Neutral Citation no. [2007] NIQB 44                  	Ref:     	MORF5855	
			
Judgment: approved by the Court for handing down	Delivered:	29/05/07	
(subject to editorial corrections)*			

IN THE HIGH COURT OF JUSTICE IN NORTHERN IRELAND
 ________

QUEEN'S BENCH DIVISION
 ________

BETWEEN:

THE DIRECTOR OF THE ASSETS RECOVERY AGENCY

PLAINTIFF
AND

WILLIAM JOSEPH LOVELL

FIRST NAMED DEFENDANT

AND

PAULINE MARIE LOVELL

SECOND NAMED DEFENDANT
AND

MARGARET LOVELL

THIRD NAMED DEFENDANT

AND

WILLIAM LOVELL

FOURTH NAMED DEFENDANT

(Legal Expenses Exclusion; Legal Aid Certificate)

 ________

MORGAN J

[1]	Each of the defendants has made an application for legal expenses exclusion in respect of these proceedings.  I have adjourned those applications in order to enable the defendants to explore with the plaintiff the extent to which an agreement can be reached in relation to those exclusions.  In this ruling I will deal with a specific argument advanced on behalf of the first named defendant that the expenses incurred by the first named defendant prior to the issue of civil recovery proceedings should be met by legal aid. 

[2]	An Interim Receiving Order over the first named defendant’s property was made by Mr Justice Coghlin on 23 September 2004.  An emergency legal aid certificate for proceedings under section 246 of the Proceeds of Crime Act 2002 was granted to the first named defendant on 15 October 2004 and on 22 October 2004 that certificate was replaced by a full legal aid certificate.  The defendant made three applications to vary the Interim Receiving Order.  On 13 December 2004 the defendant's solicitors made an interim payment claim to the Legal Aid Department.  On 17 January 2005 the Legal Aid Department made an interim payment on foot of that claim.  During that month the defendant's solicitors applied to the Legal Services Commission for authority to incur the expense of a forensic accountant.  Authority to a figure of £720 was eventually received on 30 January 2006.  The Interim Receiver's recoverable property report was issued on 22 July 2005 and on 20 January 2006 the plaintiff issued civil recovery proceedings. 

[3]	The principal legislative provisions relating to legal expenses exclusions were set out at paragraphs 3 and 5 of my decision in Director of the Asset Recovery Agency v Fleming, Fleming and Hook [2007] NIQB 16 and I set them out again.

“[3]	The original provisions dealing with restrictions on dealing with property the subject of an Interim Receiving Order were found in section 252 of the Proceeds of Crime Act 2002:

“252 Restrictions on dealing etc. with property

(1)	An interim receiving order must, subject to any exclusions made in accordance with this section, prohibit any person to whose property the order applies from dealing with the property.

(2)	Exclusions may be made when the interim receiving order is made or on an application to vary the order.

(3)	An exclusion may, in particular, make provision for the purpose of enabling any person - 

(a)	to meet his reasonable living expenses, or

(b)	to carry on any trade, business, profession or occupation,

and may be made subject to conditions.

(4)	But an exclusion may not be made for the purpose of enabling any person to meet any legal expenses in respect of proceedings under this Part.

(5)	If the excluded property is not specified in the order it must be described in the order in general terms.

(6)	The power to make exclusions must be exercised with a view to ensuring, so far as practicable, that the satisfaction of any right of the enforcement authority to recover the property obtained through unlawful conduct is not unduly prejudiced.”

[5]	Section 252 of the 2002 Act was amended by paragraph 14 of schedule 6 of the Serious and Organised Crime Act 2005:

“14  (1) Section 252 (interim receiving orders: prohibition on dealings) is amended as follows:

(2)	For subsection (4) (restriction on exclusions for legal expenses) substitute - 

‘(4)	Where the court exercises the power to make an exclusion for the purpose of enabling a person to meet legal expenses that he has incurred, or may incur, in respect of proceedings under this Part, it must ensure that the exclusion – 

(a)	is limited to reasonable legal expenses that the person has reasonably incurred or that he reasonably incurs,

(b)	specifies the total amount that may be released for legal expenses in pursuance of the exclusion, and

(c)	is made subject to the required conditions (see section 286A) in addition to any conditions imposed under subsection (3).

(4A)	The court, in deciding whether to make an exclusion for the purpose of enabling a person to meet legal expenses of his in respect of proceedings under this Part-

(a)	must have regard (in particular) to the desirability of the person being represented in any proceedings under this Part in which he is a participant, and

(b)	must, where the person is the respondent, disregard the possibility that legal representation of the person in any such proceedings might, were an exclusion not made, be funded by the Legal Services Commission or the Northern Ireland Legal Services Commission.’

(3)	In subsection (6) (power to make exclusions not to be exercised so as to prejudice enforcement authority's rights to recover property), after "must" insert ", subject to subsection (4A)".”

[4]	It is clear that the regime set out in section 252(4) and (4A) of the 2002 Act only applies in relation to exclusions for the purpose of enabling a person to meet legal expenses that he has incurred, or may incur, in respect of proceedings under part 5 of the 2002 Act.  It was submitted on behalf of the first named defendant that although this regime applied to proceedings for a civil recovery order under section 243 of the 2002 Act it did not apply in relation to applications for work done in connection with an application for an Interim Receiving Order under section 246 of the said Act.  I do not consider that the provisions can be so interpreted.  Part 5 of the 2002 Act contemplates proceedings for a civil recovery order, proceedings for an Interim Receiving Order, summary proceedings in relation to cash and various Scottish proceedings.  There is, in my view, no obvious basis for restricting the application of section 252 (4) to proceedings for a civil recovery order and excluding its application to those other proceedings. 

[5]	The second issue that arose in this case concerned the fact that a full legal aid certificate had been granted in this case for the Interim Receiving Order proceedings and an interim payment had been made.  In order to deal with that issue it is necessary to establish the entitlement which arises by virtue of a legal aid certificate.  This is set out in article 13 of the Legal Aid, Advice and Assistance (Northern Ireland) Order 1981.

"Remuneration of persons giving legal aid

13. — (1) Subject to this Part, a solicitor who has acted for a person receiving legal aid shall be paid for so acting out of the legal aid fund, and any fees paid to counsel for so acting shall also be paid out of the legal aid fund. 

(2)	Subject to any rules of court made by virtue of Article 12(3)(g) of the Family Law (Northern Ireland) Order 1993, the sums payable under paragraph (1) to a solicitor or counsel shall not exceed those allowed under Schedule 2. 

(3)	Nothing in this Article shall prejudice Article 15A(b), and in particular— 

(a) 	paragraph (2) shall not affect the sums recoverable by virtue of an order for costs made in favour of a person who had received legal aid or of an agreement for costs so made which provides for taxation; and

(b) 	for the purpose of any such order or agreement, the solicitor who acted for the person in whose favour it is made shall be treated as having paid any counsel's fees.

(4)	References in this Article to a solicitor acting for a person receiving legal aid shall be construed in accordance with Article 15(4).”

[6]	The amount of any payment is, however, to be determined in accordance with Regulation 17 the Legal Aid (General) Regulations (Northern Ireland) 1965 which provides that any moneys payable by virtue of an order in connection with the cause or matter to which the certificate relates is to be paid to the assisted person’s solicitor and taken into account in the liability of the department to pay. Where the payment is sufficient to satisfy the proper claim for costs no further claim for costs against the fund could succeed.

[7]	Since the first named defendant is entitled to pursue an application for legal expenses exclusion by virtue of section 252 (4) of the 2002 Act I consider that the effect of these provisions it is that the first named defendant by virtue of his legal aid certificate has no more than a possibility that his proceedings might be funded by the Northern Ireland Legal Services Commission and that such a possibility must be disregarded having regard to section 252 (4A) (b) of the 2002 Act.

[8]	In light of that conclusion I consider that the first named defendant is entitled to pursue his legal expenses exclusion in respect of the proceedings connected with the application for the Interim Receiving Order.  I have given the parties an opportunity to agree the terms of the Order and the amounts which should be allowed out of specified assets.