The ex-wife of a drug dealer is entitled to her share of the matrimonial home seized by the Crown, appeals court judges have determined.

The Newfoundland Supreme Court's appeals division found that Theresa Connolly knew nothing of the criminal activities of her former husband, Raymond Connolly.

Following his conviction on drug trafficking charges, the Connollys were charged in 1998 with being in possession of the proceeds of crime.

Raymond Connolly pleaded guilty to the charge in 2000, while Theresa Connolly fought a related charge against her and won the case in court in 2002.

The Connollys had separated by the time of Raymond Connolly's guilty plea.

Nonetheless, as part of Raymond Connolly's sentence, the Crown seized the matrimonial home in Benoit's Cove. It sold for $69,900, even though it had had an estimated value of $136,656.20.

Theresa Connolly had been given no notice that the Crown had applied for forfeiture.

In a unanimous decision brought down this week, the Appeals Court ruled that Theresa Connolly and her children were treated unfairly.

The court ordered that half of the proceeds of the sale of the house, plus interest, should be paid to them.

Justice Gale Welsh, who wrote the decision that upheld a lower court decision, described Theresa Connolly as an "innocent third party" caught in a dispute between the Crown and her former husband's troubles.