CHIN LAM v THE CROWN

In a sole-name family-home case, the court must determine objectively whether the parties intended the legal owner to hold the property on trust for both and, if so, the terms of that trust. The exercise is the same as in a joint-name case. Domestic and financial contributions, prior ownership of jointly held homes, pooled resources and the purpose of acquisition may all be relevant. It is an error to treat non-financial family contributions as legally irrelevant or to focus only on direct payments. A later declaration of sole ownership may have no evidential value where it forms part of a dishonest charge designed to defeat confiscation proceedings.

Following guilty pleas to VAT evasion, confiscation proceedings were brought against Chin Lam under the Proceeds of Crime Act 2002. The Crown Court determined under section 10A that he was the sole legal and beneficial owner of the matrimonial home and rejected Yit Gan Lam’s claim to a 50% beneficial interest. Chin Lam appealed against the resulting confiscation order, while Yit Gan Lam appealed under section 31(4). The central issue was whether the evidence established a beneficial interest and whether the Crown Court had applied the correct legal approach.

1. Outcome. Both appeals were allowed to the extent that the Crown Court’s determination that Mrs Lam had no beneficial interest could not stand. The confiscation order was varied to recognise a 50% beneficial interest.
2. Applicable approach. The appeal involved no new point of principle. In a sole-name case, the court must determine objectively from the parties’ conduct whether there was a common intention that the property should be held on trust and, if so, the terms of that trust. The exercise is the same as in a joint-name case. Evidence relevant in a joint-name case is not legally irrelevant in a sole-name case. The approach was consistent with Stack v Dowden [2007] 2 AC 432 and Jones v Kernott [2011] UKSC 53.
3. Reassessment of the evidence. The Crown Court judge erred in treating Mrs Lam’s contribution to the family as irrelevant as a matter of law. Her earlier income, domestic work and care of the children were relevant. So too were the parties’ previous jointly owned matrimonial homes, the absence of any agreement that the position should change, and the use of pooled family funds. The judge’s treatment of the 2018 legal charge as evidence that Mr Lam was solely beneficially entitled was unjustified. The charge was found to be a tainted gift designed to defeat confiscation proceedings, and the declaration of sole ownership in that document had no evidential value. The £50,000 loan paid to Mrs Lam and used for building work could also be treated as a contribution. The Portsmouth property was probably irrelevant to the parties’ common intention concerning their home.
4. Final order. Mrs Lam held a 50% beneficial interest. The available amount was 50% of the proceeds of sale of 11 Cavendish Road after payment of the 2007 mortgage. The charge in favour of Mr Loy did not reduce the available amount. The parties were invited to lodge an amended confiscation order.

• Court of Appeal (Criminal Division): allowed both appeals to the stated extent and varied the confiscation order.
• Harrow Crown Court: determined under section 10A of the Proceeds of Crime Act 2002 that Chin Lam was the sole legal and beneficial owner of the property and rejected Yit Gan Lam’s claimed beneficial interest.