Posted: 03 / 04 / 2022
There has been very recently another Court of Appeal decision concerning confiscation, the defendant’s ‘available amount’ and beneficial interests in the matrimonial home.
The case concerned a property in England, dealt with by the Crown Court – slightly different provisions apply to cases in Scotland.
The case, Lam v R  EWCA Crim 448, decided in April 2022 concerned a husband convicted of the fraudulent evasion of Value Added Tax. In consequence of the length of time over which the offences had been committed and the amounts involved, Mr Lam had a ‘criminal lifestyle’. His ‘benefit’ for confiscation purposes was agreed to be in excess of £1m – and was found to be in excess of his ‘available amount’.
Mr Lam’s only asset was his interest in the matrimonial home. The Land Registry title showed Mr Lam to be the sole owner, subject to a first mortgage obtained from a High Street lender, and a second charge in favour of Mr Lam’s brother-in-law.
In the Crown Court the judge was invited to make a determination under s10A PoCA 2002 concerning Mr Lam’s beneficial interest. Mr Lam’s wife claimed a 50% beneficial interest in the property, his brother-in-law claimed an interest under the second charge.
The decision in the Crown Court
The Crown Court judge held that the creation of the second charge in favour of the brother-in-law was a tainted gift and therefore the second charge did not reduce Mr Lam’s available amount at all.
The judge also held, after detailed consideration of the rather sparse evidence produced in the confiscation proceedings and having heard oral evidence from the wife (but not from Mr Lam) that Mr Lam held a 100% beneficial interest in the property, subject only to the mortgage in favour of the High Street lender.
Mr and Mrs Lam appealed the confiscation order and the s10A determination.
The appeal court judgment refers to the well known cases of Stack v Dowden  UKHL 17 and Jones v Kernott  UKSC 53. Perhaps surprisingly the judgment does not refer to R v Hayes  EWCA Crim 682 (but that case, unlike this one, concerned an alleged tainted gift from the husband to the wife).
No new point of principle
It is fair to say that the Court of Appeal’s decision in this case is fact specific, and expressly states that no new point of principle is involved. The Court of Appeal, reversing the finding in the Crown Court, found that, “The decision that [the matrimonial home] should be conveyed into his sole name appears to have been taken by [the defendant] alone and not to have been the result of any agreement between [the husband and wife]”.
The judgment continues, “The evidence concerning the reason why 11 Cavendish Road, unlike the previous two matrimonial homes, was conveyed into Mr. Lam’s sole name was very limited. He did not give evidence, and Mrs. Lam said she did not know that this had happened until much later. The court was therefore faced with deciding on the balance of probabilities whether this was done because the common intention of the parties was that Mr. Lam should be the sole legal and beneficial owner of the family home, or for some other reason. Mrs. Lam’s evidence was very clear that she and her husband both regarded the family assets including this property as jointly owned, and that the purpose of the acquisition and development of 11 Cavendish Road was to provide a home for them both for the rest of their lives”.
The Court of Appeal accepted that evidence, and other evidence from Mrs Lam, as establishing that she held a 50% beneficial interest in the property. The appeal was successful.
The lessons to be learned
One has to say that the chances of success for Mr and Mrs Lam in the Crown Court could have been improved by greater provision of relevant evidence – and there is a lesson to be learned there!
The key question, as the Court of Appeal confirmed, was, ‘What had been the common intention of the parties at the relevant times regarding beneficial ownership of the matrimonial home?’.
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(Note: This article applies to confiscation proceedings under the provisions of Part 2 of the Proceeds of Crime Act 2002 in England and Wales. There are a number of additional issues which could be relevant to a defendant’s confiscation proceedings in particular cases which it is not possible to deal with in a relatively short article such as this. Appropriate professional advice should be sought in each individual case.)