectly, to enjoy the benefit of the bundle of rights which the securities represent to the exclusion of others (unless the ultimate beneficial owner has transferred them away, for example to a chargee).

In any event, in my judgment, even if the above analysis requires review, restriction or other refinement, the rights of persons holding intermediated securities through CREST, such as I understand all the Claimants to be, comprise an “interest in securities” such as to confer standing to sue under FSMA for compensation in respect of any untrue or misleading statement or omission in Tesco’s published information if they can show that they did “acquire, continue to hold or dispose” of the securities in question in reliance upon that statement or omission.

I am fortified in that conclusion by the consideration that the adoption of this available interpretation as a matter of semantics is necessary to fulfil the purposes of the legislation. That consideration is the stronger given that, although Mr Mumford disputed this, it seems to me that these provisions were intended also to ensure a proper statutory regime of investor remedies for false statements or omissions required by the Transparency Directive in order to give teeth to the disclosure regime it requires, and compensation for breach of its rules.

Further, having regard to the long and detailed review of the legislation, and the process of commentary and debate which preceded its enactment in its present form, I cannot agree with Mr Mumford that the draftsman and legislature simply overlooked or misunderstood the process of intermediation or its legal attributes, and unwittingly deployed language which cannot conform to it. In my view, I must proceed on the basis that the draftsman and legislature did understand the market in intermediated securities, did not intend to strip away the rights of investors who chose that mode of holding their investment, and must have been persuaded that the words they used were appropriate to preserve and enhance such rights. Unless the words cannot be made to bear the meaning intended, then they should be made to do so. That seems to

In short, whilst personally I might query whether the adoption of some suitably altered form of definition such as is in the USR might have been wiser, I do not see such mismatch between the plain practical objectives of the statutory provisions in question and the legal concepts which bind me that they cannot be reconciled.

I consider that the risk of multiple claimants, whilst important, is likely to prove more theoretical than real on the approach which I favour; and in any event, in my judgment, it is not sufficient to justify confining the application of the section so as to render it practically of no use or purpose in the context of the main market for shares. It is dangerous, and often foolish, to seek to extrapolate a general rule or proposition from a particular circumstance, and I would not wish to be thought to be doing so; but my conclusion that the ultimate investor, as ultimate beneficial owner, does have standing, does not connote that anyone else than (probably) the legal owner does also.

The possibility of the legal owner also having standing is a risk inherent in any situation where equitable ownership and legal title are separate. Even in a certificated market, with no custody chain but where the securities are held (as was very usual) in a nominee or ‘street name’, there could be two claimants: the legal and the beneficial owner. In my view, however, the risk is unlikely to eventuate or cause a substantial problem. The custodian, though the holder of the legal interest, is (as previously noted) unlikely to have been more than a passive recipient, who will thus not have made any investment decision in reliance on published information, and so will have no claim under section 90A and Schedule 10A. The possibility of a claim under section 90 FSMA, in which context proof of reliance is not necessary, cannot be excluded; but it is not at all clear why a legal owner would wish to bring a claim in competition with the ultimate beneficiary; and if it did so, it should not be beyond the power of the Court to insist on a single claimant to vindicate the same right.

For the avoidance of doubt, I should not be taken to be deciding that persons having a lesser or more indirect interest, such as beneficiaries under a trust entirely separate from the intermediary chain in which relevant shares were held by the ultimate investor is trustee, or a company holding the shares in the ultimate investor (both being possibilities canvassed by Mr Mumford), would have standing under otherwise applicable provisions of FSMA.

All I am deciding is that for the reasons I have given, the Claimants have in each case an “interest in securities” sufficient to enable them to maintain proceedings for the purposes of section 90A and Schedule 10A FSMA, and these claims should not be struck out unless Tesco can establish its second limb of argument.

The second limb of Tesco’s case is intended to cover the position of Claimants which do have an “Interest in securities”, either because of being in a direct relationship with the only custodian or because it is to be assumed that (contrary to the first limb of Tesco’s case) all the Claimants have such an interest. Tesco’s second limb of argument is that, even in those circumstances none of the Claimants can sue because none can be said to have “acquired” or “disposed of” their interest in Tesco shares within the meaning of paragraph 8(3).

In Tesco’s skeleton argument, Mr Mumford illustrated his argument by reference to the Rathbone Claimants (see paragraph [51(1)] above), they being examples of claimants with a direct relationship with the legal owner. He accepted that a transfer by the legal owner (RNL) to someone else would plainly be a “disposition” of that legal title covered by paragraph 8(3). Equally, if RIML had assigned or sold its equitable interest, that would also have been covered. But, he submitted, that is not the Claimants’ case. Their case is that each acquisition or disposal of Tesco shares by

Mr Mumford’s point is that the Claimants’ construction of paragraph 8(3) therefore depends upon the proposition that it is possible to ‘acquire’ or ‘dispose of’ an interest without any dealing in that interest; which he submitted could not be so, on the basis that properly construed, there can be an ‘acquisition’ or ‘disposal’ of an interest in securities only if there is a transfer of, or dealing in, that interest (as distinct from some other interest) by the disponor. If that is right, Mr Mumford submitted, it necessarily follows that a purchase or sale by the legal owner of legal title does not constitute a purchase or sale of the beneficial interest: the beneficial interest may be created or extinguished, but it is not ‘acquired’ or ‘disposed’ of for the purposes of the paragraph and Schedule 10A. (Footnote: ¹⁶)

Mr Mumford elaborated on this argument as follows:

Section 53(1)(c) is disapplied to transfers within the CREST system: see regulation 38(5) of the 2001 Regulations. But Mr Mumford submitted that this disapplication is not exhaustive and is not engaged where a transfer is made without using the system (e.g. a transfer by an internal book-entry): see Law Commission Consultation (above), para 2.78.

Vandervell v IRC [1966] Ch 261, 298.

As may already be apparent, the SL Claimants offer an entirely different perspective on paragraph 8(3), on which for their part they rely as demonstrating an intention on the part of the legislature to attribute a broad scope to the application of section 90A. They submit that its purpose is plain and is to ensure that it is the fact of the acquisition or disposal of a security or any interest in a security (or any contract for such acquisition or disposal) made in reliance on false information, rather than the exact mode (or legal characteristics of the mode) in which the security or interest is held at the time of the claim, which is the touchstone of standing.

Mr Kitchener thus submitted that, whatever may be the strict legal meaning of

“interest in securities”, sub-paragraph 8(3)(b) informs the process of construction and extends the protection afforded by section 90A to persons who have entered into a contract for the acquisition or disposal of shares in reliance on published information, whether or not at the time of claim they have an equitable or proprietary interest, and whether or not the right under the contract is characterised as equitable, proprietary or purely economic.

Mr Kitchener, in his oral address, elaborated on this in submitting that the provision “shows that the draftsman of FSMA was not concerned exclusively with the protection of proprietary rights, because here he is showing that he is concerned to protect purely economic rights; rights under executory or executed contracts.” (Mr Kitchener allowed that the generality of this was specifically cut down by the exception for the acquisition or disposal of depositary receipts, derivative instruments or other financial instruments representing securities in what the parties referred to as the “tailpiece” of paragraph 8(3), but submitted that this in no way undermined his point.)

In response to Mr Mumford’s contention of a more limited meaning, Mr Kitchener submitted that the words “acquisition” and “disposal” covered any process whereby the investor obtains or ceases to have any sort of interest in the relevant thing, citing in further support the broad meaning accorded in dictionaries and in such cases as Congreve & Congreve v IRC [1946] 2 All ER 170 at 183, (Footnote: ²⁰) where Wrottesley J commented:

“As used by lawyers the word ‘acquired’ has long covered transactions of a purely passive nature and means little more than receiving”

Mr Kitchener submitted accordingly that (a) the natural meaning of the word “acquire” would include a situation where an investor has acquired a security, obtaining a beneficial interest himself and directing that legal title be transferred to his nominee; (b) that the words “continues to hold” take meaning from their context. A remedy in the case of a person who “continues to hold” securities and interests in securities was first introduced following the Davies Review. The words simply mean that the investor has retained what had been previously acquired; and that (c) the word “dispose” must likewise be seen in the context of the words “acquires, continues to hold or disposes”, and that in that context its natural meaning includes any dealing by which the investor no longer “continues to hold” what he had previously acquired.

As to Tesco’s submissions based on Akers v Samba and Vandervell (see paragraph [96] above), Mr Kitchener sought to distinguish both as confined to their particular contexts, as follows:

Mr Kitchener concluded that the permissible broad range of the expressions “acquisition” and “disposal” in other contexts should be adopted in this case.

Further or alternatively, he submitted that the SL Claimants had plainly “contract[ed] to acquire securities or any interest in securities” in that:

Lastly, Mr Kitchener returned to the combined effect of paragraphs 8(3)(a) and 8(3)(b) and submitted that “It cannot sensibly be suggested that a contract to acquire legal title attracts protection but that paragraph 8(3)(a) excludes a case in which the contracting party performs that contract by directing the seller to deliver legal title to the investor’s nominee.”

The MLB Claimants largely shared this perspective and adopted this construction, although (as explained previously) their focus was more upon the meaning of “any interest in securities”, which they contended must include a proprietary interest, which they state under US law governing the intermediation chain they plainly have. Certainly, they shared the view that Tesco’s argument is unsustainable, and in their skeleton argument suggested the following example where an investor instructs its custodian (as trustee) to purchase and then sell securities as a demonstration of this:

In agreement with Mr Kitchener that the authorities relied on by Mr Mumford (Akers v

Samba and Vandervell) to seek to demonstrate that there could be no qualifying

“acquisition” or “disposition” of the investor’s equitable interest under the sub-trust of which it is beneficiary by reason of the acquisition or disposition of legal title by the custodian at the beginning of the custody chain were applicable only in their specific contexts and not, in any event, in this context, Mr de Verneuil Smith concluded that paragraph 8(3)(b) gave his clients standing whether or not their interest could legally be characterised as “any interest in the securities”.

My conclusions as to the second limb

Mr Mumford’s argument that none of the Claimants ever did anything that can legitimately be characterised in law as an acquisition or disposal of the Tesco shares or any interest in them depends upon a narrow interpretation of the expressions ‘acquisition’ and ‘disposal’ as used in Schedule 10A, and in particular, their confinement to a dealing in the very interest which such Claimant has or had (otherwise than by extinguishment effected by a dealing in some other interest).

I must admit to having found this second limb of Tesco’s argument somewhat counterintuitive in light of my decision on the first limb (and possibly in any event), and given that the draftsman must be taken to have known that this was the way of the market; but I accept that intuition will not suffice. More analytically, I cannot see that either Akers v Samba or the Vandervell case has any application or provides any prescription for the restrictive construction of the relevant provisions for which Mr Mumford presses.

As Mr Kitchener submitted, in Akers v Samba, the question was whether a transfer of the legal interest in shares held by Mr Al-Sanea constituted a disposition of the company’s equitable interest in those shares so as to trigger the application of section

In the Vandervell case, the position was in a sense the converse of Akers v Samba, because the transaction in question was instigated by the beneficiary and the issue was whether the passing of legal title by the legal owner at the instigation of the beneficiary was to be treated as passing the entire interest without the need for writing to satisfy section 53(1)(c) LPA 1925. The decision of the House of Lords, as expressed in a nutshell by Lord Upjohn at 311 F was that “the greater includes the less”. I agree with

Further, in Vandervell, Lord Upjohn explained (at 311) that section 52(1)(c) LPA 1925 was derived from the Statute of Frauds, and that

“the object of the section, as was the object of the old Statute of Frauds, is to prevent hidden oral transactions in equitable interests in fraud of those truly entitled, and making it difficult, if not impossible, for the trustees to ascertain who are in truth his beneficiaries. But when the beneficial owner owns the whole beneficial estate and is in a position to give directions to his bare trustee with regard to the legal as well as the equitable estate there can be no possible ground for invoking the section where the beneficial owner wants to deal with the legal estate as well as the equitable estate.”

I do not see in that case any suggestion that where a person (X) enters into a transaction pursuant to which, at X’s direction and for value, shares previously held on trust by a custodian and then through a series of sub-trusts ultimately for X become held by the custodian and then through a series of sub-trusts ultimately for Y, would not constitute a disposal by X and an acquisition by Y of an interest in the relevant shares. Nor do I see in that case any basis for a suggestion that separate writing would be necessary for the transfer of the ultimate interest in equity thereby effected. There is no question of any untoward or secret dealing such as to trigger section 53(1)(c): no person in the chain would have any right to object or dispute the transaction, nor would any person be in doubt as to their beneficiary.

The fallacy of Mr Mumford’s approach, as I see it, is to treat as irrelevant that it is the transaction which caused the vesting or ceasing to vest in the claimant of the interest in shares (however to be characterised) which, if made in reliance on an untrue or misleading statement or omission in qualifying information from the issuer, is the relevant trigger for liability. That transaction will have been instigated by the claimant, allegedly to its detriment, on the faith of the allegedly untrue or misleading statement or omission. The whole purpose of the relevant provisions of FSMA is to confer a statutory cause of action in respect of a transaction entered into in such circumstances. Unless the wording was without any semantic doubt entirely deficient to apply in such circumstances, ordinary principles of statutory construction require the court to ensure that the statutory purpose is not thwarted. As Lord Neuberger of Abbotsbury PSC expressly acknowledged at [66], the expressions “disposal” or “disposition” are plainly semantically capable of extending to a transaction which involves the destruction or termination of an interest; and it seems to me to be plain and obvious that the expressions “holding” and “acquisition” must in logic be given broad corresponding remit. There is every reason to give the expressions such meaning here, to ensure the achievement, rather than the negation, of the statutory purpose.

I do not consider that the Secure Capital case assists Tesco either. That case concerned only the contractual rights of account holders in respect of immobilised bearer notes held by a custodian in the Clearstream system. In such a system or arrangement, it is not the bearer note, but interests in the note, that are traded through Clearstream. In a “Programme Memorandum” it was stipulated that the bearer/holder of the notes “would be deemed to be and may be treated as its absolute owner for all purposes”; and the system operates on a “no look through principle” so that each participant in the chain of interests under a custodian only has rights against their immediate counterparty. The question was whether, by reason of a provision of Luxembourg law which, it was said and for the purposes of the application only accepted, conferred a direct right of action on Secure Capital as an Account Holder, Secure Capital could sue Credit Suisse in contract for alleged misstatement in the issuing material. The decision, upheld on appeal, was that it could not, and the “no look through principle” which was well understood to be the basis of trading on the market, prevailed. But here the claim is not in contract but under a statutory cause of action. Except in the sense explained below, which assists not Tesco but the Claimants, the decision in Secure Capital seems to me to have no application to this case.

Indeed, and as was pointed out in the SL Claimants’ skeleton argument, the judgment of David Richards LJ in the appeal in part undermines, rather than supports, Tesco’s case. David Richards LJ specifically said at [56],

“I emphasise ‘in contract’ because it is not suggested that a claim in tort, if sustainable, would be similarly barred”.

Academic commentary largely supports the proposition that investors would have a non-contractual claim. For example, Ms Gullifer and Ms Payne make clear when discussing the Secure Capital case that the ultimate investor would have claims against an issuer under FSMA ss.90 or 90A (as appropriate) notwithstanding the existence of an intermediated securities structure. (Footnote: ²¹)

Accordingly, I consider that any process whereby, in a transaction or transactions on CREST, the ultimate beneficial ownership of securities that are, with the consent of the issuer, admitted to trading on a securities market in accordance with paragraph 1 of

For comprehensiveness I should confirm that I do not regard this approach as invalidated or undermined in any way by the point made by Mr Mumford as to the derivation of paragraph 8(3) from a time before the existence of CREST and the development of the market in intermediated securities. The analysis I have adopted depends on the width of the expressions “acquire” and “dispose” and “acquisition”

On that basis, in my view, paragraph 8(3)(b) applies only where the acquisition or disposal is the subject of a contract that has not yet been completed, or where the securities are not yet in issue but the entire right to them when issued is acquired or disposed of (such as is or may be the position in the case of securities allotted on renounceable letters of allotment).

Lastly, and for comprehensiveness, I accept that the adoption of Mr Mumford’s argument would further have reduced any risk of multiple claims. But, for the reasons I have given in the context of limb I, I do not myself consider that to be more than a limited theoretical risk on the construction I favour.

In my judgment, therefore, neither of the two limbs of Tesco’s argument is sustainable. It follows that Tesco’s strike-out application must be dismissed.

The parties intimated that they might seek declaratory relief, as might certainly have been appropriate had I reached the opposite conclusion. It may be that in light of the conclusion I have reached, that is not necessary; and I would require convincing that any such relief would in the circumstances be appropriate. However, if any of the parties wish to contend to the contrary, they should notify me as soon as possible. Subject to that, I would invite Counsel to agree and provide me with a draft form of order. Any consequential matters can be dealt with after formal hand-down or at a convenient moment later.