£1m confiscation order appeal – Will Martin and Grace Forbes

Lam v R. [2022] EWCA Crim 448

The Court of Appeal held that a judge had erred when imposing a confiscation order in determining that the defendant was the sole legal and beneficial owner of a property claimed to be the matrimonial home, and that the defendant’s wife’s “contribution to the family” was irrelevant. Notwithstanding the husband’s opaque and devious dealings over the years, the parties’ common intention was that the property should be held in joint and beneficial ownership. The confiscation order was varied to reflect the wife’s 50% beneficial interest in the property.

Mr Lam was convicted for evading more than £1m in VAT. As a result, the prosecution began confiscation proceedings. The only asset available to satisfy a confiscation order was the matrimonial home, a property that Mr Lam shared with his wife, Mrs Lam, and their children. The legal title for the property was in Mr Lam’s sole name.

Mrs Lam took part in the proceedings as an interested party under s.10A PoCA 2002.

The central issue was whether Mrs Lam held any beneficial interest in the property and, if so, the extent of that interest.

In the Crown Court, and later before the Court of Appeal, it was submitted on behalf of Mr and Mrs Lam that applying orthodox principles of equity and trusts law there existed a common intention constructive trust under which Mrs Lam had a 50% beneficial interest in the property.

The judge below determined that no such trust existed. The judge held by implication that the wife’s “contribution to the family” was irrelevant as a matter of law, and her subsequent reasoning was then concerned only with whether and to what extent Mrs Lam had made a financial contribution to the purchase price of the property or to the mortgage payments.  Accordingly the judge found that Mrs Lam had no interest in the property. The confiscation order was made for the total value of the property: c.£1m.

The Court of Appeal, following “conspicuously able” submissions, agreed that the first-instance judge’s determination could not stand: the judge had erred in law by disregarding Mrs Lam’s “contribution to the family” as irrelevant and focusing on financial contributions. The Court of Appeal found that a common intention constructive trust existed on the facts of the case, and that Mrs Lam’s interest in the matrimonial home was 50%. The confiscation order was reduced accordingly.

Will Martin represented Mrs Lam and was instructed via direct access.

Grace Forbes represented Mr Lam and was instructed by Jenny Boyden of Russell Cooke solicitors.