ANCILLARY RELIEF AND THIRD PARTY INTERESTS:
A PRACTICAL GUIDE
Copyright
Fiona Gibb. May 2004-All rights
reserved.
No part of this document may
be copied or used without the written permission
of the author.
|
3.1.2 3.1.2
Serve the person responsible for the pension
arrangement with Form A as required by Rule 2.70(6)
(see annex 4). Very often this is forgotten
and should be as second nature as serving
mortgagees.
3.1.3
3.1.3
If applying for pension attachment (not common) FDA
should be adjourned if person responsible for
pension arrangement has not been served. This is
because they are entitled to be represented at the
FDA (pursuant to Rule 2.70(10),
see annex 4).
This would also apply if Form A did not specify that
Victoria
was seeking an order under Section 24B (pension
sharing) as opposed to 25B or 25C (pension
attachment) of the Act of 1973. Frequently the box
is just ticked claiming pension sharing and
attachment orders, and the terms of the actual order
sought are not specified.
3.2
Endowment Policies
3.2.1
The third party interest which may need some
peripheral consideration in relation to endowment
policies is that of the mortgage company if the
policies secure the mortgage.
3.2.2 3.2.2
If there is little capital apart from the fmh and
the policy, you may want to suggest David takes the
policy and
Victoria keeps the home. In such a situation it is
important to be able to tell the Court what the
consequences would be, so make enquiries of the
mortgagees to see if they will release the policies
and what the effect will be on Victoria’s mortgage
repayments. Try to obtain written confirmation of
this.
4 DISPOSITIONS MADE TO THIRD PARTIES
4.1
4.1
Victoria
discovers that David has transferred his flat in
Knightsbridge to his girlfriend Rebecca. It is far
more valuable than the fmh and she wants something
done about it. Reassure her that section 37(2)(b) of
the Matrimonial Causes Act 1973 will come to her
rescue if David has disposed of the flat with the
intention of defeating her claim for ancillary
relief.
4.2
4.2
If proceedings have not yet been issued then include
details of the property on Form A, and in paragraph
5.4 of Form E. Serve copies of Forms A and E on
Rebecca pursuant to Rule 2.59(3)
(annex 1) and
inform the Court that she has been served pursuant
to Rule 2.61B(9)
4.3
4.3
If proceedings have already been commenced seek
leave to amend Forms A and E, and a direction for
service on Rebecca
4.4 4.4
Rebecca can put in a statement in answer, setting
out, if appropriate, her claim to have provided
valuable consideration for the flat
4.5
4.5
There is likely to have to be a trial of the issue,
which should be heard if possible at the same time
as the application for ancillary relief, but first
in time.
4.6
4.6
If the disposition to Rebecca has the effect of
defeating
Victoria’s application and was made less than 3
years before Victoria’s application, it will be
presumed to have been intended to defeat her claim.
5
5
THIRD PARTY INTERESTS AND VARIATION OF SETTLEMENTS
5.1
5.1
Victoria
tells you that the money to purchase the fmh came
from a trust set up by David’s parents after David
and
Victoria’s
marriage, under which she, David and the children
are the beneficiaries. The office copy entries
reveal that the trustees are on the title deeds.
David has no other assets out of which to satisfy
Victoria’s claim. You can remember reading something
in Rayden about post-nuptial settlements.
5.2 5.2
Obtain a copy of the deed of trust so that you can
satisfy yourself that it is a post-nuptial
settlement, and so that you can see if there are any
other beneficiaries.
5.3
5.3
Identify in Form A that you are seeking an order for
a variation of a post-nuptial settlement, and
complete paragraph 5.3 of Form E as fully as
possible. This requires you to identify the
settlement, to set out by whom it was made, who its
trustees and beneficiaries are, and why you allege
it is a post-nuptial settlement.
5.4
5.4
Serve copies of Forms A and E on the trustees of the
settlement and the settlor if still living, pursuant
to Rule 2.59(3)(a) (see
annex 1)
5.5
5.5
At the FDA the District Judge will have to give
directions for the children (as beneficiaries) to be
separately represented, and is likely to appoint the
Official Solicitor to do this, pursuant to Rule 2.57
(see annex 5)
6
6
THIRD PARTIES WHO ARE CREDITORS
6.1 6.1
Victoria
like most clients tells you that she has credit card
debts totalling many thousands of pounds and a bank
loan for another £10,000. She says that the loan and
the credit card debts are really family debts even
though they are in her sole name. She is receiving
letters from the bank and the companies asking for
her proposals to re-pay as she has not been able to
make the required monthly payments. She also owes
her mother money as she has lent her some to pay her
legal costs. She wants to know what will happen to
these debts.
6.2
6.2
It is very important that
Victoria is under no illusions as to the court’s
powers with regard to debts owed to third parties.
Most clients seem to think that the court has power
to transfer liability for a debt from one party to
another; or even that somehow the court will be able
to “generate” money to get them out of the financial
mess they are in. Robust advice to the client is
essential so that their expectations are managed!
6.3
6.3
The sort of advice to give
Victoria is as follows:-
·
The court does not have the power to alter the legal
relations between her and the various lending
institutions, thus if debts are in her name they
will remain her liability unless redeemed
·
The court can order David to pay her a lump sum,
which she can use to discharge debts, provided there
is sufficient capital out of which a lump sum can be
paid
·
Continued
