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(Queen's Bench Division, Administrative Court and Family Division; Holman J; 18 July 2008)
The husband had been convicted of tax evasion and fraud and imprisoned. A criminal confiscation order had been made against him for £900,000. The wife was seeking ancillary relief from the husband, and there were also Children Act proceedings in relation to the couple's 10-year-old child, currently living with an elder sibling because the wife's ability to care for the child was in doubt. It was highly unlikely that realisation of all known and identified assets would satisfy the confiscation order. The wife sought a full hearing of her claim for ancillary relief before the husband's assets were applied to satisfy the confiscation order; the Revenue asked the court to adjourn the wife's claims until the confiscation order had been satisfied in full. It was accepted that the wife had been completely unaware of the husband's criminal activity, and that the matrimonial home had been constructed by the husband before the offending took place; the wife was no longer living at the matrimonial home, but the couple's 10 year old and his elder sibling were still there.
The confiscation order must prevail, given the scale of the offending, the fact that the confiscation order was no greater than the tax, interest and penalties already due, and the fact that there was a victim, i.e. the state and that the effect of the compensation order would be to reimburse or compensate the state. While taint and the concept of taint could be readily considered in the case of crimes that generated proceeds, that was not the case if the criminal activity involved tax evasion. The whole of the family's economy had become pervaded by the fraud. The wife's maintenance pending suit was to end after a few months, at a reduced level to enable her to qualify for legal aid.
The Red Book is the acknowledged authority on practice and procedure