Ostroumoff (Née Martland)

CourtRoyal Court
JudgeHamon, Deputy Bailiff and Jurats Le Ruez and Bullen:
Judgment Date14 September 1999
Date14 September 1999
Hamon, Deputy Bailiff and Jurats Le Ruez and Bullen:

R. Renouf for the applicant;

A.J.N. Dessain for the Viscount.

Cases cited:

(1) Att. Gen. v. Corbiere Pavilion Hotel Ltd., 1982 J.J. 173.

(2) Att. Gen. v. Howard, 1974 J.J. 105, followed.

(3) Bradshaw v. McCluskey, 1976 J.J. 335.

(4) Bristol & West Bldg. Socy. v. May May & Merrimans (No. 2), [1997] 3 All E.R. 206, considered.

(5) Buckingham v. Constable of St. Helier, 1966 J.J. 679.

(6) Hanley, In re, 1993 JLR N-2, followed.

(7) Jersey Maincrop Potato Mktg. Bd. v. de Gruchy, 1971 J.J. 1819.

(8) Macready v. Amy, 1950 J.J. 11.

(9) New Guar. Trust Fin. Ltd. v. Birbeck, 1980 J.J. 117.

(10) Overseas Ins. Brokers Ltd., Re, 1963 J.J. 325; further proceedings, 1963 J.J. 349; further proceedings, 1966 J.J. 547.

(11) Parry v. Cleaver, [1970] A.C. 1; [1969] 1 All E.R. 555; [1969] 1 Lloyd's Rep. 183; (1969), 113 Sol. Jo. 147.

(12) St. Helier (Constable) v. Baal, 1965 J.J. 503.

(13) Super Seconds Ltd., In re, 1996 JLR 117; further proceedings, sub nom. Santer, In re, 1996 JLR 233; on appeal, sub nom. Super Seconds Ltd. v. Sparta Invs. Ltd., 1997 JLR 112.

(14) Woolwich Bldg. Socy. v. Brown, [1996] CLC 625.

Additional case cited by counsel:

Hunt v. Severs, [1994] 2 A.C. 350.

Legislation construed:

Bankruptcy (Désastre) (Jersey) Law 1990, art. 12: The relevant terms of this article are set out at page 241, line 30 - page 242, line 28.

Texts cited:

Bennion, Statutory Interpretation, 1st ed., at 259 (1984).

Berry & Bailey, Bankruptcy: Law and Practice, para. 22.12, at 308 (1987).

Bankruptcy—désastre—matrimonial home—application by debtor's spouse—Bankruptcy (Désastre) (Jersey) Law 1990, art. 12 not applicable to jointly-owned home where both spouses en désastre—purpose to protect non-involved spouse and strike balance between her interest and proper demands of creditors

The applicant applied under the Bankruptcy (Désastre) (Jersey) Law 1990, art. 12 to continue in possession of her matrimonial home until her children had finished secondary education.

The applicant and her husband had had their property declared en désastre with claims against them both jointly and individually. Their home was jointly owned and was the subject of both their désastres. It was to be repossessed by their mortgagor and in an attempt to prevent this happening the applicant made the present application under art. 12.

The applicant submitted that she was the "spouse of a debtor" within the meaning of the Bankruptcy Law and that it could not have been the intention of the legislature to preclude her from relief because she was herself a debtor. She submitted that it was unnecessary to look beyond the actual words of the statute.

The Viscount submitted that as a matter of correct statutory interpretation, the applicant was not and should not be treated as the "spouse of a debtor" because she was herself a debtor; art. 12 was intended to protect a spouse from the effects of the bankruptcy of the other spouse and that this consideration did not apply when both spouses were bankrupt.

Held, refusing the application:

Article 12 of the Bankruptcy (Désastre) (Jersey) Law 1990 could not be applicable where there was co-ownership of the matrimonial home and both spouses were en désastre. A literal interpretation of art. 12 would allow the wife to apply as the "spouse of a debtor," which would be an absurdity since, if the application were granted, the wife's assets in her own désastre would be frozen. Looking therefore at the intention of the legislature, it could not have been intended to give more protection to joint owners of property who were en désastre than to a single owner. Rather, the intention must have been simply to protect a non-involved spouse and to strike a balance between her interest (which may also be the interest of the children) and the proper demands of creditors to receive satisfaction for their claims. The applicant should therefore be treated under art. 12 as a debtor, not as the "spouse of a debtor," and she would not be entitled to continued possession of the matrimonial home (page 243, line 39 - page 244, line 9; page 248, lines 25-43).

HAMON, DEPUTY BAILIFF: On March 12th, 1998, this court declared the property of Paul Charles Henry Ostroumoff and Angela Mary Ostroumoff (née Martland), his wife, en désastre on the application of Bristol & West PLC.

On September 15th, 1997, Bristol & West PLC obtained a judgment in the capital sum of £625,709.72. Interest is accruing. The debt arose from a mortgage secured by a judicial hypothec on Mr. and Mrs. Ostroumoff's property, Pont du Val Farm, St. Brelade, Jersey. The mortgage was obtained on February 28th, 1992, in the capital sum of £375,000.

In the désastre there are claims against Mr. and Mrs. Ostroumoff jointly of £808,630.40, against Mr. Ostroumoff only of £228,725.91 and claims against Mrs. Ostroumoff only of £240,306.54.

The progress of this matter has been somewhat tortuous. The affidavit of Lynda Jane Allo (neé Crosly), the Senior Administrator, Désastre Section, sets out the progress of the matter in this way:

"On May 22nd, 1998 the applicants' present representation was presented to the Royal Court. On June 17th, July 22nd and October 28th, 1998 the Viscount's advocates requested documents and authorities to be supplied. November 24th, 1998 was fixed for the hearing of the matter. The applicants requested an adjournment as their advocate, Advocate Hoy, was due to undergo an operation. By fax of November 19th, 1998 Michael Voisin & Co. confirmed they were instructed to proceed with the application and 'can confirm that we shall provide you with all material to be placed before the court at least 21 clear working days before the adjourned date.'

On the above basis, the November 24th, 1998 hearing date was vacated and subsequently February 8th, 1999 was fixed for a hearing. January 18th, 1999 was the last date to give 21 clear days prior to the adjourned hearing. By letter of January 26th, 1999 Advocate Preston indicated he would be conducting the case on behalf of the applicants on February 8th, 1999.

On February 1st, 1999 part of the court bundle for the applicants was delivered to the Viscount's advocates. On February 2nd, 1999 Mr. Ostroumoff's affidavit sworn on February 1st, 1999 was delivered to the Viscount's advocates. By letter of February 2nd, 1999 Advocate Preston indicated there was a conflict of interest between Mr. and Mrs. Ostroumoff and Mrs. Ostroumoff was seeking alternative representation. The major creditor, Bristol & West, wished the Viscount to resist an adjournment. By consent on February 8th, 1999 the court ordered an adjournment to May 4th, 1999.

At the hearing on February 8th, 1999 the court heard that Mr. and Mrs. Ostroumoff had not been fully co-operative with the Viscount's requests for information and documents. Mr. Ostroumoff was present in court but Mrs. Ostroumoff was not. The learned Deputy Bailiff asked what procedure would follow if there was a refusal to co-operate and was informed that ultimately it could result in a contempt of court. The court made the consent order and indicated that it would regard these matters with some anxiety should progress not have been made by May 4th, 1999.

By a letter dated February 9th, 1999 the Viscount's advocates wrote to Advocate Renouf, who was acting for Mrs. Ostroumoff, to record the above. On April 23rd, 1999 (five clear working days prior to the hearing) Advocate Renouf wrote to the Viscount's advocates requesting a stay of Mrs. Ostroumoff's application and indicated an intention to bring proceedings to challenge the secured claim of Bristol & West and National Westminster Bank. On May 4th, 1999 the Royal Court adjourned, sine die, this application pursuant to art. 12 to enable the applicant to issue certain proceedings. On May 4th, 1999 Mr. Ostroumoff (en désastre), the husband of the applicant, withdrew his application under art. 12.

The applicant has not issued the proposed proceedings and Advocate Richard Renouf, by letter dated June 2nd, 1999 on her behalf, has confirmed that 'I am writing to inform you that advice has now been received from counsel and as a result I am awaiting further information from Mrs. Ostroumoff. However, I have to say that it would appear unlikely that proceedings will be commenced to set aside the Bristol & West charge.' In any event the timetable set by the Royal Court on May 4th, 1999 has not been kept. On May 4th, 1999 the Royal Court ordered the applicant and Mr. Ostroumoff to reply to questions and provide documentation that have been or may be asked of them by the Viscount. Certain questions and documentation remain outstanding but these matters are not the subject of any application to this court on September 1st, 1999.

These matters may well come before this court on a future occasion.

September 1st and 2nd, 1999 were fixed for the hearing of the applicant's application pursuant to art. 12."

This, then, is the application by Mrs. Ostroumoff ("the applicant") under art. 12 of the Bankruptcy (Désastre) (Jersey) Law 1990. Article 12 reads as follows:

"Special provisions regarding matrimonial home (1) Where any property vesting in the Viscount pursuant to paragraph (1) of Article 8 or paragraph (3) of Article 9 represents the matrimonial home or an interest in part thereof the spouse of the debtor may, within three months of the date of the declaration, apply to the court for such order as is referred to in paragraph (5) as the court thinks fit.

(2) Application may be made under paragraph (1) notwithstanding any agreement made to the contrary.

(3) The power to sell property conferred on the Viscount by Article 27 shall not be exercised in respect of property referred to in paragraph (1) until a period of more than three months has elapsed from the date of the declaration.

(4) Paragraph (1) shall apply...

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