Serious Fraud Office & Ors v Litigation Capital Limited & Ors

Mr Justice Henshaw: (A) INTRODUCTION 3 (B) FACTS 4 (1) Events from 2003 to 2012 4 (2) The Orb Litigation 5 (3) The Directed Trial 6 (4) Events since the Directed Trial Judgment 8 (C) PRINCIPLES 18 (D) APPLICATION 23 (1) Evidence about the involvement of Dr Smith and others 23 (2) Source of funding 30 (3) Outstanding costs orders 32 (4) Appropriate relief 34 (a) Relief sought by Harbour 34 (b) Debarring 34 (c) Security for costs 36 (d) Bankruptcy order 38 (E) CONCLUSION 39 (A) INTRODUCTION

1. This judgment deals with the question of whether Mr Nicholas Thomas should be permitted to participate in the phases leading up to, and at, a hearing listed in February 2026 (the “ Enforceability Hearing ”), alternatively whether he should be permitted to do so only on conditions, including as to the discharge of extant costs orders and the provision of security for costs.

2. The Enforceability Hearing has been listed following an application issued by Harbour Fund II LP (“ Harbour ”) on 31 October 2024 (“the Harbour Enforceability Application” ), along with a cross-application by Mr Thomas. The issue raised by those applications is whether entitlements established by Harbour at a trial before Foxton J in 2021 (the “ Directed Trial ”), in proceedings to which Mr Thomas was also party and in which he fully participated, and in respect of which he has brought no appeal, can be re-opened on the basis of the subsequent decision of the Supreme Court in PACCAR [2023] 1 WLR 2594 . Mr Thomas wishes to contend, on the basis of that decision that the litigation funding agreement on which Harbour’s entitlements are founded is unenforceable.

3. These issues arise in the context of legal proceedings which have been going on, in one form of another, since 2005, including proceedings in this court since 2016. They were described by Foxton J in 2021 as “a dispute of labyrinthine complexity, in which matters are rarely what they appear to be” ( SFO v LCL [2021] EWHC 1272 (Comm) ). In setting out the background below, I shall simplify it so far as possible by concentrating on the points of most relevance to the present application.

4. Harbour submits that there are many difficulties with Mr Thomas’s proposed attempt to reopen the outcome of the Directed Trial. It says the orders that were made are final, have not been appealed, and are unaffected by subsequent authority; that it is too late to raise points which could have been, but were not, taken at trial (which was fiercely contested, with Mr Thomas legally represented throughout, and expressly adopting Harbour’s submissions, because he stood to benefit from them); that any such approach is abusive and in the face of established authority concerning the finality of litigation; and that a range of other procedural and substantive difficulties exist. However, Harbour says it has been driven, by Mr Thomas’ manoeuvrings as well as related challenges in Jersey proceedings by a party connected to Mr Thomas (Dr Gail Cochrane), to issue an application of its own to bring finality to this issue, with Mr Thomas seeking relief by way of a cross-application.

5. Most of those potential issues do not, however, arise for determination now. Harbour’s present applications are focussed on the consequences of an order which Foxton J made in early 2023, seeking to prevent further attacks on the Directed Trial outcome in early 2023 (the “ Debarring Directions Order ” or “ DDO ”). In particular, this constrained future participation by Mr Thomas in proceedings unless certain conditions were met, including by requiring him to give evidence as to the involvement of Dr Gerald Smith (whose role I explain below) in any further claim or application which Mr Thomas might seek to bring. In brief, Harbour contends that (a) Mr Thomas has not complied with the conditions set out in the DDO; (b) that he accordingly may not participate in the Enforceability Hearing either as a respondent or pursuant to his cross-application; and (c) that, in any event, in the circumstances viewed as a whole, Mr Thomas should be subject to debarring or other restrictions.

6. For the reasons set out below, I have concluded that Mr Thomas should not be debarred from participating in the Enforceability Hearing, but should be required to provide security for the costs of his cross-application. (B) FACTS (1) Events from 2003 to 2012

7. 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.

8. 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.

9. 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.

10. 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.

11. 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 (“ ”) 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. CJA 1988

12. 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.

13. 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 ”). (2) The Orb Litigation

14. 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 ”).

15. 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 ”).

16. 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]).

17. 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.

18. 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. (3) The Directed Trial

19. 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.

20. 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.

21. 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.

22. 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 ”).

23. 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.

24. 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:- i) Rather than accounting for the settlement proceeds as they should have done, and complying with the Harbour Investment Agreement (which Foxton J concluded conferred priority entitlements on Harbour as funder, under the Harbour Trust), Messrs Thomas and Taylor knew and acquiesced in transfers made in breach of trust to Dr Cochrane and a company controlled by Dr Smith called SMA, and knew or suspected some of those assets were being applied by Dr Smith and Dr Cochrane for their own benefit, which Mr Thomas and Mr Taylor were content to happen as long as Dr Smith was making payments to them as well ([542]); ii) Mr Thomas received over £1 million in breach of trust and was aware that Harbour had not received the amounts it was entitled to receive under the Harbour Trust / Harbour Investment Agreement in priority to Mr Thomas, for which credit must be given from his interest ([546] and [548]); iii) Mr Thomas and Mr Taylor owed Stewarts Law, who had represented them in the underlying litigation, £3,316,320.75 in respect of outstanding fees, and Stewarts Law was entitled to an equitable lien in that sum over such residual entitlements as Mr Thomas and Mr Taylor might have under the Harbour Trust; iv) Mr Thomas’ evidence at trial was in some aspects unsatisfactory and to be approached with caution ([38]-[39]), his evidence about his understanding of who owned the assets transferred under the purported Isle of Man Settlement was thoroughly unconvincing ([227]) and in an affidavit sworn on 26 April 2016 to explain what had become of the proceeds of the Isle of Man Settlement he had failed to disclose payments including one for £600,000 ([546(iii)]); and v) Dr Cochrane held shares for Dr Smith as his nominee and there was strong support for the suggestion that her involvement was nothing more than as a cipher for him, with Dr Smith calling the shots ([606]).

25. 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).

26. 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. (4) Events since the Directed Trial Judgment

27. 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.

28. 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:- i) there was no power to appoint replacement trustees as Messrs Thomas & Taylor had purported to do ([55]); ii) there was a strong prima facie case that (a) Mr Thomas, with Mr Taylor’s support, had been co-operating with parties whose interests would at least appear to be directly opposed to those of the beneficiaries under the Harbour Trust, with Mr Thomas’ actions being funded by those parties; and (b) the various actions undertaken by Mr Thomas with the benefit of that funding, including the purported trustee appointment, were undertaken at the direction of or at least to serve the interests of those other parties ([77]); iii) that strong prima facie case had not been rebutted by Messrs Thomas and Taylor, and the power of appointment was exercised for improper purposes and void: ([77]-[79]); and iv) Messrs Thomas and Taylor should be removed as trustees if they did not resign, having regard to the misconduct recorded in the Directed Trial Judgment and in connection with the Part 8 Trial ([82]-[83]).

29. 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.

30. 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])

31. 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 ”).

32. 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 .”

33. 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.”

34. 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.”

35. 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.…”

36. 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.

37. 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.

38. 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.

39. 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” .

40. 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” .

41. 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” .

42. 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.

43. 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.”

44. 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.

45. 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.

46. 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.

47. 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 .

48. 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.

49. 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.

50. 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 ”.

51. 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.

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

53. 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]).

54. 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.

55. 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. (C) PRINCIPLES

56. The court has broad powers under CPR 3.1 and 3.4, and its inherent jurisdiction, to control its own proceedings and to guard from abuse of process. Striking out a Defence, or debarring a defendant from participation in the proceedings, are some of the means by which it does so, but are not steps to be taken lightly given their effect. The most obvious examples relate to non-compliance with Court orders. Thus, failure to comply with interlocutory costs orders, and failure to comply with disclosure orders, have led to this form of relief (see e.g. Al Saud v Gibbs [2024] EWHC 123 (Comm) ) as has failure to file compliant pleadings and evidence as ordered: see e.g. Barclay Pharmaceuticals Limited v Mekni [2025] EWHC 1219 (Comm) .

57. The breach of a Court order or rule is not a pre-requisite. In the analogous context of whether there should be a strike out for an abuse of process under CPR r3.4(2)(b), the court considers (a) whether the conduct was an abuse of process, and (b) whether in the exercise of its discretion, the relevant claim, pleading etc should be struck out. At stage (b), a balancing exercise, having regard to considerations of proportionality, is undertaken, with the court undertaking a close merits-based analysis of all the facts: see Cable v Liverpool Victoria Insurance Co Ltd [2020] 4 WLR 110 at [63]. There is no difference in principle where the relief being contemplated is not strike-out but simply debarring, in post-trial proceedings where there are no statements of case.

58. As to the threshold for whether there has been an abuse of process, the categories are not closed and can encompass a wide variety of potential situations. White Book note 3.4.17 and JSC VTB Bank v Skurikhin [2021] 1 WLR 434 [51] (see further below) indicate that there is no pre-requisite for unlawful conduct, breach of procedural rules, collateral attack on a previous decision, dishonesty or reprehensible conduct (though obviously these would be relevant); rather, the “ crucial question is whether, taking a broad merits-based approach, a party is misusing or abusing the process of the court .”

59. It is important to bear in mind the draconian effect of a debarring order, and its proper purpose. In Arrow Nominees Inc & Anr Respondents v Blackledge and Others Appellants [2000] 2 BCLC 167 ; [2001] B.C.C. 591 Chadwick LJ cited Millett J’s comments in Logicrose Ltd v Southend United Football Club Ltd (The Times, 5 March 1988) (unreported), where Millett J was considering an application to strike out a plaintiff’s action for having deliberately suppressed a crucial document (including from the court):- “… I adopt, as a general principle, the observations of Millett J in Logicrose Ltd v Southend United Football Club Ltd (The Times, 5 March 1988) that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the court; and that, accordingly, a party is not to be deprived of his right to a proper trial as a penalty for disobedience of those rules - even if such disobedience amounts to contempt for or defiance of the court - if that object is ultimately secured, by (for example) the late production of a document which has been withheld. But where a litigant's conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled - indeed, I would hold bound - to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him.” An earlier statement to similar effect was made by Denning LJ in Hadkinson v Hadkinson [1952] P 285 , 298:- “…the fact that a party to a cause has disobeyed an order of the court is not of itself a bar to his being heard, but if his disobedience is such that, so long as it continues, it impedes the course of justice in the cause, by making it more difficult for the court to ascertain the truth or to enforce the orders which it may make, then the court may in its discretion refuse to hear him until the impediment is removed or good reason is shown why it should not be removed.” An order debarring a party from being heard until they obey outstanding orders became known (at least in the family law context) as a ‘Hadkinson order’. In a later case such, Assoun v Assoun [No 1] [2017] EWCA Civ 21 , Sir Ernest Ryder for the Court of Appeal said:- “Such an order is draconian in its effect because it goes directly to a litigant’s right of access to a court. It is not and should not be a commonplace. As developed in case law, it is a case management order of last resort in substantive proceedings (for example for a financial remedy order) where a litigant is in wilful contempt rather than a species of penalty or remedy in committal proceedings for contempt.” [3]

60. More recently, Fancourt J said in Byers v Ors v Samba Financial Group [2020] EWHC 853 (Ch):- “An order striking out a defence and debarring a defendant from defending (or striking out a claim) is the ultimate sanction that the court can impose for a breach of its order that does not amount to a contempt of court. It therefore must be a sanction of last resort and is likely only to be imposed for a serious and deliberate breach. The sanction must be necessary and proportionate in the circumstances.” [120]

61. Mr Thomas submitted that a debarring order would be appropriate only where the effect of the respondent’s failures meant that the claim or application could not be fairly tried, relying on the statements Hadkinson , Logicrose and Arrow Nominees quoted above. However, it is clear that (a) in assessing fairness, it is necessary to have regard to the proceedings as a whole, including their impact on the applicant, and (b) it is also relevant to consider whether the respondent’s conduct is liable to bring the administration of justice into disrepute. In VTB the Court of Appeal said:- “47. In Hunter v Chief Constable of the West Midlands Police [1982] AC 529 HL at 536C, Lord Diplock referred to: ".. the inherent power which any court of justice must possess to prevent misuse of its procedure in a way which, although not inconsistent with the literal application of its procedural rules, would nevertheless be manifestly unfair to a party to litigation before it, or would otherwise bring the administration of justice into disrepute among right-thinking people. The circumstances in which abuse of process can arise are very varied…It would, in my view, be most unwise if this House were to use this occasion to say anything that might be taken as limiting to fixed categories the kinds of circumstances in which the court has a duty (I disavow the word discretion) to exercise this salutary power." …

49. The fact-sensitive nature of the enquiry was further emphasised in Laing v Taylor Walton [2007] EWCA Civ 1146 , where Buxton LJ at [12], after setting out the passage above from Lord Diplock's speech in Hunter , stated: "The court therefore has to consider, by intense focus on the facts of the particular case, whether in broad terms the proceedings that it is sought to strike out can be characterised as falling under one or other, or both, of the broad rubrics of unfairness or the bringing of the administration of justice into disrepute." …

51. It is clear from the above authorities that, contrary to Berenger's contention, proceedings can be struck down as an abuse of process where there has been no unlawful conduct, no breach of relevant procedural rules, no collateral attack on a previous decision and no dishonesty or other reprehensible conduct. Indeed, the power exists precisely to prevent the court's process being abused through the lawful and literal application of the rules, and most likely would not be needed or engaged where a party was acting unlawfully or in breach of procedural rules, where established rules of law or procedural sanctions would usually suffice to protect the court process. In my view Thevarajah is an example of such protection via the rules, alternatively the recognition of an issue estoppel, rather than a finding that the application in that case was an abuse of process. Recognised aspects of abuse of process include Henderson v Henderson abuse, bringing the administration of justice into disrepute and proceedings which are manifestly unfair to the other party (aspects which may well overlap), but the crucial question is whether, taking a broad merits-based approach, a party is misusing or abusing the process of the court.”

62. In the context of non-payment of costs orders, the court in Michael Wilson & Partners Ltd v Sinclair [2017] EWHC 2424 (Comm) , [2017] 5 Costs L.R. 877 said at [29]:- “(1) The imposition of a sanction for non-payment of a costs order involves the exercise of a discretion pursuant to the court’s inherent jurisdiction. (2) The court should keep carefully in mind the policy behind the imposition of costs orders made payable within a specified period of time before the end of the litigation, namely, that they serve to discourage irresponsible interlocutory applications or resistance to successful interlocutory applications. (3) Consideration must be given to all the relevant circumstances including: (a) the potential applicability of Art.6 of ECHR; (b) the availability of alternative means of enforcing the costs order through the different mechanisms of execution; (c) whether the court making the costs order did so notwithstanding a submission that it was inappropriate to make a costs order payable before the conclusion of the proceedings in question; and where no such submission was made whether it ought to have been made or there is no good reason for it not having been made. (4) A submission by the party in default that he lacks the means to pay and that therefore a debarring order would be a denial of justice and/or in breach of Art.6 of ECHR should be supported by detailed, cogent and proper evidence which gives full and frank disclosure of the witness’s financial position including his or her prospects of raising the necessary funds where his or her cash resources are insufficient to meet the liability. (5) Where the defaulting party appears to have no or markedly insufficient assets in the jurisdiction and has not adduced proper and sufficient evidence of impecuniosity, the court ought generally to require payment of the costs order as the price for being allowed to continue to contest the proceedings unless there are strong reasons for not so ordering. (6) If the court decides that a debarring order should be made, the order ought to be an unless order except where there are strong reasons for imposing an immediate order.” Siddiqi v Aidiniantz [2020] EWHC 699 (QB) at [30] is to similar effect. Saini J in that case stated that “…a litigant should not be able to continue with his or her claim without satisfying an existing and non-appealed final costs order, and the court should impose a condition requiring compliance” [30(ii)].

63. When considering debarring for failure to comply with costs orders, it is appropriate to consider the degree of connection between the unpaid costs in question and the claim or application in which the respondent wishes to participate: see Tonstate Group Ltd v Wojakovski [2020] EWHC 1004 (Ch) at [42]-[47]) (Zacaroli J).

64. The present applications concern attempts to re-open final orders made long ago at a fully contested trial. In that context, the Grand Chamber of the European Court of Human Rights said in Bochan v. Ukraine (No. 2) , 5 February 2015 (Grand Chamber) at [44]:- “In line with the above-mentioned principles, according to long-standing and established case-law, the Convention does not guarantee a right to have a terminated case reopened. Extraordinary appeals seeking the reopening of terminated judicial proceedings do not normally involve the determination of “civil rights and obligations” or of “any criminal charge” and therefore Article 6 is deemed inapplicable to them … This is because, in so far as the matter is covered by the principle of res judicata of a final judgment in national proceedings, it cannot in principle be maintained that a subsequent extraordinary application or appeal seeking revision of that judgment gives rise to an arguable claim as to the existence of a right recognised under national law or that the outcome of the proceedings in which it is decided whether or not to reconsider the same case is decisive for the “determination of ... civil rights or obligations or of any criminal charge” …”

65. The decision in Bochan recognises potential exceptions to that starting point, including where in substance the ‘extraordinary’ proceedings are similar in nature and scope to ordinary appeal proceedings [47] or (it seems) similar to an appeal on points of law [49]. The Grand Chamber indicated that it is necessary to consider the nature, scope and specific features of the proceedings in question [50].

66. As to the position once a debarring order has been made, it was stated in Financial Conduct Authority v London Property Investments [2022] EWHC 1041 (Ch) at [38]-[39] that:- “Where a debarring order does have the effect of preventing a defendant from participating in a trial, the position does not then go by default. At the trial the claimant must still demonstrate to the satisfaction of the court that the claimant is entitled to the relief sought in the relevant proceedings.” ([39(v)] quoting Times Travel v Pakistan International Airline Group [2019] EWHC 3732 (Ch) ) (D) APPLICATION

67. The effect of Mr Thomas having made his cross-application, being a “ Relevant Claim” within the DDO, was to trigger the orders and directions set out in § 5 of that order. Mr Thomas was therefore required to serve any evidence responding to Zoubir 19, addressing any involvement of Dr Smith or Mr McNally (or persons Mr Thomas knows to be associated with them) in the cross-application, and identifying any source of funding used to fund the cross-application or opposition to Harbour’s Debarring/Stay Application. The cross-application is, in the meantime, automatically stayed pending the hearing and determination of the Debarring/Stay Application.

68. Although Harbour referred to the requirements placed on Mr Thomas by the DDO as a ‘threshold’ condition, the order does not provide that any Relevant Claim must inevitably remain permanently stayed unless Mr Thomas provides evidence addressing those matters in a manner which the court finds to be adequate. Such an approach would be inconsistent with the multi-factorial approach set out in the case law summarised above, and would unduly fetter the court’s discretion. However, the adequacy of Mr Thomas’s evidence is a highly relevant consideration when considering Harbour’s Debarring/Stay Application and its fallback application for security for costs. (1) Evidence about the involvement of Dr Smith and others

69. Paragraph 5d of the DDO provided that any evidence filed by Mr Thomas must address any involvement on the part of Dr Smith or Mr McNally, or persons Mr Thomas knows to be associated with them, in the Relevant Claim i.e. Mr Thomas’s cross-application. The evidence Mr Thomas has filed pursuant to § 5 of the DDO does not satisfactorily deal with this matter.

70. Zoubir 19, to which Thomas J was to respond, had identified three areas in which Dr Smith appeared to have been involved in Mr Thomas’ litigation activities, over and above those recorded in court judgments or rulings. Those three areas were (i) Mr Thomas’s application for permission to appeal from Foxton J’s judgment dated 30 November 2022 in the Part 8 Claim, including communications with the Court of Appeal on Mr Thomas’ behalf; (ii) reference by Mr Thomas within one of his letters and the Assignment Application to one of the Enforcement Receivers’ restricted reports, which had been sent to SFO lawyers, the Administrative Court, and Dr Smith, but not Mr Thomas (leading to possible inferences that it had been leaked by Dr Smith or that Dr Smith was the author of the letter and Assignment Application); and (iii) the nature and style of Mr Thomas’s letter withdrawing the Assignment Application.

71. Thomas 6 addressed the involvement of Smith, McNally et al. in the following cursory terms:- “ Involvement of Dr Smith and Mr Simon McNally in the Harbour Application or the Thomas Cross-Application

15. I can confirm that neither Dr Smith nor Mr Simon McNally (nor persons I know to be associated with them) have had any involvement in the preparation of my response to the Harbour Application or the Thomas Cross-Application, save for providing ad hoc assistance to me with the provision of relevant background documents and information. In addition, and without waiving privilege, my solicitor has discussed these applications with the legal adviser to Mr Simon McNally, about some relevant aspects of the complicated legal and factual background to the Directed Trial, of which he has a detailed historic knowledge.” No documents were exhibited on this topic.

72. Zoubir 21, in reply, pointed out that Thomas 6 was extremely vague, and did not address the points made in Zoubir 19. The parties agreed that Mr Thomas would be permitted to supplement Thomas 6, leading to the service of Thomas 7. The following passages are of particular note:- “19. My evidence at paragraphs 15 – 17 of Thomas 6 sets out all the information legitimately required to be addressed by paragraph 5(d) of the Debarring Directions Order about any involvement of Dr Smith and his associates in the Thomas Cross-Application (and the Harbour Application); and my funding of those, and provides supporting documentary evidence in the form of a letter from my litigation funder, LitFin, which was exhibited at NT5.

20. Although I believe it is clear from the context, I take this opportunity to confirm expressly that Litfin is also funding my opposition to the Debarring/Stay Application where Mr Zoubir has attempted in Zoubir 21 to suggest that this has not adequately been addressed (paragraph 113). In relation to this (and responding to paragraph 113) I would like to explain the following. At the time of preparing Thomas 6, no costs had been expended on opposing the Debarring/Stay Application (as distinct from complying with the Debarring Directions Order) and therefore at that time no funding had “been used to fund…the opposition to the Debarring/Stay Application” (to use the words of paragraph 5(d) of the Debarring Directions Order). Indeed, as I have outlined at paragraph 6 above, shortly after service of Thomas 6, my solicitors, Marriott Harrison, wrote to Harcus Parker pointing out that there was no basis to pursue the Debarring/Stay Application and asking Harcus Parker to confirm that the application would not be pursued. It was only after receipt of Harcus Parker’s responsive letter dated 18 December 2024 stating that Harbour still intended to pursue the Debarring/Stay Application that any costs started to be incurred in respect of the opposition to the Debarring/Stay Application. I can confirm that such costs have indeed been funded by LitFin since then, i.e. since 18 December 2024. For the reasons explained, there was no non-compliance with the terms of the Debarring Directions Order as alleged in paragraph 113 of Zoubir 21.

21. I also explained in those passages of Thomas 6 the substantial commercial interest I have in the Thomas Cross-Application (and my defence of the Harbour Application); and that the only involvement of the parties referred to in paragraph 5(c) of the Debarring Directions Order has been in the form of ad hoc assistance to me.

22. Zoubir 21 does not dispute my personal interest in the Thomas Cross-Application or in defending the Harbour Application; or that these are being funded independently (paragraph 95 of Zoubir 21 positively accepts this). Nor does Harbour explain what interest it believes Dr Smith or his associates have in these applications. In fact, paragraph 111.7 of Zoubir 21 demands that I explain what arrangements I have made with them about sharing “the recoveries” (it is not clear whether this relates to the Thomas Cross-Application or more broadly, and Mr Zoubir does not explain it further). In other words, Harbour is unable itself to identify any benefit that Dr Smith and his associates have in the Thomas Cross Application. In any event, it was clear from Thomas 6, but I repeat and categorically confirm, that none of them has any control whatsoever over the Thomas Cross-Application, or of my defence to the Harbour Application and I have not entered into any “arrangements” with any of them about sharing “the recoveries”.

23. Further, it makes no sense for me to work to undermine the outcome of the Directed Trial. The Consequentials Order provides at paragraph 4 that all of the assets referred to therein are subject to the Harbour Trust and are to be apportioned between the beneficiaries of the Harbour Trust in accordance with its terms. This is an order in my favour as a beneficiary of the Harbour Trust – a position which no party disputes – and it is therefore wholly in my interests to seek to ensure that all the designated assets pursuant to paragraph 4 of the Consequentials Order are ultimately transferred to the Harbour Trust so that I can benefit from them upon distribution. The Thomas Cross-Application does not work against this objective; rather, the purpose of the Thomas Cross-Application is to have the relevant parts of the Harbour IA declared unenforceable in line with the PACCAR Decision such that the distributions to me under the terms of the Harbour Trust are proportionately increased.” and:- “38. In paragraph 116, Harbour seeks further intrusive information, this time covered (I understand) by privilege. This will be addressed fully by my legal representatives in the course of submissions. Moreover and in any event, the information sought has no relevance to the Debarring Issue, given that I have now discharged all my costs liabilities to Harbour. In particular: … (4) In paragraph 116.5 Harbour demand to know whether Dr Smith or Mr McNally or other so-called “Smith Parties” procured or paid for legal advice as to the effects of the PACCAR judgment and the prospects of the Thomas Cross-Application. Again, this is irrelevant to the Debarring Issue, but, without waiving privilege, I can confirm categorically that they did not. (5) Paragraph 116.6 – Harbour demands to know what incentive Dr Smith and Mr McNally have to assist me. The next sentence refers to “any such incentives or arrangements agreed between Mr Thomas, Dr Smith and Mr McNally” which seems to form an allegation that there is some sort of “back-hander” or other financial arrangement between us. At paragraph 111.7 Harbour asserts that “some agreement must exist between [Dr Smith and me] or between Mr Thomas and Dr Smith’s associates by which any recoveries made by Mr Thomas are to be shared with him or them…”. This is more baseless and self-serving speculation: (i) I confirm categorically that there is no such financial arrangement or incentive agreement of any kind between us. They have chosen to provide assistance to me at my request because I assume that they consider it to be in their interests to do so, but I am not involved in their decision-making in this regard. I am certainly not involved in any agreements or arrangements to “thwart the Directed Trial Judgment or related decisions or the asset-realisation activities of court appointed asset holders” as referred to at paragraph 116.6. I address this further below. (ii) As I have already stated, as a matter of commercial logic, it is very much in my interests to pursue the Thomas Cross-Application because if the relevant parts of the Harbour IA are unenforceable this will lead to additional entitlements for me, as a beneficiary of the Harbour Trust, to the assets of the Harbour Trust.”

73. In the course of preparing reply evidence, Harbour found that Dr Smith’s metadata featured in Thomas 6 and Thomas 7 themselves, with Dr Smith described as their “ author ”. Asked about this, Mr Thomas’s then solicitors, Marriott Harrison, said that at some point prior to the service of Thomas 6, Mr Thomas met with Dr Smith, and that after that meeting, Dr Smith sent a Microsoft Word document by email to Mr Thomas; that Mr Thomas then forwarded the Word document to Marriott Harrison without explaining that it had come from Dr Smith; that Marriott Harrison used the Word document “for convenience” “ as a template ” to draft Thomas 6 and Thomas 7; and that “ the original content of the document was entirely overwritten during this process and none of the original content survived”. Attempts by Harbour to get further details were met by reliance on legal professional privilege.

74. Mr Thomas adhered to this version of events in Thomas 8, where he said:- “24. However, without waiving privilege, and in the spirit of providing assurances to the Court given Harbour’s dogged pursuit of this issue, I confirm that following the Directed Trial, I contacted both Harbour and the Enforcement Receivers to obtain factual information from them about Dr Smith’s companies and the various assets the Enforcement Receivers were seeking enforcement over. Harbour and the Enforcement Receivers refused to provide this information. In fact they refused to engage with me or meet with me at all, instead choosing to shut me out of discussions entirely in the manner that is recorded in the transcript of the 11 June 2021 Consequentials hearing, where Foxton J seems to agree with my counsel’s (Mr Crossley) submission that “It seems to me a pity that the enforcement receivers would choose to shut [Mr Thomas] out … We believe that [Mr Thomas] can actively assist, and I think that it is unfortunate that as owners of these assets, ultimately, they should be denied some level of input and consultation in relation to them.”

25. Given Harbour’s and the Enforcement Receivers’ refusal to assist me, out of necessity, I contacted Dr Smith in or around August 2021 to obtain the factual information from him. Dr Smith provided the information I needed in various telephone conversations and a small number of in-person meetings. As the matter unfolded further, however, I became increasingly concerned by allegations that I was in some way connected with Dr Smith and his actions. At the point of the debarring application, I therefore made the decision that I would cut ties with Dr Smith altogether. Having been ordered by Foxton J to address any involvement of Dr Smith in any Relevant Claim though, I contacted Dr Smith to clarify the extent of his factual involvement so that I could accurately outline this to the Court. Dr Smith subsequently sent me a short note in a document summarising his involvement, which I passed on to my then solicitors, Marriott Harrison LLP. Without explanation, Marriot Harrison used that document as a template for my witness statements, although the short content which Dr Smith had provided was not used but entirely overwritten.

26. Dr Smith had no role in drafting the content of my witness statements, provided no input or advice on what should go into them, and played no part in shaping the strategy for the application. His only involvement was as I have described, and I have had no interaction with him since.

27. I believe this sole event to be entirely consistent with what Harbour dismisses as my “contentions in evidence as to Dr Smith’s limited involvement” in paragraph 10 of Zoubir 23. In any event, my witness statements are based on my and only my input and were drafted by my previous solicitors on the basis of my instructions. Moreover, even Harbour admits in paragraphs 11-13 of Zoubir 23 that Marriot Harrison have confirmed that the communication from Smith was “entirely overwritten” and that “none of the content survived” during its work on my statement. Despite this recognition, Harbour have put in yet another application seeking to control my involvement in the proceedings (the security for costs application) and another witness statement seeking to discredit me on exactly the same grounds.

28. I cannot say whether or not Marriott Harrison’s use of document sent by Dr Smith as a template for my witness statements resulted in any of the metadata concerns that Harbour raises, but as I have previously confirmed, neither Dr Smith nor any of his associates have any control whatsoever over the Thomas Cross-Application, and I have not entered into any financial arrangements with any of them about sharing the recoveries.

29. As I confirmed in Thomas 6, any assistance Dr Smith (or Mr McNally, for that matter) has provided to me in respect of these applications has been ad-hoc, voluntary and unpaid, based on I assume his own interests. In respect of Mr McNally, and again without waiving privilege, he has also assisted me by providing factual information and administrative support for preparing for and responding to the applications, but all statements, views and instructions in respect of these applications are mine and Mr McNally has no control over the applications either. The factual information Mr McNally has provided has been limited to the nature and location of assets, given his knowledge of the original Isle of Man Settlement.”

75. It is difficult to give much credence to this evidence in circumstances where (a) Thomas 6 and Thomas 7 did not explain that Dr Smith had provided Mr Thomas with a document in this way and (b) having referred to and relied on the alleged contents of the document received from Dr Smith (hence, in my view, clearly waiving any privilege that might previously have applied to it), Mr Thomas has conspicuously failed to produce it. Moreover, the statements in Thomas 8 that, apart from this ‘sole contact’, Mr Thomas cut ties with Dr Smith when the debarring application was made (March 2023) is difficult or impossible to reconcile with (i) the open letter to the Lord Chancellor dated 16 April 2024, written to oppose retrospective legislation then under consideration to reverse PACCAR, signed, amongst others by each of Mr Thomas, Dr Smith and Ms Halevy of Marriott Harrison; (ii) the reference to Mr Thomas’ proposed attack on the Directed Trial outcome, at a hearing in Dr Cochrane’s Jersey proceedings on 6 February 2024 (to which he is not a party); and (iii) Mr Thomas’ reference to those proceedings in his letter before action dated 11 July 2024 (bearing in mind Dr Cochrane’s ongoing connection with Dr Smith, including her having previously been found to be Dr Smith’s nominee). Mr Thomas’s suggestion that “any assistance” that Dr Smith has provided in respect of these applications has been ad hoc, voluntary and unpaid is also hard to square with evidence of substantial prior financing provided by Dr Smith to Mr Thomas (which presumably remains due for repayment to Dr Smith).

76. It is also hard to see why Mr Thomas would need to ask Dr Smith for details of his involvement in Mr Thomas’s cross-application: Mr Thomas would know himself. All these matters give rise to the strong suspicion that the reason for consulting Dr Smith was to ask for his instructions about what to say.

77. All in all, I do not consider Mr Thomas to have provided a satisfactory explanation of the involvement of Dr Smith et al. in his cross-application. This is concerning in circumstances where it is unclear precisely how Mr Thomas personally could benefit from the Harbour Investment Agreement being held to be void. Even if he did recover, Dr Smith may at least attempt to take the benefit. In the course of the recent contempt proceedings against him, Dr Smith said “I have always believed my entitlement flows from my efforts, from the Smith Fee Agreement” . That appears to be a reference to an agreement between Dr Smith and the Orb Claimants, under which he may prima facie be entitled to 50% of any process received by (among others) Mr Thomas, up to a maximum of £40.9 million, in return for Dr Smith’s assistance with their claims. It emerged during the Directed Trial litigation that Dr Smith and Mr McNally had lent significant sums to Mr Thomas. Mr Thomas in his evidence on the present application made no reference to the Smith Fee Agreement, and has denied that Dr Smith has any such entitlement. It is unclear how Dr Smith could properly benefit from any recoveries Mr Thomas might make, given the unsatisfied confiscation order against Dr Smith. Nonetheless, it appears he might well make the attempt. (2) Source of funding

78. Paragraph 5d of the DDO provided that any evidence filed by Mr Thomas must identify any source of funds which had been used to fund the Relevant Claim (here, Mr Thomas’s cross-application) or the opposition to the Debarring/Stay Application.

79. Thomas 6 stated:- “Source of funding

16. I confirm that the source of my funding for the Thomas Cross-Application (and, indeed, of defending the Harbour Application) is an independent commercial third party litigation funder, LitFin Justice s.r.o. (“LitFin”). I am aware as a result of having been informed by Tomáš Vít, a partner of LitFin, that LitFin is a company forming part of the LitFin group. The LitFin group specialises in funding damages actions, offers comprehensive litigation services and has committed over EUR 50 million in litigation funding. The LitFin group is one of the major European litigation funders and is ranked in Band 3 of the Chambers Guide to Europe-wide Litigation Funding: Litigation Funding, Europe-wide, Litigation Support | Chambers Rankings. Mr Vít has also informed me that neither LitFin nor the LitFin group has any connection to Dr Smith, Mr Simon McNally or persons known to be associated with them and neither LitFin nor the LitFin group has had any communication with such individuals. The position is confirmed in a letter from Mr Vít, which is exhibited at pages 7-8.

17. I provide the information regarding LitFin’s identity to comply with paragraph 5d. of the Directions Debarring Order. However, in doing so I wish to register my concerns, in light of, amongst other things, Harbour’s very powerful position within the litigation funding market, that it may seek (directly or indirectly) to interfere with my relationship with LitFin to cut off my funding and, thereby, proceed with the Harbour Application on an unopposed basis. I wish to make clear that if Harbour misuses the information that I have provided regarding LitFin’s identity in any such way then I will apply to the Court for the appropriate relief. ”

80. LitFin is based in Czechia. Mr Thomas confirmed in Thomas 7 that it is also funding his opposition to the Debarring/Stay Application, and said no money had been spent on that application until 18 December 2024, since when LitFin had been funding the costs. In Thomas 8, he said:- “36. As I have previously advised, LitFin Justice s.r.o (previously known as LitFin dieseljustice s.r.o) is providing third party funding to me in respect of this litigation. The terms of that agreement remain confidential. LitFin Justice s.r.o is a member of the wider LitFin group: https://litfin.capital/legal-disclaimer/. LitFin is a trusted litigation funding firm with a proven track record. LitFin have informed me that they have a portfolio size of €3billion, with €55m having been invested into litigation funding, with an 89% success rate. I understand that they have over 10,000 clients across 7 jurisdictions.

37. LitFin have provided me with some recent case examples, to demonstrate the type of cases they fund, including, but not limited to:- …

38. At paragraph 59 of Zoubir 22, Mr Zoubir suggests that LitFin Justice s.r.o ought to consider submitting to the jurisdiction of the English Court, and consider offering security for costs to Harbour. That is most peculiar given that LitFin is not a party to this litigation, as stated above, and is under no requirement, so far as I am aware, to submit to the English Court’s jurisdiction. Further, in so far as I understand a party’s entitlement to security for costs, I understand that the Court may make such an order (if certain conditions are satisfied) as against a party to the proceedings. As I have said, LitFin is not a party to the proceedings, and no security for costs is therefore offered. Neither of these points are relevant to the merits of the Debarring Application in my view though. I am, however, in the process of arranging After The Event insurance to address the concerns Harbour has raised and I expect to be able to provide confirmation that this cover is in place shortly.

39. In so far as paragraph 60 of Zoubir 22 is concerned, I comment as follows: 39.1. As far as I am aware, LitFin does not submit to the jurisdiction of the English Court for the reasons stated above. 39.2. LitFin will not meet any adverse costs order, although as explained further in this letter, I believe all relevant adverse costs orders have been paid in full by me. 39.3. As already noted, I am in the process of arranging ATE insurance. 39.4. LitFin has confirmed to me that it is not a member of ALF but is a member of the Czech and Slovak Association which requires similar standards. Of course, LitFin’s internal compliance issues are a matter for them and I cannot comment further on this. They are also under no legal obligation to provide details of their capitalisation within the context of this litigation, and I consider it wholly inappropriate for Harbour to seek this internal intelligence from a competitor, which appears to be an attempt at exerting pressure on me. This is particularly the case given that I believe all adverse costs orders have been paid and ATE is presently being arranged. 39.5. I am advised that LitFin are under no obligation to offer security for costs. It is not a party to the proceedings and ATE is presently being arranged.”

81. Harbour points out that, without seeing the full terms of the LitFin funding agreement, it is not possible to tell whether LitFin would be contractually obliged to fund security for costs if Mr Thomas were ordered to provide it. (3) Outstanding costs orders

82. The DDO did not refer to these in its substantive provisions, but recited that:- “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:- “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 ”)”

83. The existence of outstanding costs orders, whether those referred to in the DDO or others, is at least a potentially relevant consideration in the Debarring/Stay Application.

84. Harbour lists Mr Thomas’s costs liabilities (including some which have now been discharged) as follows:- i) under the Consequentials Order (June 2021), any ultimate entitlements to Mr Thomas are subject to him first repaying over £1 million received in breach of trust, and the satisfaction of several million pounds of unpaid fees due to Stewarts Law (which Harbour understands still to be unpaid); ii) under the Costs Consequentials Order (October 2021), Messrs Thomas & Taylor were ordered to make a payment on account of £335,000 (plus interest) in relation to the Settlement Parties’ costs of the Directed Trial; iii) under an order dated 8 July 2022, Mr Thomas was required to pay £25,000 which related to Mr Thomas’ failed application to stay execution of the Costs Consequentials Order; iv) under the Part 8 Costs Consequentials Order (March 2023), Mr Thomas was required to pay £20,000 towards the Settlement Parties’ costs of the Part 8/Receivership Applications; v) under the Part 8 Costs Consequentials Order (March 2023), Mr Thomas was required to pay £7,775.48 (plus interest) towards the Joint Liquidators costs (the “ JL Costs ”); vi) under costs orders of the Isle of Man court of 15 May 2024, Mr Thomas is required to pay Mr Sodzawiczny (who became a Settlement Party very shortly before the Directed Trial) £112,273.06 (the “ Sodzawiczny Costs ”); vii) under the “ Contempt Costs ” (November 2024), Mr Thomas was ordered to pay a total of £334,777.10 on account of the Enforcement Receivers’ costs, which related to his post-trial conduct and which formed part of a compromise to avoid a contempt trial (February 2023); viii) under an order of ICC Judge Barber dated 16 June 2025, Mr Thomas is required to pay £42,000, arising out of Mr Thomas’ failed applications to set aside the Enforcement Receivers’ statutory demand in relation to the Contempt Costs Orders and to adjourn the hearing of his own set aside application (the “ Statutory Demand Costs ”).

85. Items (ii), (iii), (iv) and (v) above were the outstanding costs orders referred to in the recitals to the DDO. It is common ground that (ii), (iii) and (iv) have been discharged, albeit only in July and October 2024 and therefore late. Mr Thomas claims to have satisfied item (v), the JL Costs, too, and he notes that Zoubir 20 stated that “[t]he final costs order was settled by Mr Thomas on 22 October 2024” (§ 19). There appeared to be some doubt about this, since Zoubir 23 suggested that this sum (£7,775.48) had not in fact been settled. Mr Thomas’s counsel informed me that Mr Thomas had arranged to pay it again (subject to the right to recover any double payment), albeit Harbour noted it was not owed to them but to the joint liquidators, and questioned the source of any such payment. In all the circumstances, including the small size of the relevant sum in the scheme of things, I do not think it necessary to consider this costs order further.

86. Mr Thomas in any event makes the point that none of the outstanding costs are due to Harbour. Harbour counters that the sums due to the Enforcement Receivers, i.e. items (vii) and (viii) reduce the assets available for distribution to all Settlement Parties and thus do affect Harbour. On that basis, I consider it proper to take them into account to some extent. However, they have little connection with the Harbour Enforceability Application or Mr Thomas’s cross-application. The Sodzawiczny Costs arise from proceedings outside this jurisdiction, relate to parties not involved in these proceedings and concern obligations owed by multiple parties, not Mr Thomas alone. The Contempt Costs arise from an application pursued by the Enforcement Receivers and relate to a settlement resolving a dispute between the Enforcement Receivers and Mr Thomas. I have already indicated how the Statutory Demand costs arose. (4) Appropriate relief (a) Relief sought by Harbour

87. Harbour submits that the court should debar Mr Thomas from participating in the Enforceability Hearing (i) on the basis of his failure to discharge the burden imposed upon him as to the involvement of Dr Smith, Mr McNally et al. and (ii) on the basis of the unpaid costs orders. It submits that the order should be immediate, rather than on ‘unless’ terms, because Mr Thomas (a) has been the subject of multiple serious adverse findings by the English courts in connection with these matters; (b) has, by way of the DDO, had the same express opportunity and indeed obligation to respond to the underlying concerns as that afforded by an unless order; (c) has had multiple opportunities adequately to address those concerns, such that there is no reason to consider that a yet further opportunity is reasonable or proportionate, or likely to improve the position.

88. As a fallback, Harbour submits that the court could make an order allowing Mr Thomas to participate only on condition that he: i) provides full and proper further evidence on the matters referred to in the DDO, including disclosure of the “short note” Dr Smith is said to have provided to Mr Thomas and to have been used as a “template” for Mr Thomas’s witness statements; ii) satisfies the outstanding costs orders; and iii) provides security for costs in the sum of £290,700. (b) Debarring

89. The Debarring/Stay Application seeks 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 Ord, 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.” (emphasis added)

90. It is accepted that Mr Thomas’s cross-application is a Relevant Action for the purposes the Debarring/Stay Application. The application did not seek an order debarring Mr Thomas from defending any application that Harbour might itself make, such as the Harbour Enforceability Application, though as noted earlier Zoubir 21 served in January 2025 does invite the court to grant such relief.

91. Both parties submit that Mr Thomas’s cross-application is merely the mirror image of Harbour’s Enforceability application. Harbour also submits that, in the circumstances summarised earlier, it was in effect pressurised into making the application by Mr Thomas’s own threats of action, as well as Dr Cochrane’s application in Jersey raising the PACCAR point. Harbour submits that, in order to be effective, any debarring order needs to cover both the cross-application and the defence of Harbour’s Enforceability Application, and that Mr Thomas should not be allowed to escape from debarring by a procedural technicality.

92. At the same time, the fact that Harbour has itself issued the Harbour Enforceability Application is not without significance. But for Mr Thomas’s cross-application, Harbour would have been arguing for a debarring order falling wholly outside the terms of the Debarring/Stay Application, and which sought debarring in relation to an application raised by Harbour itself without a claim or application having been brought by Mr Thomas himself. Further, the fact that Harbour has felt it appropriate to issue the Harbour Enforceability Application itself may suggest that there is a point of substance that needs to be resolved, and which is relevant to the proceedings in Jersey as well as those here. As matters now stand, this court may be asked to address the PACCAR point at the Enforceability Hearing, contingently on Mr Thomas being able to overcome the various significant bars which stand in the way of his being entitled to rely on it (and, if relevant, the further bar applicable to Dr Cochrane by reason of her participation in the LCL Settlement).

93. It is clear from the history summarised earlier that Mr Thomas has been engaged in a persistent and collusive course of conduct aimed at avoiding the consequences of the Directed Trial Judgment. Further, for the reasons given in section (D)(1) above, I consider that Mr Thomas has not properly complied with paragraph 5d of the DDO, because his purported explanation of Dr Smith’s involvement in Mr Thomas’s cross-application has been unsatisfactory and incomplete. The costs orders that remain unpaid, albeit not directly owed to Harbour, are also a relevant consideration.

94. However, the question of debarment does not arise in the abstract but, rather, in relation to a specific proposed participation on Mr Thomas’s part in the proceedings. The question is whether Mr Thomas’s misconduct in the proceedings to date makes it just that he should be debarred from defending, and cross-applying in, the Harbour Enforceability Application.

95. The raising of PACCAR by, successively, Dr Smith, Dr Cochrane and Mr Thomas could be viewed as yet another facet of a course of abusive conduct seeking to evade the consequences of the Directed Trial Judgment. However, that cannot be said to be clearly the case.

96. First, the fact that Mr Thomas and others have acted abusively in the past does not demonstrate that further steps they may take are necessarily to be regarded as abusive.

97. Secondly, the PACCAR issue is distinguishable from an obvious abuse of the type which commonly involves attempting to recycle arguments already made, considered and rejected. It relates to a discrete issue of law, arising from a Supreme Court decision on a point that has led to challenges to other litigation funding agreements. Further, although in principle the point was available to be taken during the Directed Trial, the decision of the Competition Appeal Tribunal in the Trucks case was against it at that stage, and that decision was affirmed by the Court of Appeal shortly before the end of the Directed Trial.

98. Thirdly, some account should be taken of the fact that Mr Thomas has, belatedly, paid the outstanding costs orders due to Harbour, and during the hearing before me has offered to provide security for costs via ATE insurance (from an entity within the jurisdiction, separate from LitFin).

99. Fourthly, insofar as costs orders against Mr Thomas remain outstanding, I am not persuaded that they have sufficient nexus with his proposed participation in the Enforceability Hearing to be a significant factor in favour of debarring him. I do, however, take account of them (as well as Harbour’s general points about the length and cost of proceedings, significantly contributed to by Mr Thomas) when I consider security for costs.

100. In all the circumstances, I am not persuaded that it is abusive for Mr Thomas to have raised the PACCAR argument, or to defend or cross-apply in the Harbour Enforceability Application based on that argument; or, at any rate, that it is sufficiently abusive to justify debarring him from participation in the hearing of that application, either immediately or unless he complies with conditions of the kind proposed (in the alternative) by Harbour. I am not persuaded that I should reach a different conclusion if, as appears entirely possible, Dr Smith has been helping Mr Thomas in relation to the Application.

101. A further consideration is that, on the basis that the Enforceability Hearing may reach the PACCAR point in any event, it would not be ideal from the court’s point of view to have the benefit of arguments from one side only.

102. I make clear that nothing I have said above in relation to the question of debarment in any way pre-empts the court’s decision on the issues due to be heard at the Enforceability Hearing about whether Mr Thomas is disentitled from raising the PACCAR argument by reason of considerations of finality and res judicata (nor, if relevant, any argument based on abuse of process in the Henderson v Henderson sense). (c) Security for costs

103. Harbour’s application filed on 1 August 2025 seeks orders that:- “1. Mr Thomas shall provide security for Harbour’s costs of the Thomas Cross Application in the sum of £290,700, either: a. by payment into court, or b. by provision of a First Class Bank Guarantee from a UK-based bank, or a suitably worded ATE policy with relevant anti-avoidance provisions, or any other form of security proposed by Mr Thomas that is acceptable to Harbour and the Court.

2. If Mr Thomas does not comply with the requirements of paragraph 1 within [21] days, he shall be debarred from pursuing the Thomas Cross Application and contesting the Harbour October 2024 Application.” The application followed Zoubir 21 dated 13 January 2025 and Zoubir 22 dated 14 March 2025, both of which raised security for costs, albeit neither was itself an application for security for costs and neither sought security for costs in precisely the same terms as the application made by Harbour on 1 August.

104. Harbour submits that the court has jurisdiction to require security for costs, based on CPR r3.1(3)(a) (making orders subject to conditions) and CPR r3.1(5) (failure to comply without good reason with a rule, practice direction or relevant pre-action protocol), each of which empowers the court to order a party to pay a sum of money into Court, which then stands as security per CPR r3.1(6A). Any such order should be a proportionate and effective means of achieving a particular purpose, and requires the same consideration of the same factors, such as risk of stifling, as apply to orders requiring satisfaction of unpaid costs orders (see WB Notes 3.1.14.2 to 3 and 3.1.16, and Komcept Solutions Ltd v Prestige Group [2018] EWHC 1550 (Comm) ).

105. Harbour submits that there is no risk of stifling here. Mr Thomas has not sought to raise any such argument, nor to give the full and frank disclosure that would be required. Indeed, Mr Thomas’ position is that he has litigation funding in place for the Enforceability Hearing. However, the position in that regard is highly unsatisfactory from Harbour’s point of view, because LitFin is out of the jurisdiction and Mr Thomas has now confirmed that LitFin is unwilling to submit to the jurisdiction and unwilling to put up security voluntarily. He has also declined to disclose the full terms of the LitFin funding agreement, which would enable the court to see whether LitFin is contractually obliged to fund security for costs if Mr Thomas is ordered to provide it.

106. Further, Harbour points out, Mr Thomas has been able to access funds where it suits him, referring to:- i) the revelation, during the Part 8 Hearing before Foxton J, that the claim was being funded by entities connected with Dr Smith and Mr McNally (against whom, on Harbour’s evidence, there appears to be no plausible route to costs recovery); ii) Mr Thomas having confirmed that he was being funded by LitFin for the purposes of the Enforceability Application; and iii) the indication in Thomas 8 that he still intends to pursue parties whom he considers to be wrongfully holding trust property.

107. Mr Thomas does not dispute that the court has power to order security for costs, though he invites me to consider whether such an order should be refused or tempered on the grounds of delay on Harbour’s part, and otherwise to look carefully at the appropriate figure. For completeness, I record that I am satisfied that the court does have jurisdiction to order security here, at least under CPR r3.1(5) (failure to comply without good reason with a rule, practice direction or relevant pre-action protocol). Mr Thomas has breached court orders, both in relation to costs and in relation to the DDO, and an order for security is justifiable in circumstances where Mr Thomas has (in the ways I have already outlined) demonstrated a lack of “will to litigate a genuine claim or defence as economically and expeditiously as reasonably possible in accordance with the overriding objective” ( Olatawura v Abiloye [2002] EWCA Civ 998 at [25]).

108. I do not consider that security for costs should be refused or reduced on the grounds of delay. It was raised some months ago in Zoubir 21 dated 13 January 2025 and Zoubir 22 dated 14 March 2025, at the CMC (28 March 2025), in correspondence, and then by Harbour’s formal application of 1 August 2025. Mr Thomas did not suggest that he had been prejudiced in any way by the lapse of time between (a) the issue of the Harbour Enforceability Application, the issue of Mr Thomas’s cross-application or Mr Thomas’s affidavits purporting to comply with the DDO and (b) the issue of Harbour’s security application.

109. Harbour seeks security in the sum of £290,700. That is the total of:- i) £80,700, being one third of Harbour’s costs of the applications to date, that representing the proportion which Harbour estimates arose from Mr Thomas’s threatened and then actual cross-application; and ii) £210,000, being Harbour’s estimated additional future costs over and above those which would be incurred anyway if Mr Thomas were not participating. Harbour estimates that without his participation the hearing would reduce from 4 days as currently listed to 1 day, reducing the estimated future costs from £350,000 to £140,000.

110. I am satisfied that it is appropriate to order security for costs to the extent that Harbour’s costs are likely to be increased by reason of Mr Thomas’s cross-application. That includes the costs mentioned at (i) above, and a significant part of the costs at (ii) above. Overall, I consider the just order to be for security in the sum of £200,000.

111. Security should be provided promptly by payment into court or the provision of a suitable bank guarantee from a first-class UK-based bank. If acceptable ATE insurance can be provided, then the parties may in due course agree (or the court may direct) that security over that insurance should replace such funds or guarantee. (d) Bankruptcy order

112. The Committal Costs were the subject of a statutory demand and a bankruptcy petition, which as at the date of the hearing before me was due to be heard on 23 September 2025. After the hearing, the parties notified me that Mr Thomas was adjudged bankrupt on that date by the Insolvency and Bankruptcy Court. The parties did not suggest that that fact altered any of the matters I had to decide, but I shall hear any submissions that may be made about its impact (if any) on the appropriate relief. (E) CONCLUSION

113. Mr Thomas will not be debarred from participating in the Enforceability Hearing. He will, however, be required to provide security for costs in the sum of £200,000, subject to further argument in the event that making of the bankruptcy order renders it necessary to consider another form of order.