Ancillary Relief - A Legal and Practical Overview TIPS AND TRAPS or SOME BORING BITS YOU MAY HAVE MISSED Copyright Jane Drew's June 2003-All rights reserved. No part of this document may be copied or used without the written permission of the author.

1. THE LAND REGISTRATION ACT 2002.

This Act is due to come into force on 13 October 2003. It makes major changes to the land registration system - such as compulsory registration of leases granted for more than 7 years or assigned when they have over 7 years left to run - whereas the present requirement for registration only applies to leases of 21 years or more.

For matrimonial practitioners, however, the most important thing to note is the new system for protecting third party interests.

Old Law
Under the present system third parties with a claim against registered land can protect themselves in one of 4 ways-

(a) by a caution against dealings
(b) by notice
(c) by restriction
(d) by inhibition.

New Law
Under the new system cautions against dealings and inhibitions are abolished. Existing cautions will remain on the Register but it will not be possible to register new ones.

Instead the Act provides 2 new types of notice.
By Section 34(2) an application may be made for either an agreed notice or a unilateral notice.

(3) The registrar may only approve an application for an agreed notice if:

(a) the applicant is the registered proprietor, or a person entitled to be registered as such proprietor,

(b) the relevant registered proprietor, or the person entitled to be registered as such proprietor, consents to such a notice,

(c) the registrar is satisfied as to the validity of the applicant's claim.

An example of an agreed notice (or one to which the proprietor could not object) would be notice of a spouse's rights of occupation under the Family Law Act 1996.

Unilateral notices are set out in Section 35.

If the registrar enters a notice in the register in pursuance of an application
Under Section 34(2) (b) "a unilateral notice" he must give notice to:

(1) the registered proprietor
(2) such other persons as the rules may provide.

A unilateral notice must indicate that it is such a notice and identify who is the beneficiary of the notice.

Provisions relating to cancellation of unilateral notices are set out in Section 36.

2. PROCEEDS OF CRIME ACT 2002

This Act came into force on 24 February 2003.

When this Act was first placed before Parliament it seemed that the intended target for the legislation was a relatively narrow group of very well off criminals.

However a strict interpretation of the statute extends the ambit of the provisions to anyone involved in criminal activity, no matter how minor in nature.

Prior to 24 February 2003 the money laundering offences for which solicitors could generally be prosecuted were restricted to crimes of drug trafficking and terrorism. NOW things are different!

In general terms solicitors are now required to take action when they have knowledge or the reasonable suspicion, of the existence of the proceeds of all criminal conduct.

"Criminal conduct" is defined at Section 340(2) as conduct that:

(a) constitutes an offence in any part of the United Kingdom, or
(b) would constitute an offence in any part of the United Kingdom if it occurred there.

In Section 340(3) property is "criminal property" if

(a) it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or part and whether directly or indirectly), and
(b) the alleged offender knows or suspects that it constitutes or represents such a benefit.

This is clearly intended to cover all forms of criminal conduct from multi million pound drug -running hoods to the window cleaner from Catford!

New Offences

Section 327 Concealing

A person commits an offence if he-

(a) conceals criminal property;
(b) disguises criminal property
(c) converts criminal property
(d) transfers criminal property
(e) removes criminal property from England and Wales or from Scotland or from Northern Ireland.

Section 328 Arrangements

A person commits an offence if he enters into or becomes concerned in an arrangement which he knows or suspects facilitates(by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person.

Section 329 Acquisition, use and possession

A person commits an offence if he-

(a) acquires criminal property;
(b) uses criminal property;
(c) has possession of criminal property;

Each offence carries a maximum penalty of 14 years imprisonment and an unlimited fine.

Note particularly "concerned in an arrangement" when settling a consent matrimonial property order.

Defences
The defence to an offence under Sections 327-329 is an authorised disclosure under Section 338 of POCA 2002.

A disclosure is authorised if

• a disclosure is made to a nominated officer(money laundering reporting officer MLRO, constable or customs officer by the alleged offender (the solicitor);
  
• made in the prescribed form (see s 339 of the POCA2002) ;and
  
• about a prohibited act under s 327, 328 or 329 of the POCA 2002.

A copy of the prescribed form may be obtained from the National Criminal Intelligence Service (NICS) website (www.ncis.co.uk).

Each practice must have a nominated MLRO to whom disclosures in the prescribed form must be made.

Sole practitioners must make disclosures to NCIS in the prescribed form.

Knowledge or Suspicion of Money Laundering

Section 330 introduces another offence which will be committed if a person:

• knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in money laundering; and
  
  
• that the information came to the person in the course of a business in the regulated sector; and
  
  
• the person does not make the required disclosure as soon as practicable after the information or other matter comes to him.

The Money Laundering Regulations 2003 will come into force on 15 September 2003. Once introduced it is anticipated that the new regulations will apply to all solicitors conducting:

(a) - (f)

(g) the provision of legal services by a body corporate or unincorporated or, in the case of a sole practitioner, by an individual and which involves participation in a financial or real property transaction (whether by assisting in the planning or execution of transactions or otherwise by acting for, or on behalf of, a client);

It is a defence to this section that the person does not give disclosure if "he is a professional legal adviser and the information or other matter came to him in privileged circumstances" (section 330(6) (b).

Information comes to an adviser in privileged circumstances where he gives legal advice to clients, including those in connection with "legal proceedings or contemplated legal proceedings" (Section 330 (10))

Privilege does not cover information provided by the client "with the intention of furthering a criminal purpose" (Section 330(11)).

3. THE PRESIDENT OF THE FAMILY DIVISION'S ANCILLARY RELIEF GROUP: BEST PRACTICE GUIDE FOR INSTRUCTING A JOINT EXPERT.

Set out at [2003] 1FLR 573.

Important features:

1. It is only a practice guide but is of great persuasive weight when working in ancillary relief field- particularly at the Registry.

2. The emphasis is very much on the prevention of the unnecessary increase in costs.

3. The parties are encouraged to agree upon a single joint expert whom they can jointly instruct. If they cannot agree upon the expert to be instructed then the court may step in and take the decision out of the parties' hands.

4. If there is likely to be an issue with experts you need to go along armed with your info at the First Appointment.

5. The guide applies equally prior to the issue of proceedings.

6. Proportionality is the name of the game!

7. An expert instructed by one party separately will not usually be appointable later as a SJE. So you need to consider the costs implications before appointing your own expert rather than suggesting a SJE to the other side.

8. Make sure you have agreed the ground rules in advance by confirming with the expert in advance that they are ready, willing and able to do the report in the time available.

9. If you can't agree on a SJE the court will take over and draw up the instructions.

10. Don't extend the instructions unless the other party has agreed or the court has said OK.

11. All communications to the expert should be copied to the other side.

12. Any meetings should be attended by both parties and legal advisers. The SJE should not attend any meeting that is not a joint one.

13. Report should be served simultaneously.

14. If SJE resigns you will need to sort it out amongst yourselves or ask the court for directions.