Representation of Prospect Capital Security Trustees Limited (Court of Appeal : Appeal (Civil) : Le Cocq : Debt) [2025] JCA 265 (17 October 2025)

Court of Appeal (On Appeal from Royal Court Samedi Division) 17 October 2025 Before : Sir Timothy Le Cocq, Bailiff Between James Renouard Sullivan Appellant And Prospect Capital Security Trustees Limited Respondent

IN THE MATTER OF THE REPRESENTATION OF

PROSPECT CAPITAL SECURITY TRUSTEES LIMITED

AND IN THE MATTER

OF AN APPLICATION FOR ADJUDICATION OF RENUNCIATION Advocate H. B. Mistry for the Appellant. Advocate M. J. Kushner for the Respondent The Viscount in person

JUDGMENT THE BAILIFF: 1. This is an application by James Renouard Sullivan ("the Appellant" or "Debtor") against decision of the Deputy Bailiff of 4 June 2025 ("the Royal Court judgment")(unpublished) and an Acte Vicomte Chargé D'écrire granted on 13 October 2023 ("AVCD"). Prospect Capital Security Trustees Limited ("the Respondent" or "Prospect") is the creditor in this case in respect of which the AVCD was granted. Test for leave to appeal 2. The test for leave to appeal has been set out in a number of cases and was stated in, amongst others, Crociani v BNP Paribas Jersey Trust Corporation Limited [2016] JCA 231 , which established that there are three bases on which a Court would grant leave to appeal to the Court of Appeal. They were: (i) The appeal has a real prospect of success; (ii) A question of general principle falls to be decided for the first time; or (iii) There is an important point of law upon which further argument and a decision of the Court of Appeal would be to the public advantage.

3. Law relating to stays of execution were also put before me, but a stay has been ordered of the dégrèvement proceedings pending the outcome of this leave application. It was not opposed by Prospect and I do not therefore need to consider the matter further. Background 4. It is important to set out to some extent the background of this matter. It is complex and whilst it was, in my view, set out sufficiently in the Royal Court judgment, I will refer to it in some greater detail hereunder, taken, to an extent, from the Skeleton Argument of the Appellant.

5. The background and relevant dates are as follows: (i) 16 July - Prospect agreed to provide the Appellant with a loan facility, (the "Facility") in the capital sum of £3,500,000, together with associated costs (representing an arrangement fee) of £82,474. The agreed interest rate was 10.5% per annum (the "Interest Rate") rolled up for a 15-month term. The Facility was to be used to acquire a house and land in St Lawrence ("the Property"), and pursuant to the terms of the Facility, the sum of £4,123,711 was due to be repaid to Prospect on 16 October 2022. (ii) 16 July 2021 - A promissory note was executed by the Appellant in favour of Prospect. The Promissory Note was secured by way of a specific judicial hypothec over the Property pursuant to an Act of Court dated and registered in the Public Registry on 16 July 2021. (iii) 14 October 2022 - The Appellant subsequently entered into an agreement with Prospect whereby - the repayment date of the Facility was extended to 16 January 2023; the interest rate was increased to a rate of 1.5% per calendar month, accruing daily and now compounded monthly; and a fee (excluding additional legal fees) of £98,969 was payable. The cost to the Appellant of this three-month extension was £291,854. This, it is alleged, equated to an interest rate of 28.3% per annum. (iv) 16 January 2023: The Appellant subsequently entered into another extension

agreement with Prospect whereby - the repayment date of the Facility was extended to 16 March 2023; the interest rate remained at the higher level of 1.5% per calendar month, accruing daily and compounded monthly; and a further fee of £105,974 (excluding additional legal fees) was incurred. The cost to the Appellant was £239,762. This, it is alleged, equated to an interest rate of 33% per annum. (v) 16 March 2023: The Appellant did not repay either the capital sum or interest due pursuant to the Facility Agreement. Prospect thereafter sought to charge penalty interest imposed pursuant to the extension agreements (referred to in previous paragraphs) (1.5% per calendar month) plus interest at a rate of 2% per calendar month. This rate amounted to 3.5% of the Facility per calendar month, accruing daily and compounding monthly. It is alleged that since the expiry of the extension on 16 March 2023, interest has been charged at 65% per annum. (vi) 31 August 2023: Messrs Carey Olsen acting for Prospect wrote to the Appellant requesting the repayment of the sums due by 14 September 2023, and advised that at that date, inclusive of default interest and legal fees, the Appellant owed £5,740,192. The uplift, including interest and charges from the capital sum of £3,500,000 and fees of £282,474 stood at £2,157,718. (vii) 13 October 2023: By ex parte application, the Respondent applied to

the Royal Court and obtained an AVCD and the sum represented as being owed from the Appellant to Prospect on that date was £5,945,461. The AVCD was served by the Viscount's Department on the Appellant on 19 October 2023. (viii) 25 April 2025: Messrs Carey Olsen wrote to the Appellant pursuant to Practice Direction 21/03 ( Dégrèvement Proceedings) advising him that if repayment of £5,945,461 was not made by 7 May 2025, the Respondent would be making an application for renunciation on 8 May 2025 in the Royal Court. (ix) 6 May 2025 - Prospect and the Appellant entered into a draft consent order ("the Draft Consent Order") (which was not ultimately approved by the Court) but which recited purported agreement to appoint Prospect as "tenant après dégrèvement " of the Property, a payment would be made to the Appellant to pay certain secured creditors for various other matters. The terms of the consent order also provided that: (a) That the Property be adjudged renounced; (b) Dégrèvement be authorised in respect of the Property; (c) Those ultimately appointed as attorney to conduct the dégrèvement were so appointed; and (d) The attorney would attend within a specific period to fix a date for the dégrèvement hearing. The Court did not approve this consent order considering it to be a matter in respect of which consent could not be properly be given. The consent order provided in the

preamble that the Respondent had the AVCD reflecting the amount due. (x) 12 May 2025: The Appellant was served with a copy of a Representation. At paragraph 13 of the Representation, it was stated that as at 30 April 2025, the Appellant owed Prospect the sum of £11,416,635. The uplift, including interest and charges from the capital sum of £3,500,000 and fees of £82,474 is claimed to be £7,834,161. (xi) 28 May 2025: The Appellant issues a Summons seeking Royal Court adjudication re interest rates and that the AVCD is void. (xii) 4 June 2025: The Summons is heard and is dismissed. Leave to appeal and an application for a stay of execution pending the determination of an appeal against the Judgement was made by the Appellant and refused by the Court. (xiii) 6 June 2025: The Representation is heard and the orders sought are granted. the Act of Court dated 6 June 2025 is granted, which ordered, inter alia , that the Property be adjudged renounced and Advocate Eleanor Davies and Advocate Mike Kushner be authorised as Attournés to conduct the dégrèvement of the Property. (xiv) 7 July 2025: The hearing of the État dated 19 June 2025 was listed to be heard.

6. I also note by way of background information that: (a) no payment of any capital or interest under the facility agreement had been paid; (b) although the Appellant was not at some points in the past legally represented, it should be noted that he is a non-practising advocate of this Court and accordingly may be taken as a sufficiently sophisticated borrower; (c) the Appellant is therefore taken to have understood the agreements under which the original facility was extended, and the interest that obtained; (d) it is also the case, as referred to in the Royal Court judgment, that during the significant period following the grant of the AVCD, there were negotiations between the Appellant and the Respondent. Those negotiations, as it is apparent, were not fruitful. The Royal Court judgment 7. As indicated above on 4 June 2025, the Royal Court judgment dismissed the Appellant's Summons. In doing so, the learned Deputy Bailiff, sitting alone, rehearsed in general terms the background to this matter and noted that the Summons raised arguments concerning the interest and other charges payable under the relevant Facility Agreement, that they were excessive or unreasonable or usurious, and that accordingly much of the sum claimed by Prospect was unenforceable. It was also argued that the AVCD is void not only because the debt claimed by Prospect was flawed but it was not the subject of a full and frank disclosure.

8. The Deputy Bailiff went on to express the view that the allegation of a want of a full and frank disclosure was likely to fail because the interest rates and other payments were set out in black and white.

9. The Court then went on to say as follows: "9. The difficulty for the Debtor is a procedural one, mentioned not only in an authority filed in the electronic bundle, namely Eves v Hambros Bank (Jesey) Limited [1995] JRC 082 from 1 May 1995, but also the earlier decision in Hambros Bank (Jersey) Ltd v Eves and Eves from October 1994 reported in the Jersey Law Reports for that year at Note 1a in which the Royal Court, Bailhache, Deputy Bailiff presiding said that "the Royal Court does not have the jurisdiction to set aside its own order for an Acte Vicomte chargé d'écrire ", which in substance this Summons seeks. The Note goes on to say that the Court "may stay the dégrèvement proceedings if at that time there is an application pending for leave to appeal to the Judicial Committee of the Privy Council in respect of such debt. The court will stay the dégrèvement provided that no injustice is thereby caused to the creditor, because it is important that there is no risk of injustice being done to the debtor, which could occur if there had been a successful appeal but the dégrèvement had been allowed to continue. This is the case even if the chances of the debtor's application for leave to appeal being successful are remote." 10. Well, there is no appeal or application for leave to appeal before the Court. Subsequently in Eves v Hambros Bank (Jersey) Limited [1995] JRC 082 on 1 May

1995, the Bailiff sitting as a single Judge of the Court of Appeal, traversed similar ground. Mr Eves was seeking leave to appeal against an order of the Royal Court of March 1995 pronouncing the adjudication of the renunciation of his property and the appointment of attournés to conduct a dégrèvement . In that decision the Court appears to have accepted that the adjudication of renunciation of a debtor's property is purely a ministerial act in which the Court has no discretion in deciding which order to make. As a matter of law, therefore, no appeal can generally lie, and then the judgment went on to say that Counsel qualified the proposition in two respects: "First, he conceded that if the underlying debt were flawed in some way then an appeal would lie to set aside the adjudication. Secondly, he conceded that if there was some procedural irregularity leading up to the application for an adjudication of renunciation of the debtor's property, then an appeal would again lie." 11. Reference was then made to Article 3 of the Loi (1832) sur les Décrets . The Bailiff went on to accept those submissions on the second page of the judgment at line 30, and in relation to both the Acte Vicomte chargé d'écrire and the Act of adjudication of renunciation of the property of the debtor, he said both orders were "obtained ex parte without prior notice being required to be given to the

judgment debtor. There are, no doubt, exceptional circumstances which would entitle the Court to intervene where, for example, there had been a procedural irregularity. If, however, the underlying debt is not flawed in some way, a creditor is entitled to take the various procedural steps to proceed to execution without having each step challenged along the way. In this case, the summary judgment in respect of the underlying debt has been the subject of appeal to the Royal Court, to this Court, and to the Judicial Committee of the Privy Council, in each case without success." 10. Finally, in dismissing the Summons, the Court noted that the correct avenue for challenging an AVCD is an application for leave to appeal to the Court of Appeal and that there would need to be special circumstances to justify a stay pending such an appeal. The Appellant's arguments 11. The Appellant wishes to appeal the Royal Court judgment and the AVCD on a number of bases. Essentially, however, leave is sought on the basis that the underlying debt is flawed or there had been a procedural irregularity. The Appellant wishes to argue that the appeal is not, in fact, out of time or asks the Court to extend the time within which an appeal may be brought.

12. Furthermore, the Appellant seeks to argue as indicated above that there was a want of full and frank disclosure in that the Respondent had failed in applications before the Court to highlight the " clearly usurious and unenforceable nature " of the totality of the interest rates and other charges or failing to disclose that a debt was subject to a bona fide dispute.

13. The Appellant also argues that the Royal Court misdirected itself in determining that it did not have a jurisdiction to set aside the AVCD. The Appellant seeks further to argue that the procedure used to obtain the AVCD should be declared incompatible with and an infringement of the Appellant's human rights.

14. I do not set out all of the details of the Appellant's submissions which are lengthy nor, indeed, the authorities cited in support of them. The essential grounds of appeal are, however, as stated above. The Respondent's arguments 15. The Respondent in its submissions rests on the Royal Court judgment and does not seek to cross-appeal. In addressing the tests on leave to appeal, the Respondent argues: (i) There is no real prospect of success as the interest challenge is moot. It is argued that even if the default interest claimed is struck out in its entirety, there remains a claim for in excess of £7 million which is in excess of the value of the property and there would be no surplus following dégrèvement ; (ii) There is no issue to be decided for the first time as the Court of Appeal has already considered human rights implications in relation to dégrèvement ; and (iii) There is no important point of law where the Court of Appeal decision would be to the public advantage in that the Court had already considered whether or not an AVCD can be brought on the basis of a judicial hypothec without the need to obtain a further judgment in Representation of Alfalfa Investment Limited [2020] JRC 055 ("Alfalfa").

16. The Respondent argues amongst other things that it was wrong to say that it failed to disclose a genuine dispute in respect of the sum claimed because although, for example, by email of 12 October 2022 the Appellant had challenged the interest rates proposed by the Respondent, in fact some two days later he entered into the first extension agreement and thereafter the second extension agreement both mentioned above. Furthermore, it is argued, by signing the Draft Consent Order referred to in paragraph 5 (ix) above, the Appellant had acknowledged in clear terms his indebtedness in the sum claimed in the AVCD.

17. The Respondent argues that on any reasonable analysis, the debt significantly exceeds the value of the property on which it is secured.

18. With regard to timings, the Respondent points out that it has received no repayment over the entirety of the loan, and that the AVCD was served on the Appellant on 19 October 2023 and the application for the adjudication of renunciation was served some 623 days later on 2 July 2025. The Respondent further argues that it would be wrong in law to say that a dispute as to part of a debt renders the entire debt void and that the undisputed portion of the debt, so it is argued, is a liquidated sum.

19. The Respondent also refers to the human rights arguments advanced by the Appellant and makes reference to a number of judgments of the Court. In this regard, I make reference only to Re Powell [2018] JCA 113 in which McNeill, QC sitting as a single judge of this Court in respect of an application for leave to appeal said this: "19. As regards the dégrèvement process in this jurisdiction and the suggestion that it was draconian and in breach of Mrs Powell's human rights, Mrs Powell's submissions take no account of the rights of creditors, who are entitled to have processes of law which give protection to their economic interests. In a situation such as the present, it is the availability of the Remise which, as has been indicated, allows to the debtor a different form of disposal of property under the control of the court as opposed to the control of the creditors.

20. For these reasons I consider that the proposed appeal has no prospect of success. Furthermore, given the numerous judicial determinations in this area of law this is not a case where it is manifest that further consideration by the Court of Appeal of its views set out in Super Seconds Limited would be warranted, given, especially, that those views will have been applied in practice on many occasions in the last twenty years." 20. It is perhaps also of interest to note that the property in question has been demolished. It is not someone's home and nobody lives there.

21. In terms of the argument that this Court should review whether or not the case of Alfalfa was correctly decided, the guidance given by the Royal Court in that case, over which I presided, was reflected in a Practice Direction. There is accordingly a Practice Direction that requires adequate notice to be given and adequate information to be furnished to the Court when such an application for an Acte Vicomte Chargé D'écrire on the basis of an acknowledgement of debt is made. It may be that such safeguards can be further enhanced by, for example, the requirement for notice to be given to a debtor of the precise date of an application for the Acte Vicomte Chargé D'écrire and the precise amount to be claimed under it but that will be a matter for the Royal Court.

22. The Respondent further argues that it would have been open to challenge a dégrèvement by means of an application for a remise de biens provided it is done before the property is vested in the tenant après dégrèvement . The Appellant has not sought a remise de biens and, it is argued by the Respondent, the two inferences that may be drawn from this fact are that either the Appellant would not satisfy the requirements for a remise because there is no prospect of a dividend to unsecured creditors or that, for some reason, he wished to cause maximum delay and disruption to the recovery of monies lent to him. Conclusion 23. As I have already indicated, I have not set out all of the arguments put before me.

24. In essence, however: (a) On any analysis of timing the application to challenge a substantial portion of the debt, that set out in the AVCD, has expired; (b) The penalties and / or other charges and interest rates were clearly set out in the various documents and were not challenged in a timely way and were in effect acknowledged by the Appellant; (c) The remedy of dégrèvement when viewed in the overall context of the availability of remise or désastre is not contrary to a debtor's human rights; (d) The fact that the Appellant for whatever reasons has neglected to raise the points, make the challenges or avail himself of other legal remedies in good time does not elevate his arguments to important points of law.

25. In my view the appeal does not have a real prospect of success; there is no question of general principle to be decided for the first time; there is no important point of law upon which further argument and a decision before the Court of Appeal would be to the public advantage and accordingly I reject the application. Authorities Crociani v BNP Paribas Jersey Trust Corporation Limited [2016] JCA 231 . Representation of Alfalfa Investment Limited [2020] JRC 055 . Re Powell [2018] JCA 113 Page Last Updated: 30 Oct 2025 BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII