1 User Commentary
31 August 2012
Realisable Assets (Beneficial Interest)
The applicant applied for a declaration that she held a 50 per cent beneficial interest in three properties which she owned jointly with her husband (‘D’) who had convictions for money laundering and was the defendant to confiscation proceedings concerning those properties. One of them,TurtonHeights, was in theUnited Kingdomand the other two were inSpain. D accepted that from 1996 his earnings had included the proceeds of money laundering. However, he claimed that the money used to purchaseTurtonHeights, in 2003, had derived from the sale of previous matrimonial homes,Farnborough Road, and before that the Grange. He claimed that when the Grange was sold, the sale proceeds were used to purchase Turton Heights and one of the Spanish properties. During the years before his arrest, large sums of money had passed through his bank accounts. The couple had been married for almost 40 years and the appellant had brought up the children whilst D ran his business. She was not able to provide details of how the various purchases had been financed. At the confiscation hearing, D accepted that the appellant’s quantifiable interest in the matrimonial estate was a ring-fenced sum of £108,818, representing one third of the value ofTurtonHeights, an amount which was paid to her. The appellant argued that she had provided consideration by bringing up the children of the family and it had been intended that she should have a 50 per cent interest in all three properties, irrespective of her financial contribution and the source of the money used to purchase them. She argued that it had not been established that the money used for the purchase of the Grange had not truly come from D's business and the equity inFarnborough Road.
The court refused the application on the following grounds. First, though the appellant was entitled to 50% of the earlier property, Farnborough Road, this had decreased as they moved to later properties. It was found that later properties had been tainted by D’s criminal proceeds. It was also found that D had paid the deposit and serviced the mortgage on the later two properties, and there was no agreement between the couple as to the equity they would both hold in the property. Therefore the appellant’s beneficial interest was reduced from 50 per cent because that was the common intention and because there was an element of gift, Stack v Dowden  UKHL 17,  2 A.C. 432 followed. The ordinary presumption of an equal beneficial interest had been rebutted in relation to theUnited Kingdom properties the best estimate of the appellant’s beneficial interest inFarnborough Road was that reached in the confiscation proceedings. Second, all of the evidence in relation to the two Spanish properties was deeply unsatisfactory. There was no evidence that the appellant had made any contribution or given any consideration to the properties. Therefore placing the properties into her name could be regarded as by way of gift. The presumption of equal beneficial ownership had been rebutted.
On that basis the court found that there was no further sum due to the appellant. This case restates establishes principles, but it does highlight important evidential considerations. The key in similar matters is the importance of clear financial and documentary information setting out the way in which assets were funded.
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