Gibson v HM Revenue and Customs Prosecution Office
| Jurisdiction | England & Wales |
| Judgment Date | 2007 |
| Neutral Citation | [2007] EWHC 1405 (Admin) |
| Date | 2007 |
| Court | Queen's Bench Division (Administrative Court) |
Crime - Sentence - Confiscation order - Confiscation order made against defendant following conviction for drug trafficking offence - Defendant’s wife asserting half interest in matrimonial home and endowment policies held in joint names - Judge finding wife becoming aware after acquisition that proceeds of crime being used to pay mortgage and make policy payments - Whether statutory jurisdiction to confiscate wife’s interest as gift from defendant - Whether public policy conferring jurisdiction to reduce extent of wife’s interest to reflect her guilty knowledge -
The defendant was convicted of a drug trafficking offence and a confiscation order was made against him under the Drug Trafficking Act 1994. A receiver was appointed in respect of the defendant’s realisable assets which included the matrimonial home acquired in 1990, three endowment policies effected to support the mortgage on the house and two bank accounts, all of which were in joint names with the defendant’s wife. In enforcement proceedings in the High Court to which the wife was joined, she claimed a half interest in the assets held in joint names. The judge found that the wife had known that from 1993 money used to pay the mortgage and to make payments under the endowment policies had not been legitimately earned. He held that although there was no provision in the 1994 Act which could deprive the wife of her 50% interest in the disputed property, public policy required that her guilty knowledge should be taken into account against her and he accordingly declared that the disputed property was held by the defendant as to 87·5% and the wife as to 12·5%.
On appeal by the wife—
Held, allowing the appeal, that since the wife had provided consideration her interest in the disputed property had not been given to her by the husband and she could not therefore be deprived of her interest under section 8 of the 1994 Act; that, although the public interest that those who trafficked unlawfully in drugs should be deprived of the proceeds of their crimes might entitle a court in ancillary relief proceedings to decline to exercise its discretion to transfer assets to a spouse who had been complicit in their unlawful acquisition, there was no freestanding public policy jurisdiction entitling the court to confiscate assets which already belonged to a spouse; that since the law presumed equal beneficial ownership of property held in joint names unless a contrary intention were shown, and since no such intention had been shown, the wife had owned 50% of the disputed property from the moment of its acquisition in joint names and her interest therefore did not depend on her later agreement with her husband to use the proceeds of crime to pay the mortgage instalments or on any other illegality; and that, accordingly, the wife was entitled to a 50% share in the disputed property (post, paras 14, 20–21, 22, 23, 25, 27, 28–29, 33).
Quaere. Whether, had the defendant and his wife agreed at the outset to use the proceeds of crime to pay off the mortgage on the jointly acquired property in whole or substantial part, the agreement would have been enforceable at all and the court would have upheld any interest in the property attributable to lawful sources of income, or whether in those circumstances the wife could nevertheless have relied on a common intention to hold in equal shares the beneficial interest in property registered in their joint names so that she did not have to rely on the unlawful agreement to establish her interest (post, paras 24, 32).
The following cases are referred to in the judgments:
Crown Prosecution Service v Richards
Customs and Excise Comrs v A
Norris, In re
Pettitt v Pettitt [
R v Buckman [
R v Ginwalla
Stack v Dowden
Tinsley v Milligan [
No additional cases were cited in argument.
The following additional cases, although not cited, were referred to in the skeleton arguments:
Bishop, decd, In re [
D, In re
Jones v Maynard [
Phillips v United Kingdom (
R v Rezvi
X v X (Crown Prosecution Service intervening)
Young, In re (
APPEAL from James Goudie QC, sitting as a deputy judge of the Queen’s Bench Division
On 21 May 1999 the defendant, Gene Murray Gibson, was convicted in the Crown Court at Manchester of conspiracy to import a controlled drug and sentenced to 25 years’ imprisonment. On 29 March 2000 the Crown Court made a confiscation order against the defendant in the sum of £5,430,671 with a term of six years in default of payment.
On 4 August 2006 the defendant’s wife, Marion Gibson, filed an application claiming a half interest in certain of the defendant’s realisable assets, namely 50 Cartier Close, Warrington WA5 8TD, the matrimonial home, three insurance policies and two bank accounts in joint names. On 19 June 2007 the deputy judge made a declaration that the beneficial interest in the disputed property was held by the defendant as to 87·5% and by the wife as to 12·5%.
By an appellant’s notice dated 20 August 2007 and pursuant to permission granted by the Court of Appeal (May LJ) on 11 October 2007 the wife appealed on the grounds, inter alia, that the deputy judge had wrongly relied on two cases concerning ancillary relief applications where the court had been asked to make property adjustment orders in relation to confiscated assets, whereas she was claiming a half share in the disputed property in her own right.
The facts are stated in the judgment of May LJ.
Julie Case (instructed by
The wife’s half share in the assets was not caught by the gift provisions in section 8 of the Drug Trafficking Act 1994: see Stack v Dowden [2007] 2 AC 432. The judge was wrong to extend the statutory powers in section 8 so as to reduce the wife’s share. Customs and Excise Comrs v A [2003] Fam 55 and Crown Prosecution Service v Richards [2006] 2 FLR 1220 are distinguishable since they involved property adjustment orders.
When the court is considering what interests a husband and wife intended that each should have in a property in their joint names, the court is not exercising a discretion as to what is fair. In the instant case the wife had a half share of the assets in her own right and needed no intervention by the court to establish her entitlement. Her rights to retain or recover her property were safeguarded by section 31(4) of the 1994 Act: see In re Norris [2001] 1 WLR 1388, para 16.
David Bartlett and Rupert Jones (instructed by
The husband is bound by the rulings and confiscation order against him and is estopped from going beyond it in the enforcement proceedings. Only his wife can challenge any confiscation findings at the enforcement stage: see In re Norris [2001] 1 WLR 1388. The judge was right to apply Customs and Excise Comrs v A [2003] Fam 55 and Crown Prosecution Service v Richards [2006] 2 FLR 1220. The wife does not have to rely on illegality to establish her beneficial entitlement: see Tinsley v Milligan [1994] 1 AC 340. However, public policy requires that the wife must not be allowed to retain the value of assets which to her knowledge had been augmented by tainted funds.
Case replied.
The court took time for consideration.
12 June 2008. The following judgments were handed down.
MAY LJ
1 On 21 May 1999, Gene Gibson, whose application for permission to appeal the judgment and order now before this court was dismissed on 10 April 2008, was convicted of conspiracy to import large quantities of cocaine between 1 October 1996 and 27 March 1998. He was sentenced to 25 years’ imprisonment. He had been arrested on 27 March 1998 on a private aircraft arriving at...
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