Case No: 2014 FOLIO 1242
Neutral Citation Number: [2015] EWHC 1428 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 20/05/2015

Before :

MR JUSTICE BURTON
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Between :

	(1) Patokh Chodiev
(2) Alexander Machkevitch
(3) Alijan Ibragimov	Claimants	
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	Kirill Ace Stein	Defendant	

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Stephen Rubin QC and Caley Wright (instructed by Hogan Lovells International LLP) for the Claimants
Daniel Oudkerk QC and Robert Weekes (instructed by Eversheds LLP) for the Defendant

Hearing dates: 21, 22, 23 and 24 April 2015
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Judgment
Mr Justice Burton : 
1.	Mr Stein, the Defendant, is a US qualified lawyer, banker and corporate financier.  He brought proceedings in the Commercial Court against the three Claimants, who are very substantial businessmen, primarily based in Kazakhstan and colloquially called “the Trio”, who have held business interests together for over 20 years, and together run various successful businesses, operating in mining and in the processing and marketing of the products of those mines.  In particular they founded a business which became ENRC Plc, a natural resources company which was listed in the London Stock Exchange on 12 December 2007 as a result of an Initial Public Offering (“IPO”) of its shares, which raised for them as shareholders, holding approximately 20% of the shares, the sum of US$3.1 billion between them.  In those proceedings the Defendant claimed sums due pursuant to an oral agreement with them in January 2006 (“the January Agreement”) in respect of an entitlement to a success fee of 0.5% of monies raised by him for the Claimants, resulting first from a syndicated finance facility (“Trade Finance”), which produced between February and April 2007 US$1.48 billion, mostly used in order to fund the payment of dividends to the shareholders, primarily the Trio, and thereafter the US$3.1 billion from the IPO. 
2.	After a hotly contested trial before me, which lasted 11 days in February and March 2014, the Defendant obtained judgment on 16 April 2014 against the Claimants in the sum of US$2.9 million in debt in respect of the balance of his entitlement with regard to the Trade Finance and the sum of US$15.5 million damages in respect of the Claimants’ repudiatory breach of their obligation to pay him in respect of the IPO, together with interest and costs, of which a substantial proportion were on the indemnity basis.  
3.	Save for a small proportion of those costs which the Claimants were required to pay as a condition of a stay while they made an unsuccessful application for permission to appeal to the Court of Appeal (which, after refusal on paper, was refused at an oral hearing on 24 July 2014), no sum has been paid by the Claimants to the Defendant.  Instead they issued on 14 October 2014 these proceedings, seeking to set aside my judgment in favour of the Defendant on the ground that it was obtained by fraud: they were subsequently required by an Order of Hamblen J on 27 October 2014 to pay the sums of US$30,495,673.60 and £1,459,739.69 into their solicitors’ client account as a condition of the stay of the judgment against them.  The Defendant has issued an Application Notice on 9 December 2014 applying to strike out the Claimants’ Particulars of Claim, and/or seeking summary judgment against the Claimants pursuant to Part 24, and this has been the hearing of that application.  By application of 27 February 2015 the Claimants have applied to amend the Particulars of Claim by adding additional pleas and matters and they have also applied to put in some additional documents, and it has been common ground that the contents of that proposed amendment (and those additional documents) should be considered before me, on the basis that if their contents can “save” the proceedings, then I should not strike out the claim (subject to any impact of costs); and I can thus consider the nature and strength of the Claimants’ claim by reference to the proposed amendment as well as the existing claim.  
4.	My judgment, of 47 pages and 105 paragraphs ([2014] EWHC 1201 (Comm)), was not challenged on appeal save in one respect, to which I shall return, and even as to that permission was refused by the Court of Appeal, as described above.  It is that judgment which is now sought to be set aside, and in that context its contents must be fully considered.  Of course I do not set that judgment out in full, but refer the reader to it, though it will be necessary to summarise and in part quote from it.  
5.	At the outset of that judgment (paragraphs 3 to 20) I set out the history on the basis of what was either common ground or not challenged, and I summarise it as follows: 
(i)	In July 2005 the First Claimant, his daughter (“Mounissa”) and the Defendant discussed the appointment of the Defendant as a consultant, on terms of remuneration on the basis of a retainer and a success fee: after which the Defendant was to and did seek further information about the Claimants’ business, and there were further meetings and discussions with the First Claimant and Mounissa. 
(ii)	Mounissa invited the Defendant to put a written proposal for his engagement to the Claimants in writing, and as a result he submitted to her a proposal dated 16 January 2006 (“the January Term Sheet”), prior to a meeting arranged between him, the First Claimant and Mounissa, at the Peninsula Hotel in New York, to discuss it.  Mounissa agreed that she had received and considered that document before the Peninsula meeting and, although the First Claimant had not himself read it, she had summarised and explained it to him, so that he knew its contents.  
(iii)	That Term Sheet included, as part of the Defendant’s proposals, in addition to a salary and a guaranteed minimum bonus, an earned bonus expressed as a percentage of the transaction value on a sliding scale, depending upon the quantum of the transaction, from 0.5% up to 1%, in respect of the successful completion of any “liquidity event” as defined, which included an IPO.  
(iv)	It was common ground that, after some discussion, the First Claimant indicated that the Defendant should make his proposals simpler, or less complicated, and that they should just say 0.5%.  The Defendant said he would think about this, and the First Claimant said that he would speak to the Second and Third Claimants.  The First Claimant told the Defendant that this must be kept confidential.  The Defendant and Mounissa spoke on the telephone some days later (“the post-Peninsula telephone call”) and reached agreement.  
(v)	Although draft agreements were prepared in respect of the Defendant’s engagement (which he had commenced on 1 March 2006), none was signed, nor remuneration paid, until September 2006, when 2 service agreements were executed between two (Alferon) companies associated with the Claimants and the Defendant, relating to parts of his remuneration, and a contract was executed between Aurdeley Enterprises Limited (“Aurdeley”), described in paragraph 1 of my judgment as a “consultancy company which employs” the Defendant, and a company called Darcon Marketing Ltd (“Darcon”), which I described in paragraph 8 of my judgment as “an entity obviously emanating from the [Claimants], but whose identity neither any of the [Claimants] nor their witnesses could explain”.  This picked up the balance of the Defendant’s unpaid retainer, and the guaranteed minimum bonus provided for in the January Term Sheet (in clause 4.2 of the “Darcon Contract”).  It was common ground that there had been included in the draft, at clause 4.3, a provision recording the Defendant’s entitlement to a 0.5% success fee, and that this was removed from the Darcon Contract as executed.  I recorded in paragraph 9 of my judgment that: 
		“There is a dispute as to why this clause was removed before the 		agreement was executed: 
(i)	[Mounissa] says that it was taken out because, 	although such a 0.5% success fee had been agreed (albeit only in respect of Trade Finance), it was discretionary. 
(ii)	The [Defendant] contends that [Mounissa] insisted on the clause being taken out because, although agreed, she said that it must remain confidential, as the First [Claimant] had said at the Peninsula Hotel meeting.”
(vi)	By virtue of what the Claimants conceded was excellent work on the part of the Defendant in respect of the Trade Finance, a sum of $1.48 billion, considerably increased over their initial expectations, was received in March 2007, and the majority of it was used to pay out dividends to the shareholders, mostly the Trio.  The Defendant was also doing preparatory work in respect of the IPO, as confirmed in an unchallenged witness statement from a Mr Lucas on the Defendant’s behalf.  Dr Sittard, the CEO of the Alferon companies, announced at an IPO kick-off meeting in February 2007 that the Defendant was leader of the IPO, and the Defendant addressed the meeting in that capacity.  The increased amount of the Trade Finance ($1.48 billion) was signed off by the Board of ENRC at the end of March 2007 and the last tranche was to be received on 12 April 2007.  On 1 April 2007 in Zurich the Defendant met with the Second Claimant and with the First Claimant’s nephew Olim Chodiev.  The Second Claimant announced that the Defendant would be paid a bonus in respect of the Trade Finance, calculated by reference to 0.5% of $1 billion (i.e. not the full amount of $1.48 billion), from which the Claimants proposed to deduct his guaranteed bonus and his annual retainer, thus a sum of $4 million, with additionally an offer of a bonus of $1 million for working on the IPO.  It is common ground that the Claimant regarded this as unacceptable, and said that he would be leaving the Group.  So far as the $4 million is concerned, an agreement was drawn up between another of the Claimants’ companies and Aurdeley dated 5 April 2007 (“the April Agreement”), which did not contain a full and final settlement clause, although it contained, at clause 9, an Entire Agreement clause.  The $1 million offered in respect of the IPO was not paid.  The $4 million was paid to Aurdeley on 11 April, and on 13 April, the Defendant’s last day in the Alferon offices, the First Claimant came to see him, and it is common ground both that the Defendant vigorously complained, and that he threatened to sue: the First Claimant proposed that rather than engage in any legal action, the Defendant should come and work for the Chodiev family businesses, and the Defendant said he would think about it.  
(vii)	In August 2007, Mounissa telephoned the Defendant and asked him to help out with a problem that had arisen in the family business, and the Defendant agreed to work for the Chodiev family which, when executed in service agreements with the Defendant and Aurdeley, backdated to September 2007, involved remuneration of $1 million per year.  
(viii)	The IPO was delayed from June to September 2007 but was completed in December 2007, raising a total of some $3.1 billion.  
(ix)	The Defendant continued to work for the Chodiev family businesses.  The First Claimant confirmed in evidence that the Defendant continued to complain about being owed money from his time with ENRC, which the First Claimant denied.  
(x)	Such complaints continued between September 2009 and August 2010, but it was common ground at the trial that the first time that the Defendant set out in writing his complaints as to sums being outstanding in respect of Trade Finance, and in particular sums being unpaid in respect of the IPO, was by a lengthy email of 26 September 2010, which I set out in full in paragraph 17 of my judgment.  After that email there was no response to allege that the claims were false and unfounded and, as I describe in paragraph 73 of my judgment, he continued to be employed by the Chodievs in a position of trust.       
(xi)	A number of meetings followed, and Mounissa recounted in her evidence that “he said he felt he had been underpaid on the IPO.  I did tell him that it would be unfair to my father to have to pay him anything further for his time at ENRC”.  
(xii)	The Defendant’s employment with the Chodiev family ended on 31 March 2011, when termination payments in respect of the contracts with the Chodiev family were agreed, but no payment was made in respect of any of the Defendant’s claims in respect of his time with ENRC.  The agreed severance payments were made on 11 May 2011 and no settlement agreement was signed.  The Defendant issued proceedings.    
6.	At paragraph 21 of the judgment I set out the seven issues which I had to resolve, of which Issues 5 and 6 are of no materiality to the case now before me.  They were as follows: 
Issue 1  
Was there an oral agreement in January 2006, or was it simply subject to contract and never enforceable?  If the former:
Issue 2 
Was the 0.5% a fixed or a discretionary success fee or bonus? 
Issue 3
Did the 0.5% pertain to all sums raised, or only to the Trade Finance and not to the IPO?
Issue 4
Who was the contract with?  (If necessary, was there a subsequent confirmatory or ratificatory agreement?)
Issue 7
Was there a compromise of the Defendant’s claims (in respect of the Trade Finance and/or of the IPO) (A) on April 1 2007 (B) on April 22 2011?
7.	I addressed the witnesses in the judgment, of which I set out below the relevant parts: 
(i)	Paragraph 23: 
“23.  In those circumstances, the case depends upon the resolution of disputed evidence, relating to events primarily in 2005 through to 2007.  Much therefore depends upon my assessment of the witnesses whom I have heard and seen giving evidence, both in chief, because I requested that, in relation to the most disputed areas, the [Defendant], [the First Claimant] and [Mounissa] gave oral evidence in chief, and when cross-examined and, to an extent, re-examined.  Inevitably a judge of oral evidence will make allowances for inconsistencies and contradictions in relation to the recounting of recollections of events many years ago.  He will also be astute to appreciate and to take account of those inconsistencies and contradictions which appear immaterial or can be accounted for or accepted as inevitable or accidental.  The judge will also be looking for what has been described as a hook, upon which to peg a conclusion, or to give corroboration to one side or the other, which is not dependent upon the vagaries of recollection.  In this case there was some contemporaneous documentation, although not as much as there should have been because for some reason ENRC, and/or the [Claimants’] companies, have operated an unusually radical programme of disposition, not only of hard copies but of documents contained on computer. Clearly the most important contemporaneous documents were the January Term Sheet, and the draft Darcon contract referred to in paragraph 9 above.  The other hook upon which a Judge can feel confident in resting, or at any rate testing, his conclusions is that of unchallenged evidence.  In this case the evidence of two of the witnesses for the [Defendant] was not challenged, that of Mr Lucas, then of ABN Amro, and of Mr van Broekhoven, who gave evidence as to the Trade Finance.  There was also third party evidence, from apparently independent parties with nothing to gain from their evidence (who in both cases attended under witness summons), both of whom supported the [Defendant’s] case as to his entitlement and involvement in respect of the IPO, Mr Barinstein, then of Deutsche Bank, the relationship banker for the [Claimants] but also a friend, and original recommender, of the [Defendant], and Mr Radjabov, the former long-term boyfriend of [Mounissa].”  
(ii)	Paragraph 24: 
“24. Inevitably there was some interlocutory jostling for position, not all of which reflected well on either party.  The [Defendant] included in his witness statement a good deal of background information as to his work with the [Claimants] and their businesses in 2006, which the [Claimants] say was only included in order to create embarrassment for them and perhaps to encourage them to settle short of the court door. . .  [T]he [Defendant] asserted, an issue which I cut short because it seemed to me likely to lead into collateral issues, that the influence of the [Claimants] has been such that he has not been able to obtain relevant work in his specialist field in Russia since bringing these proceedings.  And just before the start of the trial separate leading and junior counsel and solicitors instructed by the now privatised ENRC intervened in order to seek injunctions not only preventing the airing of some of the matters in the [Defendant’s] witness statement to which I have referred (and which I excluded), but also of documents which, given the paucity of disclosure from the [Claimants’] businesses, for the reasons I have given, were essential for him to seek to prove his case as to his involvement in the IPO . . . I do not regard any of this as playing any material role in my assessment of the witnesses.”
(iii)	Paragraph 25: 
“25. Inevitably when assessing the credibility of a witness who seeks recovery of a very substantial sum allegedly due pursuant to an oral agreement made 8 years ago, a judge would approach such claim with scepticism, even without encouragement from the [Claimants] by reference to the words of Gloster J in paragraphs 90 to 95 of Berezovsky v Abramovich [2012] EWHC 2463 (Comm).  However I found the [Defendant] a most impressive witness.  He met the able cross-examination by Mr Flynn QC with steadfastness, moderation and credibility.  On occasion he may have embellished his case – although it may well be that he was simply belatedly remembering matters which after so long had been forgotten – as in his assertion of the discussion of a 12 month ‘tail’ (referred to in paragraph 21 above) with [Mounissa] at St. Jean Cap Ferrat, or his recollection of a particular conversation with the [First Claimant] in Moscow in early 2008, not mentioned specifically in his witness statement and not put by Mr Oudkerk QC his equally able counsel, in cross-examination, to the [First Claimant], some time after the completion of the IPO.  However, I found his evidence credible and consistent, and, in particular, consistent with and supported by the contemporaneous documents and the independent witnesses.”
(iv)	Paragraph 26: 
“26. As to his witnesses, the credibility or honesty of Mr Barinstein was not challenged.  It was pointed out that he was a long standing friend, and indeed business associate of the [Defendant], but also (indeed for longer) of [Mounissa], and not only does his wife remain in business with [Mounissa], but he continues to have a professional relationship with ENRC.  His evidence was sensible and persuasive, and he gave accounts of conversations both with the [Defendant] and with [Mounissa] at the relevant time which substantially supported the case of the [Defendant].  I have already referred to the supportive evidence of the plainly independent, and unchallenged, Mr Lucas of ABN Amro.  So far as concerns Mr Radjabov, he was not challenged in relation to any specific evidence he gave as to the conversations at the material time, of which he also spoke, both with the [Defendant], with whom he was friendly, and with [Mounissa], with whom he had a long standing and intimate relationship.  I am entirely satisfied that he was giving honest evidence and was not in any way motivated, as was suggested, by any antipathy towards either [Mounissa], with whom he had had a close relationship, on and off, for some 8 years, or her father, the [First Claimant].  I am entirely satisfied that the third party witnesses called by the [Defendant] were indeed independent.”
(v)	Paragraph 27: 
“27. As for the [Claimants], they called no independent witnesses.  The [First, Second and Third Claimants] are all very experienced and powerful men.  They gave evidence with the assistance of an interpreter, but such was the ability of the interpreter that I am satisfied nothing was lost in relation either to lack of spontaneity or comprehensibility in relation to their giving of evidence.  I found Mr Olim Chodiev an unpersuasive witness, although he gave evidence primarily only of the meeting of April 2007, particularly in the respect detailed below.  There were material differences between the evidence of the [First and Fourth Claimants], to which I shall return, and which Mr Flynn invited me to accept were the inevitable differences of recollection by witnesses honestly intending to give a true account.  There was however a significant feature in relation to the [Claimants’] evidence, which is relevant to the credibility of all their leading witnesses.  I shall describe below how Dr Sittard, the CEO of Alferon UK, and subsequently the CEO of ENRC after the IPO, included a false case in his witness statements, which he only (and then at first only partially) corrected on going into the witness box, and before deposing to the truth of those statements in the witness box.  He in fact was the last witness to go into the box, and therefore that false case was not withdrawn until he did so on Day 11.”
(vi)	Paragraph 28: 
“28. The case was that the [Defendant] had never had anything material to do with the IPO, and that Mr Amre Youness was appointed in October 2006 to lead the IPO, not the [Defendant].  Dr Sittard accepted, by his correction, that Mr Youness was not appointed to lead the IPO until after the [Defendant] had left in April 2007 (a case which had been painstakingly put by Mr Oudkerk to the earlier witnesses and rejected by them), and that he had appointed the [Defendant] to lead the IPO (admittedly only in February 2007, on his case).  Prior to this correction, in relation to a matter of considerable importance to the question of whether the [Defendant] had been asked to lead the IPO on terms of receiving a success fee, all of the [First, Second and Fourth Claimants] and a Mr Ehrensberger, who had been called specifically to give evidence as to the preparatory work done on the IPO prior to April 2007, had firmly rejected any suggestion of the [Defendant] having any role, never mind a leading one, in the IPO or its preparation.  For example the [First Claimant] said (Day 10/47):
“Absolutely wrong position, wrong picture.  Absolutely wrong.  It was Mr Youness who was coordinating the [IPO] work.    Mr Stein had nothing to do with it.””
(vii)	Paragraph 29: 
“29. Careful assessment of the evidence is required, and the [Defendant] carries the burden of proof of the oral agreement.  But I preferred his evidence and those of his witnesses.”  
(viii)	At paragraph 53 of the judgment, in dealing with the central issue, Issue 2, I set out more fully my findings as to the false case which the Claimants put forward, after recording in paragraph 52 the false evidence which had been set out by the Claimants both in their witness statements and those of the five witnesses called by the Claimants prior to Dr Sittard, in oral evidence by them: 
“In fact, as set out above, Dr Sittard was not prepared when he went into the witness box to support what he had said in his witness statement and (Day 11/62-3, 91-8) after initially correcting some of his statements, he was driven to correct them all.  What he now said was that Mr Youness had not been brought in to lead the IPO, and had never done so until after the [Defendant] departed in April 2007 (as the [Defendant] had always said), and that the [Defendant] was indeed appointed to lead the IPO, and was announced as such at the kick-off meeting in February 2007.  He gave no explanation as to why his witness statements were so inaccurate, and it is clear, that unlike all the other witnesses for the [Claimants], he was finally prepared to correct those misstatements.  Of course the fact that once the IPO started to be prepared and in due course got off the ground the [Defendant] did indeed lead it does not prove that in January 2006, when it is plain that the IPO was already in the minds of the [Claimants], he was asked to take up that role, as he asserts.  Nor does the fact that a deliberately inaccurate case to the contrary was put forward by the [Claimants’] witnesses, and pursued until Dr Sittard went into the witness box, prove that the [First and Fourth Claimants] are not to be believed in relation to their denial that they had asked him to take on that role in return for a success fee in January 2006, but it plainly supports the [Defendant’s] case and his credibility, and undermines the [Claimants’]. 
(ix)	Paragraph 54:
“54. In fact it is clear that at least from October 2006 he – and not Youness – was putting the IPO together on behalf of the [Claimants].  This is supported by the evidence from the independent witnesses:-
i)	Mr Barinstein persuasively describes the [Defendant’s] role in his witness statement (paragraphs 70-77) and in evidence (Day 7/59-60) from the point of view of Deutsche Bank, which was lead underwriter on the IPO.  He confirmed (paragraph 79) that by April 2007 almost all of the work on the IPO was completed.  There was then a delay, as accountancy problems were revealed within the Group, which required to be resolved, and work on the IPO restarted, after the [Defendant] had left, in September 2007, leading to listing in December. 
ii)	Mr Lucas of ABM Amro, joint book runner on the IPO, gave evidence which was unchallenged, and consequently, although he attended at court, he did not need to give evidence.  In paragraphs 13 and 16 of his witness statement he confirms his understanding that the [Defendant] was deal co-ordinator of the IPO, and that he was his principal point of contact in relation to the IPO until (paragraph 22) the [Defendant] ceased to be deal co-ordinator and Mr Youness took over.”
8.	When it came to my dealing with an application for indemnity costs against the Claimants in a judgment of 16 April 2014, I stated as follows: 
“36. Although I have made criticisms in my judgment, upon which [the Defendant’s solicitor] has based her own arguments, I conclude that there is only one area in this case which really is so out of the ordinary by way of unreasonableness or impropriety that it should be marked by indemnity costs.  That is the fact that, in my judgment, a false case was put together by the [Claimants’] witnesses.  In particular, Mr Ehrensberger, who gave evidence solely in relation to the IPO, but clearly also the [First and Fourth Claimants] and Dr Sittard, who all in their witness statements, as I have described in my judgment, put a false case forward.  
37. The first three whom I have named, and indeed the other [Claimants] to an extent, all gave oral evidence in support of that false case, but Dr Sittard was not prepared to do so and for that he must get credit - - although he did not immediately abandon the entirety of it, as I point out in my judgment, and as Mr Oudkerk has pointed out in his submissions: namely the false case that Mr Youness led the IPO, indeed was brought in to lead the IPO from October 2006 onwards, and that the [Defendant] had nothing whatever material to do with it, which was a significant part of their defence and which, if right, would have cast a considerable doubt on whether there ever was such an agreement as the [Defendant] asserted.”
9.	I resolved all of the issues, for reasons which I set out at length in my judgment, and to part of which I shall return below, in favour of the Defendant.  There was no appeal in respect of any of my findings.  The only application for permission to appeal related to the position of Aurdeley.  Until closing submissions on behalf of the Claimants, Issue 4, set out in paragraph 6 above, was limited to the question as to with whom the Defendant made the contract, it being denied that the contract was with the Claimants personally: hence the reference to a fall back case on confirmation or ratification.  However, as described in paragraph 75 of my judgment, Mr Flynn QC for the first time in such closing submissions submitted that the Defendant was not entitled to sue on the January Agreement, or that such oral agreement was not enforceable by the Defendant, but by Aurdeley.  Aurdeley had of course been referred to during the trial, not least because, as set out in paragraph 5(v), (vi) and (vii) above, a number of the written contracts were entered into with Aurdeley, which the Defendant described in evidence as a company of which Mr Zakharov was the principal, as was known to Mounissa, who confirmed in her own evidence that she had been so told by the Defendant (and had indeed met Mr Zakharov on occasion).  The Defendant said he had an arrangement that Aurdeley would fund him by way of a monthly retainer, and he would then share the proceeds of any project he entered into with Aurdeley on a 60:40 basis.  As set out in paragraph 75 of my judgment, the Defendant explained during the trial that his arrangement with Mr Zakharov was such that he could either enter into a contract with a client in his own name or in that of Aurdeley, so that he could personally enter into a contract with Alferon or Darcon or the Chodiev family without being in breach of his agreement with Aurdeley.  
10.	As I set out in paragraph 76 of my judgment:    
“Mr Flynn submitted that if there was an exclusive agreement between the [Defendant] and Aurdeley, then he could not contract personally with the [Claimants].  I was satisfied that this contention was unarguable and in any event was not entitled to be pursued at the trial, and did not call upon [Mr Oudkerk] in his following closing submissions: 
(i)	I was satisfied that the point was not expressly pleaded in paragraph 8(c) of the Re-amended Defence.  If I permitted such an amendment as was suggested by the [Claimants] in their supplementary closing submissions, there would be substantial, if not irremediable, prejudice to the [Defendant], as the [Defendant] would have needed to seek an adjournment to consider calling Mr Zakharov, and/or causing Aurdeley to be joined as a co-claimant, to which there would almost certainly be a limitation defence.
(ii)	Even if it could be said that the Defence did not require amending, I am satisfied that the question whether Aurdeley rather than the [Defendant] was party to the January Agreement was not one of the list of issues which had been ordered to be tried and which I had tried for thirteen days.
(iii)	It could not be said that the point had only arisen for the first time as a result of the precise evidence given by the [Defendant].  Indeed the issue had been canvassed, but not pursued, in a summary judgment application, upon which I made no order on the first day of the trial . . . 
(iv)	Even if all the above could be excused and overlooked on the basis that the [Defendant] still retains the burden of proof to establish entitlement pursuant to the January Agreement, I am satisfied that the [Defendant’s] own answer in evidence is perfectly satisfactory, certainly given the belated way in which the point has arisen.  No doubt if it had been made earlier Mr Zakharov could have been called:
(a)	As the [Defendant] explains, there was no breach of the exclusive agreement, because it is part of his arrangement with Aurdeley that he could contract in his own name where appropriate.
(b)	This is exemplified by the fact that some but not all of the written contracts in this case were with Aurdeley.
(c)	In any event the [Defendant] as agent for an undisclosed principal would be entitled to sue (see Bowstead & Reynolds on Agency (19th ed) 9-005).”
11.	This argument (alone) was the basis of the Claimant’s applications, made on paper and then renewed orally, to the Court of Appeal, and Aikens LJ rejected, largely for the same reasons that I had done, the Claimants’ arguments, including a submission that, by reference to a number of documents which fresh counsel, Mr Head QC, showed to the Court of Appeal, such documents “indicate very strongly that it was intended that the contracting party should be Aurdeley rather than the [Defendant] himself”.  Aikens LJ refused permission on the basis that the point was “simply unarguable.  The [Claimants] have had their trial.  They have lost, they must now obey the Judge’s order”.  As referred to in paragraph 3 above, the Claimants did not obey my order, but, even before the hearing on 1 October 2014 when, after previous adjournments, I adjudicated on the amount of interest to be paid by the Claimants, they had obtained from the court in Cyprus an order for disclosure of documents by Abacus Limited, a corporate services company responsible for administering Aurdeley, whose details openly appeared on at least two of the agreements providing the Defendant’s services to the Chodiev family referred to in paragraph 5(vii) above, with a view to issuing these proceedings.  The case now brought in these proceedings is based upon the assertion that Aurdeley was not owned by Mr Zakharov, but that the Defendant himself beneficially owned Aurdeley, and that the Defendant thus dishonestly told lies in that regard.  
12.	The case so brought, based upon such assertion, is put, by reference to the words of Aikens LJ in The Royal Bank of Scotland Plc v Highland Financial Partners [2013] EWCA Civ 328 at paragraph 106, on the basis that such alleged dishonesty is fresh evidence and if known “would have entirely changed the way in which [I as] the first Court approached and came to [my] decision [and was] relevant, conscious and deliberate dishonesty . . . causative of the impugned judgment being obtained in the terms that it was”: 
13.	Mr Rubin QC, now appearing for the Claimants, submits: 
(i)	that such alleged fact if known would have entirely changed my decision on Issues 2 and 7 and/or was conscious and deliberate dishonesty causative of my decision on those issues.  (Proposition 1).    
and/or 
(ii)	that such alleged fact was of such paramount importance that, even though going only to the credibility of the Defendant, it would have formed a determining factor in the result, or would have led me to a different conclusion: reference were made to two decisions in which such approach to fresh evidence relating to credibility was addressed by the Court of Appeal, Braddock v Tillotson’s  Newspapers Ltd [1950] 1 KB 47 and Meek v Fleming [1961] 2 QB 366, the latter leading to an order by the Court of Appeal for a new trial.  (Proposition 2).  
and/or 
(iii)	that, insofar as it may be said to be a different way of putting the case, then there is, by reference to the proposed Amended Particulars of Claim, a case of “Fundamental Deception”, by virtue of the Defendant’s bringing the claim in his own name rather than in the name of Aurdeley, knowing that the claim was really Aurdeley’s claim.  (Proposition 3).     
and/or 
(iv)	that, again largely by reference to the proposed Amended Particulars of Claim, there is a case that the Defendant dishonestly obtained an order for interest on the judgment and/or costs by my Order of 1 October 2014.  
The Law
14.	The first issue to address is whether fresh evidence, as defined by Ladd v Marshall [1954] 1 WLR 1489 CA, is required, i.e. whether that must not only be evidence that was not before the first court but evidence which could not have been obtained by reasonable diligence (the “Reasonable Diligence requirement”).  Mr Rubin relies upon the words of the editor of Spencer Bower & Handley: Res Judicata (Fourth Edition), now edited by Handley J of the New South Wales Court of Appeal, who in the book at paragraph 17-05 (and judicially in a New South Wales case Toubia v Schwenke [2002] 54 NSWLR 46 CA at 54-55, suggested, “despite dicta from eminent judges” that the Reasonable Diligence requirement was not necessary in seeking a new trial “where fraud can be established”.  Those dicta from eminent judges were however made in decisions of the Court of Appeal and the House of Lords and in any event do not seem to me to be capable of challenge.  In Dicey, Morris & Collins Conflict of Laws (15th Edition) at 14-138, though noting the doubts in Toubia, Lord Collins as editor at 14-138 said that “a party against whom an English judgment has been given may bring an independent action to set aside the judgment on the ground that it was obtained by fraud; but this is subject to very stringent safeguards, which are found to be necessary because otherwise they would be no end to litigation and no solemnity in judgments.  The most important of these safeguards is that the second action will be summarily dismissed unless the Claimant can produce evidence newly discovered since the trial, which evidence could not have been produced at the trial with reasonable diligence,[my underlining] and which is so material that its production at the trial would probably have affected the result, and (when the fraud consists of perjury) so strong that it would reasonably be expected to be decisive at the rehearing and if unanswered must have that result”. 
15.	Hip Foong Hong v H Neotia  & Co [1918] AC 888, upon which Spencer Bower appears to rely, does not in terms address the Reasonable Diligence requirement, and its impact was in any event doubted by Langley J in Sphere Drake Insurance Plc v The Orion Insurance Co Plc (unreported, 11 February 1999) at 182-3.  
16.	The authorities in the House of Lords and the Court of Appeal, which seem to me clear and compelling, are Hunter v Chief Constable of the West Midlands Police [1982] AC 529 and Owens Bank Ltd v Bracco in the CA and HL [1992] 2 AC 443.  I shall underline in what follows the references to the Reasonable Diligence requirement.  Hunter was a case where the decision of a criminal Court was sought to be reopened by way of challenge in a subsequent civil action, where, at 545B, in a passage with which Lords Russell, Keith, Roskill and Brandon agreed, Lord Diplock expressed himself in full agreement with the judgment in the Court of Appeal of Goff LJ, who had concluded that the challenge failed in limine because the “so called ‘fresh evidence’ on which they seek to rely on the civil action was available at the trial, or could by reasonable diligence have been obtained then”.  He approved that proposition, and also Goff LJ’s adoption of the test “as to the character of fresh evidence which would justify departing from the general policy by permitting the plaintiff to challenge a previous final decision against him by a court of competent jurisdiction” as being that the new evidence must be such as “entirely changes the aspect of the case”.  
17.	In the Court of Appeal in Owens Bank Parker LJ records at 459G that: “Our law had long permitted the party against whom an English judgment had been given to bring an independent action to set aside the judgment on the ground that it had been obtained by fraud, but strict limits were imposed in order to preserve the principle that a judgment which brings litigation to an end should not be too easily disturbed.  In particular the Court would not permit the new action to proceed unless the plaintiff would put forward fresh evidence, discovered since the first trial, being evidence which could not have been produced then with reasonable diligence and which is such that, if it had been put forward at the trial, it would in probability have caused a different conclusion to be reached”.  Lord Bridge’s speech in the House of Lords is significant, because he records that their Lordships were “taken, in the course of argument, through the many authorities” in which the rule he was expressing had been developed and applied, which he sets out at 483F-H: 
“The common law rule that the unsuccessful party who has been sued to judgment is not permitted to challenge that judgment on the ground that it was obtained by fraud unless he is able to prove that fraud by fresh evidence that was not available to him and could not have been discovered with reasonable diligence before the judgment was delivered . . . is the rule to be applied in an action brought to set aside an English judgment on the ground that it was obtained by fraud.  The rule rests on the principle that there must be finality in litigation which would be defeated if it were open to the unsuccessful party in one action to bring a second action to re-litigate the issue determined against him simply on the ground that the opposing party had obtained judgment in the first action by perjured evidence.  Your Lordships were taken, in the course of argument, through the many authorities in which this salutary English rule has been developed and applied and which demonstrate the stringency of the criterion which the fresh evidence must satisfy if it is to be admissible to impeach a judgment on the ground of fraud.  I do not find it necessary to examine these authorities.  The rule they establish is unquestionable and the principle on which they rest is clear.”
18.	This (binding) proposition relating to actions to set aside a judgment as obtained by fraud is followed by Langley J in Sphere Drake at 182: 
“There must be apparently credible evidence as to the fraud or perjury which not only was not available at the trial and could not have been obtained with reasonable diligence for use at the trial, but which is such as entirely changes the aspect of the case, in the sense that it must be likely to be decisive of the outcome of the claim in question.”
19.	David Steel J in KAC v IAC [2003] 1 Lloyd’s Law Rep 448 at paragraph 146 sets out the principles, relying not only on Hunter and Langley J, but seemingly also (though the reference appears wrong) on a previous edition of Spencer Bower, before the editor had enunciated his new theory, as follows: 
“(a)	A judgment obtained by perjury is a judgment obtained by fraud for this purpose. 
 (b)	The action seeking an order setting aside the earlier judgment must be based on new evidence which was not before the Court that first heard the action and which the claimant could not with reasonable diligence have placed before that Court.
 (c)	The new evidence must establish perjury in the sense that a person or persons sworn as a witness in the earlier action who could properly be treated as the successful party itself wilfully made a statement in those proceedings which statement the person knew to be false or did not believe to be true. 
 (d)	The burden is on the claimants to establish perjury as “distinctly more probable than not”.  
 (e)	The disparity between the perjured evidence and the new evidence would be material if it “entirely changed the nature of the case”.”
20.	Mr Rubin made some concession towards an argument based on the House of Lords authority rather than on the opinion of Spencer Bower, when he proposed in opening that: “the further away you get from the central issues, the more this issue of reasonable diligence becomes less important”, i.e. that insofar as his case relies upon Proposition 1, set out in paragraph 13 above, as to the entire change to my decision on Issues 3 and 7, the fresh evidence might need to comply with the Reasonable Diligence requirement, but insofar as he relied upon Propositions 2 and 3, based upon an assertion that the credibility of the Defendant has been destroyed, or upon the alleged Fundamental Deception, then the Reasonable Diligence requirement might be of less significance.  I do not consider there to be any such distinction.   In any event Mr Oudkerk QC submits that, particularly in this case, the Reasonable Diligence requirement is only another way of enforcing an election on the Claimants (he refers to Khetani v Kanbi [2006] EWCA Civ 1621 at para 29) i.e. in that they knew about Aurdeley, and indeed Abacus, and chose (and that belatedly) to run a case based upon the ownership of Mr Zakharov, rather than asserting that Mr Zakharov held Aurdeley on the Defendant’s behalf.  I shall return to these matters below.  
21.	Leaving aside the Reasonable Diligence requirement, there was not entire agreement between counsel on the appropriate wording for the test to be applied to justify the exceptional course of setting aside a judgment, in breach of the presumption of finality, as allegedly obtained by fraud; although it is common ground that, whatever the test, it is difficult to comply with, and must be rarely permitted.  In the course of my citation of the significant judgments above, the words which have been previously adopted have been quoted: “so strong that it would reasonably be expected to be decisive at the rehearing and if unanswered must have that result” (Dicey, Morris & Collins), “such that it would in probability have caused a different conclusion to be reached” (Parker LJ in Owens), then as per Hunter, as interpreted by Langley J at 182(3) and by David Steel J in his further KAE v IAC judgment [2005] EWHC 2524 (Comm) (colloquially called “Perjury II”) at 197-8, that the “disparity between the concealed (or perjured) evidence and the new evidence would be material if it “entirely changed the nature of the case” . . . [which] at least requires material which was likely to be decisive of the outcome”.  The most recent articulation has been that of Aikens LJ in RBS v Highland, referred to in paragraph 12 above, at paragraph 106.  
22.	As appears from paragraph 13 above, Mr Rubin submits that even if he cannot succeed by reference to any fresh evidence entirely changing the nature or aspect of the case with regard to Issues 3 and 7, or being reasonably expected or likely to be decisive or which probably would have caused a different conclusion to be reached on those issues, then he relies more generally, by reference to his alternative Proposition 2, upon what he alleges to be the lies by the Defendant in relation to his ownership of Aurdeley as destroying or damaging his credibility, such that my reliance upon him as a “most impressive witness” (see paragraph 25 of my judgment, quoted in paragraph 7(iii) above) would have been entirely changed.  
23.	Mr Rubin accepts that this is a heavy burden for him to fulfil.  Both counsel have referred me to three Court of Appeal decisions in which credibility was thus under the spotlight: 
(i)	The first is Braddock, relating to a libel case brought unsuccessfully by Bessie Braddock MP against the Bolton Evening News in relation to an allegation that she had danced a jig on the floor of the House of Commons.  On appeal to the Court of Appeal, the unsuccessful plaintiff sought recall of a witness for cross-examination as to credit.  In dismissing the appeal, Tucker LJ pointed out (at page 50) that the practice relating to the admission of fresh evidence (incorporating the Reasonable Diligence requirement) had “hitherto been confined to evidence relating to an issue in the case, or at any rate to an issue which could and might yet be raised if there was a new trial in the action.   No case has been cited in which this Court has ever admitted or has ever been asked to admit evidence going to credit only.”  The evidence related to unknown previous convictions of a very significant witness for the defendants.  He concluded (at page 53) that: “if . . . this Court is to depart from its invariable practice of confining such evidence to the relevant issues and is to admit fresh evidence directed solely to credit, I am of opinion that such a course would, if ever, only be justified where the evidence is of such a nature, and the circumstances of the case are such, that no reasonable jury could be expected to act upon the evidence of the witness whose character had been called in question.  It would, in my view, be wrong for this Court to admit fresh evidence directly solely to credit, merely because there is a possibility, or merely a reasonable probability, that such evidence would result in a different verdict”.  The appeal was dismissed, and this was followed in a similar case by the Court of Appeal in Ali v Ellmore [1953] 1 WLR 1300, where the alleged fresh evidence concerned the credit of two of the defendants and did not relate to an issue in the case, but to events which took place at a date after the hearing of the civil action.  
(ii)	The one reported case in which the exceptional course was taken is Meek, where a plaintiff claimed damages for assault and wrongful imprisonment, and his virtually unsupported evidence was in direct conflict with that of the defendant, a Chief Inspector, and the honesty of one was necessarily the obverse of the dishonesty of the other (“obverse of honesty”).  The plaintiff successfully applied on appeal to adduce fresh evidence which showed that the Inspector in question had previously been reduced in rank for giving false evidence in a similar previous incident, a fact which was not disclosed to the Court at the first trial.  The unsuccessful plaintiff sought leave to adduce the fresh evidence relating to the defendant’s demotion, and in his appeal asked for a new trial, which was ordered.  Holroyd Pearce LJ stated (at 378) that “where . . . the fresh evidence does not relate directly to an issue, but is merely evidence as to the credibility of an important witness, this court applies a stricter test.  It will only allow its admission (if ever) where the evidence is of such a nature and the circumstances of the case are such that no reasonable jury can be expected to act upon the evidence of “the witness whose character had been called into question” (per Tucker LJ in Braddock [above]) or “where the Court is satisfied that the additional evidence must have led a reasonable jury to a different conclusion from that actually arrived at in the case: per Cohen LJ” [Braddock at 56].  As to the other two judges, Willmer LJ referred (at 382) to “the exceptional nature of the present case . . . in which the character of the parties was of peculiarly vital significance”: Pearson LJ concluded (at 383) that “the fresh evidence only affects the credit of the defendant and does not relate directly to any issue in the case.  Accordingly it would not be right to order a new trial unless there is some feature of paramount importance outweighing a grave disadvantage of protracting the litigation”.  He found an exceptional course in that (384) “the main issue at the trial was whether the evidence of the plaintiff or the evidence of the defendant should be believed as to what happened in the passage at the police station.  If the purpose of the fresh evidence had become known in the course of the trial, it would have shown both that the defendant had taken part in the deception of a court in the matter for which he was demoted, and also that he was at the trial of this action participating in another deception of a court”.  
24.	If the Claimants are to be left to fall back on this route, then they will need to address it in a context in which, as recorded in paragraph 23 of my judgment, I was expressly looking for a hook or peg or corroboration in contemporaneous documentation and the existence of independent witnesses, and where I reminded myself (in paragraph 53) that a deliberately inaccurate case which I had found to be put forward by the Claimants at the trial (not challenged on appeal or now before me) was not decisive as against them.    
25.	I should address one question, and that is whether it is in any way a factor that, as in RBS v Highland, I was the trial Judge, and have subsequently been tasked (in this case only with a Part 24/strike out application) to consider whether my judgment should (arguably) be set aside as obtained by fraud.  There was no objection by either party to my hearing this application either before or during the hearing, but I raised the matter myself in the course of submissions.  Plainly on the one hand I have no role in ‘defending’ my own judgment, not least where there was no appeal against it, and even the subject matter of the present action does not in any way challenge any of my findings on the evidence that was before me: and equally there is no role for me to consider whether I am personally concerned at there having been, if there were, undisclosed lies put before me.  It seems to me advantageous that, at least on this application, I should be the Judge considering whether there is an arguable case for the Claimants, because of my very considerable familiarity with the case, not of course because I have carried the facts with me in the 12 months or so since the hearing, but because I have been much more easily able to familiarise myself with the detail than would have been another Judge.  I actually consider that it is helpful that, to adopt the words of Langley J in Sphere Drake at 186, it is the same Judge who is considering whether the fresh evidence would have entirely changed the way in which I approached and came to my decision.  The important caveat is that I must ensure that I follow the course laid down by David Steel J in Perjury II at 198 (and repeated and adopted by the Court of Appeal in RBS v Highland at 106) that “the question of materiality [of the fresh evidence] is to be assessed by reference to its impact on the evidence supporting the original decision, not to its impact on what might be the decision if the matter were retried on honest evidence”.  The question is the impact, if any, upon my decision if in cross-examination of the Defendant it had been put that he was the owner of Aurdeley, and if I had disbelieved him.  
26.	The last question to raise at this stage is by reference to the application before me being under Part 24 and/or by way of a strike out.  There is no doubt that, even before the modern interlocutory practices, it was appropriate to consider at an early stage whether an action to set aside an earlier judgment should be permitted to proceed.  That is exactly what occurred in Boswell v Coaks [1894] 6 R167.  The previous practice had apparently been that no action could be brought to set aside a judgment without leave of the Court, but, that practice having been abolished, it was appropriate in a suitable case for a defendant to move to stay such an action as frivolous and vexatious and an abuse of the process of the Court, and the House of Lords dismissed an appeal by the plaintiff against a decision of the Court of Appeal which struck out his action.  Spencer Bower & Handley records at paragraph 17.04, by reference to English and Australian cases, that “the action can be summarily dismissed if it does not disclose a proper case”, and Dicey, Morris & Collins at 13-138 records that “the second action will be summarily dismissed unless the claimant can produce evidence newly discovered since the trial [etc]”.  There is not only the important presumption in favour of finality, referred to in the decisions which I have set out above, but also the heavy burden upon a claimant who alleges fraud or (as referred to by Dicey, Morris & Collins at 14-138, set out in paragraph 18 above) perjury.  
27.	Mr Oudkerk referred to paragraph 184 of Three Rivers DC v Bank of England (No.3) [2003] 2 AC 1 at paragraph 184 per Lord Millett: 
“It is well established that fraud or dishonesty . . . must be distinctly alleged and as distinctly proved; that it must be sufficiently particularised, and that it is not sufficiently particularised if the facts pleaded are consistent with innocence”.  
There is thus not only the requirement upon the Claimants to show that they have, at any rate arguably, what is often referred to as irrefragable evidence of fraud, but that they have a sufficient case to set aside a fully argued and contested inter partes judgment.  I refer to David Steel J’s statement of the burden on the claimant at trial to establish perjury set out in paragraph 19 above: “distinctly more probable than not”.  The most recent recitation of the requirements on an application for summary judgment by defendants was set out by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) namely:  
“i) The court must consider whether the claimant has a "realistic" as opposed to a "fanciful" prospect of success.
ii) A "realistic" claim is one that carries some degree of conviction. This means a claim that is more than merely arguable.
iii) In reaching its conclusion the court must not conduct a "mini-trial".
iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents.”
The Alleged lies
28.	I turn to Mr Rubin’s case as to the alleged lies of the Defendant at the first hearing.  Mr Rubin addressed this topic by taking me through 4 passages of transcript of his cross-examination by Mr Flynn, Day 2/pages 192-218, Day 3/page 140, Day 4/pages 129-134 and, when the Defendant was recalled for matters to be put to him which had not been put, Day 11/pages 151-158.  As Mr Rubin took me through the transcript, I allocated numbers to the statements or answers which Mr Rubin said to be lies, and they total 35 (some of them overlapping) – hence described in argument as the ‘35 lies’.  Many of them were however ‘repeats’ and I aggregate them together as follows: 
(i)	Statements that he was not Aurdeley: there were 14 of these (express or implied), including that he did not have any beneficial interest in Aurdeley, direct or indirect (Day 2/page 211 and also Day 4/page 139): his agreement with Aurdeley that Aurdeley would pay him $20,000 a month retainer and in exchange receive 60% of whatever success fees he generated (Day 2/page 213 and Day 4/page 129): a statement (Day 2/page 216) that his relationship with Aurdeley and the monthly payments would end if he acted in an incorrect way towards Aurdeley.  
(ii)	Statements (3 of them) that he did not have access to all of Aurdeley’s ‘things’, and did not know of nor was involved in all of Aurdeley’s business.  
(iii)	That Mr Zakharov was the principal of Aurdeley, who paid the retainer in return for the 60-40 share and occasionally provided recommendations for business, of which he gave some examples.  There were 13 such statements or answers.  He said that, so far as he was aware, Mr Zakharov owned Aurdeley 100% (Day 2/page 211).  He said that in April 2007 he was in a difficult position between the Trio and the principal of Aurdeley, and that he had a conversation with Mr Zakharov as principal of Aurdeley, and described how Mr Zakharov said that he thought that it was very noble of him to cede the whole of US$4 million which the Claimants were then paying to Aurdeley.  Mr Rubin submitted this was an invented conversation, which was intended to cast the Defendant in a good light.  
(iv)	That the Defendant did not know whether Aurdeley had any employees (1 statement) and that according to Mr Rubin, he said he was only rarely in contact with Aurdeley (1 statement): this letter however is a reference to Day 2/page 211, and I agree with Mr Oudkerk that this is a mischaracterisation of what the Defendant said, which was rather that he was rarely in touch with the directors of Aurdeley, which, from the schedule of documents now put together by the Claimants, does appear to have been the case (out of 117 communications one director, Sophia Ioannou, appears once).  
(v)	That he used his own funds/life savings to fund his action against the Claimants (3 statements, which again Mr Rubin submits were intended to show him in a good light).  At Day 3/page 147, after denying that he was the sort of person who would make an unjustified claim in order to make money from wealthy people (pointing out that he would have done so at the time when they were preparing the IPO if that was “the kind of person I was)”, he then added “and I very, very strongly reject that suggestion that this is the kind of person I am. I am not – I have never been that kind of person, and I would not have spent just about my entire life savings simply to come here and lie about something.  That is not who I am, sir”, and when Mr Flynn asks whether it is correct he is funding the litigation out of his savings, he so confirms.  In fact, as described below, it was Aurdeley which was paying his legal fees.    
(vi)	I have not troubled to address a thirty-fifth alleged lie (Day 2/page 197) about his involvement in the conclusion of the drafting, by Lovells as it happens, apparently then acting for Alfa Bank, of the contract by which Aurdeley had provided his services to Alfa Bank, to which I briefly refer in paragraph 37 of my judgment; this is, even if incorrect, of no materiality to the issues now before me.  
29.	The first four categories of alleged lies must be addressed together.  I can immediately deal with (ii) and (iv) as in any event the least significant: 
(i)	As for (ii) the Claimants sought an order from the Cypriot Court for the production of documents by Abacus, of which the relevant paragraph called for “every piece of information known to the defendants regarding any agreements and/or transactions between Aurdeley and Mr Kirill Stein, and/or between Aurdeley and any natural or legal person that is known to the defendants to be related and/or be affiliated with Mr Kirill Stein and/or any payments made by Aurdeley to Mr Kirill Stein and/or any natural or legal person that is known to the defendants to be related and/or affiliated with Mr Kirill Stein or vice versa, and every document (including all printed or electronic records) that they have or had in their possession or control, either directly or indirectly, and in connection with any such agreement and/or transactions and/or payments”.  This did not call for all documents in the possession of Abacus relating to Aurdeley.  Ms Raouna of Abacus, which is not suggested to be other than a reputable corporate services company, has stated at paragraph 11 of her Affidavit of 3 October 2014  that: “since 2003 Aurdeley has entered into many transactions and I have made many payments (other than the documents produced herewith) which, though to the best of my knowledge and belief, are not related in any manner whatsoever to Mr Stein, and the instructions upon which they were made did not come from him”.  I do not conclude that there is even the beginning of a case that when the Defendant stated that he had no access to all of Aurdeley’s documents, or knowledge of all of Aurdeley’s affairs, or that there are matters relating to Aurdeley in which he is not involved, such statements were lies (unless he was lying in relation to (i) and (iii), addressed below).  Mr Oudkerk submits that I am entitled to draw inferences from the fact either that the Claimants have refrained from asking Abacus for more or that they have in fact, as is the case, received more from Abacus than they have disclosed in these proceedings, that there are or may be documents available to the Claimants which disprove the case which they wish to put against the Defendant.  I have no need to draw those inferences, but I am certainly unpersuaded on what I have seen that these particular statements relied upon are even arguably lies, and they are consistent with the evidence of Ms Raouna.  
(ii)	I am also not satisfied that (iv) is even arguably untrue.  Disclosed by Abacus is a large number of communications between the Defendant and representatives either of Alfa Bank or of Abacus, and only once with a director of Aurdeley.  In most cases, if not in every case, instructions by the Defendant are confirmed by Mr Zakharov.  That is, on its face, wholly supportive of the Defendant’s case, and is in any event again consistent with the evidence of Ms Raouna described in paragraph 32 below.     
30.	The lie at (v) I deal with below, as it is relied on in relation to the judgment for interest on costs.  I turn to the central alleged lie, combining (i) and (iii), namely that the Defendant was not Aurdeley, and that Mr Zakharov was its beneficial owner.  Mr Pavel Nazariyan is a director within the Alfa Bank Group, for which the Defendant used to work.  He describes how in May 2003 the Defendant, who had a managerial position at Alfa Bank at that time, asked him to assist him in acquiring an off-shore company for his own purposes, and he agreed to assist the Defendant in the acquisition of a shelf company from Abacus.  He says that he was sure that the Defendant was to be the ultimate beneficial owner of the new company: 
“7. . . at a late stage in the process, Mr Stein identified an individual named Mr Zakhar Zakharov to act instead of him as owner on the record of the new company.  It was clear to me that Mr Zakharov was acting as the nominee shareholder, whereas the actual ultimate beneficial owner was Mr Stein.”
He continues in paragraph 8 by stating that he does not recall instructions from Mr Zakharov, and that as far as he was concerned Aurdeley was the Defendant’s company, and that he had never met Mr Zakharov and never communicated with him directly, and has never provided corporate services to Mr Zakharov.  
31.	It is difficult to know what Mr Nazariyan meant by “at a late stage in the process”, when in one of the documents produced by Abacus, and exhibited by the Claimants, dated 15 May 2003 by which Mr Nazariyan is first reserving the off the shelf company Aurdeley, Mr Zakharov is already mentioned by him to Ms Ioannou, who was or was to be a director of Aurdeley.  But, more significantly, Mr Oudkerk relies upon another email from Mr Nazariyan to Ms Ioannou in October 2003 when he describes Mr Stein to her as “a representative person of company’s principal”, which appears positively contradictory of Mr Nazariyan’s own evidence.  
32.	Mr Oudkerk sets against the evidence of Mr Nazariyan the evidence of Ms Raouna, whom I have referred to in paragraph 29(i) above.  At paragraph 5 of her affidavit she refers to the shelf company Aurdeley and confirms that the sole shareholder was originally Abacus (Cyprus) Ltd, from the date of establishment, when Aurdeley’s shares were transferred on 2 June 2003 to Mr Zakharov.  She confirms in paragraph 6 that, by reference to the Abacus Service Agreement, the authorised person for providing instructions regarding Aurdeley to Abacus was Mr Zakharov.  In paragraph 8 she refers to Mr Stein as a business consultant/associate of the company, paid a monthly salary by Aurdeley from 2004.  She then confirms: 
“9. Since 2 June 2003, when the company became active, any and all the instructions concerning Aurdeley’s administration were coming from Mr Zakharov. 
10. In January 2004, Mr Zakharov informed us in his letter of 14 January 2004 that he instructed Mr Stein to represent him in certain business activities, and consequently he provided us with the directions to accept Mr Stein’s instructions on certain matters concerning trading and transactions in foreign currency . . . 
11. . . for each instruction concerning payment to Mr Stein, in all cases other than those covered by the [exhibited] authorities . . . we asked Mr Zakharov’s approval.”
She then makes the statement, which I have set out in paragraph 29(i) above, as to the lack of involvement of the Defendant in many aspects of Aurdeley’s business.  Mr Rubin’s submission is that Ms Raouna and Aurdeley have been misled into believing that Mr Zakharov, and now since 14 August 2014 Mr Topper (to whom I shall now refer), have been the beneficial owners of Aurdeley.  
33.	Mr Zakharov is said to have been intimidated by the Claimants, and a recent intimidatory contact with him in Moscow by a representative on their behalf is alleged by the Defendant: in the witness statement of the Claimants’ solicitor the contact is not denied but the intimidation is.  The Defendant relies on some other evidence of alleged intimidation of one of his witnesses at the first trial, Mr Radjabov, and Mr Oudkerk also refers to paragraph 24 of my judgment.  At any rate Mr Zakharov is not (at least at this stage) giving any evidence.  He has, according to the Defendant, transferred his interest in Aurdeley to a Mr Topper, and Mr Rubin points out that there is no evidence produced as to the dealings between Mr Zakharov and Mr Topper or, save for a nominal $1000 consideration, as to what value was paid for Aurdeley as between Mr Zakharov and Mr Topper when, if the Defendant be right, Aurdeley is entitled to receive a very substantial sum, being 60% of a substantial part of the judgment debt owed by the Claimants to the Defendant.  
34.	Mr Rubin also raises questions about the Declaration of Trust in favour of Aurdeley of 26 June 2014.  Although it is plain that it was drafted by counsel in Wilberforce Chambers in June 2014 and delivered to the Defendant’s solicitors, and sent on by them to the Defendant for signature, on 26 June, and although there is evidence by a witness statement from Mr Eugene Jaffe of 23 March 2015 that the Defendant signed it at his house on 26 June and he witnessed it, there are unanswered questions:  
(i)	Instructions had not reached Mr Oudkerk about it before the hearing on interest on 1 October. 
(ii)	Abacus’s copy, as sent to it by the Defendant in July, was not a signed copy, even though they were intended to sign it also, and, it seems, sought instructions (see below) from Mr Zakharov to do so.  
(iii)	The copy exhibited by the Defendant in these proceedings on 9 December was also not a signed copy, though a signed copy has subsequently been provided.  
(iv)	No metadata evidencing an electronic signed copy prior to January 2015 has been provided or, seemingly, can be found.  
(v)	There is, as now appears, a further signature on the Declaration of Trust by the other beneficiary, apparently signed on the same date, and yet Mr Jaffe has not mentioned her.  
Mr Rubin also points to Abacus’s note of a conversation with Mr Zakharov of 7 July 2014, whereby, though he confirms to Abacus that he is aware of the Declaration of Trust and that they can proceed with signing it, the record seems to suggest that he is uncertain (though it is common ground that his English is poor) what the document is.   
35.	There are certain matters that seem to me to be clear even at this stage: 
(i)	I cannot accept the arguability on the evidence of the case at paragraph 31(1) of the Particulars of Claim that “Mr Stein gave instructions for all or substantially all of Aurdeley’s business activities.  Those activities appear to be carried out according to plans created by, at the behest of and for the benefit of Mr Stein without any involvement of Mr Zakharov”.   
(ii)	The statement in paragraph 18(4) of the Particulars of Claim that “on every or almost every occasion for the sake of appearances only Mr Zakharov’s approval was sought as the purported owner of the company” cannot support a case in fraud, not least by reference to the words of Lord Millett set out in paragraph 27 above.  The fact that Aurdeley did always or almost always receive instructions from Mr Zakharov is supportive of the Defendant’s case, particularly given the evidence of Ms Raouna set out in paragraph 32 above and the admitted need for Mr Zakharov to be assisted with his English.  
(iii)	The suggestion that it is not supportable that Mr Zakharov’s assistance was valuable for the purposes of obtaining business contacts such as to falsify the Defendant’s evidence in this regard is met by the evidence of Mr Jaffe in his witness statement of 5 December 2014, particularly at paragraphs 12 to 22.    
(iv)	The fact that there is no evidence of any payments by way of dividend etc to Mr Zakharov, a point made by Mr Rubin, is plainly explicable by the fact, referred to at paragraph 29(i) above, that Abacus has not disclosed, and was not asked to disclose, any dealings with Mr Zakharov other than those falling within the limited scope of the order set out in that paragraph.
(v)	There is actually now disclosed by Abacus an email dated 8 July 2011, in which he speaks (in Russian) of the possibility of his bringing a law suit against the Chodievs, which supports his involvement.     
36.	Nevertheless on this application I am of the view that in the light of the (albeit questioned) evidence of Mr Nazariyan, the unanswered questions about the transfer to Mr Topper and the Declaration of Trust, and the occasional references in the documents from Abacus to “Stein Loan Agreement”, or to “my [rather than Aurdeley’s] USD account”, there is an arguable case that, contrary to what the Defendant said in cross-examination at the trial, he is the beneficial owner of Aurdeley.  
Proposition 1
37.	I turn then to consider the question of whether, if the Defendant was the beneficial owner of Aurdeley, and if I had concluded that he had lied in this regard (a matter to which I shall return at paragraph 47 below) that would have entirely changed the way in which I approached and came to my decision, or would probably have caused a different conclusion to be reached, in respect of Issues 2 and 7, being expressly the only areas of the case where Mr Rubin suggests that the alleged lies would have had an impact on any of the central issues in the case (Proposition 1).  
38.	I deal first with Issue 2.  It is understandable that Mr Rubin, particularly coming fresh to the case, should emphasise my comment in paragraph 23 of the judgment (set out in paragraph 7 above) as to the problems of relying on oral evidence, and draw attention to my conclusion in paragraph 25 that I found that the Defendant was a most impressive witness.  I am now asked to assume that, in respect of Issue 2 (Was the oral January Agreement for 0.5% a fixed or discretionary success fee?), I had resolved the issue of the beneficial ownership of Aurdeley against the Defendant (see further at paragraph 47 below) and thus that, on the assumptions, I had concluded that he had lied in that regard.  I would thus have been faced with the Defendant, whom I had found to have lied in relation to the beneficial ownership of Aurdeley, and with the Claimants whom I had found to have lied (“put forward a deliberately inaccurate case”) in respect of Issue 3 i.e. on a directly relevant issue in the case.  Of course, just as I said in relation to the Claimants in paragraph 53 that the fact that they had lied did not necessarily mean that I had to disbelieve them on all matters (and I did in fact address Issue 3 on its own merits), so I would no doubt have considered whether such a lie about the beneficial ownership of Aurdeley was for some other reason than misleading me as to the merits of the case, for example disguising such beneficial ownership in case judgment came to be enforced against him for a substantial costs order by the Claimants if he were unsuccessful.  However, if I had been faced with a choice between two sets of oral evidence in relation to Issue 2 by parties both of whom I had cause to conclude had lied to me, or to have doubts about their credibility, I would have all the more done exactly that which I did do, namely looked for reliable corroboration of the evidence for one side or another, and such process was and remains entirely clear.  
39.	I could not simply have accepted straightforwardly the Defendant’s evidence, as set out in paragraph 34 of my judgment.  But in any event, impressive witness or not, I did not do that: 
(i)	As set out in paragraph 35, there were serious inconsistencies between the First Claimant and Mounissa, each in part in any event self-contradictory, and the fact that evidence by each of them was afterthought, not having been mentioned in their detailed witness statements or indeed materially in chief, rendered it unpersuasive and unreliable:  
(ii)	As set out in paragraph 36 of the judgment, quite apart from such inconsistencies, there were other serious problems in accepting the evidence of either the First Claimant or Mounissa:  
(iii)	As set out in paragraphs 39-45 of the judgment there were 4 powerful and convincing corroborative factors in favour of the Defendant.  The January Term Sheet was itself self-standing corroboration, because it was common ground that it had been supplied to the Claimants prior to the meeting.  The evidence relating to the draft Darcon contract (paragraphs 42-3) is almost conclusive of itself, and is based upon the evidence of an independent witness and of the First Claimant himself.  The evidence of the Second Claimant and of Mr Olim Chodiev was either unhelpful to the Claimants or positively supportive of the Defendant.  
40.	I am entirely satisfied that had I known, and found, that the Defendant had lied in relation to beneficial ownership of Aurdeley, I should of course have addressed it, but it would have made no difference whatever to my conclusion.  
41.	As to Issue 7, it was made entirely clear by Mr Rubin that his only case relates to Issue 7A, i.e. Was there a compromise of the Claimants’ claims (in respect of the Trade Finance and/or of the IPO) on 1 April 2007?: not the (in my judgment almost unarguable) case in respect of an alleged compromise in April 2011.  
42.	Once again I am to assume that I had been persuaded that the issue of beneficial ownership of Aurdeley was one which I had to decide and was not collateral (see paragraph 47 below), and that I had resolved that issue by concluding that the Defendant was lying.  I would thus again be regarding him as not wholly or always reliable, of being capable of telling lies where it suited him, and perhaps would conclude that I was unable to accept his evidence unless it were corroborated.  Thus again I would not be able to accept without more the account he gave, set out in paragraph 94 of my judgment.  Once again however there were powerful independent factors supporting his account and rebutting that of the Claimants: 
(i)	I record in paragraph 94 the significant fact that, whereas the Second Claimant denied that the Defendant said he would, effectively, be taking the money and suing, the First Claimant admits that this is exactly what he said 12 days later in their own conversation: and I concluded, in paragraph 94, that that is indeed the very reason why the First Claimant came to see the Defendant on 13 April – the whole of the end of paragraph 94 is significant.  
(ii)	The second factor is the belated, and for that and other reasons unbelievable, evidence of the Second Claimant, as recorded in paragraph 95 of my judgment.  
(iii)	The third factor is important, and was emphasised by Mr Oudkerk.  Whereas in the event I said in paragraph 99 that I preferred the Defendant’s evidence, the significant factor is that I was satisfied as to what the Second Claimant did not say, and in relation to this issue, the question of compromise, the onus of proof was upon the Claimants, and they plainly did not satisfy it.  
(iv)	The fourth factor is also an important one, namely the independent corroboration by Mr Barinstein, referred to in paragraph 98 of my judgment.  
(v)	I concluded that it was wholly unlikely that, if it was intended that the payment was in full and final settlement, such agreement would not have been recorded in the Agreement which was signed on 5 April, which it was not.  
(vi)	Finally a further factor was the common ground that he refused the $1million which, unlike the $4 million, came with strings attached i.e. continuing to work for the Claimants on the IPO.  
43.	As with Issue 2, therefore, I am entirely satisfied that knowledge of, and a finding as to, lies by the Defendant with regard to his beneficial ownership of Aurdeley, would have made no difference whatever to my conclusion in respect of Issue 7A, and Proposition 1 is unarguable.  
44.	I am sure that Mr Rubin picked Issues 2 and 7A as being the only issues in relation to which there might be the ghost of an argument that my decision would have been, or even might have been, different.  I do not need to consider the other issues therefore, but, had I done so, I am satisfied the answer would have been the same: indeed even more clearly so in relation to Issue 3, where I found 10 supportive points in favour of the Defendant, and concluded that the Claimants’ witnesses had all lied on this very significant issue in the case.   

Proposition 2
45.	The Claimants’ case on Proposition 2, as set out in paragraph 13(ii) above, and by reference to the authorities in paragraph 23 above, is that had the Defendant’s alleged lie summarised in paragraph 36 above been revealed at the trial it would have had such an impact on his credibility that “no reasonable [Judge] could have acted upon his evidence” or that the “additional evidence [as to his credit] must have led a reasonable [Judge] to a different conclusion from that actually arrived at”, that “the character of the  [defendant] was of peculiarly vital significance” and/or “that there was a feature of paramount importance outweighing the grave disadvantage of protracting the litigation”.  However characterised by the various dicta, it is a very high hurdle.    
46.	I take into account the alleged lies as to the ownership of Aurdeley, as summarised above, and in addition the assertion that he had spent his life savings in pursuing the litigation, which Mr Flynn suggested to me in his closing submissions had been influential in my approach to the case.  However (i) I have and had no recollection at all of this – I was I believe far more influenced by the manifest dishonesty of the Claimants and their witnesses, as described vividly in paragraphs 52 to 56 of my judgment and (ii) if the Defendant did indeed own Aurdeley as now suggested, and Aurdeley was receiving his earnings, then it was those very funds i.e. his earnings which he was using to meet the very substantial costs.  
47.	It is important to bear in mind that the alleged lies related to his ownership of (and involvement in) Aurdeley.  The case I was actually deciding was whether the Claimants had agreed to engage the Defendant on the basis of a fixed percentage success fee for both Trade Finance and the IPO, and whether that had been compromised.  The issues about Aurdeley were plainly collateral issues, as indeed is recognised by Mr Rubin’s argument, which I have recorded in paragraph 20 above, with regard to ‘getting away from the central issues’.  I had already ruled out (see paragraph 24 of my judgment set out in paragraph 7(ii) above) a number of collateral and satellite issues, namely (i) the Defendant’s allegations as to misconduct by the Claimants, which had it been admitted might, if established, have damaged the credibility of the Claimants (ii) the Defendant’s allegation as to intimidation by the Claimants.  It does not seem to me therefore that I would necessarily have resolved the collateral issues as to the ownership of Aurdeley.    
48.	I have already determined, in relation to my conclusions with regard to Proposition 1, that such alleged lies (even if established) were not operative or causative in relation to the only Issues relied upon in that regard by Mr Rubin.  Had I concluded that, by reference to the alleged lies, I had to regard his credibility as damaged, I would have been required to set that against the severely damaged credibility of the Claimants on central issues (see paragraphs 27 and 28 of the judgment in particular).  I have no doubt that it would have made no difference, given (i) the support and corroboration to be looked for, and which was obtained, from contemporaneous documents (ii) such support and corroboration of the Defendant’s case by reference to the convincing evidence from independent witnesses (iii) the inconsistent and, in important respects, dishonest evidence of the Claimants on central issues.  I must of course consider the Claimants’ case at this stage by reference to whether it satisfies the test of being arguable or having a realistic prospect of success (see paragraph 27 above), noting that, as appears from all the authorities to which I have referred, the hurdle at trial would be a high one for the Claimants to surmount.  It is important to record, in respect of both Propositions 1 and 2, that I disbelieved the Claimants and their witnesses for good and substantial reasons, irrespective of any conclusion as to the credibility or character of the Defendant.  Thus in relation to Proposition 1, I have already explained this in paragraphs 37 to 44 above, and as to Proposition 2, this was not a straightforward ‘obverse of honesty’ scenario, as it was on the facts of Meek, referred to in paragraph 23(ii) above.  I have no doubt that, by reference to any of the ways in which Proposition 2 can be put on the basis of the authorities, it is not arguable.    
Fresh evidence
49.	In any event, there is an important further obstacle for the Claimants to surmount in relation to both Propositions 1 and 2, which I have not yet brought into account.  This is the issue of fresh evidence, which I am quite satisfied requires the satisfaction of the Reasonable Diligence requirement.  The Claimants always knew about Aurdeley.  The Defendant provided his services through Aurdeley, as the Claimants knew.  The Darcon contract, the April Agreement, and several of the family contracts with the Chodievs under which the Defendant provided his services to them from 2007 to 2011, were entered into with Aurdeley.  The case now is based upon the information obtained by the Claimants pursuant to the order of the Cypriot Court against Abacus obtained on 22 July 2014, referred to in paragraph 29(i) above.  It is plain that the Claimants could have similarly obtained that information prior to the trial.  For example in the two Agreements of 30 September 2009 between Aurdeley as Consultant (providing the services of the Defendant as Associate) and, respectively, the First Claimant and Mounissa, the authorised address of the Consultant was stated as Abacus Services, with its address in Nicosia, Cyprus, and listing Ms Raouna’s name.  Reasonable or any diligence would have enabled the Claimants to access Abacus to find out the desired information as to the identity of the owner of Aurdeley, and to obtain all and any other documents which were subsequently obtained by the July 2014 Order.  Instead they ‘elected’ (see paragraph 20 above) to pursue correspondence prior to trial with the Defendant’s solicitors as to the role of Aurdeley, and then issue, and not pursue, a summary judgment application, and then run closing submissions, all upon the quite different basis that the Defendant did not have a claim because the claim was that of another party, Aurdeley.  
50.	What is more, it is now clear from the documents recently disclosed in these proceedings, which I permitted the Claimants to put in ‘de bene esse’ for the purposes of this application, that there were other communications in 2007 and 2008 between the Defendant and various representatives of the Claimants or the Chodiev family (Akmal Bekmirzaev, Sabir Chodiev) in which the Defendant referred to Aurdeley as “my company” and to an Aurdeley account as “my account”, which was consequently available to them.  
51.	If there had been, by reference to Propositions 1 and 2, any arguable case by reference to fresh evidence that my judgment in favour of the Defendant should be set aside by reference to alleged lies with regard to his ownership of or involvement in Aurdeley, it would in any event be unarguable by reference to the Reasonable Diligence requirement.  

Proposition 3
52.	I turn to Proposition 3, the “Fundamental Deception”.  This is put in the proposed Amended Particulars of Claim by way of addition to paragraph 1 as follows: 
“(1)	Mr Stein brought the claim in his own name rather than in the name of Aurdeley Enterprises Limited (“Aurdeley”) knowing that the claim, if any, was really Aurdeley’s claim.  He did this to prevent exposure of the fact that he had been using Aurdeley as a vehicle to evade tax in the United States and/or to prevent the proper disclosure of documents and/or to prevent it being apparent that the claim was truly Aurdeley’s claim.  
(2)	To maintain that deception he was obliged to give knowingly false evidence at the trial about Aurdeley and his relationship with it. 
(3)	The Original Stein Proceedings were thus fraudulent in their very inception (the “Fundamental Deception”).”  
This is characterised by Mr Shiu of the Claimants’ solicitors, in paragraph 73 of his witness statement, by the words “Mr Stein thus appears to have deliberately constructed a bogus claim in his own name in such a way that its ownership of Aurdeley would not be revealed”.  To describe the claim as “bogus” is somewhat of an excessive statement, given the (unchallenged) conclusions in my judgment on all 7 Issues.  The proposed amended pleading is in any event difficult to grasp once it condescends to particulars.  Paragraph 9 of the original Particulars of Claim remains, setting out four agreements, the Darcon contract, the two agreements between the Defendant and the Alferon companies and the April Agreement.  The new paragraph 10(A) now states: 
“10A	Mr Stein, while acknowledging the existence of previous agreements for service between Aurdeley and various companies in the ownership or control of the Claimants, asserted that the agreements set out in paragraph 9 above were made between him in his personal capacity and the Claimants, even though he had previously drafted a letter for Aurdeley to send (9th February 2010) claiming the same bonus payments for that company and which he deliberately did not disclose.”
This makes no sense.  Two of the four agreements in paragraph 9 were indeed made between him in his personal capacity and associate companies of the Claimants, and he at no stage asserted that the Darcon contract or the April Agreement were entered into by him in his personal capacity.  What his case was, and I found, and the Court of Appeal upheld, was that the oral agreement made in January 2006 was by him personally (with the Trio personally).  
53.	The Proposition 3 case is that he dishonestly brought the claim in his own name and not in that of Aurdeley, when Aurdeley had the claim.  This is on the face of it inconsistent with the case discussed above that he was Aurdeley, because if he was Aurdeley then it is plain that he would have had no problem with establishing an entitlement as agent for an undisclosed principal, since he would also have controlled the principal, and there would have been no ‘rival’ claim by a third party; but then, as Mr Rubin at one stage in his submissions disarmingly said: “in this case one has to ride several horses”. 
54.	There are two reasons put forward why it is alleged that he was dishonestly putting forward a claim in his own name when he knew it belonged to Aurdeley.  The first is (paragraph 21B(v) of the proposed Amended Particulars of Claim) a motive of “avoiding the Claimants advancing a defence of illegality in relation to his use of Aurdeley” which he allegedly had (paragraph 21D(iv)) set up as an off shore vehicle for the purposes of tax evasion.  
55.	It is significant that: 
(i)	There is no proper or particularised case of the broadbrush allegation that the Defendant used Aurdeley for tax evasion, or indeed money laundering, as was also thrown into the pot.  Mr Rubin did not in his oral submissions address this or take me to any relevant documents.  
(ii)	It is resonant of the allegations made by the Defendant against the Claimants which at the outset of the trial I struck out of his witness statement and ruled out of the trial (paragraph 24 of my judgment). 
(iii)	There is simply no argument that the Claimants would have had a defence of illegality to the claims for commission.  So far as tax is concerned, it is difficult to see, as Mr Oudkerk points out, how there could be a tax motive for making the claim in his own name, with the inevitable tax consequences.  But in any event even if Aurdeley was set up for tax or other purposes, and he did not want that company (one already fully known to the Claimants, with whom it had entered into a number of contracts) to be in the forefront, there is no basis for any assertion that a claim by Aurdeley for these commissions, rather than a claim by the Defendant, could have been met by the defence of illegality.  Again Mr Rubin devoted no time to developing this proposition, while Mr Oudkerk both emphasised that any illegality would have been by reference not to English but to US law, and US revenue law at that, and illustrated, by reference to the recent decision of Watts v Watts (21 August 2014 unreported), that in order to be unenforceable for illegality this commission agreement would either have to have been illegal of performance or entered into between the Claimants and the Defendant for the purpose of facilitating unlawful tax evasion (paragraphs 8, 144 and 153).  
This allegation is in my judgment wholly unsupportable.  
56.	The second justification for the proposed amendment to add the so-called “Fundamental Deception”, of bringing the claim in his own name when it in fact belonged to Aurdeley, is said to arise out of the non-disclosure in the proceedings by the Defendant of the letter of 9 February 2010, referred to in paragraph 10A of the Amended Particulars of Claim, which I have quoted in paragraph 52 above.  This is a letter composed by the Defendant and sent via Aurdeley to the First Claimant (care of Mr Bekmirzaev, referred to in paragraph 50 above) at Capellen Investments, which is accepted to have been the normal post box used by the Claimants (and also used for a second letter, sent to the same address, dated 17 February 2010, which both the Claimants and the Defendant disclosed in the proceedings).  The letter is a claim by Aurdeley for monies due (and only paid much later, as recounted in my judgment) under the “family contracts” entered into with Aurdeley for the provision of the services of the Defendant, referred to in paragraphs 5(vii) to (xii) above).  
57.	Using a formalistic wording by reference to the terms of the relevant Consulting Services Agreement, which described the relevant member of the Chodiev family as “Client”, Aurdeley as “Consultant” and the Defendant as “Associate”, the Consultant was complaining about sums unpaid by the Client.  After setting out the sums due under the identified Agreement in full, the letter continues: 
“As was made clear to the Client by the Consultant during this conversation, any agreement regarding a future working relationship must take into account amounts previously earned by the Consultant several years ago, that have still not been paid.  
More specifically, the Consultant successfully performed its services in connection with securing trade financing in the amount of one billion five hundred million US dollars ($1,500,000,000) for the benefit of the Client and his partners.  By prior oral agreement with the Client and his partners, the Consultant was to receive a fee for these services.  To date, the Client has still not paid the balance of this fee, in an amount equal to three million US dollars ($3,000,000).  Moreover, the Consultant has also successfully performed its services in connection with the Initial Public Offering of Eurasian Natural Resources Corporation.  By prior oral agreement with the Client and his partners, the Consultant was also to receive a fee for performing these services.  To date no amounts whatsoever have been paid to the Consultant in this regard. 
It is the express wish of the Consultant to seek an amicable resolution of these issues and to agree new terms that will enable the Client and the Consultant to continue their working relationship in a mutually advantageous manner.  We note, however, that very little time remains to have discussions and reach an agreement on these issues.  
In the event no discussions are had and no new agreement is reached, it is the intention of the Consultant to cease its services to the Client immediately upon the expiry of the Term.  The Consultant expressly reserves all of its rights to seek legal redress with respect to all moneys owed to it.”
58.	The Claimants allege that this letter shows not only that the sums being claimed by Aurdeley under the separate Consultancy Services Agreement were due to Aurdeley, but that Aurdeley is admitting and asserting that it was the party to whom the earlier sums unpaid in respect of the Trade Finance and the IPO should also be paid.  The Defendant accepts that his language was inapt; he asserts that the purpose of the letter was to make the claim under the identified Consultancy Services Agreement, while making plain that substantial sums were still due from his time with Alferon/ENRC, and that the word “Associate” rather than the word “Consultant” should have been used in respect of those earlier matters which were not the express subject matter of the claim itself being made in the letter.  
59.	This letter of 9 February 2010 was not disclosed by the Defendant in the proceedings, even though it is apparent that he was supplied with it by Abacus, together with other documents which he did disclose.  Rather than its being an oversight as the Defendant says, Mr Rubin submits that it was deliberately “filleted out”, to avoid its being disclosed in the proceedings to the Claimants, so that the fact that the claim was really that of Aurdeley would not be revealed to the Claimants.  This is the basis of the dishonesty alleged in the proposed amendment.  
60.	Quite apart from the question of fresh evidence, to which I shall return, this seems a very strange dishonesty: 
(i)	The letter in question was sent to the Claimants, to their usual post-box.  Therefore he obviously did not hide it at the time, and there was never any subsequent discussion between the parties in correspondence or otherwise along the lines that any claim was that of Aurdeley.  If he chose deliberately not to disclose it in the proceedings, he must have anticipated that the Claimants would disclose it.  Mr Rubin says he “took the chance” that they would not disclose it.  
(ii)	Even stranger is the fact that the Defendant did disclose the subsequent letter of 17 February 2010, sent to the same addressee and address, and beginning with an express reference to “our letter to you, dated February 9, 2010”.  This letter was also disclosed by the Claimants, so that coincidentally neither party disclosed the 9 February letter but both parties disclosed the 17 February letter.  
(iii)	The letter of 9 February was in fact on the face of it very favourable to the Defendant, had he disclosed it.  He had some difficulty at the trial from the fact that it was, on the basis of disclosed documents in play in the trial, common ground (as I record in paragraph 5(x) above) that the first time he made complaint about non-payment in respect of the IPO in writing was in his letter of September 2010; and as appears from paragraph 70 of the judgment Mr Flynn made some play of his lack of complaint until that letter of 26 September 2010.  Had this letter been disclosed, then it would have been apparent that such claim was in fact made in terms 8 months earlier.  Mr Rubin points out that the 9 February letter does not quantify the claim in respect of the IPO, but it seems to me clear that this was not in fact a letter of claim for anything other than the sums due under the particular Consultancy Services Agreement, and was simply recording an outstanding earlier entitlement as a matter of complaint, and it would not be expected that the detail of that entitlement should have been spelt out.  Mr Oudkerk submits that while the Defendant’s failure to disclose the 9 February letter is submitted by Mr Rubin to have been a dishonest concealment, the equivalent failure by the Claimants to disclose the same document, being a document which would have been unfavourable to them could have been similarly so characterised. 
61.	If there were an inference to be drawn that the Defendant deliberately failed to disclose the letter of 9 February as part of an intention to conceal the entitlement of Aurdeley to sue, Mr Rubin puts forward the following as the purpose which would or could have underlain it:
(i)	I again quote from paragraph 20D(v) of the proposed Amended Particulars of Claim, namely “avoiding the Claimants advancing a Defence . . . relying on the entire agreement clause in the April 2007 agreement as a defence to a claim by Aurdeley (rather than Mr Stein) for the alleged bonus.” It is thus submitted that, had the Claimants known that Aurdeley was really the claimant, the Claimants would have relied on the Entire Agreement clause in the April Agreement. But they did rely on that clause, even against the Defendant, as allegedly ousting his entitlement to claim the balance of the Trade Finance claim and the whole of the IPO claim, and it failed.  It failed not on the basis that the Defendant could not rely on the Entire Agreement clause so as to oust the claim because the Defendant, who was making the claim, was not affected by the Entire Agreement clause because he was not party to the April Agreement, but because the Entire Agreement clause was not a full and final settlement clause, and so could not oust any previous unpaid claims: see paragraphs 94 to 100 of my judgment, and in particular paragraphs 96-97.
(ii)	By a proposed further amendment, after the close of the hearing (though adumbrated without such amendment during the course of it) a similar point was made in relation to the existence of the Entire Agreement clause in the Darcon Contract, referred to in paragraph 5(v) above.  It is said that if the claim had been brought in the name of Aurdeley, the claims under the oral agreement with the Chodievs of January 2006 would have been affected by such Entire Agreement clause.  I agree with Mr Oudkerk that this is unarguable:
a)	It is quite plain that the Darcon Contract was not intended to replace all previous agreements relating to the engagement of the Defendant by the Claimants: quite the contrary, because, as set out in paragraph 5(v), and not in any way in dispute during the trial before me, it was only part of the arrangement, picking up some but not all of the terms that had been agreed in the January Agreement, and so the “subject matter of this agreement”, as to which it was “the entire agreement”, was very limited.     
b)	Again as appears in paragraph 5(v), Darcon was a company about whom nothing was known on the evidence before me from either side at the trial, and was never intended to constitute the governing party in the relationship with the Defendant, replacing all other arrangements.  
c)	Even assuming that Darcon was an associate of the ENRC or Alferon Group, the definition of the “parties” whose “entire agreement and understanding” was contained within the Agreement was at its widest on the Darcon side extended to “the principal and its affiliates”.  “Affiliates” were defined as meaning “an entity”: and by no stretch of the imagination could  the First, Second and Third Claimants be described as an “entity”.    
(iii)	Mr Rubin’s last point was abstruse, and in my judgment unarguable.  It does not seem to me that it was expressly pleaded.  But in any event he submits that had the Claimants had in mind the contents of the 9 February letter (as referred to below there is no evidence that they did not read it at the time, but at any rate it was not available as part of the trial bundles), they could have taken a point which would have amounted to a good defence to an agent suing on behalf of an undisclosed principal, if that was what the Defendant was doing.  Mr Rubin submits that the letter of 9 February amounted to a claim not only for the sums due under the Consultancy Services Agreement, but for the other sums referred to, as historic unsettled matters, as referred to above, (and he also refers to the Zakharov email disclosed by Abacus dated 8 July 2011 referred to in paragraph 35(v) above), and hence Mr Rubin submits that the Claimants can pray in aid the content of Bowstead & Reynolds on Agency (20th Ed) at 9-012.  Under the heading “Undisclosed Principal” it is said that “where the principal is undisclosed at the time of contracting, the contract is made with the agent, and he is personally liable and entitled on it.  There is no need for the agent to join the principal as a party.  However the principal also may intervene to sue, and may be sued, but the latter only subject to the general rule that nothing must prejudice the right of the third party to sue the agent if he so wishes.”  The passage Mr Rubin relies on is as follows: 
“In this context, it is often said that the right of the principal is superior to that of the agent, and it is a defence for the third party to prove that the principal has intervened and claimed payment or damages, or that the agent’s authority to sue is otherwise terminated. ”
No authority is put forward to support this proposition, though the comment in Bowstead, by reference to the Second Restatement, and to an Australian first instance case, is that “on principle this seems correct”.  Mr Rubin submits that the Defendant, a US lawyer (but no doubt not a devotee of esoteric paragraphs of Bowstead) may have had this in mind.  I am entirely satisfied that the letter of 9 February is not such an intervention by the undisclosed principal and indeed is not a claim by the undisclosed principal in respect of the IPO and Trade Finance ousting the right of the agent.  However in any event it certainly did not terminate the authority of the agent, which is plainly the significant aspect of Bowstead’s opinion.  There is nothing in this point.  
62.	I consider that this proposed amended case of Fundamental Deception does not save the proceedings, and is not arguable, but in any event it is further flawed by the fresh evidence rule, and in particular the Reasonable Diligence requirement.  The Claimants could have run (did run) a case by reference to the Entire Agreement in the April Agreement, and could, if so advised, have run a case by reference to the Entire Agreement clause in the Darcon Contract, which would have been no more viable with the letter of 9 February than without it.  But in any event the careful construct of this new amended case is all founded primarily upon the shaky foundation of the production of a copy of the 9 February letter in the Abacus disclosure.  But the Claimants had the letter.  It is not ‘fresh evidence’.  The only explanation is given by Mr Shiu in paragraph 58 of his witness statement of 6 February 2015:
“58. Without waiving privilege, I understand from the Claimants’ representatives that Capellen is a company within the Chodiev family companies, that it has no assets and carries on no commercial activity and that its principal function is to act as a post room for the Chodiev family and its companies.  The Claimants’ representatives have been able to confirm that the [9] February 2010 Letter was received by Capellen.  I am instructed that the Claimants do not recall locating or identifying the [9] February 2010 Letter in the course of their disclosure searches in the Original Proceedings.  I further understand from King & Wood Mallesons LLP, the Claimants’ solicitors in the Original Proceedings, that they have checked their files and confirmed that they were not provided with a copy of the [9] February 2010 Letter in the course of the disclosure exercise or otherwise.  I understand that a search of Capellen’s documents repositories is currently under way.”
This limited explanation does not even say whether, given that the letter, like its successor of 17 February which made express reference to it, reached the regular post-box of the Claimants it (or either of them) was read by the Claimants or anyone on their behalf.  No evidence to that effect is given by any of the Claimants or on their behalf.  Whether or not it was read, the material which is now said to justify the Fundamental Deception case was available to them at the time.  There was also no explanation given which would begin to satisfy the test of reasonable diligence as to why that letter, unlike its successor of 17 February, was not disclosed to, and thus considered by, the Claimants representatives. 
63.	I am satisfied that on the basis of none of the ways in which Mr Rubin puts his case on behalf of the Claimants is there any proper basis for challenge to my judgment and no arguable case for it to be set aside as obtained by fraud or perjury. 
Interest 
64.	I awarded interest on the judgment sum, which was in part a debt, carrying interest under the Late Payment of Commercial Debts (Interest) Act 1998 (“the 1998 Act”), and in part damages, and also on the costs.  There were two hearings, and consequently two judgments, when I dealt with these matters, because, at the instance of the Claimants, some issues were adjourned from what was otherwise the usual post-judgment consequentials hearing on 16 April 2014. On that occasion I adjudicated on some matters of principle, including the issue arising out of the Part 36 offer made by the Defendant in July 2013, to which the Claimants had failed to make any response at all.  After hearing argument, including argument by reference to CPR 36.14(4) relating to the circumstances in which the specified consequences under Part 36 should not follow in whole or in part, I concluded that for the period since 21 August 2013 I should award indemnity costs, by reference to Part 36, in favour of the Defendant, and I also, in terms to which I have referred in paragraph 8 above, awarded indemnity costs in respect of 35% of the costs of the Defendant from 1 January to 20 August 2013, but otherwise costs on the standard basis.  
65.	On 1 October 2014 I dealt with the matters which had been adjourned on the earlier occasion: further fresh counsel, Mr Wolfson QC, was now instructed for the Claimants.  There were three issues.  The first related to the applicability of the statutory interest (under the 1998 Act) on the debt claim, to which I have referred above; the second related to interest on the damages; and the third to the rate of interest on the debt, damages and costs.  In respect of the statutory interest on the debt, that led to an interest rate of 8.5% which, after argument, I awarded in respect of the entire period until it was increased by virtue of the impact of Part 36 as from 21 August 2013 to 10.5% from then onwards.  As for the damages, there was some argument about the appropriateness of 4% over US prime rate, which in the event I concluded was appropriate, amounting to a rate of 7.5% with regard to the period prior to 21 August 2013, and the Part 36 rate of 10.5% thereafter.  The interest on the costs followed the same course, namely, 7.5% prior to 20 August 2013 (paragraph 8 of my Order) and 10.5% thereafter pursuant, to CPR Rule 36.14(3)(c). 
66.	In their proposed Amended Particulars of Claim, the Claimants bring forward a new case, which is expressly clarified by paragraph 75, namely “whether or not Mr Stein’s dishonesty is sufficient to justify setting aside the judgment itself, the interest award stands as a distinct award induced by fraud which should be set aside even if the claimed bonus award is not.”
67.	Mr Rubin’s submissions were helpfully addressed separately as between the interest on the judgment and the interest on the costs, and both are centred upon my judgment and Order of 1 October 2014.  There has been no appeal against, nor is there any challenge even in the amended pleadings to, my judgment and Order of 16 April 2014.  Consequently my conclusions with regard to the Part 36 offer and to the appropriateness of indemnity costs by virtue of the Claimants’ conduct stand unchallenged.  Although in written submissions subsequent to the hearing Mr Rubin for the first time referred to CPR 36, by reference to a decision of Briggs J in Lilleyman v Lilleyman (No.2) [2012] 1 WLR 2801, though without referring to a subsequent decision of Briggs J in Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch), to which Mr Oudkerk subsequently referred me, I am satisfied that there is neither a pleaded nor arguable basis for my revisiting my decision on the impact of the Part 36 consequences as to indemnity costs, and as to the increased rate for interest on debt, damages and costs.  In any event Mr Oudkerk referred me to the words of Briggs J in Smith at paragraph 13(d) when he said that “the court does not have an unfettered discretion to depart from the ordinary costs consequences set out in Part 36.14.  The burden on a claimant who has failed to beat the defendant’s Part 36 offer to show injustice is a formidable obstacle to the obtaining of a different costs order.  If that were not so, then the salutary purpose of the Part 36, in promoting compromise on the avoidance of unnecessary expenditure of costs and court time, would be undermined.”
68.	I turn first to deal with the interest on the judgment sums. 
69.	This arises in the way I describe in my judgment of 1 October 2014, namely as follows.  As previously, I shall change the nomenclature to reflect the present position: 
“12. The greater argument that was put forward before me related to the fact that [the Defendant] gave evidence in the course of the hearing that he had reached an agreement, when he went independent, effectively, as a consultant, that he would account to Aurdeley Enterprises Limited 60/40 in their favour in respect of any success fees that he earned.  And when he was [paid] the 4 million, which was the only time during the course of this relevant dispute that the [Claimants] paid him anything, he did in fact account to Aurdeley Enterprises as to 100 per cent of that sum.
13. He gave evidence by the end of the trial that he regarded himself as obliged to pay Aurdeley, although not under any contractual obligation to do so.  Perfectly understandably, Mr Wolfson raised, through Mr Shiu's witness statement, the question as to whether the fact that the [Defendant] had said at the outset that he had a contractual obligation to pay to Aurdeley 60 per cent of any success fee affected his entitlement to interest.
14. A number of authorities were looked at, but effectively, the nub of Mr Wolfson's argument was that, whereas he would have perhaps argued that, if the interest was payable to Aurdeley Enterprises, it might perhaps have been at a different rate by virtue perhaps of some greater borrowing power on the part of Aurdeley, that was not an argument he pursued.
15. But what might be the case would be if there was an obligation to pay Aurdeley Enterprises the capital but not to pay any interest.  That would have led to a windfall by Mr Stein, and Mr Wolfson submitted that the [Defendant] should in those circumstances only become entitled to 40 per cent of the sum otherwise recoverable against his client.
16. Mr Oudkerk QC took a strong position in relation to this.  First of all, he said this was simply a continuation of a failed argument at the hearing, indeed only at the end of the hearing, and in the Court of Appeal, which rejected it, that Aurdeley Enterprises, rather than the [Defendant], ought to have been making the claim.
17. Mr Wolfson made plain that that was not the case, and I accept that it is not the case, by virtue of his submission, to which I have referred, that he accepted that if in fact there was the contractual obligation to Aurdeley, he would not be pursuing this argument.
18. His argument depended upon there being a contractual obligation to Aurdeley, but not a contractual obligation to pay the interest.
19. Mr Oudkerk's second submission was that this was nihil ad rem as between the [Defendant] and the [Claimants], and just as the Court is not interested in how in fact a judgment creditor has financed himself, whether he had had to borrow money or not, whether he had had the funds or not, but, nevertheless, the appropriate rate of interest was judged on the basis of how he could have borrowed, so here it was not of any interest, and should not be of any interest to the [Claimants], whatever his arrangement was with Aurdeley.
20. The latter argument by Mr Oudkerk is an interesting one, and I raised in the course of argument what the position would be if a claimant had, and it was known that he had had, an interest-free loan which he then was in a position to repay out of judgment proceeds.  Would such a person be prevented from recovering against a defendant interest which he in fact had no obligation to pay to the person who had put him in funds?
21. It seems to me Mr Oudkerk had a powerful case that that would indeed be nihil ad rem, but, not least because this was a point that effectively only came up in the course of argument, he had no authorities at his hand to deal with the point.
22. It seemed to me that the sensible course, given that the [Defendant] himself was at court, that this should be put beyond doubt by a witness statement from him.  And it has been put beyond doubt, namely that he is under an obligation to pay to Aurdeley Enterprises, after receiving credit for the $4 million which he has already paid over to them in full, 60 per cent of the net proceeds and including 60 per cent of the interest.  In those circumstances, the point falls away.  I conclude that it is appropriate to award the interest at 4 per cent over prime rate on the full amount of the damages.”
70.	The Defendant’s witness statement to which I make reference in paragraph 22 was his fifth witness statement.  The authorities to whose absence I referred in paragraph 21 have now been provided by Mr Oudkerk for argument on this application, and, as will be seen, they do indeed support his proposition, namely Fattal v Walbrook Trustees (Jersey) Ltd [2009] 4 Costs LR 591 and Simcoe v Jacuzzi UK Group Plc [2012] 1WLR 2393. 
71.	Mr Rubin runs effectively in tandem two assaults on the Order for interest, based upon the Defendant’s evidence as to the 60/40 split with Aurdeley: 
(i)	He says that, in the light of subsequent disclosure, the Defendant’s fifth statement cannot be relied upon.  The documents in question are, as the Defendant himself made clear in his fifth statement, post-judgment – and indeed they post date the April hearing when, but, for the adjournment at the request of the Claimants, all matters of interest would have been decided.  They are the Cooperation Agreement between the Defendant and Aurdeley dated 6 August 2014, which is specified as having a commencement date of 1 July 2004 and is thus plainly intended to be retrospective and declaratory, and the Declaration of Trust, made on 26 June 2014, which apportions the judgment sums including interest as between the Defendant and Aurdeley (and another beneficiary), as referred to in paragraph 34 above.  With regard to the Cooperation Agreement, Mr Rubin challenges whether it provides that what the Defendant receives, including interest, must be paid to Aurdeley.  With regard to the Declaration of Trust, although the Claimants are unable to challenge the fact that Counsel in Wilberforce Chambers was instructed in June to settle the draft, and that the settled draft was sent out by the Defendant’s solicitors to the Defendant on 26 June for signature, he casts doubt by raising the questions set out in paragraph 34 above.  I shall return to these agreements.  Criticism is made in the proposed Amended Particulars of Claim at paragraph 73.1 that “the ‘binding obligation’ to pay sums including interest to Aurdeley was only purportedly entered into after the Judgment was handed down and cannot properly form the basis of a claim for interest”.  This is an argument that cannot be run, as the fact that the agreement/obligation was after the judgment was (as set out above) made expressly clear in the fifth witness statement, and no point was taken.   
(ii)	This cannot however be disentangled from his primary case that the Defendant is the beneficial owner of Aurdeley.  Hence the Defendant and Aurdeley are one and the same, and no material reliance should be placed on the documentation as between the two of them – though paying due regard to the principle of corporate identity.  The case made in the proposed Amended Particulars of Claim at paragraph 69 is that by the fifth witness statement he “continued to maintain his earlier (false) evidence that he had an arms length relationship with Aurdeley”.  
72.	Before I consider the impact of those arguments, I must address the following:  
(i)	The arguments cannot relate to the statutory interest of 8.5% under the 1998 Act, which is mandatory, subject to certain discretionary factors which I considered in my judgment on 1 October and do not fall for reconsideration, even on the Claimants’ case.  Similarly it does not apply to the period subsequent to 21 August 2013 in respect of debt or damages, pursuant to the principles of CPR 36.14, which are in no way in play, as I have discussed above, even by reference to Lilleyman and Smith, and even if otherwise pleaded and arguable: whether the Defendant did or did not have a 60/40 arrangement with Aurdeley cannot possibly have been a circumstance making it unjust to make the ordinary order as to the consequences of an egregious failure to comply with CPR 36.14. 
(ii)	The authorities of Fattal and Simcoe are of some significance, and do seem to support the provisional view which I had formed at the October hearing as set out in paragraph 69 above (my paragraph 21).  They both address specifically interest on costs, and are thus directly applicable to that argument, with which I shall deal below, but they are of relevance in relation to the position where a successful party is liable to reimburse, and/or has been supported by, a third party. On the assumption that there was no obligation on the Defendant to account for interest to Aurdeley the dicta would appear relevant:
a)	In Fattal per Christopher Clarke J:
“29. At the same time, the circumstances in which in practice the just order is that no interest shall accrue on the costs from any date are likely to be highly exceptional. It may be that that was what Master O'Hare meant when he said that the court should not exercise its discretion readily, but only in exceptional circumstances.
30. Since the payment of solicitors' costs involves the payment of money which could otherwise have been profitably employed, the overwhelming likelihood is that justice requires some recompense to be made in the form of interest. If the receiving party has financed the costs from his own money or from money that he has borrowed at interest, the case for his receiving interest on his costs, at least from some date, is likely to be overwhelming. The position might be different if the finance had been advanced entirely voluntarily, interest free, from a sympathetic relative or institution, as Akenhead J contemplated in Fosse Motor Engineers Limited v Conde Nast and National Magazine Distributors Limited [2008] EWHC 2527 QB, or conceivably from a lender which mistakenly failed to call for interest. In some cases it may be necessary to examine the underlying financial arrangements. 
31. Does the fact that in the present case it is BS 2000 which has financed the costs make any difference? In my judgment, it does not. The trustees had to finance the payment of the costs. It no doubt made sense for BS 2000, a company which was owned by the trustees as an asset of the trusts, to advance the necessary funds without interest. The effect of BS 2000 making that advance was to deprive it of the use of that money. As a result, the trusts have been deprived of the benefit which they would have received indirectly from the use of the money. In effect, they have, through BS 2000, borne ultimately and indirectly the expense of the litigation. The interest received by the trustees will enure to the benefit of the trusts. It represents compensation to the trust estate for a company owned by the trust being unable to use the money in question.
32. Mr Ullstein submitted that such an approach ignored the distinction between the assets of BS 2000 and the assets of the Trusts. . .
33. Further, as he submits, what BS 2000 would have done with the monies which it was prepared to lend without interest if it had not made the loan is quite uncertain. There is no indication that, if the costs had not been financed by BS 2000, any monies would have come into the hands of the trustees from interest earned on the amount expended on the costs. The supposed loss is illusory and unestablished.
34. I regard this approach as losing touch with commercial reality and substantial justice. It is idle to suppose that the £275,000-odd advanced would not have been used to earn a return if not used to pay costs, and unrealistic to suppose that the fact that a company wholly owned by trustees for the benefit of the trusts was deprived of the use of that money represents no loss to the trusts, even if the loss be indirect and through the trusts' wholly owned company.
35. In addition, it seems to me that the Master was entitled to look at the position of the defendants, who included BS 2000 which had advanced the monies, collectively. Between them they were out of pocket and the payment of interest to the trustees was a proper means of compensating them. The position was not that a benevolent third party with no personal interest in the dispute had advanced the funds.”

b)	In Simcoe per Lord Neuberger MR:
“47. We were referred to Fattal v Walbrook Trustees (Jersey) Ltd [2009] 4 Costs LR 591, paras 25-30 in which Christopher Clarke J held, in summary terms, that the effect of CPR r 40.8 was that (a) the general rule is that interest on costs runs from the incipitur date, (b) a departure from that general rule is justified if it is “what justice requires”; (c) the notion that a departure can only be justified in “exceptional” cases is an unhelpful guide; (d) the primary purpose of an award of interest is “ to compensate the recipient for [having] been precluded from obtaining a return on [his] money”; (e) “[s]ince the payment of solicitors’ costs involves the payment of money which could otherwise have been profitably employed, the overwhelming likelihood is that justice requires some recompense… in the form of interest”. 
48. I agree with all those observations, but would add two precautionary comments on his observations. First, I would discourage too detailed an approach into the facts of the particular case in hand for the purpose of determining the date from which interest should run. As Lord Ackner’s speech in the Hunt case [1990] I AC 298 implies, when making such a determination, the court should take a broad view of the position. Prolonged argument, let alone detailed evidence, on the issue must be avoided. There will often be no perfect date, and the decision inevitably will, indeed should, be broad bush. Further, if interest was to run from different dates on different components of the costs, it would, in many cases lead to arguments which would do the legal system no credit. The second observation is that I would not necessarily agree with the suggestion [2009] 4 Costs LR 591, para 30 that it may be inappropriate to award interest on costs where the case is being funded by a third party entirely voluntarily or otherwise free of any cost. I would have thought that, following the logic of reason (v) in para II above (and see para 46 above), if interest on costs is payable from the incipitur date, the party to whom it is paid may have to account for it to the third party, and if that is correct, there would seem to me to be a powerful argument for saying that the third party should get interest on costs in the normal way ”. 
There was thus obviously ground, even without the Cooperation Agreement (and/or the Declaration of Trust) to regard the interest as payable by the Claimants as judgment debtors, as in accordance with “commercial reality and substantial justice”, and to regard the Defendant and Aurdeley as “between them out of pocket”.  
73.	I address first the proposition that the Defendant is in fact the owner of Aurdeley, which, it must be emphasised, is of course the Claimants’ main case, as discussed above.  I have found this to be arguable, though dismissing it as a ground for setting aside my judgment of 16 April, for the reasons I have given: it is also the backcloth to the doubts which the Claimants express as to whether the Declaration of Trust was signed in June, or whether it was backdated, perhaps after the October hearing.  The suggestion therefore is that the Defendant is in fact free to dispose of his assets as between himself and Aurdeley as he wishes.  If that is so, then the argument for the Claimants on this point falls away completely.  There was no reason why he should not have interest on the sums he has received because he has chosen to deal with them in a certain way as between himself and Aurdeley, and any lies he may have told do not constitute ground for punishment by denying him interest on his award: or more accurately interest on that part of the award as has not in any event been dealt with by virtue of the statutory interest on the debt and the penal interest on the costs under CPR 36.14, to which alone the Claimants’ challenge can relate. 
74.	If on the other hand Aurdeley does not belong to him, but he has made the arrangement with Mr Zakharov described above, then it seems to me that the matter is fully resolved by the Cooperation Agreement, quite irrespective of the Declaration of Trust.  Given that, as between them, he is in my judgment obliged to account to Aurdeley for their share of the sums received, the provisions of clause 7.3 are apt to cover both principal and interest received:
“In order to further the progress of each Project, Mr Stein is permitted to be employed by the Client or engage as a consultant or member of the board provided that Mr. Stein accounts to Aurdeley for any funds received in compensation for such employment or consultation (excluding reimbursement of personal expenses) as part of the fees received from the Client pursuant to clause 5.5(b)”
75.	Because it forms an important part of the Claimants’ case that the Defendant is the beneficial owner of Aurdeley, they understandably continue to rely on the unanswered questions to which I refer in paragraph 34 above about the Declaration of Trust.  However, even in the absence of the Declaration of Trust, the Cooperation Agreement remains, and there is in any event the powerful effect of the two authorities to which I have referred, which suggest that, even without an obligation to account to a related funder for interest, interest would still be payable to the judgment creditor.  Without the Cooperation Agreement, and certainly prior to its execution, the Defendant would either have been liable to account to Aurdeley or, if he did so voluntarily, would or could have done so with or without interest, without impact upon the question as to whether the Claimants were liable to pay interest to him.    
76.	The Claimants put their case in this regard as follows in the Amended Particulars of Claim: 
“73.4	There was no evidence apart from Mr Stein’s that there was any genuine obligation to pay interest over to Aurdeley.  Hence, the Fifth Witness statement was not a proper basis for making the award of interest.  The court could not have been satisfied that any obligation to pay the principal sum to Aurdeley also carried with it an obligation to pay over interest also.
74.	If Burton J had known that what Mr Stein had said at the trial about Aurdeley was knowingly false he would not (or may not) have accepted the Fifth Witness Statement and in any event would not have made the award of interest.  The award of interest was thus procured by fraud.  Or Burton J would not have awarded interest to Mr Stein at the rate he did or would not have awarded interest on the Judgment sum in full.”
This puts the case firmly on the basis of the false account about Aurdeley and asserts that he was the beneficial owner of Aurdeley.  I do not conclude that if I had known that, and, as I have determined, had still given judgment for the Defendant, it would have had any impact upon the order for interest (or the balance of it not covered by the 1998 Act or CPR 36.14).  I do not therefore conclude that there is an arguable case, nor one with any realistic prospect of success, for the order for interest on the judgment sum to be set aside either in whole or in part.  
77.	However there is a further ground which, even if I had not come to that conclusion, would have been fatal to this application, and once again it relates to the fundamental requirement for fresh evidence for an application such as this.  By the time of my judgment and Order of 1 October 2014, the Claimants had already made their application in Cyprus and obtained their order of 22 July, although it would appear, given that Ms Raouna’s affidavit was not sworn until 3 October 2014, that they had not actually received any documents.  However even without those documents it is plain that they had sufficient information to be able to set out their case to the Nicosia Court on 18 July 2014 under the heading “the ownership of Aurdeley”.  Insofar as it was relevant in the consideration of whether interest should be paid to the Defendant by the Claimants that there was a contractual obligation between the Defendant and Aurdeley, at least the matters then known to the Claimants, which of course in accordance with my finding in relation to the main judgment could have been obtained by reasonable diligence long before, could and should have been brought to my attention on 1 October, but the Claimants ‘elected’ to rely on a case that Aurdeley was an independent third party (not owed interest), just as it had done in pursuing their case to the Court of Appeal.  
78.	I turn finally to the question of interest on costs, which is a self-contained point.  The Defendant stated in evidence, as set out in paragraph 28(v) above, that he had had to spend his life savings on the litigation.  He said this again in his third witness statement made on 16 May 2014: 
“29. Whereas the First to Third [Claimants] have unlimited resources, I have been forced to use my life savings to fund my living expenses and the substantial litigation costs of pursuing the claim. . . 
31.2 As a result of funding the litigation from my savings, I have been deprived of the interest which I would have been entitled to on those sums had I held them in a personal savings account where they would have accrued interest on a compound basis.”
79.	This was, it seems, false unless he is or was accepting that Aurdeley was his company, since so far as the Defendant’s legal costs are concerned they have throughout been paid by Aurdeley, as he asserts by virtue of an (unwritten) loan agreement, at rates of interest increasing from 8% to 10%.  The funding by Aurdeley of the legal fees was disclosed as a result of the Abacus order, and is consequently also in the category described in paragraph 49 above.  
80.	The Claimants seek by their amended pleading to set aside my judgment and Order of 1 October 2014 in relation to interest on costs as obtained by fraud: again it could not apply to the penal interest rate imposed on the costs since 21 August 2013 under CPR 36.14.  
81.	The Defendant’s lie, as such it appears to have been, was obviously an affront to the Court, particularly when repeated.  However there are two factors which lead me to conclude that it was not a false statement which had any operative effect on the Order I made, such that there is no arguable case to set it aside: 
(i)	Mr Wolfson QC specifically addressed the Defendant’s statements in this regard in his submissions on 1 October, when he referred to the assertion by the Defendant that he had used his savings to fund the litigation, and his express case was that such was irrelevant, and that he apprehended I was not going to take that into account.  It is plain, since there is no mention of the point thereafter by counsel and certainly none by me in my judgment, that I did indeed, as is most likely, treat it as irrelevant, such that my judgment and Order were not put forward on that basis, nor influenced or caused by it.  
(ii)	I refer to Fattal  and Simcoe.  Had I known that the Defendant’s fees were paid by Aurdeley, I would most likely have followed that guidance, particularly that of the Court of Appeal, and ignored the fact that, particularly in these circumstances of the litigant in person facing substantially funded opponents, he was using Aurdeley as his funder, and insofar as the interest was not covered by my order under CPR 36.14 I would most likely have taken the ordinary course, and not followed the “exceptional” course of disallowing interest on the costs.  
82.	I do not accordingly conclude that the Claimants have an arguable case, nor one with any realistic prospect of success, to set aside my Order of 1 October 2014.    
Conclusions
83.	In the circumstances I grant the Defendant’s application to strike out and dismiss the Claimants’ claim, and, having considered the proposed Amended Particulars of Claim and the additional documents which the Claimants apply to rely on, consider that they make no difference to the Claimants’ case, and cannot ‘save’ it, so that such applications are dismissed.  
Postscript
84.	After I had written this judgment, and minutes before my clerk was to send an email to the parties distributing it, a note was received from counsel for the Claimants drawing my attention to a judgment of Newey J handed down on 6 May 2015 Takhar v Gracefield Developments Ltd [2015] EWHC 1276 (Ch), whereby he concluded that, in a fresh action to set aside an earlier judgment between the same parties as obtained by fraud, the Reasonable Diligence requirement did not have to be satisfied, contrary to my own conclusion set out in paragraphs 14 to 20 above.  I have not altered my judgment in the light of Newey J’s judgment for two reasons: 
(i)	I respectfully disagree with Newey J’s decision, by which of course I am not bound.  I have set out my reasons for my conclusion in paragraphs 14 to 20 above.  Although I was not referred to the two other Commonwealth decisions, to which Newey J was referred (paragraphs 33 and 34 of his judgment), I specifically addressed the point which plainly weighed with him, drawn from the views of Handley JA both judicially and as Editor of Spencer Bower & Handley.  I note that Newey J was not referred to Hunter, the House of Lords decision (paragraph 16 above) which I consider binding upon me, and which Newey J might well have also concluded to bind him; and although Newey J concluded that the unanimous opinion, after full argument, of the Law Lords and the Court of Appeal in Owens Bank Ltd v Bracco did not bind him, and although he was referred to, but did not follow, the views of Dicey, Morris & Collins, he was also not referred to the consistent views of Langley J in Sphere Drake and David Steel J in KAC v IAC (paragraphs 18 and 19 above); had he been, he would not have thought, as he plainly did (paragraph 39 of his judgment), that Norris J in Re Surety Guarantee Consultants Ltd  stood alone.  Paragraph 62 of my judgment above is a very good example of why the Reasonable Diligence requirement is necessary, to preserve the salutary concept of sit finis litium.
(ii)	In any event I reached my conclusions in this judgment independently of the Reasonable Diligence requirement, which is certainly not decisive of those conclusions (paragraphs 42-44, 46-48, 60-61, 72-76 and 81 above).  
85.	I accordingly, with the benefit of overnight consideration of my draft judgment, stand by it.