CL-2017-000323 - [2025] EWHC 2876 (Comm)

FACTS

I begin with such parts of the early background as are useful in understanding what follows, drawing on some material from my judgment at [2024] EWHC 3154 (Comm) relating to the committal of Dr Smith.

In March 2003, Orb a.r.l. (“Orb”), a private limited company registered in Jersey, entered into an agreement with Atlantic Hotels (UK) Ltd (“Atlantic Hotels”) a company connected to a businessman named Mr Andrew Ruhan. In simple terms, the agreement provided for the transfer to Atlantic Hotels of Orb's shares in Izodia Plc, a portfolio of 37 hotels, and a portfolio of development, commercial and warehouse businesses. Dr Smith was the chief executive officer of Orb.

On 29 March 2004, a discretionary trust was established in the Isle of Man on the instructions of Mr Andrew Ruhan (“the Arena Settlement”). Mr Simon Cooper and Mr Simon McNally were closely connected with the Arena Settlement: Mr Cooper was named as the Settlor, and they both were initially named as members of the class of beneficiaries. The assets settled into the Arena Settlement included the hotel portfolio and the portfolio of businesses.

On 18 February 2005, the SFO charged Dr Smith with offences of conspiracy to defraud and theft in connection with payments that he had procured from Izodia Plc between August and November 2002.

On 20 May 2005, the High Court (Administrative Court) made a Restraint Order in respect of Dr Smith’s realisable property, on the SFO’s application, under section 77 of the Criminal Justice Act 1988 (“CJA 1988”) in connection with the theft from Izodia. The Restraint Order also extended to others who were considered to hold Dr Smith’s assets, including his then wife Dr Gail Cochrane.

On 24 April 2006, Dr Smith pleaded guilty to ten counts of theft and false accounting contrary to the Theft Act 1968 and was convicted of stealing £35 million from Izodia. On 11 September 2006, he was sentenced to eight years’ imprisonment.

On 13 November 2007, a confiscation order was made against Dr Smith under the CJA 1998 in the sum of £40,956,911. Receivers were appointed in due course to enforce payment of the confiscation order (the “Enforcement Receivers”).

In 2012, proceedings were brought by Orb, Mr Thomas and Mr Roger Taylor, who are, or at least were, close associates of Dr Smith (Mr Nicholas Thomas having met Dr Smith in 1990) (“the Orb Claimants”) against Mr Andrew Ruhan and Messrs Cooper and McNally in relation to the March 2003 agreement that led to the transfer of Orb's assets to Atlantic Hotels (“the Orb Litigation”).

The Orb Litigation was pursued with the help of Harbour, which advanced some £5.2 million to support the litigation. The terms upon which Harbour provided the funding were set out in an investment agreement (“the Harbour Investment Agreement”), which included a provision by which the Orb Claimants would hold any proceeds of the Orb Litigation on bare trust for Harbour and themselves (“the Harbour Trust”).

It was finally resolved by a settlement in 2016. There had been an earlier purported settlement, referred to as the “Isle of Man Settlement”, but the court later (in the Directed Trial Judgment) held that to be a fraudulent breach of trust perpetrated by Mr McNally and Mr Cooper on Mr Ruhan, with Dr Smith the moving force behind it ([208]-[212]).

There were disputes about entitlement to the proceeds of the settlement. The confiscation order against Dr Smith was an important factor in this context. It conferred an entitlement on the SFO to the extent that the proceeds belonged to Dr Smith, up to the amount of the confiscation order. Further, a confiscation order prevails over third party personal rights such as ordinary debts, but does not prevail over any equitable or proprietary rights third parties may have. Thus, in order to recover from what would otherwise be assets of Dr Smith, third parties (i.e. persons other than the SFO) needed to establish (a) that they had an equitable or proprietary right, and (b) that any such right was a better or prior right than those of competing claimants.

By early 2016, a number of different parties had claimed interests in Dr Smith’s assets. In order to case manage these together with the CJA proceedings, on 13 January 2017 Popplewell J transferred the CJA proceedings (and hence the restraint and receivership proceedings) from the Administrative Court to this court.

On 26 June 2017, the SFO and the Enforcement Receivers applied for a determination that the shares of 27 Marshall Islands, Manx, Canadian, Dutch, Jersey and English companies created by entities associated with the Defendant (known as “the Non-Arena Companies”) were the realisable property of Dr Smith and so could be applied by the Enforcement Receivers towards the confiscation order. A number of parties joined this claim to assert a proprietary interest in various classes of property which had been included in the claim, including Dr Smith himself, Dr Cochrane, Mr Thomas, Mr Taylor, Harbour, the Viscount of the Royal Court of Jersey (in her capacity as the administrator of the en désastre or bankruptcy estates of Dr Gail Cochrane and Orb) and Stewarts Law, who had acted for the claimants in the Orb Litigation.

Many interlocutory hearings took place between 2016 and early 2021. There was a partial settlement in late 2019 between the SFO, the Enforcement Receivers, Harbour, Stewarts Law, the Viscount of the Royal Court of Jersey and the Joint Liquidators of various BVI and IoM companies involved in the matter (together, the “Settlement Parties”) in respect of their claimed proprietary interests in the assets, and an initial trial date was vacated.

Foxton J was designated to manage the proceedings, and on 20 May 2020 Foxton J made an order identifying the assets which were to be the subject of the trial of the action, and a ‘guillotine’ provision requiring all claims to any of the relevant assets to be made by a specified date.

A 10-week trial was listed to take place from January 2021, which became known as the Directed Trial. There was a further partial settlement, early on in the trial, between the Settlement Parties and Dr Smith, Dr Cochrane, Anthony Smith, LCL, Dr Morris (an old friend of Dr Smith’s) and others connected to Dr Smith (“the LCL Parties”). The terms of settlement were set out in the “LCL Settlement Deed” entered into on 27 January 2021. The Deed released the LCL Parties’ claim to any proprietary or other interest in assets which were the subject of the SFO and the Enforcement Receivers’ application and identified in § 3 of the Deed. It is of note that the LCL Settlement Deed provided in § 5 that:-

“The LCL Parties do not and will not challenge (or cause, procure, facilitate or assist any other person to challenge) the Settlement Parties’ cases at the Directed Trial, or in any further, consequential or related proceedings which seek to vindicate the Settlement Parties’ rights to the Paragraph 3 Property or establish the quantum of the Settlement Parties’ entitlements in relation thereto. For the avoidance of doubt, this clause does not prevent and is not intended to prevent any of the LCL Parties from giving evidence in the SFO Proceedings if required by the Court to do so.”

The settlement was also reflected in an order of Foxton J dated 4 February 2021, which included undertakings by the LCL Parties (“the LCL Discontinuance Order”).

The Directed Trial continued before Foxton J, lasting seven weeks in total. As part of the trial, Harbour sought to rely on equitable rights arising under the Harbour Investment Agreement and related documents, which it contended conferred priority on it; Mr Thomas and Mr Taylor adopted those arguments, on the basis that if the Harbour Trust, as it became known, was established, they stood, as funded parties and residual beneficiaries, to have an entitlement to any surplus once Harbour’s prior claims had been satisfied. The Directed Trial involved an extensive factual investigation into many years of transactions, with many parties participating and Harbour’s rights being heavily challenged. Mr Thomas was cross-examined, including as to his conduct in relation to underlying transactions which was said to have had the effect of depriving Harbour of its asserted rights to settlement assets.

Foxton J handed down a 220-page judgment on 18 May 2021 (“the Directed Trial Judgment”), finding in favour of the Settlement Parties, including Harbour, in numerous respects. As regards Mr Thomas and Dr Cochrane, Foxton J found that:-

A substantial consequentials hearing took place before Foxton J on 11 June 2021. The Consequentials Order set the equitable interests in each of the assets which were the subject of the Directed Trial, including providing that the interests in specified assets “are held by their legal owners on the terms of the Harbour Trust and are to be applied and apportioned between the beneficiaries, namely Harbour, Orb arl, and Messrs Thomas and Taylor, in accordance with those terms (save as set out below)” (§ 4).

Some matters were deferred, specifically costs and further consideration of the future receivership regime (viz the interaction of the management and enforcement receiverships relating to the confiscation order with the relevant trust rights) relating to various of the assets. A further substantial consequentials hearing dealing with costs took place on 30 September and 1 October 2021, which resulted in a 16-page judgment handed down by Foxton J on 21 October 2021. Various applications for permission to appeal against the Directed Trial Judgment were refused. One party, Phoenix Group Foundation, was given permission to appeal by Foxton J on a more limited basis, but the Court of Appeal dismissed the appeal and upheld Harbour’s relevant equitable interest and its priority in a judgment handed down on 20 January 2023.

A number of parties who were dissatisfied with the outcome of the Directed Trial then took a series of steps designed to frustrate it, with Mr Thomas being a leading protagonist.

First, Mr Thomas and Mr Taylor tried to get control of the trust assets, initially by seeking the appointment of their preferred receivers, though that was superseded by an application by them for the appointment of a new trustee. This led to a Part 8 Trial on 14 and 15 November 2022. Foxton J handed down a 38-page judgment on 30 November 2022, holding among other things that:-

Mr Thomas notes that Foxton J also stated in his judgment that:-

“if Messrs Thomas and Taylor are able to identify assets to which they believe the Orb claimants or the beneficiaries under the Harbour Trust have a claim, they could seek the approval of the beneficiaries under the Harbour Trust to use trust funds to pursue those claims, and if that was not forthcoming, seek an assignment of the relevant cause of action and pursue them themselves.” [95]

and that in a later ruling, on 18 April 2024, Foxton J said:

“as I have repeatedly made clear, the only underlying assets which fell within the scope of the Directed Trial were the so-called ‘Identified Underlying Assets’ which do not include the Spanish Assets. I did not otherwise make findings as to the ownership of underlying assets.” [9]

Thus Foxton J was referring to the possibility of Mr Thomas or Mr Taylor, as residuary beneficiaries under the Harbour Trust, obtaining funding to advance claims to other assets for the benefit of the Harbour Trust. Mr Thomas asserts that he wishes, and has made efforts, to ensure that all assets that properly constitute the Harbour Trust are collected and dealt with under its terms. However, it is very hard to see how Mr Thomas’s present efforts to undermine the Harbour Investment Agreement could form any part of any such efforts.

Secondly, a subsequent application by Harbour to place the relevant assets into the hands of the new trustees was opposed by an entity called BKV purporting to be a director of SMA (which held legal, but not equitable, title to those assets). Following a hearing on 10 February 2023, Foxton J handed down a 33-page judgment on 28 February 2023, which amongst other things observed at [18] that:-

“…we are past the time in this litigation in which it is appropriate to pull punches. It is clear that co-ordinated activity has been undertaken as part of a rear-guard action by individuals who are dissatisfied with the outcome of the litigation in some or other respects, which at various stages has involved at least Dr Smith, associates of Mr McNally, and Mr Thomas. I am satisfied that this co-ordinated activity has extended to the steps taken or promoted by Mr Thomas in the run-up to the Part 8 claims (which entities connected with Dr Smith and Mr McNally funded), the recent claims by Minardi and the steps taken by BKV (whose activities were supported by Mr Thomas, and which is linked to a known associate of Mr McNally, Mr Miah)…” (§ 18)

and:-

“As will be apparent from the foregoing, there is a real risk in this case that individuals who are bound by, but unhappy with, the outcome of the Directed Trial have been and are continuing to instigate proceedings and applications in these proceedings and elsewhere to challenge the outcome of the Directed Trial or by way of a collateral attack on its conclusions. The scale of these activities and the legal costs and court time they are consuming, mean that considerable vigilance will be required on the court’s part to ensure that its judgments are respected and its processes are not abused.” ([103])

Thirdly, Mr Thomas issued an application on 31 January 2023 (the “Assignment Application”) seeking the assignment of various rights of action to him. On 28 February 2023 (the same date as the judgment mentioned above), Foxton J directed Mr Thomas to file submissions and evidence setting out greater details of his claims, the terms on which he sought assignment and the involvement to date, as well as the future involvement, of Dr Smith and others (the “28 February 2023 Direction”).

By agreement between the parties, Mr Thomas’ evidence was due on 24 March 2023, but instead, shortly beforehand, Mr Thomas indicated that the Assignment Application would be withdrawn: instead, he would be bringing similar claims against the receivers, to bring about the transfer of certain assets into the Harbour Trust, and commencing new Part 8 proceedings to attempt to vary the previous trust orders made following the Part 8 Trial. Mr Thomas says this followed an email from Foxton J asking Messrs Thomas and Taylor to explain why the Assignment Application was necessary, “rather than simply Messrs Thomas and Taylor commencing proceedings in their own name as trust beneficiaries, joining the other trust beneficiaries as defendants as necessary.”

In a ruling on consequentials matters following the Part 8 Trial, Foxton J on 24 March 2023 made substantial percentage-based costs orders against Messrs Thomas and Taylor. Foxton J’s ruling included these passages relating to Mr Thomas:-

“4.

In the Trustee Judgment, I found that Messrs Thomas and Taylor had purported to appoint Mr Ticehurst as trustee for an improper purpose, and that Messrs Thomas and Taylor should be removed as trustees given the findings which had been made about their probity and integrity, and given that Mr Thomas had been conducting himself in a manner which appeared calculated to advance the interests of third parties in opposition to the interests of the Harbour Trust. I essentially rejected all of the directions sought by Messrs Thomas and Taylor.

5.

It is not permissible for Messrs Thomas and Taylor (who were able to submit any evidence at the Part 8 hearing which they wished to submit) to seek to challenge those conclusions by evidence filed for this consequentials hearing. In any event, it became clear that, once again, Mr Thomas’ submissions are being influenced by Dr Smith and Mr McNally, and I am satisfied that once again he was seeking to promote their agenda as well as his own. The evidence adduced was wholly unpersuasive, and the accounts offered as to why Mr Anthony Smith (Dr Smith’s brother) and Mr Anthony McNally (Mr McNally’s brother) had decided to fund the Part 8 Claim only served to confirm that Messrs Thomas and Taylor were pursuing a course designed to advance the competing interests of non-beneficiaries.

…

7(c) … the Receivership application issued by Messrs Thomas and Taylor in conjunction with and as an alternative to the Part 8 Claim, and the opposition to the Part 20 Claim formed part of an ongoing pattern of conduct with which Messrs Thomas and Taylor were associated to frustrate attempts to give effect to the Directed Trial Judgment and to make the realisation by the Settlement Parties of their rights as difficult and costly as possible, working in conjunction with Dr Smith and Mr McNally…

7(d) … Messrs Thomas and Taylor did not “properly incur” those liabilities in their capacity as trustees, but acted contrary to the interests of the Harbour Trust (the Part 8 Claims leading to £1m of costs being incurred) and in conjunction with individuals whose interests are adverse to those of the Harbour Trust. There can be no question, therefore, of any indemnity being granted from the trust assets … Messrs Thomas and Taylor’s behaviour clearly amounted to “misconduct” for the purposes of the limitation on the trustee’s right of indemnity.

…

7(g) … the costs of resolving [Harbour’s receivership application] were made more expensive than they need have been because of the opposition taken by Messrs Thomas and Taylor to the involvement of the ERs , which I found to be “essentially manufactured grievances”.

7(h) … I am satisfied that Messrs Thomas and Taylor’s resistance to the appointment of the ERs was unreasonable, and part of the strategy of seeking to obstruct the discharge of the ERs’ responsibilities … I am also satisfied that the ERs’ costs in relation to the Harbour Receivership application were substantially increased by that unreasonable opposition…

…

17.

This application [by the Joint Liquidators] … should never have been opposed, nor should Messrs Thomas and Taylor have issued a directions application in relation to the JLs’ application.

18.

The reasons given by Messrs Thomas and Taylor for resisting the application of payment of monies in court to the companies entitled to them … was entirely without merit…

19 … I am satisfied that the resistance to the application formed part of the co-ordinated attempts to frustrate the process of giving effect to the Directed Trial Judgment to which I referred in the Trustee Judgment. It is telling that Mr Thomas confirmed that his submissions for this consequential hearing had been prepared with the benefit of input from Dr Smith and Mr McNally. I am satisfied that Messrs Thomas and Taylor’s resistance to the Philbin application was also undertaken in consultation with one or both of them.”

In the light of Mr Thomas’s indication that he would be bringing further claims in lieu of the Assignment Application, and in circumstances where Mr Thomas was defaulting on costs orders against him in favour of the Settlement Parties, Harbour applied on 24 March 2023 for orders that:-

“That, save insofar as the Court may direct otherwise following a request for permission made in accordance with paragraph 2 below, unless within 14 days all outstanding costs awards against Messrs Thomas & Taylor in favour of the Settlement Parties are satisfied, Messrs Thomas & Taylor be debarred from bring (sic) any further applications or claims against any of the Settlement Parties or the Trust Receivers or the New Trustees in any way connected with the subject matter of the Directed Trial or the Part 8 Proceedings (“Relevant Actions”) until all such costs awards as may exist from time to time are satisfied;

That in any event, Messrs Thomas & Taylor shall not be permitted to bring any Relevant Actions without either (1) the prior consent of Harbour and Orb, or (2) the permission of the Court. Such request for permission from the Court is to be made on 14 days’ written notice to Harbour and Orb and will be conditional on the filing of evidence by Mr Thomas and/or Mr Taylor addressing in full the conditions set out in paragraph 4 of the Court’s direction of 28 February 2023.”

Foxton J did not make orders in these terms, but instead on 31 March 2023 made the Debarring Directions Order (DDO), as follows:-

“WHEREAS Mr Nicholas Thomas and Mr Roger Taylor (“Messrs Thomas & Taylor”) have failed to satisfy existing costs orders in these proceedings in favour of the Settlement Parties (namely the SFO, ERs, the Viscount, Stewarts, Harbour and the Joint Liquidators), in particular £335,000 (plus interest) which has been due since 2 December 2021 and £25,000 (plus interest) which has been due since 5 August 2022 (the “Outstanding Costs Orders”)

…

AND WHEREAS Messrs Thomas & Taylor will be liable for further costs to certain of the Settlement Parties and to the Trust Receivers pursuant to a ruling of Foxton J dated 24 March 2023 (“Further Costs Orders”)

AND WHEREAS an application was issued by Messrs Thomas & Taylor on 31 January 2023 in respect of the forced assignment of certain claims which may be available to the other beneficiaries of the Harbour Trust, namely Harbour and Orb ARL, in favour of Messrs Thomas & Taylor absolutely (“the Assignment Application”)

AND WHEREAS by a letter of 23 March 2023 and a witness statement of Mr Thomas dated 27 March 2023, Mr Thomas indicated that the Assignment Application was no longer pursued for the time being, and by the same submissions Mr Thomas threatened further actions including a Part 8 claim and a claim against "KPMG-Interpath and their court appointed members, John Milsom and David Standish" (sic) (the “Further Actions”)

AND UPON submissions and evidence dated 24 March 2023 filed in accordance with the Court’s directions on the Assignment Application, by which Harbour Fund II, L.P (“Harbour”), the Viscount of the Royal Court of Jersey (qua Orb) (the “Viscount”), and Stewarts Law LLP (“Stewarts”) (the “Assignment Application Respondents”) sought a Debarring Order against Messrs Thomas & Taylor in respect of the Assignment Application, unless the Outstanding Costs Orders and Further Costs Orders were satisfied,

AND UPON an application by letter to the Court dated 31 March 2023 in which the Settlement Parties sought a broader Debarring/Stay Order against Messrs Thomas & Taylor in respect of any Further Actions against the Settlement Parties, Trust Receivers or New Trustees (the “Respondent Parties” and the “Debarring/Stay Application”)

AND UPON the terms of a ruling issued by Foxton J by email dated 31 March 2023

IT IS ORDERED that:

1.

The Assignment Application is dismissed and the hearing listed for 12 May 2023 is vacated.

…

3.

By 4pm on 28 April 2023, Mr Thomas shall confirm whether he and/or Mr Taylor has made any application to this court or the Chancery Division or has brought any claim or application against any of the Respondent Parties or to which they are necessary parties relating to the subject-matter of the Directed Trial (a “Relevant Claim”), and if so, identify the application notice or claim form.

4.

If Mr Thomas and/or Mr Taylor has brought a Relevant Claim, or at any time hereafter seeks to do so, then (1) Mr Thomas and Mr Taylor must inform the Respondent Parties and also Mr Justice Foxton (via the Commercial Court Listing Office), within 7 days, and (2) before further steps are taken in relation to the Relevant Claim, the court will first hear the Debarring/Stay Application.

5.

In either eventuality set out in paragraph 4, the following orders and directions will apply:

a.

If the Relevant Claim is in the Commercial Court, the Relevant Claim will automatically be stayed until the Debarring Application has been disposed of.

b.

If the Relevant Claim is in the Chancery Division, King's Bench Division, or another court, Mr Justice Foxton is to be notified as soon as practicable of the claim name and number so that steps can be taken to transfer it to the Commercial Court.

c.

Mr Thomas should serve any evidence responding to Mr Zoubir's 19th witness statement of 24 March 2023 within 28 days of issuing the Relevant Claim .

d.

That evidence must address any involvement on the part of Dr Smith or Mr Simon McNally or persons Mr Thomas knows to be associated with them in the Relevant Claim and identify any source of funding which has been used to fund the Relevant Claim or the opposition to the Debarring/Stay Application.

e.

The Respondent Parties should serve any evidence in reply within 21 days of receiving Mr Thomas' evidence.

f.

The Debarring/Stay Application shall be listed for determination at a hearing with a time estimate of half a day.…”

On 23 July 2023, the Supreme Court handed down its decision in PACCAR. Dr Cochrane began to raise arguments based on that decision. She had been bankrupted in her home jurisdiction of Jersey, in 2016, based on her failure to satisfy a guarantee she provided for the performance of the Harbour Investment Agreement, but seemingly took the view that if she could impugn Harbour’s rights then she might be able to unravel the bankruptcy (notwithstanding the passage of time, and the existence of other substantial creditors). Similarly, Dr Smith wrote to the Enforcement Receivers and Harbour on 7 September 2023 suggesting that the Harbour Investment Agreement was void applying PACCAR.

On 28 September 2023, Mr Thomas threatened, but did not pursue, an out of time application to the Court of Appeal for permission to appeal the Directed Trial judgment as a result of PACCAR. He did not serve any Grounds of Appeal, skeleton argument or evidence.

On 21 November 2023, Dr Cochrane issued an application in Jersey seeking to recall, i.e. cancel, her désastre (bankruptcy), on the basis that the Harbour Investment Agreement was unenforceable due to PACCAR, such that she should not have been bankrupted in 2016.

On 11 July 2024, Mr Thomas wrote a letter before action intimating that he would seek declarations from the (first instance) English court that the Harbour Investment Agreement was unenforceable and that Harbour’s rights as found at the Directed Trial should be set aside. It requested a prompt response “in light of the indication given by Harcus Parker on your behalf in proceedings in the Royal Court of Jersey of an imminent intention to issue declaration proceedings in the English courts in respect of the Harbour IA dealing with the matter of its enforceability as referred to in this letter”.

Harbour’s solicitors replied on 18 July 2024, indicating among other things that they were preparing a draft application within the present proceedings in relation to the status of the Harbour Investment Agreement, “as directed by the Jersey Court … in which our client’s position will be set out in detail”.

By letters of 22 July, 23 August and 25 September 2025, Mr Thomas’s solicitors urged Harbour to proceed with that application promptly. In this latest of these, Mr Thomas’s solicitors asked for confirmation that Harbour intended to issue its application by 9 October 2024, requesting that, if it did not so intend, to “please inform us immediately so that our client may take the appropriate steps”.

In October 2024, in the course of contempt proceedings against him, Dr Smith said that he and the Orb Claimants had been aware for some time of the PACCAR decision, which he said gave rise to a “question mark surrounding the Harbour [Investment Agreement]’s validity”, but that “[w]e have never taken the point”. He also suggested that he might be able to ‘re-engage’ his tenancy of certain properties (part of the subject-matter of the contempt application) once the “Harbour issue” had been determined.

Harbour’s position is that, in the light of what it considered to be further co-ordinated action directed by Dr Smith, it had no option but to seek precautionary relief from the English court confirming the finality of the relief which it had already obtained. As a result, it applied in Jersey for a stay of Dr Cochrane’s application in favour of English proceedings (which was subsequently granted), and on 31 October 2024 issued the Harbour Enforceability Application. Zoubir 21 (dated 13 January 2025) states at § 19:-

“In short, my client was left with little choice but to issue the Harbour October 2024 Application, or face the prospect of contesting the Cochrane Recall Proceedings. Whilst it had every confidence that it would prevail, this would be at great further cost which would be compounded by the necessity for expert evidence of, among other things, English Law to be adduced before the Jersey Courts. Further, Harbour was concerned that if it contested the issue in the Jersey Courts, there would be a real risk of irreconcilable judgments given the complexity of the matter. By contrast, Dr Cochrane appears to concede that she would not pursue her PACCAR arguments (or indeed pursue her Recall Applications at all) if the Harbour October 2024 Application succeeds in this jurisdiction.”

The Harbour Enforceability Application seeks orders that:-

“2.

Dr Cochrane and Mr Thomas are not entitled to raise arguments [before this Court]:

a.

challenging either the outcome, or the Court’s findings in favour of the Settlement Parties, at the Directed Trial, including but not limited to (a) the ownership of the shares in Orb ARL; and (b) its conclusions concerning Harbour’s entitlements under the Harbour IA; and

b.

challenging the Court’s orders and declarations as to the proprietary rights considered at the Directed Trial as recorded in the Consequentials Order.

Such arguments are an abuse of process and are dismissed as totally without merit.

3.

No party to these proceedings (or privy of such a party) shall be entitled to raise arguments seeking to make the type of challenges outlined at paragraphs 2(a) and (b) without first applying for and obtaining the Court’s permission…

4.

[The Harbour [Investment Agreement] has not been rendered unenforceable by reason of the PACCAR Decision.]”

I understand the orders sought at 2 above to reflect Harbour’s case that Dr Cochrane and Mr Thomas are not entitled, by reasons of finality and res judicata (and, in Dr Cochrane’s case, undertakings she gave in connection with the LCL Settlement), to challenge the outcome of the Directed Trial, rather than concerning the present (or any other) debarring application. Those matters will form at least part of the subject-matter of the Enforceability Hearing. There are other respondents to the Harbour Enforceability Application but only Dr Cochrane and Mr Thomas have to date sought to participate in it.

On 28 November 2024, Mr Thomas issued a cross-application, seeking declarations that key parts of the Harbour Investment Agreement are invalid and that Harbour is not entitled to any part of the Proceeds or payment under or in relation to the Agreement, and a variation to Foxton J’s consequentials order following the Directed Trial to remove reference to any interest on the part of Harbour.

Mr Thomas accepts that his cross-application is a Relevant Claim for the purposes of the DDO, and thus engages §§ 4 and 5 of that order. Accordingly, on 9 December 2024 Mr Thomas filed his sixth witness statement (“Thomas 6”), which purported to address the requirements set out in those paragraphs.

Meanwhile, Dr Smith on 20 September 2024 was sentenced to 18 months’ imprisonment by HHJ Cole sitting at Southwark Crown Court, having been convicted after a trial for the fraudulent procurement of a £50,000 Covid ‘Bounce Back’ loan. On 6 December 2024, I handed down judgment finding that Dr Smith was guilty of contempts of court relating, in particular, to breaches of undertakings he had given as part of the LCL Settlement; and I sentenced him to 13 months’ imprisonment (including 2 months’ reactivation of a suspended sentence previously imposed in July 2022 for owning and operating three bank accounts in breach of a restraint order made under the Criminal Justice Act 1988.

On 10 January 2025, Harbour filed the 21^st witness statement of its solicitor, Mr Zoubir (“Zoubir 21”) explaining its view as to Mr Thomas’ non-compliance with the requirements of the DDO. Paragraph 121 stated Harbour’s conclusion that Mr Thomas had not complied with the letter or spirit of the Order. Paragraph 122 stated:-

“In the circumstances, I would respectfully suggest that Mr Thomas should be debarred from pursing the Thomas Cross-Application /resisting the Harbour October 2024 Application unless he, and his litigation funder, satisfy the conditions set out in Section C of this witness statement.” (emphasis added)

That proposal was in wider terms than the Debarring/Stay Application itself, which, as quoted in § 34 above, seeks orders only in respect of the bringing of any further applications or claims by Mr Thomas.

On 18 February 2025, following agreement that Mr Thomas be permitted to attempt further to address the requirements of the DDO provided that Harbour be permitted to reply, Mr Thomas filed Thomas 7. Harbour filed Zoubir 22 in reply on 14 March 2025.

By a letter dated 24 March 2025, Dr Cochrane indicated that she opposes Harbour’s Enforceability Application and supports Mr Thomas’ cross-application. In a subsequent letter dated 26 March 2025, sent shortly prior to the CMC in these proceedings heard by Dias J, Dr Cochrane stated in relation to Mr Thomas’ position that “I believe our interests are entirely aligned”.

The interests of Dr Cochrane, as a person en désastre, are formally represented by the Viscount of the Royal Court of Jersey and she does not in principle have standing to address the court. However, the Viscount is one of the Settlement Parties, and as a result, and in order to best assist the court, Harbour has indicated a willingness to take a pragmatic view on this issue and not to object to the court hearing from Dr Cochrane. Dr Cochrane has indicated in her correspondence that she was in the process of making an application to the Jersey court for release of sufficient of her earnings in Jersey to pay for solicitors or counsel, but that until she has secured such a release or third party funding, she would attend hearings as a litigant in person (having previously intimated this in a letter of 28 November 2024). Harbour says that, as far as it is aware, no such application has yet been issued. Dr Cochrane did, however, serve a witness statement on 26 June 2025 in opposition to Harbour’s Enforceability Application and in support of Mr Thomas’s cross-application.

On 28 March 2025, a directions hearing took place before Dias J. Directions were given for the present hearing and the Enforceability Hearing.

Beginning prior to the directions hearing, correspondence took place about the metadata of Thomas 6 and Thomas 7 as served, because it identified Dr Smith as their “author”. During the course of this correspondence, Mr Thomas’ then solicitors, Marriott Harrison, came off the record on 26 June 2025 and were replaced by Keystone Law. (Counsel for Mr Thomas informed me in oral submissions that that was not through Marriott Harrison’s choice.) Foxton J found that LCL was ultimately owned by Dr Smith (with his brother, Anthony Smith, merely being a nominee shareholder), that Dr Smith had “largely determined” LCL’s position in the litigation. Dr Smith had appeared as the author in some of LCL’s legal documents, including Anthony Smith’s trial witness statement (Directed Trial Judgment at [610]).

On 1 August 2025, Harbour filed an application (supported by Zoubir 23) for an order, in the alternative to full debarring, that unless Mr Thomas provide security for the costs of Mr Thomas’s cross-application in the sum of £290,700, he be debarred both from pursuing his cross-application and from contesting the Harbour Enforceability Application. This reflected paragraph § 67 of Zoubir 22, dated 14 March 2025, which had indicated that if Mr Thomas were permitted to pursue his cross-application or defend the Harbour Enforceability Application, then he should be permitted to do so (on an ‘unless’ basis) only if he provided security for Harbour’s costs of his cross-application in a manner acceptable to Harbour.

On 29 August 2025, after the deadline for any responsive evidence, Mr Thomas filed Thomas 8, which addresses the question of security as well as other matters, along with an application for permission and/or relief from sanctions. To ensure that there was no disruption to the hearing in any of its aspects, Harbour indicated that it did not object to the admission of that witness statement in evidence.