Summary
The Court of Appeal held for the first time that payments made by a defendant to the mothers of his children for the children’s maintenance were not tainted gifts for the purposes of confiscation. At the confiscation hearing, the prosecution accepted that the payments were in fact made for the purpose of child maintenance, albeit not under a court order or formal agreement. The question was whether they were “for a consideration whose value is significantly less than the value of the property at the time of the transfer”: POCA 2002 s 78(1). The Court of Appeal agreed that the defendant did have a moral or legal duty to make maintenance payments and that the mother’s care of the children could amount to consideration for the purposes of the Act. They distinguished the case of R v Kim Smith [2013] EWCA Crim 502, in which a benefit fraudster had made payments to other members of her family and those payments had been found to be tainted gifts. In that case there was no obligation to make the payments.
Result
Appeal allowed and the payments were deducted from the defendant’s realisable assets.
Comment
This case brings confiscation law into line with the contract and family law position that the maintenance and care of children has a value and can be regarded as consideration. In similar cases, three questions are likely to be crucial. First, did the defendant have a legal or moral obligation to make maintenance payments? Second, did the child care provided by the recipient of the payments amount to consideration? Third – and this will be a difficult factual question – did the defendant pay a reasonable amount to discharge his obligations, or did he deliberately pay too much in order to dissipate the proceeds of his crime?
