Tax Man First, Family Second

The Court of Appeal has ruled that a divorcee must wait until a confiscation order against her husband has been satisfied before she can obtain a financial settlement from him.

Joseita Stodgell went to the Court to contest a £900,000 confiscation order against her ex-husband after he was jailed for three years after being convicted of cheating the Revenue. Under the Proceeds of Crime Act, the assets of those convicted of criminal offences can be seized to the extent that they originate from criminal activity.

Following their divorce in 2004, Mrs Stodgell sought a settlement of £300,000 to provide for her and their 11 year-old son. Although she had been ignorant of her husband’s criminal activity, the Court ruled that the decision of the lower court that the financial settlement between the couple had to be deferred until Mr Stodgell had satisfied the confiscation order should stand.

This case reinforces the view of the courts that where a family’s assets have their origin in criminality, the first claim on them is by those outside the family who have suffered as a result.