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||Neutral Citation Number:  EWHC 361 (Comm)
||Case No: CL-2015-000876
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
||Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
B e f o r e :
THE HON. MR JUSTICE POPPLEWELL
|| (1) ORB A.R.L
(2) ROGER JAMES TAYLOR
(3) NICHOLAS THOMAS
(4) PRO VINCI LIMITED
||- and -
||(1) STEPHEN RICHARD FIDDLER
(2) DOMINIC ANCIANO
Mr James Drake QC, Miss Lorna Skinner, Mr Nicholas Gibson (instructed by Stewarts Law LLP) for the Claimants
Mr Patrick Lawrence QC and Mr Shail Patel (instructed by Enyo Law LLP) for the
Hearing date: 18 February 2016
HTML VERSION OF JUDGMENT
Crown Copyright ©
The Hon. Mr Justice Popplewell :
- On 14 January 2016 I heard a without notice application by the Claimants for Norwich Pharmacal relief requiring the First Defendant ("Mr Fiddler") and the Second Defendant ("Mr Anciano") to deliver up telephones and telephone records, and to provide information on affidavit ("the Norwich Pharmacal Application"). Following redrafting of parts of the draft order, I made such an order against Mr Fiddler and Mr Anciano on 15 January 2016 ("the Norwich Pharmacal Order"). At the return date on 28 January 2016 and at a further hearing on 18 February 2016 an application was made on behalf of Mr Anciano to discharge the Norwich Pharmacal Order. At the conclusion of the hearing on 18 February 2016 I announced my decision to accede to that application, and gave such brief reasons as the lateness of the hour permitted. These are my fuller reasons.
- In August 2002, the First Claimant ("Orb") became the ultimate holding company of a group with interests in hotels, commercial and warehouse properties, transport and logistics businesses and venture and private capital. Dr Smith was its chief executive officer, a position he retained until his resignation in April 2006. The Second Claimant, Mr Taylor, was the group property director for the Orb group. The Third Claimant, Mr Thomas, is a businessman who became involved in the Orb Group in 2003.
- Orb is a company incorporated under the laws of Jersey. Its issued share capital is registered in the name of a trust company which holds the shares as the sole trustee of a settlement of which Dr Cochrane, Dr Smith's former wife, and their two daughters are the sole beneficiaries. Dr Cochrane, who is a medical practitioner practicing full time in Jersey, is the director and sole owner of Orb. The Fourth Claimant ("Pro Vinci") provides family office services to her and her family. The managing director and sole shareholder of Pro Vinci is Ms Dawna Stickler. Ms Sinead Irving is employed as an executive assistant to Ms Stickler.
- Orb, Mr Taylor and Mr Thomas are claimants in Commercial Court proceedings 2012 Folio 1414 (now CL-2015-000625) ("the main action") commenced in October 2012 against Andrew Joseph Ruhan ("Mr Ruhan"). The main action, which I describe in more detail below, concerns assets worth in excess of £250 million. It is awaiting trial.
- Although Dr Smith no longer holds any formal position or interest in Orb, the main action claimants have agreed with him that in return for his cooperation and assistance in that action, they will transfer to him 50% of the sums recovered in those proceedings (up to a certain limit). Dr Smith was described in the Claimants' evidence on the Norwich Pharmacal Application as being "a consultant".
The events giving rise to the Norwich Pharmacal Application
- The events with which this application is concerned were described in the course of argument as "shenanigans". They involve activity the full nature and purpose of which remains to a significant extent obscure or uncertain. Neither side suggested that they could provide a coherent explanation for all the evidence in the case.
- The genesis of the Norwich Pharmacal Order lies in the following events asserted by the Claimants:
(1) On 3 September 2015 Ms Irving was approached by a person using the pseudonym "Oscar" who wanted to speak to Dr Smith. At meetings on 7 and 10 September 2015 between Oscar and Dr Smith alone, Oscar explained that he was a computer hacker and that he had been offered £50,000 by an anonymous agent to perform a file drop of child pornography onto Dr Smith's or Pro Vinci's computer systems. Oscar said that he had evidence that the source of the instruction was an IP address associated with a boat in a harbour in Palma, Mallorca, and that he needed £30,000 to buy specialist equipment to enable him to provide evidence which would trace the source of his instructions. The impression which Oscar gave was that the source of his instructions was connected to Mr Ruhan.
(2) On 14 September 2015 Oscar met Ms Irving and Dr Smith at the Westbury Hotel, together with Mr Upson and Mr Erusalimsky of the Claimant's solicitors, Stewarts Law LLP. At that meeting Oscar was given £30,000 in cash for the purpose of buying equipment he said was necessary in order to trace the source of his instructions and provide evidence thereof.
- In anticipation of receipt of files containing child pornography from Oscar, the Claimants were concerned that they would be exposed to allegations of criminal conduct merely by virtue of receipt and examination of such material. Accordingly an application was made in private to Walker J on 25 September 2015 in effect to sanction the receipt and examination of such material. Walker J heard the application in private on the Claimants' without notice application, and made such an order including provisions designed to retain the privacy of such an order ("the Data Sticks order"). The application and order were made in the main action.
- The Claimants' account of events continues as follows:
(1) At a further meeting with Oscar at Pro Vinci's offices on 1 October 2015, at which Ms Irving and representatives of Stewarts Law LLP were present, Oscar handed over three memory sticks said to include the child pornography. The Claimants say that on that occasion Oscar was paid a further £100,000 in cash, which he had said he required in order to be able to produce the evidence of the source of his instructions. He said the material on the data sticks was encrypted; he declined to provide the password but said that any expert worth his salt would be able to get past the encryption.
(2) Matters then went quiet and the Claimants lost touch with Oscar.
(3) The next the Claimants heard was a telephone call from Mr Fiddler to Ms Irving on 22 November 2015 seeking to speak to Dr Smith about Oscar. A meeting was arranged, which took place on 24 November 2015, initially at Starbucks and then at Pro Vinci's offices, attended by Mr Fiddler, Dr Smith and Ms Irving. At that meeting Mr Fiddler played to them a video on his telephone, which portrayed Oscar, apparently reading a script from prepared cards, making the allegation that contrary to his earlier assertions, in fact he had been engaged by Dr Smith to file-drop child pornography on Dr Smith's/Pro Vinci's servers and to make it look as though he had been instructed to do so by Mr Ruhan.
- In the light of what Mr Fiddler was now saying, the Claimants sought an order from Walker J against Mr Fiddler for disclosure of Oscar's identity and to enable them to interrogate Mr Fiddler's phone in order to try to obtain information from the metadata which might cast light on the circumstances in which the video had been made, for the avowed purpose of discovering who was behind Oscar's behaviour. After a number of adjournments, Walker J made such an order on 14 December 2015 ("the First Fiddler Order"). That order was made in private and included provisions designed to avoid knowledge coming to the attention of Mr Ruhan or any others who might have been responsible for this scheme as it was understood to be at that stage. Unlike the Data Sticks Order, the First Fiddler Order was made in separate proceedings commenced for that purpose, which are the proceedings in which the Norwich Pharmacal Application and Order were subsequently made.
- On the return date for the First Fiddler Order, 21 December 2015, Walker J was told that Mr Fiddler had agreed to make Oscar available to provide an affidavit explaining his involvement, as a result of which the return date was adjourned until 18 January 2016.
- The history to this point is set out in considerably greater detail in two written judgments of Walker J dated 22 December 2015, one in each of the two actions. The judgments were given in private, but the privacy restrictions have subsequently been removed in relation to the Data Sticks Order made in the main action.
The Norwich Pharmacal Application
- Over the period between 21 December 2015 and 14 January 2016, the Claimants' representatives spoke to Oscar on a number of occasions. His true identity was now revealed as being one Oliver Mason.
- The return date for the First Fiddler Order and the Data Sticks Order was Monday 18 January 2016. The applications were now in separate proceedings with privacy attaching to the history of each. In the previous week I was provided with reading lists and skeleton arguments in respect of both hearings. The skeleton argument in relation to the Data Sticks return date indicated that the Order had run its course and that the Claimants would not seek to continue the privacy which had attached to that application and its return dates. When I had substantially, although not wholly, completed my reading, the Claimants made the without notice Norwich Pharmacal Application against Mr Fiddler and Mr Anciano on 14 January 2016.
- That came about because as a result of the discussions between Mr Mason and the Claimants' representatives since 21 December 2015, Mr Mason had provided a yet further account of events which was contained in his affidavit dated 14 January 2016. In that affidavit Mr Mason's account of events included the following:
(1) Mr Mason was approached by Mr Fiddler in late July/early August 2015. The approach came about because a longstanding friend said there was someone who wanted to make contact with him; Mr Fiddler was known to his friend's father "as he and Mr Fiddler operated in the criminal world". At a meeting at Mr Mason's house in Chester in late July/August, Mr Fiddler asked Mr Mason to carry out a job for his "mate" (who was not named) which involved hacking into three email accounts related to Dr Smith. Mr Fiddler gave him the email addresses of Dr Smith, Ms Stickler and Ms Irving at Pro Vinci. Mr Fiddler showed Mr Mason press reports on the Internet relating to the litigation between Orb and Mr Ruhan, identifying that there were hundreds of millions of pounds at stake. Mr Fiddler explained the task by saying that Dr Smith had an email proving, that he, Dr Smith, was corrupt; and that if Mr Fiddler's mate could get hold of that email then "he could 'bury' Gerald Smith". Mr Fiddler suggested that there was a 7-digit sum of money which might be obtainable for Mr Mason if he succeeded.
(2) Despite his reluctance to get involved, Mr Mason was pressed in phone calls by Mr Fiddler during August 2015 and at some point in August received a long text message from Mr Fiddler telling him off because he had not done what he had promised to.
(3) At that point, Mr Mason himself came up with the idea that he should contact Dr Smith and Pro Vinci, explain that he had been hired to hack into their systems with a view thereby to gaining their trust and thus gain voluntary access to the Pro Vinci server so as to be able to download all the emails and find the incriminating email. He discussed this plan with Mr Fiddler who, having apparently discussed the idea with someone else whom Mr Mason assumed to be his "mate", agreed with such plan. Mr Fiddler and Mr Mason met over the following days in August to discuss what was to be said to Dr Smith. The idea that it should be suggested that Mr Mason had been asked to file-drop child pornography onto the server was Mr Fiddler's. That was what gave rise to the approach to Dr Smith on 3 September 2015 and the meetings on 7, 10 and 14 September 2015. Mr Mason was driven to and from the meeting on 14 September 2015 by an associate of Mr Fiddler's.
(4) Over the following weeks Mr Fiddler and Mr Mason discussed how to make the evidence which was to be provided to the Claimants seem convincing. Mr Mason produced the data sticks containing the evidence of the alleged file-drop. He pretended to Mr Fiddler that there was child pornography on them, but because he found the idea of obtaining it so repulsive he made sure that they contained no such material. Accordingly the data sticks he handed over at the meeting with the Claimants on 1 October 2015 at Pro Vinci's offices did not in fact contain child pornography.
(5) Mr Mason said that at that point he was sickened by the whole affair and wanted to get out of it and disappear, but was constantly being pressed by Mr Fiddler.
(6) Until October 2015, Mr Mason had assumed, for reasons which he could not clearly recall, that Mr Fiddler's "mate" was a man called Harry Harvey. However, as a result of events in October it became clear to him that Harry Harvey was not the "mate" who had initiated matters.
(7) Mr Mason was approached again by Mr Fiddler on 19 November 2015, whom he met at a Costa Coffee in Chester. Mr Fiddler seemed determined to obtain the large sum of money available and suggested that they should "spin the story" so that it looked as though Dr Smith had initiated the child pornography plot from the outset. He suggested that a video should be made, the purpose of which was to blackmail Dr Smith to bury the story in the video; and that if Dr Smith would pay to stop the revelation of what was in the video, that would be an admission which could be taken to Mr Ruhan to extract money from Mr Ruhan. Accordingly, on that day the video was made at Mr Mason's house with that account of events. After making the video, Mr Mason was told by Mr Fiddler to leave it all up to him.
(8) In the week of 30 November 2015, Mr Fiddler came to Mr Mason's house to say that they would be selling the video to Mr Ruhan. Mr Mason was to speak to Mr Ruhan.
(9) On 10 December 2015, Mr Mason called Mr Ruhan on his mobile and gave the account which was on the video, namely that Dr Smith had engaged him to drop child pornography on his own/Pro Vinci servers and to make it look as though Mr Ruhan was responsible in order to incriminate Mr Ruhan. The matter was left that Mr Fiddler would then get in touch with Mr Ruhan. The following day Mr Mason was told by Mr Fiddler that the latter had met Mr Ruhan, together with an associate of Mr Ruhan's called Dom or Don (this was subsequently identified as Mr Anciano).
(10) On 15 December 2015, Mr Mason and Mr Fiddler had a meeting at Manchester Piccadilly station with Mr Ruhan, Dom (Anciano) and another gentleman (who proved to be a lawyer from Mills & Reeve called Adrian Kwintner). Mr Mason repeated the story in the video. Mr Anciano and Mr Fiddler seemed very friendly. Mr Anciano asked Mr Mason a series of questions about the story in the video in a way that seemed to be testing him out. Mr Anciano also asked Mr Mason to call Miss Irving in order to try to get her to come over to Mr Ruhan's camp. Mr Anciano and Mr Fiddler left to have a discussion; when they returned Mr Ruhan asked if it was all sorted and they said yes.
(11) Following the First Fiddler Order, and agreement that Mr Mason would provide an account to the Claimants, Mr Mason gave an account to Stewarts Law LLP on 21 December 2015 in which he was told by Mr Fiddler to say (falsely) that:
(a) he, Mr Mason, overhead Mr Fiddler talking to Harry Harvey about Mr Ruhan and Dr Smith;
(b) without telling Mr Fiddler, it was he, Mr Mason, alone who had decided to make up the story about child pornography to extract money;
(c) he had obtained Miss Irving's number by subterfuge from Mr Fiddler's phone;
(d) he had contacted Pro Vinci alone;
(e) he had only brought Mr Fiddler in when he was over his head by showing him the video and presenting that story as real;
(f) Mr Fiddler believed the story in the video was real right up to the point when at Manchester Piccadilly station, under Mr Anciano's questioning, he got some of the details wrong. Mr Fiddler then began to have doubts.
(12) Having gone on holiday over the Christmas period to South East Asia and "done a lot of soul searching" he had decided that the only way to end the nightmare episode was to tell the complete truth which was as set out in his affidavit.
- On the Norwich Pharmacal Application, the Claimants also relied upon an affidavit of Mr Woodhead, dated 14 January 2016. Mr Woodhead is a former soldier who works for Pro Vinci "to provide close protection and security services to Dr Gale Cochrane and her family, the employees of Pro Vinci and others associated with (including witnesses for) the Claimants". He gave an account of how on the 21 November 2015, he had been approached in his home town in Sheffield by Mr Anciano accompanied by two security personnel who now worked for Mr Ruhan but had formerly worked for the claimants, Mr Billingham and Mr Walker. They had attempted to persuade him to defect to Mr Ruhan's camp. In the course of doing so, Mr Anciano had made clear that he was an important part of Mr Ruhan's operations. At one stage, according to Mr Woodhead, Mr Anciano lent in close and said "Gerald [i.e. Dr Smith] even went to the extent of getting somebody to drop kiddie porn files on his own server and then blame Andy [i.e. Mr Ruhan]". Because this was described as taking place on 21 November 2015, only two days after Mr Mason said that Mr Fiddler had procured the making of the video in which that scheme had been articulated, this was relied on as independent corroboration of Mr Mason's evidence, and of Mr Anciano's involvement in the scheme.
- The Claimants also relied on an affidavit of John Henry Harvey (the "Harry Harvey" referred to by Mr Mason) dated 21 December 2015. He explained that he was a friend of Mr Fiddler who had stayed in touch with him since 2012. Mr Ruhan was someone whom he had known, and had a business relationship with, since about 2012 which had given rise to disputes. Whilst Mr Ruhan and he were in dispute, they had nevertheless stayed in touch and from time to time spoke about steps to resolve the dispute. Amongst other things, he said that prompted by a call from Dr Smith on 24 November 2015 to ask whether it was he who had given Mr Fiddler Miss Irving's telephone number, he met Mr Fiddler later that day at Wilmslow Station, where Mr Fiddler showed him the video. He also gave an account of having been told by Mr Fiddler on 16 December 2015 of the latter's meetings with Mr Ruhan on 11 December 2015 and 15 December 2015. He also described a further meeting with Mr Fiddler on 17 December 2015 at which Mr Fiddler recounted a recent meeting with "Dom" at Euston Station, in which Dom said he had come to meet Mr Fiddler on behalf of Mr Ruhan because Mr Ruhan could not be seen to be getting involved in the discussions; that Dom had told Mr Fiddler that Mr Ruhan was prepared to pay Mr Fiddler £230,000 to "finish this", which Mr Harvey understood to be a reference to the video; that Dom had said to Mr Fiddler that Ruhan's side had the case where they wanted it; and that Dom had said to Mr Fiddler that Mr Ruhan had said that "this whole thing has got Gerald (i.e. Dr Smith) and Harry Harvey all over it." This affidavit evidence was also relied upon at the Norwich Pharmacal Application hearing as corroborative of Mr Mason's and Ms Irving's account of events and as providing further evidence against Mr Fiddler and Mr Anciano.
- In the light of this further evidence from Mr Mason, taken together with that of Mr Woodhead and Mr Harvey, the Claimants made the application on 14 January 2016 for Norwich Pharmacal relief against Mr Fiddler and Mr Anciano. The application was also supported by a first affidavit of Ms Irving (her first in these proceedings) which did no more than exhibit the five affidavits she had already sworn in the Ruhan proceedings in relation to this matter, without the exhibits to those Irving (Ruhan) affidavits. I was also provided with a skeleton argument ("The Skeleton Argument").
- The alleged wrongdoing in support of which the Norwich Pharmacal relief was sought was formulated by the Claimants in the following terms in the Norwich Pharmacal Order which I made on 15 January 2016 (which involved the Claimants redrafting the wording from that in the draft order initially before me):
"5.4 (1) For the purposes of this Order, "the Scheme" means as follows:
(a) The conduct of Mr Oliver Mason (also known as "Oscar") and [Mr Fiddler] and other unidentified person or persons (possibly including [Mr Anciano]):
(b) during the period from around 1 July 2015 to date;
(c) by which Mr Mason and [Mr Fiddler], acting together and with unknown others (possibly including [Mr Anciano] agreed to do the following things:
(i) In the first instance, for Mr Mason to gain unlawful access (to "hack") into the computer servers of the [Pro Vinci] (in particular into the email accounts of Dr Smith, Ms Stickler and Ms Irving) and to obtain information therefrom, and pursuant to which to make the false representations to [Pro Vinci] and to Dr Smith that:
(1) Mr Mason had been approached by an anonymous agent and offered payment of £50,000 in return for planting child pornography on to the computer servers of the [Pro Vinci]and to make it appear as if the material had been accessed repeatedly;
(2) the source of the approach indicated that it was something to do and/or connected with Mr Andrew Ruhan and had originated from an IP address associated with a yacht in Palma, Mallorca;
(3) in order for Mr Mason to verify that association, Mr Mason would need to purchase specialist equipment at a cost of no less than £30,000;
(4) Mr Mason had possession of the relevant data on two data storage devices, one of which (containing child pornography) in encrypted form; and
(5) Mr Mason would require payment of a sum of £100,000 for provision of the data and documents relating to the matters set out in 5.4(c)(i)(1)-(4) above and for related services.
(ii) In the second instance, to procure an advantage by unlawful means from Dr Smith and/or [Pro Vinci] by making (the false) allegation that Dr Smith had contacted Mr Mason in August 2015 and that he, Dr Smith, wanted to place child pornography on [Pro Vinci's]computer servers and to make it look as if someone else had done so."
- At the outset of the hearing of the Norwich Pharmacal Application on 14 January 2016, I indicated that I had read the Skeleton Argument and most, but not quite all, of what was on the reading lists for the intended return dates on 18 January 2016. I made clear that I had not read in their entirety the five Irving (Ruhan) affidavits. Although I expressed reservations about granting relief based on the uncorroborated evidence of Mr Mason, and about what further action an order might enable the Claimants to take, Mr Drake QC ultimately persuaded me that I should in principle make orders against Mr Anciano and Mr Fiddler, in particular by reference to the corroborative evidence of Mr Woodhead, Mr Harvey and Ms Irving. It was not possible for the Order to be finalised or made on that day because it required further redrafting in a number of respects. The redraft was provided to me and signed and sealed late in the day on Friday 15 January 2016.
- The Norwich Pharmacal Order contained the following provisions vis a vis Mr Anciano (and equivalent provisions against Mr Fiddler):
- This is an injunction, with other orders as set out below, made against the Defendants on 15 January 2016 by the Judge identified above ("the Judge") on the application ("the Application") of the Claimants. The Judge:
1.1 pre-read the evidence referred to in Schedule A to this Order;
1.2 accepted the undertakings set out in Schedules B and C at the end of this Order; and
1.2 considered the provisions of the Human Rights Act 1998 ("HRA"), section 12.
JOINDER OF SECOND DEFENDANT
8. Mr Dominic Anciano shall be added as a Second Defendant to these proceedings.
INJUNCTION REGARDING THE SECOND DEFENDANT
9. The Second Defendant shall forthwith take all necessary and reasonable steps to retain and preserve:
9.1 any mobile telephone or other communication device or account which he owns or controls and which he has used to communicate with the First Defendant and any third party in relation to the Scheme during the Relevant Period ("the Anciano Telephones"); and
9.2 the last eight (8) months of itemised invoices or other records of communications corresponding to each of those mobile telephones or communication devices ("the Anciano Telephone Records").
10. The Second Defendant shall not later than 5.00pm on Monday, 18 January 2016 (or such later date as the Claimants may agree in writing) deliver to the Independent Solicitor
..Mr Malcolm Robson:
(a) the Anciano Telephones;
(b) all necessary information, codes and passwords that he may require in order to access the Anciano Telephones;
(c) the power supply cables and cognate devices that he may require to render the Anciano Telephones functional and operational; and
(d) the Anciano Telephone Records.
11. The Second Defendant shall no later than 500pm on Friday, 22 January 2016 (or such later date as the Claimants may agree to in writing) provide the Claimants (via the Claimants' solicitors, Stewarts Law LLP
with a sworn affidavit that:
11.1 identifies all those persons for whom he was acting in relation to the Scheme and/ or from whom he took instructions and/or with whom he consulted in relation to the Scheme and/or the Unidentified Principal(s) [which were defined as the unknown person or persons in the definition of the Scheme in paragraph 5.4 of the Order, set out above], and discloses the means by which to contact such person(s) (including the postal address(es), telephone number(s) and email address(es) of such person(s));
11.2 provides the dates, times, content and other particulars of all communications in relation to the Scheme and/or the matters described in Woodhead 1 and which have occurred between the Second Defendant and any third party in the Relevant Period, including in particular communications with Mr Ruhan, the First Defendant, Mr Harvey and/or Mr Darren Woodhead, and, where the communication was with someone via an intermediary, details of both the intermediary and the principal;
(a) for the avoidance of doubt, the details to be provided in respect of the matters set out in paragraph 11.1 above shall include particulars of the matters discussed at the meetings attended by the Second Defendant with one or more of the persons listed in that paragraph on 11, 15 and 19 December 2015;
11.3 provides the telephone numbers and/or other relevant identifying details of any mobile telephones or other communication devices owned or controlled by the Second Defendant and which were used in the communications set out in paragraph 11.2 above;
11.4 provides the details of all money, benefits and/or other consideration he has been offered or received in relation to the matters set out in paragraph 11.2 above, including the value, means of payment offered or made or the means of transfer, date of offer or receipt, and name, address and other relevant contact details of the offeror or payor of any such consideration;
11.5 provides the particulars of any agreement made with or offered to Mr Mason, including the details of all money, benefits and/or other consideration offered to Mr Mason and the consideration which Mr Mason was required to provide in return;
11.6 provides the particulars of any agreement made with or offered to the First Defendant, including the details of all money, benefits and/or other consideration offered to the First Defendant and the consideration which the First Defendant was required to provide in return; and
11.7 discloses the full name(s) of the person(s) who have worked or are working with or for the Claimants and who was or were or is or are providing the Claimants' confidential information to third parties.
THE INDEPENDENT SOLICITOR
12. Upon receipt of the Fiddler and Anciano Telephones, the Fiddler and Anciano Telephone Records and/or the Property delivered to him pursuant to the December Order (as defined therein):
12.1 the Independent Solicitor is authorised to inspect, view, copy and do all such things incidental to the foregoing in relation to the Fiddler and Anciano Telephones, the Fiddler and Anciano Telephone Records and Property for the purposes only of ascertaining the matters to be reported upon pursuant to paragraph 12.2 below;
12.2 the Independent Solicitor shall within 14 days of this Order prepare and submit to the Claimants (via the Claimants' solicitors, Stewarts Law LLP,
.a report on the following matters in relation to the Relevant Period:
(a) whether directly or indirectly through one or more intermediaries, the dates, times and (where known) substance of all communications between the First Defendant, and:
(i) Mr Ruhan, the Second Defendant and/or Mr Harvey;
(ii) any other third party identified by the First Defendant pursuant to paragraph 7 above;
(iii) any other third party where the Independent Solicitor reasonably believes that the communications with that third party were related to the Scheme;
(b) whether directly or indirectly through one or more intermediaries, the dates, times and (where known) substance of all communications between the Second Defendant, and:
(i) Mr Ruhan, the First Defendant and/or Mr Harvey;
(ii) any other third party identified by the Second Defendant pursuant to paragraph 11 above;
(iii) any other third party where the Independent Solicitor reasonably believes that the communications with that third party were related to the Scheme; and
(c) whether any voice, text and/ or other recorded messages and/or call logs and/or other records of communications in connection with the Scheme have or have apparently been deleted;
12.3 the Independent Solicitor has permission to seek assistance from one or more persons with expertise in analysing mobile telephones, in accordance with Part 35 of the CPR, to assist him in carrying out the tasks set out in subparagraphs 12.1 and/or 12.2above;
12.4 the Independent Solicitor may appoint one such individual to act as Independent Forensic Computer Expert if satisfied that that individual is appropriately qualified, has no conflict of interest, and has given undertakings to comply with CPR 35 and to take reasonable care not to damage the Property; and
12.5 the Independent Forensic Computer Expert, as so appointed, is authorised to do the things set out at sub-paragraph 12.1 above.
INABILITY TO COMPLY AND SELF-INCRIMINATION
13. To the extent that either of the Defendants asserts that he was or is unable to comply with paragraphs 5, 6, 7, 9, 10 or 11 of this Order, he shall, no later than 1230pm on the day after the date for compliance, email to the Claimants' solicitors an affidavit stating the reason(s) and identifying the steps he has taken to comply with those paragraphs.
14. If the provision of information in accordance with this Order is likely to incriminate a Defendant, that Defendant may be entitled to refuse to provide it, but is recommended to take legal advice before refusing to provide the information. Wrongful refusal to provide the information is contempt of court and may render the Defendant liable to be imprisoned, fined or have his assets seized.
ORDINARY USE OF THE PROPERTY
16. Nothing in this Order prevents either Defendant from using the Fiddler Telephones or Anciano Telephones and/or the Fiddler Telephone Records or Anciano Telephone Records in the ordinary way prior to delivering them to the Claimants, provided that such use is consistent with this Order.
MATERIAL PRE-READ BY THE JUDGE
1. Draft Amended Claim Form initialled by the Judge.
2. Draft Application Notice initialled by the Judge.
3. Judgments of Walker I dated 14 December 2015:
3.1 in these proceedings; and
3.2 in claim no. CL-2012-000625.
4. The December Order.
5. The following evidence:
5.1 First Affidavit of Mr Oliver Mason sworn on 14 January 2016 ("Mason 1");
5.2 First Affidavit of Mr Darren John Woodhead sworn on 14 January 2016 ("Woodhead 1");
5.3 First Affidavit of Ms Sinead Catherine Irving in these proceedings sworn on 14 December 2015 ("Irving (Fiddler Claim) 1");
5.4 Second Affidavit of Ms Sinead Catherine Irving in these proceedings sworn on 21 December 2015 ("Irving (Fiddler Claim) 2");
5.5 First Affidavit of Mr John Henry Harvey sworn on 21 December 2015 ("Harvey 1").
6. Written submissions filed on behalf of the Claimants:
6.1 in these proceedings:
(a) on 13 January 2016 (inter partes); and
(b) on 14 January 2016 (ex parte); and
6.2 in claim no. CL-2012-000625 on 12 January 2016.
UNDERTAKINGS BY THE CLAIMANTS
The Claimants provide the following undertakings to the Court and to the Defendants:
1. to pay any damages to the Defendants that the Court considers should be paid in respect of any loss that either or both of the Defendants sustains as a result of this Order;
2. if the carrying out of this Order has been in breach of the terms of this Order or otherwise in a manner inconsistent with the Claimants' solicitors' duties as officers of the Court, to comply with any order for damages the Court may make;
3.to file with the Court as soon as is reasonably practicable upon the making of the Order an amended Part 8 claim form and an application notice in the form of the drafts initialled by the judge;
4. to serve on each of the Defendants as soon as is reasonably practicable upon the making of the Order:
4.1 this Order;
4.2 the issued application notice and amended Part 8 Claim form pertaining to the application in respect of which this Order has been made;
4.3 the evidence listed in Schedule A, sub-paragraphs 1.1 to 1.5 (save, in the case of the First Defendant, where such evidence has already been provided);
4.4 a copy of the transcript of the hearing in relation to this application before Mr Justice Popplewell on 14 January 2016; and
4.5 the Claimants' written submissions for the hearing at which the Order was made; and
5. prior to the Return Date, to use information and material supplied by the Defendants pursuant to this Order only for the purposes of this claim."
- The short timescale provided for in paragraph 10, which required delivery up of the telephones by 5pm on Monday 18 January 2016, was imposed because I was told that service would be effected in London and I expected it to be effected on Friday 15 January 2016. In fact, it transpired that Mr Anciano was resident not in London but in Mallorca, and attempts were made to serve him there on the evening of Saturday 16 January 2016. There is a dispute as to what exactly happened in relation to such attempted service, but it is common ground that there was a conversation between the process server and Mr Anciano via the entry gate intercom at his walled villa, that the process server was not allowed entry, and that he threw a bundle of documents over the wall into the garden.
- The return date for the Norwich Pharmacal Order was 28 January 2016. On that occasion Mr Fiddler's representative made submissions that the order had been complied with, which I rejected. I continued the order against Mr Fiddler until an adjourned return date to enable further compliance.
- On behalf of Mr Anciano it was submitted that the order should be set aside. Shortly before the hearing Mr Anciano had served two affirmations dated 27 January 2016 in support of such application, one dealing with service, and the other dealing with his involvement with the events under scrutiny. It was apparent that there was insufficient time for that application to be determined in full given the inadequate time estimates provided by the parties. Mr Lawrence QC, on behalf of Mr Anciano, persuaded me to hear an application that the order should be discharged in any event on just one of the grounds advanced, which could be argued within the time available. This was that there had been failure to make full and frank disclosure to me as to the materials which the Claimants proposed to serve on Mr Anciano. This came to be referred to as "The Narrow Ground". Having heard argument on the Narrow Ground, I concluded that there was a breach of the duty of disclosure in the order being framed in a way which did not provide for service on Mr Anciano of all the material which I had considered, which had arisen due to a misunderstanding, in the way more fully described in my ruling on that date. Nevertheless I held that it was not possible at that stage to decide whether it was of sufficient materiality or gravity to justify or require immediate discharge of the order without re-grant in circumstances where I had not yet heard the merits of the full grounds on which it was sought to discharge the order. Accordingly I rejected the application that the order should be discharged without re-grant on the Narrow Ground alone and adjourned the matter to enable argument on the other grounds on 18 February 2016.
The Grounds for the Discharge Application
- On behalf of Mr Anciano, Mr Lawrence advanced essentially four main grounds for setting aside the order:
(1) There has been a failure to make full and frank disclosure in a number of respects.
(2) The evidence of wrongdoing put before the Court by the Claimants is incomplete, unreliable and in places incredible; and falls short of the solid, credible, candid and comprehensive evidence which is required, particularly in circumstances in which these Claimants have a history of abusing the Court's processes and misleading the Court.
(3) For the same reasons the evidence put before the Court as to Mr Anciano's involvement falls short of the cogent evidence needed to establish that he was sufficiently involved in the alleged wrongdoing to come within the Norwich Pharmacal jurisdiction.
(4) The purpose for which the information is sought is an illegitimate one: the Claimants do not seek the information in order to achieve legal redress against the perpetrators of any alleged wrongdoing, but are merely hoping to acquire evidence with a view to damaging the credibility of Mr Ruhan for the purposes of forensic advantage in relation to the main action and the dispute with which it is concerned.
- I am satisfied that the order should be set aside on the first and fourth of these grounds. They apply equally to the Norwich Pharmacal Order vis a vis Mr Fiddler, which I also ordered to be set aside at the conclusion of the hearing on 18 February 2016.
The Main Action
- In order to understand the issues which arise on those two grounds, it is necessary to provide some further detail of the dispute between the Claimants and Mr Ruhan which is the subject matter of the main action.
- Between August and November 2002, Dr Smith, the then Chief Executive of Orb, stole approximately £35 million from Izodia plc, a company in which Orb held a 29.9% shareholding, and misapplied the bulk of those monies for Orb's benefit. Of the total sum of £35 million stolen, only £2.78 million was returned, leaving a balance of £32.3 million owing to Izodia. In December 2002, the Serious Fraud Office raided Orb's offices in London and Jersey. As a result of the SFO's investigations, Dr Smith personally faced criminal sanctions. By early 2003, Izodia had also brought proceedings against Orb and Dr Smith for recovery of sums transferred from Izodia's bank account. Once Dr Smith's Izodia theft had been discovered, and in an attempt to ensure that the misappropriated funds could be repaid to Izodia, those in control of Orb resolved to sell a substantial proportion of Orb's assets, including a very valuable portfolio of hotels.
- During the early part of 2003, negotiations took place between Dr Smith on behalf of Orb on the one hand, and Mr Ruhan and Mr Campbell on the other hand, resulting in an agreement for the sale of various of Orb's assets to Mr Ruhan and companies associated with and/or controlled by him ("the Orb Assets"). The Orb Assets transferred by Orb to Mr Ruhan and various of his companies in 2003 included a substantial portfolio of 37 hotels, a further portfolio of development, commercial and warehouse properties and a warehousing and logistics business, and a minority shareholding in Izodia Plc.
- Following the acquisition, in or about 2004 a number of the Orb Assets came to reside in a group of companies within a Manx trust structure set up by deed of settlement dated 29 March 2004 known as "the Arena Settlement". These included Unicorn, Bridghouse (Cannizaro House) Ltd ("Bridgehouse Cannizaro") and Skypark Ltd ("Skypark"). Between 2004 and 9 April 2014, there were over 100 companies within the Arena Settlement. Whilst Mr Ruhan at one stage in the main action denied the same, he now avers that he was at all material times the ultimate beneficiary of the Arena Settlement, via his former solicitors and business advisors, Mr Simon Cooper and Mr Simon McNally, as nominees, who were discretionary objects thereunder. He also maintains that he was in ultimate control of all of the companies within the Arena Settlement.
- In April 2006, Dr Smith pleaded guilty to a number of charges relating to the transfer of Izodia's monies and was subsequently sentenced to eight years in prison. In 2007, a confiscation order was made against Dr Smith in the sum of approximately £41 million.
- On 27 October 2012, shortly after Dr Smith's release from prison, the main action was commenced by Orb, Mr Taylor and Mr Thomas. The Claimants allege that there was an oral agreement reached on 6 May 2003 between Dr Smith on behalf of the claimants, and Mr Ruhan, whereby the claimants would share the financial benefits accruing to Mr Ruhan flowing from the transfer of the Orb Assets to him and his companies, claimed to be worth in excess of £250 million. Mr Ruhan denies the claim in its entirety and has filed a detailed defence. The claimants have agreed with Dr Smith that, in return for his cooperation and assistance with the main action, they will transfer to him 50% of the sums recovered, up to the amount owing by Dr Smith under the confiscation order.
- Shortly before the deadline for disclosure in the action, in March 2014, Dr Smith, Dr Cochrane and a company incorporated in the Marshall Islands which they own and control, SMA Investment Holdings Limited ("SMA") entered into an agreement with Mr Cooper and Mr McNally. The effect of this arrangement, which came to be known as the Isle of Man Settlement, was for Mr Cooper and Mr McNally to transfer to Dr Smith, Dr Cochrane, SMA and/or their nominees, for apparently no monetary consideration, ownership and control of all of the businesses and property which they held under the terms of the Arena Settlement. The business and property so transferred included, inter alia, Bridgehouse Cannizaro, and Skypark. That is to say, rather than awaiting the outcome of the main action, Dr Smith, Dr Cochrane and SMA have taken matters into their own hands and have taken over control of such of the Orb Assets and/or their allegedly traceable proceeds as were in the Arena Settlement ahead of the trial.
- In response, Mr Ruhan is now counterclaiming in the main action for what he contends is a misappropriation of the Arena Settlement assets. His application to amend to pursue the counterclaim was heard with other applications by Cooke J over four days between 2 and 5 February 2015. The counterclaim involved a volte face by Mr Ruhan of the position adopted in his then current defence. In his original defence, when he was seeking to avoid interference by Dr Smith and the Claimants in his business affairs, he had said that he had no beneficial interest in the Arena Settlement assets. Now that what had emerged was that the Claimants had acquired the assets as a result of the Isle of Man Settlement, Mr Ruhan wished to assert that those assets were in reality his; and that although he was not a named discretionary beneficiary, Mr Cooper and Mr McNally who were at various times so named were always his nominees. Cooke J found that what Mr Ruhan had previously said had been misleading, and deliberately so, but that there was an arguable case for the proposed amendments and permission should be granted.
- It emerged before Cooke J that the Claimants had not only retaken control of the Arena Settlement assets in this way, to an extent which exceeded the value of the claim, but had also in part realised some of the assets and used the proceeds. Accordingly so far as the issues in the main action are concerned it is Mr Ruhan who is out of the money.
Full and Frank Disclosure
- The duty to make full and frank disclosure on a without notice application, and the principles which apply, are well known and do not require detailed exposition. It is sufficient for present purposes to quote the summary of Ralph Gibson LJ in Brink's Mat Ltd v Elcombe  1WLR 1350 at 1356F to 1357G:
"In considering whether there has been relevant non-disclosure and what consequence the court should attach to any failure to comply with the duty to make full and frank disclosure, the principles relevant to the issues in these appeals appear to me to include the following.
(1) The duty of the applicant is to make "a full and fair disclosure of all the material facts:" see Rex v. Kensington Income Tax Commissioners, Ex parte Princess Edmond de Polignac  1 K.B. 486, 514, per Scrutton LJ.
(2) The material facts are those which it is material for the judge to know in dealing with the application as made: materiality is to be decided by the court and not by the assessment of the applicant or his legal advisers: see Rex v. Kensington Income Tax Commissioners, per Lord Cozens-Hardy M.R., at p. 504, citing Dalglish v. Jarvie (1850) 2 Mac. & G. 231, 238, and Browne-Wilkinson J. in Thermax Ltd. v. Schott Industrial Glass Ltd.  F.S.R. 289, 295.
(3) The applicant must make proper inquiries before making the application: see Bank Mellat v. Nikpour  F.S.R. 87. The duty of disclosure therefore applies not only to material facts known to the applicant but also to any additional facts which he would have known if he had made such inquiries.
(4) The extent of the inquiries which will be held to be proper, and therefore necessary, must depend on all the circumstances of the case including (a) the nature of the case which the applicant is making when he makes the application; and (b) the order for which application is made and the probable effect of the order on the defendant: see, for example, the examination by Scott J. of the possible effect of an Anton Piller order in Columbia Picture Industries Inc. v. Robinson  Ch. 38; and (c) the degree of legitimate urgency and the time available for the making of inquiries: see per Slade L.J. in Bank Mellat v. Nikpour  F.S.R. 87, 9293.
(5) If material non-disclosure is established the court will be "astute to ensure that a plaintiff who obtains [an ex parte injunction] without full disclosure
is deprived of any advantage he may have derived by that breach of duty:" see per Donaldson L.J. in Bank Mellat v. Nikpour, at p. 91, citing Warrington L.J. in the Kensington Income Tax Commissioners' case  1 K.B. 486, 509.
(6) Whether the fact not disclosed is of sufficient materiality to justify or require immediate discharge of the order without examination of the merits depends on the importance of the fact to the issues which were to be decided by the judge on the application. The answer to the question whether the non-disclosure was innocent, in the sense that the fact was not known to the applicant or that its relevance was or perceived, is an important consideration but not decisive by reason of the duty on the applicant to make all proper inquiries and to give careful consideration to the case being presented.
(7) Finally, it "is not for every omission that the injunction will be automatically discharged. A locus poenitentiae may sometimes afforded:" per Lord Denning M.R. in Bank Mellat v. Nikpour  F.S.R. 87, 90. The court has a discretion, notwithstanding proof of material non-disclosure which justifies or requires the immediate discharge of the ex parte order, nevertheless to continue the order, or to make a new order on terms.
"when the whole of the facts, including that of the original non disclosure, are before [the court, it] may well grant
a second injunction if the original non-disclosure was innocent and if an injunction could properly be granted even had the facts been disclosed:" per Glidewell L.J. in Lloyds Bowmaker Ltd. v. Britannia Arrow Holdings Plc., ante, pp.1343H-1344A."
- The breaches of the duty of full and frank disclosure duty which I find to be established are the following.
(1)The findings of Ms Registrar Barber
- There was a failure sufficiently to draw to the Court's attention the nature and seriousness of the findings of Ms Registrar Barber in her judgment of 19 December 2014. The Registrar was concerned with bankruptcy petitions presented by Skypark and Mr Harvey against Mr Ruhan, together with statutory demands by a number of companies including Bridgehouse Cannizaro. Bridgehouse Cannizaro and Skypark were companies in which the ultimate beneficial ownership was a matter of dispute, because they were the subject matter of the Arena Settlement, but they were claimed by Dr Cochrane to be in the ultimate beneficial ownership of Orb, and the presentation of the petitions and statutory demands on their behalf was procured by Dr Smith and/or Orb. The petitions were presented on an expedited basis under s.270 of the Insolvency Act 1986.
- At paragraph 109 of her judgment, the Registrar concluded that not only was the petition wholly lacking in merit, as was the demand upon which it was based, but also that expedited presentation of the Skypark petition was unwarranted. The expedited presentation resulted in substantive injustice to Mr Ruhan by depriving him of the opportunity to set aside the statutory demand, which would undoubtedly have occurred had Skypark not unjustifiably claimed to have been entitled to expedited presentation. Mr Ruhan was thereby subjected to the serious prejudice of having a bankruptcy petition recorded against his name affecting his standing reputation and credit which ought not to have occurred. At paragraph 110 she recorded that in the circumstances she would mark the disapproval of the Court not only on the grounds that the petition was unjustified but also that its presentation on an expedited basis was unjustified. She awarded indemnity costs.
- At paragraph 219 to 220, the Registrar dismissed the petition of Mr Harvey and sought to mark the Court's disapproval for the same reasons and in similar terms as for the Skypark petition. The petition wholly lacking in merit, as was the demand upon which it was based, and the expedited presentation of the Harvey petition was unwarranted.
- At paragraphs 141 to 144 the Registrar drew attention to a series of anomalies in the invoices which were said to support the statutory demand made by Bridgehouse Cannizaro. At paragraph 145 she recorded that viewed in the context of the evidence as a whole "they bear all the indicia of having been doctored."
- At the end of her judgment she addressed the argument raised on behalf of Mr Ruhan that the petitions and statutory demands which formed the subject matter of the hearing, together with other demands which had either then been abandoned or not then served or pursued, formed part of an abusive concerted attempt on behalf of Dr Smith, Dr Cochrane and the claimant companies to force Mr Ruhan to settle the main action, amounting to an improper collateral purpose. The Registrar concluded at paragraph 226 that the relevant question was whether the demands and petitions were being used as "instruments of oppression" and concluded on the evidence before her that they "clearly" were. She therefore concluded at paragraph 228 that regardless of her other grounds for setting aside the demands and petitions, it would have been appropriate to set them aside on the grounds of abuse and/or improper purpose alone.
- The Norwich Pharmacal Application skeleton put before me for the hearing on 14 January 2016 contained a section headed "full and frank disclosure" commencing at paragraph 49. That made no mention of the judgment of Ms Registrar Barber or her findings. There was a reference to it in Ms Irving's first affidavit (Ruhan) at paragraph 49 in a section under the heading "full and frank disclosure" in which she said the following:
The conduct of all the parties including the Claimants, has been criticised by the Court. I refer in this regard to the following example of criticisms made in judgments:
a. Judgment of Registrar Barber dated 19 December 2014 [SCI1 pages 151 to 152] in respect of Skypark Limited's unsuccessful petition heard on 29 and 30 October 2014 in the High Court in bankruptcy to bankrupt Mr Ruhan which was dismissed with indemnity costs and in which the Registrar described the Skypark Limited's petition as a tool of oppression against Mr Ruhan
- Exhibit SCI1, and therefore the judgment itself, was not amongst the papers attached to Ms Irving's first affidavit in the Fiddler proceedings, which only exhibited her previous affidavits in the main action, not the exhibits thereto.
- This affidavit of Ms Irving was amongst those which I specifically drew to Mr Drake's attention at the beginning of the 14 January 2016 hearing that I had not read, or at least not read in their entirety. I did however indicate, as was the case, that I had read Mr Justice Walker's judgments dated 22 December 2015. Paragraph 46 of the judgment in the main action includes a recitation of paragraph 49a of Ms Irving's affidavit. Mr Drake therefore submits that what was contained in that paragraph was sufficiently brought to the attention of the Court, I having confirmed at the outset of the hearing that I had read Mr Justice Walker's judgment.
- In my view this does not amount to sufficiently full or frank disclosure of the nature and findings of the Registrar for a number of reasons:
(1) In a without notice application of the kind with which I was concerned, it is not sufficient that something important which needs to be drawn to the attention of the Court is merely to be found somewhere amongst the material before the Court. What is required is that attention should specifically be drawn to it as something which is potentially adverse to the claimant's case insofar as it is relevant to the issues which the Court is being asked to decide. In this case, a specific section was devoted to full and frank disclosure in the skeleton argument put before me. It can now be seen to be derived from the fuller account in Ms Irving's first affidavit, but to have been edited to remove any reference to Ms Registrar Barber's Judgment. The Court was entitled to expect that any material matters would be included in the skeleton which purported to address them. The duty to draw specific attention to matters in the evidence which are potentially adverse to the granting of the relief sought is all the more important in a case such as the present where a Judge is coming for the first time, on an urgent and expedited basis, to a case with a lengthy and complex background, involving a substantial body of documentary material.
(2) In any event, there were a number of important aspects of the findings of the Registrar and the terms in which they had been expressed which ought to have been drawn to the Court's attention and were absent even from the summary in Ms Irving's affidavit quoted in the Judgment of Walker J. They include the following:
(a) The criticisms had been made not only in relation to Skypark but also in relation to Mr Harvey. That was important, not least because Mr Harvey's evidence was relied upon before me as evidence upon which I could rely for the purposes of corroborating the Claimants' evidence and that of Mr Mason.
(b) There was no mention of the fact that the Registrar found that the invoices on which the statutory demand of Bridgehouse Cannizaro bore the indicia of having been doctored.
(c) Although Ms Irving's affidavit referred to Skypark's petition being used as a tool of oppression against Mr Ruhan, it did not capture the full flavour or seriousness of what the Registrar found in paragraphs 222-228. In those paragraphs she accepted the submission on behalf of Counsel for Mr Ruhan that those petitions and statutory demands formed part of an abusive and concerted attempt on the part of Dr Smith and Dr Cochrane and the Claimants to force Mr Ruhan to settle the main action. It was material to draw attention to that aspect, because it is highly relevant to the Norwich Pharmacal relief which was being sought for the Court to consider what was the Claimants' true purpose in seeking the relief, and whether it was in fact merely to seek advantage against Mr Ruhan in order to force him to settle the main action. It was also material to the weight which could be attached to Mr Harvey's evidence, because it indicated that Mr Harvey was prepared to indulge in abusive process for the same purpose at the behest of Dr Smith and Dr Cochrane.
(2) The Judgments of Cooke J of 11 February 2015 and 20 March 2015
- As I have indicated above, in early February 2015 Cooke J heard an application by Mr Ruhan for permission to amend his defence and pursue a counterclaim for recovery of the assets of the Arena Settlement or their proceeds. At the same time Cooke J also heard an application by the claimants in the main action to add Mr Stevens and three other corporate defendants, together with permission to serve them out of the jurisdiction; and for a proprietary injunction against those defendants with ancilliary relief. Cooke J refused the application to serve out of the jurisdiction against the additional defendants and refused the application for an injunction.
- At paragraph 50 of his judgment of 11 February 2015, he drew attention to the Isle of Man Settlement, by which Dr Smith and Dr Cochrane and their creature company SMA had procured that Mr Cooper and Mr McNally who controlled the assets of the Arena Settlement had been prevailed upon to transfer those assets to their control. He described the terms of the documents which were disclosed in relation to the Isle of Man Settlement as "extraordinary". He drew attention to the remarkable circumstances in which Mr McNally and Mr Cooper put forward evidence to the Court that they were entitled to the assets concerned, without any nominee arrangement, but where no consideration appeared to have passed to them in respect of the supposed loss to them of millions of pounds worth of assets which they collectively owned, other than the compromise of a claim against them, where there was no explanation with supporting evidence of the background to, the nature of, and the exact terms of the Isle of Man Settlement.
- The Claimants' conduct in relation to the Isle of Man Settlement was regarded by Cooke J as fatal to the application to serve out of the jurisdiction and for injunctive relief for two separate reasons. First, as articulated at paragraph 47 of the judgment, Cooke J identified that although the Claimants might have established realistic prospects of success on the causes of action against the Stevens defendants it was seeking to join, nevertheless the Court would not countenance permitting service out of the jurisdiction where full recovery had already been made in respect of the claim for the profit shares alleged against them by virtue of the remedy of self help which Dr Smith, Dr Cochrane and the Claimants had achieved through the extraordinary Isle of Man Settlement. Secondly, at paragraphs 49 to 56 Cooke J held that although the claimants had held the assets themselves for nine months and disposed of some of them for considerable sums, they had failed to inform the Court that the value thereby obtained exceeded the value of the claim being advanced against Mr Ruhan, conduct which Cooke J again described as extraordinary. On the evidence which became available, they had recovered far more than any claim they could properly justify, even if they were right on all points. Moreover, until the third day of the hearing, the claimants steadfastly refused to give disclosure of the Isle of Man Settlement documents to Mr Ruhan. These failures constituted a failure to make full and frank disclosure, showed a lack of clean hands, and prevented it being just and convenient to grant discretionary relief.
- Cooke J concluded, at paragraph 57:
"This is hard fought litigation with no holds barred between parties who are at enmity with one another and where a war of attrition is being waged in the shape of this action and other litigation being waged by the claimants against Mr Ruhan. The history of proceedings in the Isle of Man and of bankruptcy applications launched at the claimants' instigation and dismissed, with indemnity costs, because they were being used as a tool of oppression, speaks for itself. The Court will not give aid to a party who seeks to harass another in this way. It is not just and convenient to do so."
- Cooke J went on at paragraph 139 of his judgment to say:
"It is clear from Dr Smith's approach, as mentioned earlier, that he uses the process of litigation, and abuses it, for the purpose of obtaining leverage and harassing others
- The Norwich Pharmacal Skeleton Argument, largely reflecting what was in Ms Irving's first affidavit (Ruhan) at paragraph 49b, referred to the judgment of Cooke J in the following terms:
"53. The litigation has been described as no holds barred litigation. The proceedings between the First to Third Applicants and Mr Ruhan are bitterly contested and no expense has been spared by any party in litigating the case. The claimants, Mr Ruhan and their associates have also engaged in related litigation in BVI and the Isle of Man. The conduct of all parties, including the Claimants has been criticised by the Court.
54. By way of example, in the judgment of Cooke J in respect of the first to third applicants' failed application on 11 February 2015 to join Mr Stevens and three companies owned and/ controlled by Mr Stevens as co-defendants to these proceedings and for a freezing injunction against those parties and Mr Ruhan, the claimants were criticised for making an over-recovery through self help. They were also criticised for the failure to make disclosure of a certain settlement agreement between the claimants and Mr Ruhan's former associates until midway through the hearing which the judge considered to show a lack of clean hands and a failure to offer full and frank disclosure. The claimants were ordered to pay Mr Stevens' costs on the indemnity basis, and to pay £1,000,000 on account of his claim for costs of £3.1m."
- Whilst this gave some disclosure, in my view it failed to give sufficient full and frank disclosure of the terms and nature of Cooke J's findings. In particular, it failed to bring to the Court's attention the following:
(1) The application had in substance been rejected not merely for a failure to give full and frank disclosure and to come to the Court with clean hands, but also, as revealed particularly in paragraph 47, because it was an abusive application in circumstances where although there might be arguable causes of actions against Mr Stevens and his companies, there could be no realistic recovery from them in view of the recovery which had already occurred through the remedy of self help. It was not, therefore, a case merely of non-disclosure/lack of clean hands but an example of the Claimants' abuse of Court procedures by seeking to join defendants for a collateral purpose when there was no justification for the ostensible purpose of pursuing claims against them.
(2) There was no attempt to draw attention to the findings at paragraph 139 that it was clear from Dr Smith's approach in that case that he was using the process of litigation and abusing it for the purpose of obtaining leverage and harassing others.
(3) The expression in the skeleton argument that "the Claimants were criticised for making an over recovery through self help" is insufficient to convey the true nature or gravity of the findings of Cooke J in relation to the Isle of Man Settlement, the "extraordinary" documents which were produced to evidence it, and the circumstances surrounding it.
- In his judgment of 20 March 2015,Cooke J recorded the following:
"1. At the time of the hearing before me in February, the position being advanced on behalf of Orb parties was that the Arena assets were to be ring fenced and that the effect of the undertakings which had already been given prior to that date, on 26 September, together with the assurances effective as from 23 September, was that such assets had already been ring fenced. Reference to the transcript for Days 4 and 5 makes those points clear.
2. What the Court was not told, but is now being told in Dr Cochrane's third witness statement and in the StoneTurn report, is that by 24 September a considerable volume of the Arena Trust Assets had already been moved, such that they were not within the Arena Trust and had been expended as part of Dr Cochrane's "personal expenditure". The premise therefore upon which the order proceeded and upon which the undertakings which appear in the order were given, was therefore not a correct premise. The order made on 11 February was intended to protect the position pending trial, with schedules of the parties' undertakings to that effect, so that the Arena Trust assets were ring fenced and an order made by this court as to the entitlement of the ultimate beneficial owner would be effective."
- This reflects a further serious respect in which the Court was misled. Moreover Cooke J went on to require the Claimants to give further disclosure in relation to realisation of assets which had been the subject matter of the Arena Settlement in terms which included findings at paragraph 12 that:
(9) The Court has been further misled about the settlement between the Orb parties and Mr Cooper and Mr McNally. It now appears that the £10 million paid by Mr Cooper and Mr McNally was the subject of a further agreement on 16 September 2013 for repayment with a commission of 5 per cent to be paid by the Orb parties to these two individuals on all realised and unrealised assets of the Arena Settlement that they handed over to the Orb parties. There is no evidence before the Court that any such sums have in fact been paid, but the existence of the agreement is now plain and was not a matter disclosed to the Court at the time of the hearings in February.
10. The excuse or apology offered in breach of the order is in my judgment inadequate
nor explains how it was that the Court came to make orders or accept undertakings on the basis of an unfounded premise that the Arena Trust assets remained within the Arena Trust at the relevant time. In my judgment, Mr Ruhan's complaint that the Orb parties cannot be trusted is well founded."
- The disclosure which was made to me on 14 January 2014 in relation to this judgment was contained in paragraph 55 of the Skeleton Argument in the following terms:
"Cooke J also made further criticisms of the claimants during his subsequent hearing in March 2015."
- This disclosure again fails adequately to draw attention to the nature and gravity of the criticisms there being made. In particular it failed to draw to the Court's attention that:
(1) the Court had again been deliberately misled by the Orb parties, both in relation to the assets which were going to be ring fenced by the undertakings which had already been given, and in relation to the £10 million; and
(2) Cooke J had concluded that the Orb parties cannot be trusted.
(3)The Judgment of Warby J of 17 March 2015
- On 17 December 2014, Dingemans J acceded to a Norwich Pharmacal application brought by Orb, Pro Vinci and Dr Cochrane against a security company, Quest Global Ltd. The Claimants' evidence was that Quest had approached Mr Woodhead, who was providing security services for Pro Vinci, in circumstances which suggested it held confidential information about Dr Smith; and that Quest had, in summary, attempted to induce Mr Woodhead to join Mr Ruhan's camp and use what he knew about Dr Smith, Pro Vinci and the Claimants for Mr Ruhan's benefit. Dingemans J was persuaded to order Quest to disclose the identity of its client.
- The Claimants then made an application seeking permission to use the material disclosed for the purposes of the main action against Mr Ruhan. Warby J refused permission for reasons set out in a judgment of 17 March 2015. Paragraphs 13 and 19 of Warby J's judgment made clear that the issue to which the information was said to be relevant, and the purpose for which the claimants wished to use it, was an attack on the credibility of Mr Ruhan in the main action. At paragraph 48 of his judgment, Warby J said:
"I am concerned at the prospect that the Norwich Pharmacal jurisdiction might be subject to what in other contexts has been called "function creep" whereby the obtaining of information for one purpose enables the recipient to deploy it for another and distinct purpose. It is generally undesirable, in my judgment, for the valuable Norwich Pharmacal jurisdiction to be used as a tool to dig up evidence and facts which are in reality designed merely to impugn the credit of witnesses or parties in litigation. I recognise that the argument that it should be up to the Commercial Court to determine the extent to which this information is of use and relevance has some force. Nonetheless, it seems to me the applicants need to cross the preliminary threshold of demonstrating the need of the exercise of the Norwich Pharmacal restriction in their favour in this respect and I am not satisfied that they have succeeded in that task."
- There is no mention of this in the section of the skeleton argument before me on 14 January 2016 dealing with full and frank disclosure. There was a reference to that litigation at paragraphs 52d, 53 and 54 of Ms Irving's first affidavit (Ruhan), most of which was quoted by Walker J at paragraphs 48 to 49 of his judgment dated 22 December 2015, but in terms which invoked those aspects which were said to favour the Claimants as evidencing that they had been subject to a campaign of harassment.
- The true nature of the failed application to Warby J, and the grounds on which it was rejected, ought to have been drawn specifically to the Court's attention. This was not merely a relevant authority on which a Norwich Pharmacal application had been rejected because it was being used for an illegitimate purpose, namely to impugn the credit of witnesses or parties in litigation. More importantly it revealed that this was a previous occasion on which these very claimants had sought to invoke the Norwich Pharmacal jurisdiction specifically for the purposes of attacking the credit of Mr Ruhan in the main action. That was highly relevant to a consideration of whether the jurisdiction was being invoked again for precisely the same purpose. As Mr Lawrence put it, the fact that the Claimants had tried this gambit before and it had failed sheds light on the real purpose of the current application.
(4) What Doctor Smith said about the Claimants' intentions at the meeting with Mr Mason at the Beaumont Hotel on 8 January 2016.
- Mr Mason met representatives of Stewarts Law LLP at the Beaumont Hotel on 8 January 2016. Dr Smith had arranged for him to stay there, at his or the Claimant's expense, for the purposes of acquiring his evidence. Dr Smith attended for the first twenty minutes of the meeting. A criminal barrister, Ms Collins, attended for the purposes of taking a note. Her note, as corrected with the agreement of Mr Upson, the partner of Stewarts Law LLP, was not before the Court on the 14 January 2016, nor was there any reference to the content of what was said on that occasion. That note has now been produced. The record of the meeting shows that Dr Smith was anxious to secure the full story from Mr Mason, and to allay his concerns about his personal safety. At one point there was the following exchange:
"Mr Mason: as soon as I divulge, I am trusting you not to harm me
Dr Smith: without wanting to sound rude we are not interested in you."
- At a later stage Mr Mason was expressing his fear that he was going to be killed because of "money", by which I understand him to have been referring to his belief that there was a lot of money involved in the dispute between Mr Ruhan and the claimants in the main action. Dr Smith's response was recorded in the following terms:
"The money has already gone. We have recovered the money from Ruhan [I interpose to say I understand this to be a reference to the self-help resulting from the Isle of Man Settlement]. This is all tidying up. He can't recover this. This is not a case where your testimony makes a difference to who recovers money. What we are interested in is stopping the case. I don't want to deal with AR [i.e. Mr Ruhan] again I have spent 10 years on this. The Genii guys [associates of Mr Ruhan] or Ruhan are not going to get an advantage or disadvantage from what you say Something induced you to come and see us and we would like to know what that is. Once we have that we can bring this to an end. It is ending it that we are interested in, not that you give us facts and we try to use it in a claim in court."
- My interpretation of the note is that Dr Smith was saying that once they learned from Mr Mason who and what lay behind what has been labelled "the Scheme", the Claimants were not interested in trying to use it in a claim in court against anybody responsible; but that what they were interested in was using it to bring an end to the litigation with Mr Ruhan. It is obvious that this exchange is highly material to the question whether the application is being pursued for a legitimate purpose. It was not drawn to the Court's attention on the without notice application. This was a very serious failure.
(5) Failure to disclose the notes of the meetings with Mr Mason on the 21 December 2015 and 8 January 2016, and draw attention to discrepancies between the account given on the latter occasion and that given in his affidavit.
- As I have set out above, in Mr Mason's affidavit he gave a summary of the (admittedly false) account which he had given to Stewarts Law LLP on 21 December 2015. In paragraph 57 of the Skeleton Argument for the 14 January 2016 hearing the Claimants specifically drew attention to the fact that Mr Mason had offered four different versions of events and that the version which he told Stewarts Law LLP at the meeting at their offices on the 21 December 2015 differed from the current version set out in his affidavit. The attendance notes of that meeting were produced at Mr Anciano's request and were before the Court at the 18 February 2016 hearing, but not at the without notice application hearing on 14 January 2016. Whilst it would have been better if they had been produced, not least because they should have been provided following the hearing to Mr Fiddler and Mr Anciano, I do not regard that failure as significant in the context of other failures.
- However the position in relation to the 8 January 2016 meeting is different. I did not have drawn to my attention anything that Mr Mason had said on that occasion about the underlying events, or how what he said fell short of, or differed from, his subsequent affidavit version.
- Ms Collins's note records Mr Mason saying the following at different stages of the meeting:
there is a certain part which I can't say. I would like to say but it would end me if I told you. Which party can I trust? Although there is an independent person if I tell you the key fact you could go straight to the civil court.
Smith: Ok so how did it start?
Mason: It started a bit differently. The key fact is that what I did was entirely my plan but someone asked me [to do something]-[to start something]
Smith: Do you know who that was?
Mason: I possibly know who that person was but I turned it into a completely different opportunity but one that benefitted me not anyone else. I did not take any money from the people who started me on that road. Someone contacted me. I don't necessarily know who that person was. If I had done what that person wanted me to do, in a sense I would have been offered money. The only reason I am here is because I want to be on your side but my life is on the line with the information.
Mr Upson: Those threats are from the people who instructed you at the start?
Mr Mason: No. There are a multitude of parties
there is more than one side.
Mr Upson: Ok can I understand who the players are? You have us (Orb) and Pro Vinci, you have S Fiddler, you have Ruhan. Ruhan admits that he met you as well so everyone accepts he is a player in this issue at some level. I put Dom in his camp. Are there any other parties?
Mr Mason: Yes, everyone wants a piece of the cake. It would be pretty obvious if I said which piece.
Mr Upson: So there's a fourth group. Is it one other (fourth) group or several others?
Mr Mason: I believe there is a subsidiary group to the other (fourth) group.
Mr Upson: Of all these groups which instigated this whole affair?
Mr Mason: It is one of the groups
Mr Upson: Is it Orb, AR, SF or the others?
Mr Mason: If I tell you that it is definitive.
- This indicates that contrary to Mr Mason having made a clean breast of things in his affidavit, in which he suggested that he did not know who was ultimately responsible for instigating the whole affair, he did know who was ultimately responsible for instigating the whole affair but was unwilling to say, and that there was a fourth group or a possible fourth group involved other than Orb, the Ruhan camp, and Mr Fiddler who was responsible. That was obviously relevant material to put before the Court, which was being asked to proceed on the basis that Mr Mason had finally come clean and that the account he gave in his affidavit could be relied upon.
(6) The anomalies in the evidence of payment of £100,000 to Mr Mason
- The Claimants' evidence in relation to the payment of £100,000 is unsatisfactory. The Claimants' case is that it was paid to Mr Mason at the meeting on 1 October 2015. The way in which this evidence emerged is as follows.
- An account of the meeting was first given in Ms Irving's second affidavit dated 26 November 2015, which identified that the data sticks had been handed over at a meeting on 1 October 2015 and that Mr Mason had declined to provide a password because any expert worth his salt would be able to unlock the data. Mr Lawrence submits, with some force, that it would be somewhat surprising if the Claimants were prepared to hand over a further £100,000 for this data in circumstances where they were not being provided with the encryption although Oscar purported to be in a position to give the password. At all events, Ms Irving made no mention at all in that affidavit of the payment of £100,000 to Mr Mason.
- In her third affidavit, sworn the following day, 27 November 2015, she did mention that a total payment of £130,000 had been made. She referred to the payments as being "£130,000
in cash more than three weeks ago
" The reference to three weeks ago is surprising. The £100,000 had been paid, on the Claimants' case, on 1 October 2015, which was some eight weeks previously, and the £30,000 before that.
- It was not until 9 December 2015 in Ms Irving's fifth affidavit that she identified for the first time that it was at the end of the meeting on 1 October that she paid Oscar the sum of £100,000 in cash. There is a note of that meeting prepared by Stewarts Law LLP. It is in the form of a manuscript note, and a typed version which, as is common in the case of attendance notes, fills in some of the gaps by way of recollection or explanation for shorthand notes. That attendance note was not before the Court on 14 January but was on 18 February 2016. It makes no mention of any payment, although the evidence of Ms Irving in her fifth affidavit was that the money was paid over at the end of the meeting while she was still in the boardroom. There is no corroborative evidence from the Stewarts Law LLP attendees of payment on that occasion.
- For the purposes of the hearing on 18 February 2016, (but not the without notice application on 14 January 2016) the Claimants relied upon an affidavit of Dr Smith sworn on 12 February 2012. He says that it was at the meeting of 1 October that Mr Mason received £100,000, as described by Ms Irving.
- Mr Mason's evidence in his affidavit is consistent with, but does not directly support, Ms Irving's account. He deposes that he had on 26 September 2015 told Ms Irving that he would need a further £100,000 in order to complete his work and to deliver the data regarding the child pornography. He gives a description of the meeting on 1 October and the handing over of the data sticks. He does not mention the handing over of £100,000, but he goes on to depose that immediately after the meeting Mr Fiddler took £25,000 of "the cash".
- In correspondence, Mr Anciano's solicitors have pressed Stewarts Law LLP to answer a number of questions concerning the origin and timing of this payment of cash of £100,000, and of the £30,000. In particular they have asked where the cash came from, if from a bank when where and which, who beneficially owned it, and for supporting evidence. The questions asked by Mr Anciano's solicitors were wide ranging and in some respects excessively so. Nevertheless it is reasonable to have expected the Claimants to provide, and to put before the Court, a full explanation and any supporting documentary evidence of the source, nature and timing of these payments, and of the anomalies which were pointed out in the skeleton lodged on behalf of Mr Anciano for the hearing on 28 January 2016. This is particularly important in the light of the unsatisfactory nature of Ms Irving's evidence about the £100,000, the absence of any documentary support for either of the payments, the questionable nature of the wisdom, if not the propriety, of making any such payments, the evidence that the police had advised against any payments (which the Claimants dispute), and the question marks which surround the probability of such significant sums being paid to an unknown individual, cloaked in anonymity, without even obtaining the password for the encrypted data which was being purchased. The Claimants simply have not made disclosure which can properly be characterised as either full or frank in relation to these payments.
- This is of heightened materiality in circumstances where the purpose for which the Norwich Pharmacal relief was said to be necessary was for recovery of the £130,000 from those responsible for the alleged wrongdoing.
(7) Failure to give an adequate account of Dr Smith's dealings with Mr Mason on and between 21 December 2015 and 14 January 2016.
- Dr Smith had a meeting with Mr Mason at Denham Airport on the evening of 21 December 2015. In his affidavit of 12 February 2016 he describes it in the following terms:
"27. When I saw Mr Mason at Denham we spoke for no more than about 10 minutes while the pilots of the Pilatus prepared that plane for Mr Mason's return flight to Manchester. It was cold so we moved into the waiting area. I recall that I started by saying that I did not want to discuss his day at Stewarts Law. I did however make a point of saying that he was a young guy who was potentially in serious trouble, and that I had been told that his explanation earlier in the day made no sense.
28. Mr Mason appeared very nervous, downcast and apologetic during this short conversation. He said that he had had a difficult life and was only concerned about his young son.
29. Mr Mason also made rather repetitive, rambling excuses for his involvement and apologies for the difficulty he has caused. I said to him that I believed that the only way through all of this was for him to tell the truth, whatever that was. That way the Court process (and the police) could find the wrongdoers in it all. I told him that I thought that, if he needed protecting from someone, this was the best way for him to get that protection.
30. I suggested that he think about matters over Christmas and, if he felt able, to make a further appointment to see Stewarts Law to give them the full story between Christmas and the New Year. Mr Mason said that it would not be possible to have a meeting as he was about to go on holiday to the Far East.
31. I said that I was sure a meeting could be arranged at his holiday destination if necessary.
32. Mr Mason asked 'hypothetically' what I thought would happen if he told the truth about his and others' involvement. I said that was for others to answer, but if he had been coerced in some way into becoming involved, the police and/or the courts might be able to offer him some protection if he was being intimidated.
33. I asked if he would email me his holiday itinerary, as a good faith gesture, so that I could pass it on to Stewarts Law to consider the location and timing of a further meeting. I repeated that I believed the truth was the way through the mess he was in. At this point the conversation ended and Mr Mason went to board his flight."
78. As I have already mentioned, Dr Smith also spoke to Mr Mason for the first twenty minutes of the meeting at the Beaumont Hotel on 8 January 2016. The note of that meeting reveals Dr Smith's extensive involvement in that part of the discussions, including discussion of what could be done to encourage Mr Mason to provide information and how protection for him might be arranged. As I have already adverted to, it involved giving Mr Mason the impression that the Claimants were not interested in pursuing him.
- Those contacts between Dr Smith and Mr Mason were clearly material to the credibility of Mr Mason's later account, which would be affected by how that account came about and what inducements had been offered by the Claimants. Mr Smith's contact, involving both pressure on Mr Mason, and the inducement of immunity from suit by the Claimants, was material. That was not brought to my attention at the 14 January 2016 hearing, despite a series of exchanges in which I specifically asked Mr Drake about contact between Dr Smith and Mr Mason in the context of the credibility of the latter's evidence; the upshot of that exchange was that I was given the impression that there had been no relevant contact, and that Dr Smith's role had only been to make administrative arrangements. That was plainly not an appropriate way to characterise the contact that had taken place with him on either 21 December 2015 or 8 January 2016.
(8) The Narrow Ground
- As explained in my ruling on 28 January 2016, I considered and intended that the material which I indicated at the beginning of the hearing that I had read should be provided in its entirety to the respondents, both Mr Anciano and Mr Fiddler. At that stage what was anticipated was that any privacy in relation to the Ruhan proceedings material would be lifted because that was what the skeleton argument for the proposed Ruhan hearing on the following Monday suggested. If it was the understanding of the Claimants' advisers that the disclosure would be more limited, I ought to have been told. I accept that that arose by way of a misunderstanding and was not deliberate. I would not have regarded it as sufficiently serious on its own to discharge the order. Nevertheless it falls to be taken into account together with the other breaches of the duty of disclosure.
Conclusion on failure to make full and frank disclosure
- These breaches taken together constitute very serious failures of the duty to make full and frank disclosure of material facts. Most of them would be sufficient individually to justify discharge of the order. Taken together, they are plainly of sufficient gravity that the order should be discharged and that it should not be re-granted, even were there otherwise merit in making the order.
Ground 4: the purpose for which the information is sought
The Norwich Pharmacal jurisdiction
- The Norwich Pharmacal jurisdiction has its origin in the case of that name, Norwich Pharmacal Co and Others v Customs and Excise Commissioners  AC 133, in which the speeches of the House of Lords include the oft quoted statement of Lord Reid at p. 175B to C:
"They seem to me to point to a very reasonable principle that if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration."
- As the jurisdiction has developed there are three threshold conditions which must be satisfied.
- The first condition is that there must have been a wrong carried out, or arguably carried out, by an ultimate wrongdoer. The "wrong" may be a crime, tort, breach of contract, equitable wrong or contempt of court. It is not necessary to establish conclusively that a wrong has been carried out; it will be sufficient if it is arguable that a wrong has been carried out. The strength of the argument will be a factor in the exercise of the discretion, but an arguable case is sufficient to meet the threshold condition. The wrongdoing must be identified by the applicant at least in general terms: see Ashworth Hospital Authority v MGN Limited  1 WLR 2033 per Lord Woolf CJ at paragraph .
- The second condition is that the disclosure sought must be necessary in order to enable to applicant to bring legal proceedings or seek other legitimate redress for the wrongdoing. In Rugby Football Union v Consolidated Information Services Limited (formerly Viagogo Limited) (in liquidation)  1 WLR 3333 Lord Kerr said at paragraph 15:
"Later cases have emphasised the need for flexibility and discretion in considering whether the remedy should be granted: Ashworth Hospital Authority v MGN Ltd  1 WLR 2033, para 57, per Lord Woolf CJ; Koo Golden East Mongolia v Bank of Nova Scotia  QB 717, paras 37-38, per Sir Anthony Clarke MR. It is not necessary that an applicant intends to bring legal proceedings in respect of the arguable wrong; any form of redress (for example disciplinary action or the dismissal of an employee) will suffice to ground an application for the order: British Steel Corpn v Granada Television Ltd  AC 1096, 1200, per Lord Fraser of Tullybelton."
- In Ashworth Lord Woolf CJ said:
"59 One of the arguments Mr Browne placed before their Lordships for not adopting the non-technical approach which I regard as being correct was that if the disclosure was not linked with proceedings which would actually be brought, there would be no means of the court protecting a defendant against misuse of the material which was disclosed.
60 I agree that this is a matter for concern. However this concern will be met if an order for disclosure is not made unless a claimant has identified clearly the wrongdoing on which he relies in general terms and identifies the purposes for which the disclosure will be used when it is made. The use of the material will then be restricted expressly or implicitly to the disclosed purposes unless and until the court permits it to be used for another purpose."
- The test is one of necessity as a threshold condition; the desirability of the disclosure is not simply a matter for consideration in the exercise of discretion: see Ashworth per Lord Woolf CJ at paragraph  and R (Omar) v Secretary of State for Foreign and Commonwealth Affairs  QB 112 per Maurice Kay LJ at paragraph . The need to order disclosure will be found to exist only if it is a necessary and proportionate response in all the circumstances, although the necessity test does not require the remedy to be one of last resort (see Ashworth at paragraphs , ; R (Mohammed) v Secretary of State for Foreign and Commonwealth Affairs (No.1)  1WLR 2579 at paragraph ; and RFU v Consolidated Information at paragraph .
- The third threshold condition is that the person against whom the order is sought must be involved in the wrongdoing in a way which distinguishes him from being a mere witness. It is not necessary to analyse further where the line is to be drawn between involvement on the one hand and acting as a mere witness on the other for the purposes of deciding this application.
- If the three threshold conditions are met, there remains a discretion to be exercised, which involves weighing a number of relevant factors and deciding whether disclosure should be ordered in order to do justice. In paragraph  of RFU v Consolidated Information, Lord Kerr identified such factors, non-exhaustively, as follows:
"17 The essential purpose of the remedy is to do justice. This involves the exercise of discretion by a careful and fair weighing of all relevant factors. Various factors have been identified in the authorities as relevant. These include: (i) the strength of the possible cause of action contemplated by the applicant for the order: the Norwich Pharmacal case  AC 133,199F-G, per Lord Cross of Chelsea, Totalise plc v The Motley Fool Ltd  EMLR 750, para 27, per Owen J at first instance, Clift v Clarke  EWHC 1164 (QB) at , , per Sharp J; (ii) the strong public interest in allowing an applicant to vindicate his legal rights: the British Steel case  AC 1096, 1175C-D, per Lord Wilberforce, the Norwich Pharmacal case  AC 133, 182C-D, per Lord Morris of Borth-y-Gest, and p188E-F, per Viscount Dilhorne; (iii) whether the making of the order will deter similar wrongdoing in the future: the Ashworth case  1 WLR 2033, para 66, per Lord Woolf CJ; (iv) whether the information could be obtained from another source: the Norwich Pharmacal case [I974] AC 133, 199F-G, per Lord Cross, the Totalise plc case  EMLR 750, para 27, President of the State of Equatorial Guinea v Royal Bank of Scotland International  UKPC 7 at , per Lord Bingham of Cornhill; (v) whether the respondent to the application knew or ought to have known that he was facilitating arguable wrongdoing: the British Steel case  AC 1096, 1197A-B, per Lord Fraser, or was himself a joint tortfeasor, X Ltd v Morgan-Grampian (Publishers) Ltd  1 AC 1, 54, per Lord Lowry; (vi) whether the order might reveal the names of innocent persons as well as wrongdoers, and if so whether such innocent persons will suffer any harm as a result: the Norwich Pharmacal case  AC 133, 176B-C, per Lord Reid; Alfred Crompton Amusement Machines Ltd v Customs and Excise Comrs (No 2)  AC 405, 434, per Lord Cross of Chelsea; (vii) the degree of confidentiality of the information sought: the Norwich Pharmacal case  AC 133, 190E-F, per Viscount Dilhorne; (viii) the privacy rights under article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms of the individuals whose identity is to be disclosed: the Totalise plc case  EMLR 750, para 28; (ix) the rights and freedoms under the EU data protection regime of the individuals whose identity is to be disclosed: the Totalise plc case [zoo,] EMLR 750, at paras 18-21, per Owen J; (x) the public interest in maintaining the confidentiality of journalistic sources, as recognised in section 10 of the Contempt of Court Act 1981 and article 10 of the European Convention for the Protection of Human Rights and Fundamental Freedoms: the Ashworth case  1 WLR 2033 para 2, per Lord Slynn of Hadley"
- To this non-exhaustive list may be added that innocent third parties can be compensated for their costs (see Ashworth at paragraph ).
Disclosure not necessary for a legitimate purpose
- The Claimants have not established that the information which is sought from Mr Anciano and Mr Fiddler is necessary for a legitimate purpose, namely seeking redress in respect of the wrongdoing which is alleged. On the contrary, the inference which is to be drawn from all the evidence is that the Norwich Pharmacal Application, and indeed the other applications to Walker J, have been made, and are being pursued, in the hope of acquiring information and evidence with a view to using it to discredit Mr Ruhan and obtain a litigation advantage in relation to the main action and the dispute to which it relates. Such a collateral purpose is not one which engages the policy justification for the jurisdiction, which is "the strong public interest in allowing an applicant to vindicate his legal rights" in respect of the wrongdoing with which the respondent has become mixed up.
- As is made clear in the passage in the speech of Lord Woolf CJ in Ashworth at paragraph , quoted above, an applicant must identify the purposes for which the information will be used if an order for its disclosure is made. This is important, because only if he does so can the Court consider whether it is to be used for a legitimate purpose; and because if disclosure is ordered, the permitted use is limited to the stated intended use which has been scrutinised and sanctioned by the Court. Such identification should be made by way of evidence, not submission. That is especially important in this case, where the Claimants' previous conduct has included abuse of Court procedures for the purposes of harassment of Mr Ruhan and attempts to use information obtained under the Norwich Pharmacal jurisdiction for the illegitimate purpose of attacking Mr Ruhan's credit in the main action. What was required of the Claimants was, at the very least, a clear statement on affidavit of their intentions as to the use to which the disclosure would be put.
- There was no such statement on affidavit in the application to me. The only relevant statement of intention, on affidavit, to which Mr Drake drew my attention is to be found in Ms Irving's fifth affidavit, sworn on 9 December 2015 for the purposes of obtaining the First Fiddler Order from Walker J. At paragraph 94 she says:
"It is possible, of course, that Oscar is not a fraudster and that he made the Video Recording under duress. (I note in this respect that he was reading from prompt cards). It is conceivable, in other words, that Oscar has been telling the truth all along and that someone did in fact approach him with a view to placing illegal pornographic material on to Pro Vinci's computer servers in an attempt to frame/discredit Pro Vinci or the Applicants generally. In light of this possibility, the Applicants also wish to identify Oscar so that Oscar can remove the encryption protecting the data, help in identifying the person or persons who contracted him to upload the child pornography to Pro Vinci's computer system, and assist in determining whether this incident is connected with the harassment that the Applicants have suffered."
- Those purposes were no longer pertinent to the Norwich Pharmacal Application. The Claimants had identified who Oscar was, and obtained his evidence about "the Scheme". They had concluded, as he asserts, that there was no child pornography on the data sticks.
- This failure to state the intended use of the information sought, on affidavit, is fatal to the Claimants' application for Norwich Pharmacal relief. The relevant paragraph of Ashworth was not drawn to my attention on 14 January 2016.
- Moreover, what was advanced by way of submission as to the Claimants' purpose was not made good by the evidence. In the Skeleton Argument served for the hearing on 18 February 2016, it was argued that the application had met the test of necessity in relation to the use to which the information was to be put because the Claimants were in the process of gathering evidence with a view to understanding precisely what wrongs had been done to them and by whom; that their suspicions about who might be the ultimate wrongdoer, who was the directing mind behind the wrongdoing, were no more than that; and that they were not able to determine whether to take legal proceedings or another form of action until they had obtained all of the information sought. Paragraph 71 went on to say:
"for example, if the only wrongdoers ever identified are Mr Mason and Mr Fiddler, then the Claimants may be justified in taking the view that there is no point throwing good money after bad seeking to recoup the £130,000 and other costs from them and electing not to pursue any legal action. However if the person(s) responsible for instigating the wrongdoing against the claimants is/are identified, then the claimants are presently minded to seek substantive relief against him/her/them in so far as possible to do so."
- The substantive relief in question was not identified, but it was apparent from the exchanges which I had had with Mr Drake at the hearing on 14 January 2016 that what was being canvassed was a claim to recover by way of damages the £130,000 which had been handed over, together with subsequent costs of the investigation. That too is the redress which is canvassed in the Part 8 Claim Form i.e. a claim for damages for recovery of the £130,000 allegedly paid in cash, together with the costs and expenses incurred in instructing forensic computer and encryption specialists. Such a damages claim is identified as existing against "Oscar" and anyone else with or for whom Oscar was carrying out the scheme. Such a damages claim was the sole remedy canvassed during the exchanges I had with Mr Drake when examining potential remedies during the hearing on 14 January 2016. This was the purpose avowed in argument when the application was made.
- In his oral submissions to me on 18 February 2016, Mr Drake suggested a further and different form of legal redress. He drew attention to the fact that when the matter had originally been put before Walker J in order to sanction the anticipated receipt of child pornography, other legal remedies had been canvassed, including in particular those concerned with data protection and protection from harassment, which might include injunctions in respect of future activity. As I have said, there was no such purpose canvassed in the evidence or argument put before me on 14 January 2016. Had the purpose for which the information was being sought really included an intention to take steps to prevent any future continuation of "the Scheme," that would no doubt have been identified in evidence and argument at that stage. In truth, given what is now known about the extent of the contacts between the various parties, the idea that there would be a continuation of the Scheme seems to me fanciful.
- There are a number of strands to the evidence which strongly suggest that the information sought has nothing to do with bringing a claim against anyone for recovery of the £130,000 and costs incurred (or indeed injunctive relief unless it be part and parcel of an attack on Mr Ruhan in relation to the main action). No claim has apparently been brought against Mr Mason (although I was told after preparing these reasons that a claim form was issued against Mr Mason and Mr Fiddler on 17 February 2016; that was not in evidence at the hearing and paragraph 71 of the Skeleton quoted above suggests that it was issued without any decision whether it should be pursued). Dr Smith is recorded in the note of the meeting on 8 January 2016 as stating that the Claimants are not interested in pursuing him. No claim has apparently been brought against Mr Fiddler, despite the evidence supporting such a claim having been in the Claimants' hands for over a month.
- What are the Claimants hoping for? The constant refrain of the Claimants in argument is that their concern is to identify the person who was behind and instigated the Scheme, and to acquire evidence of their involvement. But the Scheme as now identified, which is put forward on the basis that what Mr Mason says in his affidavit is true, is in my view only consistent with Mr Ruhan being the instigator of the Scheme. If what Mr Mason says is true, the matter started by him being approached to hack in to the email accounts of Pro Vinci and Dr Smith to find an email which would "bury" Dr Smith specifically in the context of the litigation between the Claimants and Mr Ruhan. Mr Mason's story about child pornography in his approach to the Claimants was, on his account, a continuation of a scheme to obtain access to the Claimants' emails, which again can only have been for the same purpose as that which informed the original approach, i.e. to discredit Dr Smith in the context of the main action. At the hearing on 14 January 2016, Mr Drake suggested that there was an alternative possibility, which was that on Mr Mason's account someone had been acting without Mr Ruhan's knowledge or approval. That seems to me improbable, to put it at its lowest, and all the more improbable given what is now known about the extent of the contacts between Mr Mason and Mr Fiddler with Mr Ruhan himself.
- That the Claimant's desire is to seek evidence that Mr Ruhan is behind the Scheme is supported by their conduct towards Mr Mason in September and October 2015. On the Claimants' case, the natural inference is that they were prepared to pay the money to Oscar in the first place only because they wished to establish that the plot which Mr Mason said he had been asked to carry out, namely dropping child pornography onto their servers, was to be attributed to Mr Ruhan; and that the purpose of paying the money was for Mr Mason to obtain that evidence which would establish Mr Ruhan's involvement and responsibility. Payment of £130,000 to a person whose identity is unknown and without any password for the encrypted data is difficult to explain on any basis other than that this was the highly prized evidence which might be obtainable in order to attack Mr Ruhan.
- So what is it that the Claimants would do with the hoped for evidence that Mr Ruhan is behind "the shenanigans"? Were his involvement to be established, it is not realistic to think that the Claimants' real interest would lie in seeking recovery of £130,000 from Mr Ruhan, or anyone else, in the context of this bitterly contested dispute involving hundreds of millions of dollars. The payment of £130,000 and the expense of pursuing these applications would have achieved its objective of providing material with which to attack Mr Ruhan in relation to the main proceedings so as to impugn his credit and force him into settlement.
- Two matters lend further support to this conclusion. The first is that this is all of a piece with the activity of Orb, Dr Smith and Dr Cochrane in their abuse of process in previous applications, including in particular:
(1) The use of the statutory demands and petitions to harass Mr Ruhan for the purposes of the main action;
(2) The abusive attempt to join Mr Stevens and his companies in the main action; and
(3) The desire to use the material obtained on the Norwich Pharmacal application against Quest for the purposes of attacking Mr Ruhan's credit in the main action.
- The second, and to my mind decisive matter, is what Dr Smith said to Mr Mason at the meeting on 8 January 2016 at the Beaumont Hotel, as recorded in the note which I have quoted in paragraphs 63 above. There was what I regard as a clear statement by Dr Smith that the Claimants were not interested in using the information Mr Mason was able to give about who was behind the Scheme for the purposes of bringing a civil claim; but on the contrary that the information was sought in order to put an end to the 10 years of litigation with Mr Ruhan.
- Such a purpose is not a legitimate use of the Norwich Pharmacal jurisdiction. This is yet another example of Orb and Dr Smith abusing the Court's process for improper purposes in the hope of using the results to harass Mr Ruhan in relation to the main action. Mr Drake was at pains to emphasise that his instructions come from the Claimants, not Dr Smith, who is no more than "a consultant". However the conclusion I draw from the evidence before me is that Dr Smith has been the dominant individual responsible for the Claimants' decisions in relation to events concerned with "the Scheme", and responsible for instigating and pursuing the legal processes which have formed part and parcel of the Claimants' activity in relation to those events. There was no evidence of any significant involvement of any individual other than Dr Smith and Ms Irving on behalf of the Claimants: not Dr Cochrane, or Ms Stickler, or Mr Taylor or Mr Thomas, or anyone else save for Stewarts Law LLP who must have been acting on instructions. Ms Irving is not an officer of the Claimants and her role was not that of a decision maker, consistently with her status as an assistant. When approached by others such as Mr Mason and Mr Fiddler, she referred them to Dr Smith. It was Dr Smith who attended relevant meetings, the first two alone with Mr Mason, and who involved himself in relevant conversations with Mr Mason on 21 December 2015 and 8 January 2016 in the manner identified earlier in this judgment. I have little doubt that it is Dr Smith who has been the driving force behind the abusive Norwich Pharmacal Application.
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