Jersey Unreported Judgments

En Désastre - application for an extension of time in which to appeal.

[2020]JCA168

Court of Appeal

14 August 2020

Before     :

George Bompas, QC., Lord Anderson of Ipswich, KBE, QC., Sir Michael Birt

 

The Applicant in person

Advocate E. B. Drummond for the First Respondent.

Advocate O Passmore for the Second Respondent. 

judgment

Birt ja:

1.        This is the judgment of the Court. 

2.        On 24^th November 2016, the Royal Court (Commissioner Clyde-Smith OBE with Jurats Grime and Liston) declared ORB a.r.l. ("ORB") and the Applicant ("Dr Cochrane") en désastre on the application of the First Respondent ("Harbour").  The reasons for this decision were set out in a judgment dated 12th January 2017, Harbour v Orb [2017] JRC 007 ("the Désastre judgment"). 

3.        The application to declare ORB and Dr Cochrane en désastre followed an earlier application by Harbour to the Royal Court (Commissioner Clyde-Smith with Jurats Fisher and Blampied) for a letter of request to the English High Court seeking the making of an administration order in that jurisdiction in respect of ORB.  That application was refused in a judgment dated 28^th September 2016, Representation of Harbour v Orb [2016] JRC 171 ("the Administration judgment"). 

4.        On 31^st December 2019, Dr Cochrane applied under Rule 16(1) of the Court of Appeal (Civil) Rules 1964 ("the Rules") for an extension of time in which to appeal against the declaration of désastre in her case.  This application first came before Birt JA as a single judge on 14^th January 2020, who directed that the matter be brought to the full court. 

5.        The matter was due to be heard at the March sitting of this Court but that sitting was cancelled in view of the Coronavirus pandemic.  However, prior to the cancellation, the parties submitted their detailed written submissions and the matter was ready for hearing. 

6.        Dr Cochrane's application was subsequently listed for hearing during the week commencing 27^th July.  On 16^th July, Dr Cochrane applied for an adjournment, substantially on the basis that she had a short while earlier dismissed Advocate Blakeley and was planning to instruct a new firm of advocates.  That application for an adjournment was refused by this Court in a short judgment dated 20^th July 2020, Cochrane v Harbour Fund II LLP and the Viscount [2020] JCA 140A.  The new firm was not in fact instructed and accordingly Dr Cochrane appeared as a litigant in person at the hearing.

7.        On Friday 24^th July - the matter being listed for hearing on Tuesday 28^th July - Dr Cochrane sent to the Court an affidavit dated 23rd July together with various exhibits.  By letter dated 27^th July, she purported to file two further documents.  We consider whether to admit this last minute evidence later in this judgment.

The approach to granting an extension of time  

8.        Pursuant to Rule 16(1), the Court has a general discretionary power to extend time for the doing of any act in connection with an appeal, including serving a notice of appeal.  That power may be exercised even after the expiration of the time appointed for the doing of the act in question. 

9.        The principles upon which the Court will grant an extension of time to appeal are well established.  They are conveniently set out in the judgment of Beloff JA sitting as a single judge in Pitman -v- Jersey Evening Post Limited [2013](2) JLR 293 and his approach was approved by the full court in the same case at Pitman v JEP and 1^st Jersey Limited [2013] JCA 236 (see paragraph 15).  At paragraph 4, Beloff JA said this:-

"Guidance has been given by the Court of Appeal in England in Sayers v. Clarke Walker (9) as to the factors taken into account under the pre-CPR regime ([2002] 1 WLR 3095, at para. 10):

"Under the pre-CPR regime the practice of this court was conveniently summarized in The Supreme Court Practice 1999, vol. 1, p. 1031, para. 59/4/17 in these terms:

'It is entirely in the discretion of the court to grant or refuse an extension of time. The factors which are normally taken into account in deciding whether to grant an extension of time for serving a notice of appeal are:

(1)        the length of the delay;

(2)        the reasons for the delay;

(3)        the chances of the appeal succeeding if time for appealing is extended; and

(4)        the degree of prejudice to the potential respondent if the application is granted; (see CM Van Stillevoldt BV v. EL Carriers Inc. [1983] 1 W.L.R. 207 .-‰.-‰. Where the delay in serving notice of appeal is short and there is an acceptable excuse for it, an extension of time will not be refused on the basis of the merits of the intended appeal, unless the appeal is hopeless: Palata Investments Ltd. v. Burt & Sinfield Ltd. [1985] 1 W.L.R. 942. In Norwich & Peterborough Building Society v. Steed [1991] 1 W.L.R. 449 and Mallory v. Butler [1991] 1 W.L.R. 458, the Court of Appeal held that .-‰.-‰.

(4)       The settled practice of the court is to assess and take into account the merits of the proposed appeal in deciding whether or not to grant an extension of time for appealing (subject to the qualification in the Palata case [1985] 1 W.L.R. 942.'"

The Court of Appeal in Jersey appears consistently to have adopted a similar approach, see Barker v. Barclays Bank PLC (4) and B v. N (2)....."

The factual background

10.      Before turning to consider these four factors, we need to describe the factual background.  We gratefully adopt the very clear and helpful summary contained in the Administration Judgment.  

11.      Harbour is an exempted limited partnership registered in the Cayman Islands and is in the business of providing litigation funding to third parties.  ORB is a Jersey registered company, the sole director and shareholder of which is Dr Cochrane, who resides at Steephill, St Saviour's Hill, Jersey where ORB has its registered office. 

12.      The history is set out in some detail in the interlocutory judgment of Popplewell J dated 15^th April, 2016, ORB a.r.l. & Ors-v-Ruhan & Ors [2016] EWHC 850 (Comm).

13.      Following a corporate reorganisation in August 2002, ORB became the holding company of a group with interests in hotels, commercial and warehouse properties, transport and logistics businesses and venture and private capital. 

14.      Between August and November 2002, Dr Gerald Martin Smith, the former husband of Dr Cochrane and then the chief executive of ORB, stole approximately £35m from Izodia plc, a company in which ORB held a 29.9% shareholding and misapplied the bulk of those monies for ORB's benefit.  As a result of investigations by the Serious Fraud Office ("SFO"), Dr Smith personally faced criminal sanctions, and by early 2003, Izodia had also brought proceedings against ORB and Dr Smith for recovery of the sums transferred from Izodia's bank account.  Once the theft had been discovered ORB sold a substantial proportion of its assets to Mr Andrew Joseph Ruhan, and companies associated with and/or controlled by him ("the ORB assets").

15.      In 2004/5, the ORB assets were transferred by Mr Ruhan into a complex structure involving numerous (over 100) companies ultimately owned by the trustee of an Isle of Man settlement ("the Arena Settlement").

16.      In April 2006, Dr Smith pleaded guilty to a number of charges relating to the theft of Izodia's monies and was subsequently sentenced to 8 years in prison.  This was not his first conviction; in 1993 he was convicted of fraud in relation to a sum of £2m, and sentenced to 2 years' imprisonment. 

17.      In 2007, a confiscation order was made in England against Dr Smith in the sum of approximately £41m and two partners of KPMG were appointed enforcement receivers ("the Enforcement Receivers") to recover the debt.  

18.      On 27^th October, 2012, after Dr Smith's release from prison, proceedings were commenced by ORB and two individuals, Mr Taylor and Mr Thomas, whose role appears to have been minor, (together "the Claimants") in the High Court of England and Wales against Mr Ruhan ("the English proceedings"), alleging that in the sale of the ORB assets to Mr Ruhan, there was an oral agreement, not reflected in the sale documentation, that ORB would share in the assets sold and the profits made from their development by Mr Ruhan.  It was asserted that in breach of that oral agreement, Mr Ruhan had sought to conceal the ORB assets in the complex structure of the Arena Settlement, sold them for his own benefit and failed to account for the share of the profits due under the oral agreement. 

19.      The Claimants agreed with Dr Smith that in return for his cooperation and assistance in the English proceedings, they would transfer to him 50% of the sums recovered up to the amount owing by Dr Smith under the confiscation order.  Popplewell J. said there was good reason to believe that he was the driving force behind the prosecution of the English proceedings (paragraph 15 of his judgment). 

20.       Initial funding for the prosecution of the English proceedings came from Litigation Capital Funding ("Litigation Capital"), a New York based entity owned, it would seem, by Dr Smith's brother, Mr Anthony Smith. 

21.      On 10^th July, 2013, Harbour entered into an agreement with the Claimants ("the Funding Agreement") to provide litigation funding. Under the Funding Agreement, any proceeds from the English proceedings were to be utilised (after payment of certain disbursements):-

(i)        firstly, in the payment to Harbour of the legal costs it had funded; and

(ii)       secondly, in paying to Harbour a share of those proceeds calculated by reference to a formula set out in schedule 2.

22.      The monies due to Harbour under the Funding Agreement were secured by:-

(i)        a debenture giving Harbour fixed and floating charges over the whole, or substantially the whole, of ORB's property; and 

(ii)       a guarantee by Dr Cochrane which was in turn secured by a security interest agreement over the shares in ORB. 

23.      Ancillary proceedings were commenced in the Isle of Man by Dr Cochrane against Mr Simon Cooper and Mr Simon McNally, who had been cited as parties to the English proceedings.  They were described by Popplewell J as Mr Ruhan's former solicitors and trusted business advisers who were the discretionary objects under the Arena Settlement. 

24.      The Isle of Man proceedings were settled by deed dated 17^th December, 2013, entered into between Dr Cochrane, Mr Cooper and Mr McNally ("the Isle of Man Agreement").  The effect of the Isle of Man Agreement was for Mr Cooper and Mr McNally to procure the transfer by the trustee of the Arena Settlement to Dr Cochrane of control of assets held both within the Arena Settlement and outside it.  It is noteworthy that under the provisions of the Isle of Man Agreement Dr Cochrane acknowledged having received £10m on 15^th November, 2013, from Mr Cooper and Mr McNally, which she agreed was to be applied towards the settlement consideration payable to her. 

25.      ORB was expressly written out of any benefit from these arrangements which were undertaken, apparently, without the knowledge of Mr Ruhan.  On learning of these arrangements, he counter-claimed in the English proceedings for what he contended was a misappropriation of the assets transferred to Dr Cochrane.  In his original defence, when he was seeking to avoid interference in his business affairs, he had said that he had no beneficial interest in the Arena Settlement assets.  Once it had emerged that Dr Cochrane had acquired the assets as a result of the Isle of Man Agreement, he asserted that the assets were in reality his. 

26.      Popplewell J made this comment at paragraph 16 of his judgment:-

"That is to say, rather than awaiting the outcome of the action, the Claimants have taken matters into their own hands and have taken control of such of the Orb Assets and/or their allegedly traceable proceeds as were in the Arena Settlement without waiting for the trial."

27.      Popplewell J put the value of the assets transferred to Dr Cochrane under the Isle of Man Agreement as being in excess of £150m; more, he said, than the maximum amount of ORB'S claim in the English proceedings. 

28.      None of the parties to the English proceedings came out of Popplewell J's judgment with any credit, but he was particularly scathing about the conduct of what he described as the ORB parties, which expression comprised the Claimants, Dr Cochrane and SMA Investment Holding Limited, a company incorporated in the Marshall Islands owned and controlled by Dr Cochrane.  For example, at paragraph 181 Popplewell J said:-    

"181    This high handed behaviour, and refusal to recognise the authority of the Court's orders, is of a piece with their abusive behaviour in other respects.  There is a long history of behaviour by the Orb Parties in these and other proceedings which shows that they are prepared to mislead the Court and abuse the Court's processes for the improper collateral purpose of putting pressure on Mr Ruhan."

29.      On 23^rd October, 2014, Harbour entered into a deed with ORB, the other two Claimants, Dr Cochrane, Mr Cooper, Mr McNally and one other ("the 2014 Agreement") by which it was agreed that the assets received by Dr Cochrane under the Isle of Man Agreement would be treated as proceeds of the English proceedings, pursuant to the Funding Agreement.  

30.      By consent order dated 6^th May, 2016, the claims and counterclaims in the English proceedings were dismissed. 

31.      On 24^th June, 2016, Phoenix Group Foundation obtained a freezing injunction up to the value of £145m against Dr Cochrane and on 11^th July, 2016, the liquidators of a number of companies within the Arena Settlement Group obtained a proprietary injunction and world-wide freezing injunction up to £45m against Dr Cochrane (and another). 

32.      On 3^rd August, 2016, a production order, issued by the Central Criminal Court in London, was served on Andiamo Office Services Limited, ("Andiamo"), formerly Pro Vinci Limited, at its offices in London.  Andiamo provides family office services to Dr Cochrane's family and would appear to have played an important role in advising on the English proceedings.  Production was sought of the final settlement agreement to discontinue the English proceedings and documents and accounting records relating to the sale of assets by ORB to Mr Ruhan in 2003; indicating, it would seem, a criminal investigation into those matters.  

33.      Harbour claimed to have provided litigation funding for the English proceedings of £5,189,010.48, and applying the formula under schedule 2 of the Funding Agreement, it calculated that it was due a further £28,756,041.92 as its share of the proceeds.  Formal demands were made against ORB by letters dated 17^th and 26^th August, 2016, and ORB was informed that failing settlement, an application would be made for the appointment of an administrator. 

The judgments below

34.      Following the formal demand upon ORB referred to above, Harbour applied to the Royal Court for a letter of request to the English High Court seeking an administration order in respect of ORB.  This was the matter dealt with in the Administration judgment.  Litigation Capital was given leave to intervene in those proceedings and instructed both Herbert Smith Freehills in London and Carey Olsen in Jersey.  However, it was not represented at the hearing.  ORB instructed Advocate Nicholls, who put in written submissions, but was also not represented at the hearing as referred to by the Royal Court.  In paragraph 40 of its judgment, the Royal Court noted as follows:-

"In her written responses to the formal demands made by Harbour, Dr Cochrane denies any debt being due by ORB to Harbour, although that denial is not repeated in her affidavit of 7th September, 2016, filed in response to Harbour's application.  Indeed, and perhaps significantly, she says nothing in that affidavit about Harbour's claim or whether or not it is accepted by ORB.  Furthermore, in his skeleton argument, Advocate Nicholls, representing ORB, makes no reference at all to Harbour's claim and whether or not it is accepted by ORB.  His submissions are limited entirely to the lack of any evidence of ORB having assets within England and Wales, a requisite, he says, for any letter of request to be issued.  Advocate Nicholls did not appear at the hearing on the 14th September, 2016, and therefore the Court was unable to press him on the point, but if ORB had a genuine defence to Harbour's claim, it would be surprising in the extreme for that defence not to be mentioned, and indeed, given some prominence."

35.      The Royal Court concluded that Harbour was a creditor of ORB with a liquidated claim and that ORB was cash flow insolvent.  It nevertheless decided in its discretion not to issue a letter of request on the ground that, given ORB's incorporation in Jersey and other matters, a désastre would be the preferable way of proceeding. 

36.      Following the Administration judgment, Harbour made formal demand on Dr Cochrane under the terms of her personal guarantee of the obligations of ORB described at paragraph 22 (ii) above.  It then applied for declarations of désastre in respect of both ORB and Dr Cochrane.  The matter was heard inter partes on 24^th November 2016.  ORB and Dr Cochrane were represented by Advocate Nicholls and the Serious Fraud Office and another creditor were also legally represented.  Although notified of the hearing, Litigation Capital was again not represented.  The Royal Court reminded itself (at para 13 of the Désastre judgment) that, in order for the Court to declare a désastre, a creditor must show that it has a liquidated claim (i.e. a certain debt which is not the subject of a genuine dispute or an arguable defence) which exceeds the minimum threshold of £3,000 and the creditor must also show that the debtor is insolvent (defined as meaning 'an inability to pay its debts as they fall due' i.e. on a cash flow basis) but has realisable assets.  The Court said that its judgment should be read as a continuation of the Administration judgment. 

37.      As to whether Harbour was a creditor with a liquidated claim against ORB, the Royal Court said this at paragraphs 19 - 21 of the Désastre judgment:

"19.    Advocate Drummond, for Harbour, took the Court through a careful analysis, set out in his skeleton argument, of how Harbour's liquidated claim arose under the Funding Agreement, the Isle of Man Agreement, and the 2014 Agreement, the latter presenting an insurmountable hurdle for ORB and Dr Cochrane in that by that Agreement, to which they were a party, they had agreed that the assets recovered by Dr Cochrane under the Isle of Man Agreement (at least £10m) would be treated as proceeds of the English proceedings Harbour had been funding, giving rise to an immediate liability on the part of ORB to repay the sums advanced, namely £5,189,010.48, just short of the aggregate amount Harbour was committed to fund under the funding agreement."  

20.      To put the amount advanced beyond doubt, Harbour filed an affidavit by Michael Hartridge, a Senior Director of Harbour Litigation Funding, in which he listed all of the payments made by harbour to fund the English proceedings and exhibited redacted copies of the relevant Harbour bank statements, showing the transactions that correlated to each invoice payment made, redacted copies of the originating invoices and the payment instructions made by Harbour authorising each payment.  As Advocate Drummond commented, with some justification, there was little more that Harbour could do to prove the amount of its liquidated claim.

21.      Advocate Nicholls made no comment upon this careful analysis and seemingly overwhelming evidence, simply stating in his skeleton argument that Orb and Dr Cochrane did not accept the full amount of the liquidated claim.  He said that Orb and Dr Cochrane would be able to procure evidence in short order, which would cast doubt as to whether the full sum claimed was in fact advanced by Harbour.  If there was any such evidence, then, in the view of the Court, there was no excuse for it not being made available at the hearing of which Orb and Dr Cochrane had received ample notice.  Indeed, Orb and Dr Cochrane filed no evidence at all to assist the Court, upon which we comment later.

38.      The Court held that Harbour was indisputably owed this sum by ORB and there was no reasonably arguable defence to that claim.  It further held that Dr Cochrane had no reasonably arguable defence to the claim against her in this sum pursuant to her guarantee. 

39.      As to realisable assets, having found that ORB had realisable assets, the Royal Court considered the position of Dr Cochrane at paragraph 32 of its judgment in the following terms: 

"In or around April 2016, Dr Cochrane signed a loan note in favour of Phoenix Group Foundation ("Phoenix") in the sum of £73.75m in which she represents that she is the ultimate owner of a number of assets set out in Schedule 1 thereto.  She also said in her affidavit of 7th September 2016, "I am also privileged to be a very wealthy woman, with holdings in dozens of companies worldwide, including [ORB].""  

40.      The Court then considered a submission that ORB had a counterclaim against Harbour in relation to the Funding Agreement which it was entitled to set off against any debt owed to Harbour.  In this connection the Royal Court said as follows:-

"44. If this was a genuine claim for £73M, then it was inconceivable to us that no reference had been made to it in the previous proceedings before this Court, in which Dr Cochrane did file an affidavit (which made no reference to it) or at any time at all in the dealings between Orb and Dr Cochrane on the one part and Harbour on the other.  It was inconceivable to us that, if the claim was genuine, Orb and Dr Cochrane were unable to give particulars of it sufficient to enable us to assess whether it was reasonably arguable.  Furthermore, there was no explanation as to how such a substantial claim came to be filed before the High Court without legal advice a mere two days before the hearing. 

45.      These arguments had been put forward by Orb and Dr Cochrane at the last moment without any evidence being filed in support on their behalf.  In our view, given the background of this matter, we would have expected at least an affidavit from Dr Cochrane to assist us in the exercise of our discretion, an affidavit upon which she would, of course, have been susceptible to cross-examination.  She gave us no such assistance."

The Court concluded that to refuse or adjourn the applications for declarations of désastre for the reasons put forward by Advocate Nicholls would be unjust to Harbour and the other creditors.

41.      Having considered various other matters which were raised but which do not arise on this appeal, the Court held that the requirements for granting a declaration of désastre were met in respect of both ORB and Dr Cochrane and accordingly declared them both en désastre.  

Discussion

42.      Against that background, we turn to consider the four matters listed by Beloff JA. 

(i) The length of the delay

43.      As stated above, Dr Cochrane was declared en désastre on 24^th November 2016.  Pursuant to Rule 3 of the Rules (which provides that an appeal must be brought within 28 days from the date the "judgment or order of the court below" was pronounced), any appeal should therefore arguably have been brought by 22^nd December 2016.  However, the Désastre judgment, which explained the reasons for the Royal Court's decision of 24^th November 2016, was issued on 12^th January, 2017.  We are content to take the date of the Désastre judgment as the date upon which time started to run (on the basis that the Royal Court would undoubtedly have extended the time for appealing so as to run from delivery of the judgment if it had been requested to do so).  An appeal should therefore have been brought at the latest by 9^th February 2017.  The Appellant is accordingly a little under three years out of time.  On any view, that is a very lengthy period. 

(ii) The reasons for the delay

44.      The grounds relied upon by Dr Cochrane in her application for an extension of time are in the following terms:-

"(1)     By reason of the practical consequences of the Declaration, the Applicant was without sufficient financial resources with which to obtain legal advice and representation for Appeal.

(2)       The Applicant made an application for Legal Aid which was refused thereby preventing her from obtaining legal advice and representation for Appeal.

(3)       Limited resources were made available to the Applicant to obtain legal Advice and Representation in respect of an Appeal and she instructed her Advocate to commence preparation for such Appeal.  Her Advocate then became unavailable as a result of personal issues which caused further delay to prosecuting her appeal.

(4)       Further delay occurred during the Applicant's attempts to:

           (a)        obtain funding for legal advice and representation; and

           (b)        secure legal advice and representation.

(5)       After instructing alternative counsel to proceed with an appeal, time elapsed while new counsel familiarised himself with the complex legal and factual matters relating to the appeal."

45.      Dr Cochrane has sworn an affidavit dated 10^th February, 2020 in support of her application.  We also had the benefit of an affidavit dated 10^th March, 2020 from the Viscount.  When considering Dr Cochrane's reasons for her delay, it should be kept in mind that Dr Cochrane knew throughout, that during the whole period the administration of her désastre was continuing. We would summarise the key events as derived from those affidavits as follows. 

46.      Upon the granting of the désastre, all Dr Cochrane's assets vested in the Viscount.  She accordingly no longer had access to funds to pay for legal representation.  She applied for legal aid on 30^th January, 2017 (i.e. within 28 days of the Désastre judgment).  It has to be said that her application did not specifically say that she needed advice on whether she could appeal against the grant of the désastre.  Her application referred merely to advice "on my rights under Jersey law / en désastre...".  The application disclosed that she received a monthly distribution from her medical practice of £6,100.  This monthly sum appears to have been credited to an account held by her practice to the order of the Viscount and the Viscount could authorise payments out of the account.  She allowed Dr Cochrane a cash payment out of the account of £300 per week for living expenses.

47.      The application for legal aid was refused by the Acting Batônnier on 2^nd February, 2017 because Dr Cochrane's disclosed income of £6,100 per month exceeded the maximum eligibility figure of £45,000 per annum.  Importantly, however, the Acting Batônnier suggested that Dr Cochrane contact the Viscount's Department and seek the Viscount's authority to use funds from the account for legal advice.  The letter went on to say "If the Viscount's Department inform you that they are unable to approve money being released to pay a lawyer to give you advice, then you can come back to us". 

48.      Inexplicably, Dr Cochrane did not make any such application to the Viscount, nor did she revert to the Acting Batônnier.  As she says in her affidavit at para 14, "... At this point I became somewhat distracted from concentrating on an appeal of the Decision".  She explains that she was very concerned about losing her job as a general practitioner which was a vocation for her, and she was preoccupied with the significant amount of litigation and legal processes taking place in the UK, including cases involving the Serious Fraud Office ("SFO").

49.      It was not until 30^th August 2018 (i.e. some 18 months later) that Dr Cochrane approached the Viscount stating that she was in the process of identifying a lawyer in Jersey to act on her behalf and enquiring as to the process she needed to follow to enable her to pay for this legal advice out of the funds accumulated from her medical earnings.  The Viscount replied the same day to the effect that Dr Cochrane should explore applying for legal aid but that, if she was not so entitled, the Viscount would need to see an estimate of costs from her proposed legal representative.  Dr Cochrane then explains in her affidavit that she started to approach a number of lawyers about possible representation and that in November 2018, Advocate Steenson agreed to assist her.  She notified the Viscount on 23^rd November, 2018 and explained that Advocate Steenson required £5,000 on account of fees.  The Viscount replied the same day asking for more information including in particular the nature of the advice which Dr Cochrane was seeking.  Dr Cochrane replied on 29^th November to the effect that she was seeking 'general legal advice about my rights and responsibilities'.  Not surprisingly, this did not assist the Viscount greatly and it was only on 12^th December that Dr Cochrane clarified that she did not believe she should have been declared en désastre and was seeking advice in that respect.  The Viscount confirmed on 14^th December that she now understood that Dr Cochrane was seeking advice on whether to appeal against the declaration of désastre and asked that Advocate Steenson provide a quotation for such work.  This was subsequently provided in the sum of £3,500 and the Viscount authorised payment of this sum to Advocate Steenson on 20^th February, 2019. 

50.      Approximately two months later on 30^th April 2019, Advocate Steenson's firm informed the Viscount's legal advisers, Ogier, they had been instructed to appeal against the declaration of désastre.  In early May 2019, Advocate Steenson (according to Dr Cochrane) became distracted by a personal matter and Dr Cochrane explains how in mid-June 2019 she started to look for alternative legal representation.  She does not give an exact date, but it appears that it was at about this time she approached Advocate Blakeley, who agreed in principle to act.  Dr Cochrane felt that she could not approach the Viscount for funding for a further lawyer.  However it was 'at or around this time' that Dr Cochrane was able to obtain funding from Litigation Capital.  This is the New York based entity apparently owned by Dr Smith's brother.  As explained earlier, the application for an extension of time was finally presented by Advocate Blakeley on behalf of Dr Cochrane on 31^st December 2019.

51.      We have no hesitation in concluding that the circumstances described by Dr Cochrane do not begin to justify or provide an acceptable excuse for a delay of nearly three years in appealing.  We would summarise our reasons for this conclusion as follows:-

(i)        (i) No reason has been put forward to explain why Dr Cochrane did not approach the Viscount for funds in February 2017 as advised by the Acting Batônnier.  Subsequent events show that the Viscount might well have been sympathetic - she did provide funds when requested in February 2019.  Furthermore, the Acting Batônnier's office made it clear to Dr Cochrane in their letter of 2^nd February 2017 that, if the Viscount refused to provide her with funds, the question of legal aid could be reviewed, but she never reverted to them.  It was entirely Dr Cochrane's responsibility that she did not explore either of these avenues. 

(ii)       (ii)     Even if a litigant cannot obtain legal representation, this does not excuse her from complying with timetables laid down in the Rules.  Thus in Pitman, Beloff JA said at [6]:-

"...Although they provide an explanation that lack of funds disabled them from engaging further legal representation, which they enjoyed before the Royal Court, nonetheless, as their present application shows, they were not disabled from seeking to pursue an appeal as litigants as person....".

    And at [7]:-

"....Their constitutional right of access to the court was not dependent upon legal assistance."

(iii)      The point at (ii) above has been elaborated recently by the United Kingdom Supreme Court in Barton v Wright Hassall LLP [2018] 1 WLR 1119.  At [18] Lord Sumption said:-

"...In current circumstances any court will appreciate that litigating in person is not always a matter of choice.  At a time when the availability of legal aid and conditional fee agreements have been restricted, some litigants may have little option but to represent themselves.  Their lack of representation will often justify making allowances in making case management decisions and in conducting hearings.  But it will not usually justify applying to litigants in person a lower standard of compliance with the rules or orders of the court....  The rules provide a framework within which to balance the interests of both sides.  That balance is inevitably disturbed if an unrepresented litigant is entitled to greater indulgence in complying with them than his represented opponent.  Any advantage enjoyed by a litigant in person imposes a corresponding disadvantage on the other side, which may be significant if it affects the latter's legal rights.....  Unless the rules and practice directions are particularly inaccessible or obscure, it is reasonable to expect a litigant in person to familiarise themselves with the rules which apply to any step which he is about to take."

    See also the judgment of Lord Briggs at [42]:-

"...Save to the very limited extent to which the CPR now provides otherwise, there cannot fairly be one attitude to compliance with rules for represented parties and another for litigants in person, still less a general dispensation for the latter from the need to observe them."

(iv)      Dr Cochrane then allowed 18 months to expire from February 2017 to 31^st August 2018 without taking any step in relation to an appeal.  This was a very substantial delay and we do not consider that the explanation which she gives for becoming somewhat distracted amounts to any reasonable excuse for this period of delay.

(v)       When she did approach the Viscount on 30^th August 2018, the Viscount replied the same day suggesting that Dr Cochrane apply for legal aid and stating that, if she was not entitled to legal aid, she should ask her proposed legal representative to provide an estimate of costs, on receipt of which the Viscount would discuss the matter further.  There was then a further delay of nearly 3 months before Dr Cochrane emailed the Viscount on 23^rd November 2018 to say that Advocate Steenson had agreed to act and needed £5,000 on account of fees.  Dr Cochrane says that she approached a number of lawyers enquiring about possible representation but that this was quite frustrating because she was concerned so many lawyers in Jersey would be conflicted and because they might have concerns about being paid.  However we do not see this as justifying a delay of nearly 3 months.

(vi)      The Viscount provided funds for Advocate Steenson on 20^th February 2019.  Yet no step in relation to an appeal had been taken by early May 2019, when (so Dr Cochrane explained) Advocate Steenson became distracted by a personal matter.  We appreciate that any advocate would have to read into the matter but, given that Dr Cochrane was already well out of time, speed was of the essence and we do not see a delay of some two and a half months as being reasonable.

(vii)     It appears that Dr Cochrane remained with Advocate Steenson from early May until mid-June in the hope that matters would be resolved.

(viii)    However, having approached Advocate Blakeley at about this time and having apparently obtained funding from Litigation Capital, and although we accept that Advocate Blakeley would have to read into the papers, we consider the delay from then until 31^st December as being excessive and not justified.  Although Dr Cochrane does not disclose in her affidavit the exact date that Advocate Blakeley agreed to act, the implication of para 29 of her affidavit is that she had approached Advocate Blakeley before 3^rd July, when Advocate Steenson's personal issues were resolved. 

(ix)      Finally, no explanation is given by Dr Cochrane as to exactly when she applied for and obtained funding from Litigation Capital, and she further does not explain why, if Litigation Capital was willing to fund her appeal in or about June 2019, she had not been able to obtain funds from it at any earlier stage.  Indeed, she does not explain whether she applied to Litigation Capital at any earlier stage, for example in 2017 when she was refused legal aid.

52.      Putting all these matters together, this was a very lengthy period of delay and we do not find Dr Cochrane's explanations for this period of delay provide reasonable justification for it.

53.      We should add that Advocate Drummond submitted that if the Court concluded that the delay in this case was 'totally excessive' and the reasons given for it 'totally inadequate', the application should be dismissed without the Court going on to consider the merits of any possible appeal or the issue of prejudice.  In making this submission, he relied on the decision of Ereaut, Bailiff, sitting as a single judge of this Court in Jersey Demolition Contractors Limited v Resources Recovery Board 1985 - 86 JLR 77.

54.      We agree that Advocate Drummond's submission accurately reflects the decision in that case.  The appellant had delayed some 2½ years between filing a notice of appeal and lodging the appellant's contentions when this should have been done within four months.  The excuse given was that it was a complicated case which the advocate wished to consider carefully.  He said he was very busy and had not been able to find the long period of uninterrupted thought and research necessary to prepare the appellant's case.  The Bailiff held that he did not need to consider the merits or the importance of the issues which were the subject of the appeal where there had been excessive delay and no adequate explanation of that delay.  However, it is clear that the English authorities to which he was referred did not then have regard to the merits in the way that more modern cases do both in England and Wales and in this jurisdiction.  Accordingly, we cannot accept that the position is as stark as Advocate Drummond submits. 

55.      Nevertheless, where there has been a very lengthy period of delay and no reasonable justification put forward for that delay, it is likely to require some overwhelming argument on the merits for the Court to consider granting an extension.  This is of particular relevance when, as in the present case, the intending appellant knows that the judgment sought to be appealed is being actively implemented and relied upon all the while.  We refer to this point further in our conclusion at the end of this judgment.  Against that background, we turn to consider the merits of the proposed appeal.

(iii) The merits of the appeal

56.      It was not disputed that, at paragraphs 11 - 18 of the Désastre judgment, the Royal Court correctly set out the principles which the Royal Court must apply when considering an application for a declaration of désastre.  For present purposes, we would highlight that the Royal Court must be satisfied of the following two things:-

(i)        the creditor has a liquidated claim against the debtor which exceeds £3,000;

(ii)       the debtor has realisable assets.

57.      As to what is meant by a 'liquidated claim', assistance can be obtained from the judgment of Southwell JA in Re Baltic Partners [1996 JLR N1c], Unreported Judgments 1996/075, cited with approval by the Court of Appeal in Re S.O. Holding AG [2011] JLR 782 at paras 8-9.  In Baltic Partners Southwell JA said at 10-11:-

"...if the creditor does not have a judgment in his favour, there must nevertheless be a liquidated sum undoubtedly due and payable by the debtor.  The indebtedness must be certain, and not the subject of genuine dispute and arguable defence, set off or counterclaim.  The indebtedness must be such as could form the basis of an immediate summary judgment."

58.      Dr Cochrane submits that the Royal Court was wrong to grant the désastre for two reasons:-

(i)        Contrary to the findings of the Royal Court, Harbour did not have a liquidated claim against ORB pursuant to the Funding Agreement and accordingly it could not make a demand for payment against ORB.  This in turn meant that Dr Cochrane's liability to Harbour as guarantor of ORB's obligations under the Funding Agreement had not crystallised.  Harbour therefore did not have a liquidated claim against Dr Cochrane. 

(ii)       There was no proper basis for the Royal Court's finding that Dr Cochrane had 'realisable assets'.  This finding was wrong in any event, but furthermore the Royal Court was unaware of an important order made by another division of the Royal Court whilst the désastre application         was being heard, which order significantly altered the issue of Dr Cochrane's 'realisable assets'.

59.      We shall consider each of these grounds in turn.

(a) No liquidated claim

60.      Dr Cochrane's submissions on this ground depend upon the existence and provisions of the agreement dated 13^th October 2011 ("the LC Agreement") between Litigation Capital and the Claimants (i.e. ORB, Mr Taylor and Mr Thomas) whereby Litigation Capital agreed to provide funds for the English Proceedings against Mr Ruhan.  It appears that the LC Agreement was not before the Royal Court.  Dr Cochrane therefore applies for leave to adduce the LC Agreement as additional evidence in the present application and on any appeal.  We consider that application below but, for the purposes of considering Dr Cochrane's submissions on the merits of any appeal, we shall consider the LC Agreement de bene esse. 

61.      As described at paragraph 7 above, Dr Cochrane also applies for the admission in evidence of a number of other documents which were not before the Royal Court.  Again, we have considered these documents de bene esse.  The key ones upon which Dr Cochrane places the greatest reliance are the Litigation Capital Statement of Case ("the LCSC") dated 2 July 2020 filed in the current English litigation referred to below, certain letters from English solicitors Bankside Law and Kesytone Law in connection with that litigation and the Consolidated Statement of Case of the Settlement Parties ("the Consolidated SC") in that litigation dated 24^th July 2020.

62.      The LC Agreement is in not wholly dissimilar terms to the Funding Agreement.  It defines 'the Defendant(s)' as Mr Ruhan and any corporate entity controlled by him and any party subsequently joined as a co-defendant; 'Cause of Action' as any cause of action, whether in England and Wales or in any other jurisdiction, that may be vested in the Claimants against any Defendant(s); 'Success in Proceedings' as any judgment, award or settlement pursuant to which the Defendant or any third party is obliged to pay any sum of money or other assets to the Claimants in respect of the Causes of Action; and 'Proceeds' as any amount of money or other assets actually recovered by the Claimants as a result of Success in the Proceedings.  The definitions in the Funding Agreement are broadly similar save that the definition of 'Cause of Action' refers to any claim of the Claimants against the 'Defendent(s) or any other person'.  Advocate Drummond submits that this has the effect that Success in Proceedings is wider for the purposes of the Funding Agreement than it is for the LC Agreement.

63.      Clauses 8.1 and 9 of the LC Agreement provide that all Proceeds will be held on trust for the Claimants and Litigation Capital to be divided between them in accordance with the provisions set out in clause 9, which provides in summary first for the reimbursement of Litigation Capital's outlay and then payment of any legal fees, with the surplus being divided as to 50% to Litigation Capital and 50% to the Claimants. 

64.      The Funding Agreement is to broadly similar effect in that, by virtue of clauses 8 and 9 thereof, any Proceeds resulting from Success in the Proceedings are to be held on trust to divide between Harbour and the Claimants according to the provisions of clause 9 and Schedule 2.  Again, the effect is that Harbour is reimbursed first for its investment, followed by payment of legal costs with the balance being divided between Harbour and the Claimants according to the formula set out in Schedule 2. 

65.      It seems clear that, when entering into the Funding Agreement, Harbour was aware that there was an existing funder in the form of Litigation Capital.  Thus the third condition subsequent set out in Schedule 9 of the Funding Agreement refers to the need for the Claimants to produce written confirmation from Litigation Capital within 14 days that the Claimants are at liberty to enter into the Funding Agreement and that doing so will not breach any obligations owed to Litigation Capital.  On 10^th July 2013, Litigation Capital sent a letter to the Claimants, which has been referred to by Harbour as "the Subordination Letter".    It referred specifically to the Funding Agreement and went on to confirm that, in consideration of the Claimants releasing Litigation Capital from its future obligations to provide funds under the LC Agreement, Litigation Capital waived and postponed its entitlement to any sums resulting from Success in the Proceedings up to an amount required to satisfy in full the Claimants' obligations to Harbour under the Funding Agreement.  The letter went on to confirm that the Claimants' obligations to Litigation Capital under the LC Agreement continued in full force and effect in respect of any amounts recovered from proceedings 'after satisfaction in full of the terms of the [Funding Agreement]'. 

66.      Dr Cochrane submits that the consequence of these various provisions is as follows:-

(i)        Harbour can only claim against ORB for any sum that is held on trust pursuant to clause 8 of the Funding Agreement. 

(ii)       Clauses 8 and 9 of the LC Agreement require the Claimants (including ORB) to hold the Proceeds on trust for them and Litigation Capital.  The LC Agreement predated the Funding Agreement.

(iii)      It follows that no Proceeds can be held on trust for Harbour pursuant to the Funding Agreement unless and until all funds held on trust pursuant to the LC Agreement have been distributed in accordance with its terms and there is a surplus which can then be held on trust pursuant to the terms of the Funding Agreement for the benefit of, inter alia, Harbour.

67.      She further submits that the documents relating to the current English litigation, which she seeks to adduce in evidence, show that in that litigation:-

(i)        As set out in the LCSC, Litigation Capital is claiming that the assets which are the subject of that litigation ("the Assets") are held on trust for it because they derive from the Isle of Man Agreement.  It asserts that Litigation Capital funded the Isle of Man proceedings whereas Harbour did not and that the proceeds of the Isle of Man Agreement do not constitute 'Proceeds' for the purposes of the Funding Agreement because they did not result from the English litigation. 

(ii)       The Subordination Letter is of no effect because Harbour breached its funding obligations under the Funding Agreement and the Subordination Letter was conditional upon Litigation Capital being relieved of its funding obligations because they were being taken over by Harbour.

(iii)      As the Consolidated SC shows, other parties, such as the SFO, assert proprietary claims to the Assets.  It follows therefore that Harbour can have no liquidated claim to those assets because such claim is uncertain unless and until the claims of the other parties are resolved. 

68.      In our judgment, the prospects of it being held on appeal that Harbour did not have a liquidated claim as at the date of the désastre application are minimal for the following reasons:-

(i)        The £10m receipt (upon which Harbour's liquidated claim is based) was received by Dr Cochrane (not ORB or the other two Claimants) as a result of the Isle of Man Agreement which settled the Isle of Man proceedings by Dr Cochrane against Mr Cooper and Mr McNulty, not the English proceedings by the Claimants against the Defendant (Mr Ruhan).  Litigation Capital argues in the current English litigation that the receipts resulting from the Isle of Man Agreement do not constitute Proceeds for the purposes of the Funding Agreement. But if that is right, neither do they constitute Proceeds for the purposes of the LC Agreement, where the definition of Cause of Action is drawn in narrower terms than in the Funding Agreement. 

(ii)       Even if the receipts from the Isle of Man Agreement do constitute Proceeds for the LC Agreement (and therefore the Funding Agreement), the Subordination Letter would appear to defeat any claim by Litigation Capital to a claim in priority to Harbour.  It is suggested by Litigation Capital that Harbour has been in breach of its obligations under the Funding Agreement but no evidence to that effect has been produced, merely assertions in pleadings and correspondence.  Conversely, detailed evidence was produced to the Royal Court as to the amount advanced by Harbour pursuant to the Funding Agreement.   

(iii)      It is correct that the SFO asserts in the current English litigation that the assets recovered under the Isle of Man Agreement (including the £10m) are in reality the assets of Dr Smith and are held for him.  We accept therefore that it is conceivable that the English Court may eventually determine in the current English litigation that those assets are held for Dr Smith and not for Harbour and the Claimants pursuant to the Funding Agreement. 

(iv)      However, this does not assist Dr Cochrane.  The issue for the Royal Court was whether Harbour had a liquidated claim against ORB (and therefore against Dr Cochrane pursuant to her guarantee).  In our judgment, the 2014 Agreement places an insurmountable hurdle in ORB's way.  The 2014 Agreement was entered into between Harbour, ORB, the other Claimants, Dr Cochrane and the defendants in the Isle of Man proceedings (but not Mr Ruhan) and it was specifically agreed that all sums received by Dr Cochrane pursuant to the Isle of Man Agreement (which therefore included the £10m) should be treated as 'Proceeds' for the purposes of the Funding Agreement.  That could not be clearer.  As between the Claimants (including ORB) and Harbour, there was a contractual obligation to treat the receipts as 'Proceeds' and to pay Harbour what became due as a result.  The fact that the assets may not as yet be held on trust may additionally give rise to a claim for breach of trust or a proprietary claim on Harbour's part, but does not affect the contractual obligation to pay on the part of the Claimants constituted by a combination by the Funding Agreement and the 2014 Agreement.  The effect of those two agreements is that the sum of £10m received by Dr Cochrane undoubtedly constitutes 'Proceeds' for the purposes of the Funding Agreement and, as between ORB and Harbour, Harbour therefore has a certain claim in respect of the monies which it has advanced, namely £5,189,010.48, as found by the Royal Court.  If there is a liquidated claim against ORB, there is similarly a liquidated claim against Dr Cochrane pursuant to her guarantee. 

(v)       In summary, whilst, according to the pleadings and contentions in the current English litigations, there may be an arguable case as to whether or not the assets received as a result of the Isle of Man Agreement are held on trust for Harbour and the Claimants pursuant to the Funding Agreement (because there are other claimants) there can be no doubt that Harbour has a liquidated contractual claim in debt against ORB pursuant to the combined effect of the Funding Agreement, the Isle of Man Agreement and the 2014 Agreement.  If there is a liquidated claim against ORB there is also such a claim against Dr Cochrane pursuant to her guarantee. 

69.      Turning to Dr Cochrane's application to adduce the various documents referred to above as fresh evidence, the test for introducing fresh evidence on appeal is well established.  Thus, in United Capital Corporation Limited v Bender [2006] JLR 242 Southwell JA said at para 26:-

"It was also common ground among the parties that demonstrating the existence of special grounds involves satisfying the court that (i) the evidence could not have been obtained with reasonable diligence for use at the hearing; (ii) it would probably have an Important influence, albeit not a decisive one, on the result of the case; and (iii) the evidence is credible."

70.      As to (i), taking first her application in respect of the LC Agreement, Dr Cochrane submits that it was reasonable for her to expect ORB, Harbour or Litigation Capital to produce the LC Agreement to the Royal Court and it could not therefore have been obtained with reasonable diligence on her part.  We cannot accept that submission. 

71.      As to the suggestion that Harbour should have produced it, it is to be noted that Harbour was not a party to the LC Agreement and the affidavit of Susan Dunn, Head of Litigation Funding at Harbour, sworn for the purposes of the désastre application, stated at para 70 that she had not seen a copy of the LC Agreement. 

72.      As to the suggestion that Litigation Capital should have produced it, that firm was not represented before the Royal Court.  In any event it was for Dr Cochrane to produce the agreement if she felt that it assisted her case in opposing the application for désastre.

73.      As to the suggestion that ORB should have produced it, we find it hard to take this suggestion seriously.  Dr Cochrane was the sole shareholder and either the sole director or one of two directors (there is conflicting information in the papers before us) of ORB at the time of the hearing before the Royal Court and she and ORB had instructed the same advocate for the hearing.    As the (or, it may be, a) director of ORB she was a person to give directions and take actions on behalf of ORB and she could and should have made sure it was produced.

74.      Dr Cochrane does not say in her second affidavit when she came into possession of a copy of the LC Agreement, although she clearly had a copy by the time of that affidavit in February 2020.  In the absence of any explanation, she must be taken to have either had a copy or had the ability to get hold of a copy at the time of the désastre application, particularly given that ORB was a party to the LC Agreement and she had signed it on behalf of ORB as a director. 

75.      In the circumstances, Dr Cochrane has failed to satisfy us that the LC Agreement could not with reasonable diligence have been obtained by her for use at the hearing before the Royal Court.

76.      Turning to the documents referred at paragraph 7 above, we accept that a number of them did not come into existence until after the désastre application.  However, they all relate to events which occurred before that application and merely seek to mount arguments and contentions by reference to those events. 

77.      In her affidavit dated 23^rd July, Dr Cochrane states that she has been intimately involved in the litigation in England and the Isle of Man from its start.  She repeated that assertion orally before us.  It is clear that this is correct.  As a director of ORB she signed the Funding Agreement and the LC Agreement.  She was also a party to the 2014 Agreement in her own right as well as being a director of ORB at the time and she was the recipient of the proceeds of the Isle of Man Agreement. 

78.      In those circumstances she must have been aware - or at the very least could with reasonable diligence have become aware - of all of the facts which, it is said, give rise to the various arguments and contentions which are set out in the documents in the current English litigation which she now seeks to adduce in evidence.  We conclude therefore that the first condition for the admission of these documents as fresh evidence, namely that the material in them could not have been obtained with reasonable diligence for use at the hearing, is not satisfied. 

79.      As to (ii), we have dealt with this when considering the merits of the submission that there is no liquidated claim at paras 60-68 above.  In our judgment, admission of the LC Agreement and the other documents would not have an important influence on the result of the case.

80.      We do not think it necessary to address (iii) as listed in Bender.  Given our views on (i) and (ii), we reject the application to adduce the LC Agreement and the other documents as fresh evidence.

(b) No realisable assets

81.      Dr Cochrane submits that the Royal Court was not entitled to find that she had 'realisable assets' for the purposes of declaring her en désastre.  As we understand it, she makes this submission on two grounds.  First, she submits that the Royal Court was wrong on the evidence before it to conclude that she had realisable assets.  Secondly, she submits that the effect of a variation of the saisie judiciaire in respect of Dr Smith made by a different division of the Royal Court on the same day as the désastre hearing, was to prevent substantial property (which might otherwise have been attributable to her) from vesting in the Viscount pursuant to a declaration of désastre and that accordingly it no longer constituted realisable property.

82.      In respect of her first submission, there was, in our judgment, ample evidence before the Royal Court to justify its finding that she had realisable assets.  The key evidence was as follows:-

(i)        In or around April 2016 (only some 7 months before the désastre hearing) Dr Cochrane entered into a loan note instrument in the sum of £73,750,000 in favour of Phoenix Group Foundation.  Pursuant to clause 12.13 (e), Dr Cochrane warranted that she was the ultimate beneficial owner of all the 'Relevant Assets' set out in schedule 1 to the loan note.  Schedule 1 listed assets with a stated aggregate value of £58m. The underlying assets (owned by a number of companies incorporated in different jurisdictions) are stated as comprising real property in Poland, London, Birmingham, Mallorca, Italy, Somerset and Canada, as well as an aeroplane in Southampton.  The schedule gives the legal owner of each asset and, in each case, specifies Dr Cochrane as the ultimate beneficial owner of such asset.  Dr Cochrane signed the loan note.

(ii)       In an affidavit sworn by Dr Cochrane on 7^th September 2016 (only some two and a half months before the application for désastre) in relation to Harbour's Letter of Request application, Dr Cochrane stated at paragraph 9:-

"I am also privileged to be a very wealthy woman, with holdings in companies worldwide, including [ORB]."

83.      Furthermore, although not direct evidence, it is to be noted that in his judgment dated 15^th April 2016 in the English proceedings, Popplewell J found at para 87 that the value of assets transferred to Dr Cochrane under the Isle of Man Agreement was very likely to be well in excess of £150m. 

84.      In our judgment, these matters constituted ample evidence upon which the Royal Court was entitled to find that Dr Cochrane had realisable assets.

85.      Turning to Dr Cochrane's second point, it arises in this way. 

86.      On 26^th May 2006, a saisie judiciaire was granted in respect of "the realisable property held by [Dr Smith] in the Island" on the application of the Attorney General, no doubt acting on behalf of the SFO.  The saisie was made pursuant to Article 15 (1) of the Proceeds of Crime (Jersey) Law 1999 as modified pursuant to the Proceeds of Crime (Designated Countries and Territories) (Jersey) Regulations 1999 ("the Modified Law").  Without prejudice to the generality of the expression 'the realisable property held by [Dr Smith] in the Island', the saisie went on to specify particular property of Dr Smith which the Viscount should take possession of.  This included the immovable property known as Steephill, St Saviour (held in the name of Bodega Limited), the contents of Steephill, the issued share capital of Bodega Limited, twenty-five named paintings and five specified motor vehicles. 

87.      It appears that, unbeknown to the parties appearing in the désastre application on 24^th November 2016 (except possibly Advocate Garood who appeared for the SFO), and to the Royal Court itself, the Attorney General was applying on the same day for a variation of the saisie over Dr Smith's property.  At some stage during the day (it is not known exactly when but Advocate Blakeley suggests that it may have been around lunch time), Sir Michael Birt, Commissioner, granted the Attorney General's application for a variation of the saisie ("variation order").  Comparison of the original saisie and the variation order suggests that the effect of the variation was to extend the saisie in respect of Dr Smith's property in Jersey to include three cottages at Steephill, three properties in Les Grands Vaux, St Saviour, Dr Cochrane's reversionary interest in a property known as 49 Langtry Gardens, St Saviour, and 'any other property held by Dr Cochrane or ORB a.r.l. for or on behalf of, as nominee for or for the benefit of [Dr Smith]'.  It does not appear that the existence of the variation order was drawn to the attention of the Royal Court before it made its decision at about 4:45 pm that day to grant Harbour's application for a désastre in respect of ORB and Dr Cochrane and there is no mention of it in the Désastre judgment. 

88.      The question of timing is potentially significant.  Under Article 22(1) of the Modified Law, property which is subject to a saisie made before a declaration of désastre does not form part of the debtor's estate for the purposes of the désastre.  Conversely, under Article 22(2)(b) of the Modified Law, a saisie may not be granted in respect of property which has been declared en désastre.  It follows that if the variation order was made before the declaration of désastre, then such property as was subject to the saisie (as varied) could not constitute realisable property for the purposes of the désastre application.

89.      Dr Cochrane submits that, as a result of the variation order, substantial property, which may have been attributable to her, vested in the Viscount pursuant to the saisie and therefore no longer constituted realisable property for the purposes of the désastre application.  She argues that, as a result, the Royal Court was wrong to hold that she had realisable property without conducting a proper analysis of the effect of the variation order.  In support of this contention, it is asserted at paragraph 25 of the skeleton argument filed on her behalf that the Viscount said at paragraph 18 of her affidavit dated 20^th September 2019 (sworn in support of her application for the blessing of a settlement agreement as described below) that she is "uncertain whether [Dr Cochrane] has any realisable assets". 

90.      We are willing to assume for the purposes of this application that the variation order was made at some point on 24^th November 2016 prior to the Royal Court granting the declaration of désastre in respect of Dr Cochrane and ORB.  However, even on that assumption, we do not consider that this enables Dr Cochrane to mount a convincing argument that she did not have any realisable property at the point when the Royal Court declared her en désastre.  We would summarise our reasons for so concluding as follows:-

(i)        The saisie as varied is in respect of Dr Smith, not Dr Cochrane.  It only covers assets in the name of Dr Cochrane if they are specifically named, or to the extent that she holds such assets "on behalf of or as nominee for or for the benefit of Dr Smith".  The saisie does not cover any assets beneficially owned by Dr Cochrane.  Such assets are therefore realisable property for the purposes of the désastre application. 

(ii)       As the Viscount says at paragraphs 47 - 49 of her affidavit of 10^th March 2020 sworn for the purposes of the present application, she does not consider that there is any uncertainty at all as to whether Dr Cochrane had realisable assets at the time she was declared en désastre.  In particular, the Viscount has identified personal bank accounts in Dr Cochrane's name in Jersey and six items of jewellery which Dr Cochrane has identified as being her own assets.  The jewellery and bank accounts have a combined value of approximately £21,000.  She also has her income as a general practitioner in Jersey of not less than £73,200 per annum. 

(iii)      As it states specifically on its face, the saisie only extends to property in Jersey.  It does not therefore cover property outside Jersey.  Conversely, 'realisable property' for the purposes of the Bankruptcy (Désastre) (Jersey) Law 1996 ("the Désastre Law") extends to property outside Jersey, even if the Viscount may need to seek recognition of her appointment in another jurisdiction in order to secure and realise such property.  Thus, Article 1 of the Désastre Law defines 'property' as 'land, money, goods, things in action, goodwill, and every valuable thing, whether moveable or immoveable, and whether situated in Jersey or elsewhere; and also means obligations, servitudes, and every description of estate, interest and profit, present or future, vested or contingent, arising out of or incident to property'. [emphasis added]

(iv)      As already stated, there was compelling evidence before the Royal Court that Dr Cochrane was the beneficial owner of substantial assets outside Jersey in the form of the schedule to the loan note, and the assertion in her affidavit that she was "a very wealthy woman, with holdings in companies worldwide....".  Furthermore, her claims in the proceedings referred to at para 95 below constitute property within the meaning of Article 1 of the Désastre Law.  Being outside Jersey, all these assets were not caught by the variation order. 

91.      Putting these matters together, it seems clear that, even if the Royal Court had been alerted to the variation order before it granted the désastre, it would still have concluded that Dr Cochrane had realisable property and could therefore be declared en désastre.

92.      It follows that, in our judgment, the prospects of any appeal succeeding are minimal.

(iv) Prejudice

93.      Dr Cochrane submits that there will be little or no prejudice if this appeal is allowed to proceed out of time because, as the Viscount accepts, she has not yet adjudicated on the claims submitted by creditors, nor have any significant assets yet been recovered in the désastre.  She accepts that, by reason of the indemnity which it has given the Viscount, Harbour will have expended funds in meeting the costs incurred by the Viscount since the désastre, but submits that it is highly probable that a large part of such expenditure would have been incurred in any event as it would have been required for the administration of the ORB désastre, which has not been challenged.

94.      Before we consider the issue of prejudice, we need to summarise certain aspects of the position in relation to Dr Cochrane's désastre.  In this respect we have been assisted by an affidavit sworn by the Viscount on 20^th September 2019 in support of her application to the Royal Court of the same date for approval of her decision to enter into a settlement agreement ("the settlement agreement") with certain parties in connection with English litigation ("the current English litigation") to which she is a party; by the judgment of the Royal Court dated 9^th March 2020, Viscount v Smith re: Cochrane and ORB A.R.L. [2020] JRC 043 ("the Approval judgment"), which gave the reasons for its decision on 27^th January 2020 to approve the Viscount's decision to enter into the settlement agreement; and by an affidavit dated 10^th March 2020 sworn by the Viscount for the present application.

95.      The current English litigation is to be distinguished from the English proceedings referred to at para 18 above.  The latter proceedings came to an end on 6^th May 2016 (see para 30 above).  A very full explanation of the current English litigation is given in the Viscount's affidavit of 20^th September 2019.  In particular, she describes at para 27 the property which is the subject of the current English litigation.  Such property comprises 45 companies registered in a number of different jurisdictions together with 4 pieces of Jersey immovable property.  For our purposes, it is sufficient to quote the summary of that litigation contained in the Approval judgment as follows:-

"4.      The Viscount is a party to proceedings in England in which the extent of Dr Cochrane's and Orb's interest, amongst that of multiple other parties, in certain property is being determined.  In particular, the following is in issue in the English proceedings: 

(i)        Whether some or all of the property in question belongs to:

           (a)        Dr Cochrane and/or Orb (as claimed by the Viscount), or

           (b)        Dr Gerald Smith (Dr Cochrane's former husband) as claimed by the Serious Fraud Office ("the SFO") and the Enforcement Receivers appointed as receivers of the realisable property of Dr Smith, or

           (c)        Certain former business associates of Dr Smith (or persons related to such business associates) pursuant to their claims.

           Certain of the assets in question are companies, some of which are in liquidation.  Claims to certain of the property are also made by those companies or their liquidators ("the Joint Liquidators").

(ii)       Whether some or all of the property is held on trust for:

           (a)        The litigation funder Harbour, pursuant to a litigation funding arrangement with Dr Cochrane and Orb.

           (b)        Litigation Capital Ltd ("LCL"), which is purportedly ultimately beneficially owned by Dr Smith's brother, Anthony Smith, pursuant to a funding arrangement and pursuant also to purported property transfers to LCL.

(iii)      Whether the following have an enforceable charge on the property:

           (a)        Stewarts Law LLP ("Stewarts") claim they are entitled to approximately £8 million of these funds as former solicitors of Dr Cochrane, pursuant to their solicitor's lien. 

           (b)        Various former business associates of Dr Smith and Dr Cochrane (or business associates of Dr Smith's business associates).

5.        There are also a small number of non-proprietary claims brought in the English proceedings by Ulrich Pelz, Philip Barton and Dawna Stickler.  They do not affect the competing claims to the property and were not relevant for the purpose of the application. 

6.        The Viscount has no direct knowledge of these matters, and is reliant solely on the information she has been able to gather in this regard, including the documentation which has been disclosed through the course of the English proceedings.  That information is limited by the following factors in particular:-

(i)        The numerous structures and arrangements involved are highly complex, and there are various disputes of fact as to their legitimacy, composition, nature and purpose;

(ii)       These proceedings stem from transactions which allegedly took place in 2003, and the history of the assets over time is highly complex and subject to numerous disputes of fact;

(iii)      Both Dr Smith and Dr Cochrane, as well as a number of the other parties to the English proceedings (not including the parties to the settlement agreement) have been described by the English Court as having lied, cheated, abused the Court process and have been found to be dishonest; and

(iv)      The documentary evidence is incomplete and/or cannot necessarily be taken at face value.  There still remain many 'unknowns' which would need to be tested by cross-examination, with the limitations that are inherent in oral evidence.

7.        The future costs of seeing the English proceedings through to conclusion are likely to be considerable, given the plethora of parties, issues, and contradictory evidence. 

8.        Of the rival claimants in the English proceedings, the following are not business associates of (or related to or claiming through business associates of) Dr Smith or Dr Cochrane:   

(i)        The Viscount

(ii)       The SFO and the Enforcement Receiver

(iii)      Harbour

(iv)      Stewarts

(v)       The Joint Liquidators

These are the parties to the settlement agreement ("the settlement parties")

9.        The settlement agreement represents a compromise of the claims between the settlement parties inter se, and in broad summary they have agreed:-

(i)        To settle all of the claims between themselves.  No claims against third parties/non settlement parties are compromised by the terms of the settlement. 

(ii)       Subject to the final order of the English High Court determining ownership of the assets recovered both in and outside of Jersey, an agreed fixed distribution scheme in respect of the assets forming part of the English proceedings.  This scheme provides for:

           (a)        Save as described at (b) below, the distribution of the net proceeds of realisation in the proportions agreed between the settlement parties of the assets in question after the deduction of certain specified expenses and costs.  This is, subject (in the case of the SFO, Harbour and Stewarts) to a cap on the aggregate distribution that they are entitled to receive, with any balance that may be due to them over and above that cap being distributed to such of the settlement parties whose aggregate distribution does not exceed any agreed applicable cap;

           (b)        The Viscount to receive (in addition to the above) a sum equal to 50% of the sale price of the Steephill Estate situated in Jersey. 

10.      It is envisaged that Harbour will take the lead in and have the future conduct of the English proceedings including to trial on behalf of the settlement parties.  It is also anticipated that Harbour may proceed if so advised with applications seeking to achieve summary disposal of the English proceedings and minimising the prospect of other parties seeking to claim the property that is the subject of the settlement agreement. 

11.      The settlement agreement anticipates the possibility of the settlement parties entering into further settlements with non-settlement parties where it is in the best interests of the settlement parties to do so, subject to the consent of all settlement parties. 

12.      If the English High Court determines that none of the assets subject to the settlement agreement fall to be distributed to any settlement party (either because none of the settlement parties' claims are established or one or more such claims is established but such claim is entirely outranked by the claim of a non-settlement Party) then the settlement parties have agreed that the distributions agreed will not take effect. 

13.      The settlement agreement is expressly made subject to various consents and approvals being obtained, including the sanction of this Court approving the Viscount's decision to enter into the settlement agreement. 

14.      By entering into this agreement, the Viscount will:

(i)        Ensure that she receives a guaranteed proportion of the assets (if and insofar as the non-settlement parties' claims (or any of them) do not defeat entirely the claims of the settlement parties);

(ii)       Remove the costs and uncertainty of litigating the claims with the settlement parties;

(iii)      Resolve the bulk (in number and value) of the creditor claims in the respective désastres and ultimately streamline and reduce the cost of the administration of those désastres.  In particular:

           (a)        The creditor claims by Harbour, Stewarts and the Joint Liquidators (worth a total of approximately £134 million) will be settled;

           (b)        Resolution of the creditor claims by Dr Smith, LCL, Mitre Property Limited, Phoenix Group Foundation, Minardi Investments Limited, Nicholas Thomas and Roger Taylor (cumulatively worth in excess of approximately £162 million) will be achieved in the English proceedings and the costs of doing so will largely be borne by Harbour at reduced costs to the désastre estates."

96.      As already stated, the Royal Court approved the Viscount's decision to enter into the settlement agreement and said as follows at para 31 of the Approval judgment:-

"31.    Whilst the Viscount was under a duty to get in the assets of Dr Cochrane and Orb, in this case, those assets comprise choses in action which are the subject of complex, costly and unwieldy litigation.  As in all litigation, the Viscount has to take into account the merits of her claims, as advised, the evidential issues faced and the likely costs to be incurred (including the risk of adverse costs orders).  The settlement agreement:-

(i)        Resolves the bulk in number and value of the creditor claims, streamlining and reducing the cost of the administration of the désastre;

(ii)       significantly reduces the cost of litigating with the non-settlement parties; 

(iii)      removes the cost and uncertainty of litigating the claims with the settlement parties; 

(iv)      ensures that she receives a guaranteed proportion of the assets if and in so far as the non-settlement parties' claims or any of them do not defeat entirely the claims of the settlement parties; and 

(v)       reduces the number of issues in dispute in the English proceedings and paves the way for possible settlement with some or all of the other non-settlement parties." 

97.      In her affidavit of 10^th March, the Viscount explains at paras 40-43 the substantial amount of work which she has undertaken in relation to Dr Cochrane's désastre.  At para 40 she states:-

"This has included:

(a)       obtaining an order in England recognising Dr Cochrane's désastre and my role in relation to her bankruptcy;

(b)       participating in the English Proceedings (including travelling to the United Kingdom for hearings and meetings, preparing statements of case, providing disclosure, and reviewing voluminous disclosure and correspondence from other parties);

(c)       negotiating a settlement agreement with other parties to the English Proceedings and obtaining orders from the Royal Court sanctioning my decision to do so;

(d)       numerous meetings with creditors;

(e)       requesting and reviewing documents provided by Dr Cochrane, her ex-husband Dr Gerald Smith and other interested parties, including creditors;

(f)        meetings with Dr Cochrane, [Dr Smith] and Dawna Stickler (who owned companies that had provided family office services to Dr Cochrane) and reviewing information provided; and

(g)       generally administering the désastre."

98.      The Viscount goes on to explain that for pragmatic reasons (because it would be cumbersome and impractical to divide costs exactly) she has allocated the costs she has incurred equally between the désastre of ORB and the désastre of Dr Cochrane.  On this basis she estimates that, as at 31^st January 2020, she has incurred approximately £1,360,000 in legal costs and other expenses in administering Dr Cochrane's désastre.  She accepts that there is a degree of overlap and common interest between the two désastres, but the work is not identical in relation to them.  In particular, while some of the work undertaken in connection with Dr Cochrane's désastre may have also been required as part of the administration of the ORB désastre, substantial amounts of work have been carried out on tasks that are specific to Dr Cochrane's désastre only.  For example, the claim that she is pursuing in the current English litigation in respect of the ownership of Steephill and its contents is unrelated to ORB, as is work conducted in relation to liaising with Dr Cochrane and the Enforcement Receivers as to Dr Cochrane's shareholding in, and directorship of, a Dutch company called Casa Coloniches BV (which owns property in Mallorca).

99.      In his affidavit dated 9^th March 2020, Mr Mark King, a senior director of litigation funding at Harbour states that, as at the date of that affidavit, Harbour had spent a total of £2,693,250.88 funding the Viscount and her English and Jersey lawyers in respect of both désastres and a further £62,000 was due to be paid as the end of March.

100.   As to creditors, the Viscount states that the current value of claims in Dr Cochrane's désastre is approximately £304,293,400, albeit that she has not yet adjudicated upon the claims because she considers it unfair to put potential creditors to the cost of proving their claims in circumstances where the current English litigation is likely to result in the effective adjudication of many of these claims and where, pending the outcome of those proceedings, the present assets are insufficient to lead to any distribution. 

101.   In her affidavit of 10^th March, the Viscount stated that the Jersey taxpayer would be significantly out of pocket for the time spent by her and her Department on the désastre.  In her affidavit of 23rd July, Dr Cochrane queried this assertion on the grounds that Harbour had agreed to indemnify the Viscount against all costs incurred in respect of the désastre.  As a result, the Viscount has reviewed the terms of her agreement with Harbour and by letter dated 24^th July from Ogier, has confirmed that her earlier evidence was provided on a mistaken belief that the agreement with Harbour did not include indemnification for the internal time costs for work undertaken by the Viscount's Department.  Upon checking the agreement, she had now identified that such internal costs were in fact recoverable from Harbour.  She apologised for the incorrect statement in her affidavit.  It is unfortunate that this error was made but we do not think that it affects the position.  It simply determines whether any prejudice is suffered by Harbour or the Viscount. 

102.   In our judgment, considerable prejudice would be caused if we were to allow this appeal to proceed after such a lengthy delay.  Thus:-

(i)        By reason of its agreement to indemnify the Viscount in respect of both external costs, such as legal fees, and her internal costs, Harbour has incurred substantial costs in connection with the désastre.  If Dr Cochrane had appealed within the stipulated 28 day period, none of these costs would have been incurred by Harbour pending any appeal.  If the appeal were ultimately successful these costs would be substantially wasted.

(ii)       The settlement agreement is clearly very advantageous in seeking to reduce the scope and complexity of the current English litigation and ensuring that, if any monies are recovered by any of the settlement parties, Dr Cochrane (and therefore her creditors) will receive a share.  If this application is allowed, none of the parties to the settlement agreement will know whether the agreement will continue to have effect until the outcome of the appeal.  There will therefore be uncertainty which may impact on the timetable for the current English litigation.  If Dr Cochrane's appeal were to be successful, the settlement agreement would fall away unless Dr Cochrane affirmed it (which seems very unlikely given that she allied herself with Dr Smith in opposing the Viscount entering into the settlement agreement, as recorded at para 26 of the Approval judgment).  In those circumstances not only would prejudice have been caused to Harbour, but also to the other parties to the settlement agreement who would have incurred time and expense which would have been wasted.

(iii)      The creditors of Dr Cochrane continue to be kept out of their money and, in the event of a successful appeal, would have to start all over again by suing Dr Cochrane personally and seeking to enforce any judgment against her, with all the difficulties that that would clearly involve in identifying assets etc.

Conclusion

103.   In Pitman, Beloff JA said at para 14:-

"I would have dismissed this application by reference to factors (1) and (2) i.e. extreme and unjustified delay alone, unless the merits of the proposed ground of appeal were overwhelming."

In that case the delay had been some 13 months and the reasons given for the delay were a lack of funds to engage legal representation, coupled with a decision to pursue a political rather than legal remedy. 

104.   We are of like mind in relation to the first two factors in this case.  Given the extremely lengthy delay (nearly three years), and our conclusion that the reasons given for that delay do not provide justification, we would only consider extending the time for appealing if the merits of the proposed appeal were overwhelming (to use Beloff JA's expression).  That is certainly not the case.  As we have described earlier, we conclude that there are minimal prospects of Dr Cochrane being successful in showing that Harbour does not have a liquidated contractual claim in debt, or that she did not have realisable assets at the time of the désastre application.  Even in relation to whether Harbour has a proprietary claim to the assets which are the subject of the current English litigation, any case mounted on appeal would be at best arguable; it is certainly not overwhelming.

105.    The above factors are sufficient to lead to a rejection of this application. But when one adds in the factor that prejudice would be caused to Harbour and other parties if the application were to be allowed, the case for refusing to extend the time for appealing is unanswerable.

106.   This application is accordingly dismissed.

Authorities

Harbour v Orb [2017] JRC 007.  

Representation of Harbour v Orb [2016] JRC 171. 

Cochrane v Harbour Fund II LLP and the Viscount [2020] JCA 140A. 

Court of Appeal (Civil) Rules 1964. 

Pitman -v- Jersey Evening Post Limited [2013](2) JLR 293. 

Pitman v JEP and 1st Jersey Limited [2013] JCA 236. 

ORB a.r.l. & Ors-v-Ruhan & Ors [2016] EWHC 850 (Comm). 

Barton v Wright Hassall LLP [2018] 1 WLR 1119. 

Jersey Demolition Contractors Limited v Resources Recovery Board [1985 - 86 JLR 77]. 

Re S.O. Holding AG [2011] JLR 782. 

Re Baltic Partners [1996 JLR N1c].  

Unreported Judgments 1996/075.  

Capital Corporation Limited v Bender [2006] JLR 242. 

Proceeds of Crime (Jersey) Law 1999. 

Proceeds of Crime (Designated Countries and Territories) (Jersey) Regulations 1999. 

Bankruptcy (Désastre) (Jersey) Law 1996. 

Viscount v Smith re: Cochrane and ORB A.R.L. [2020] JRC 043.