The Crown has also allowed Anna Devereux to continue receiving rental income from Swann-related properties and questioned how $350,000 given to her and Swann for legal and living expenses in November 2006 had been spent.
This amount did not include a later court order for undisclosed legal costs for Swann to defend criminal proceedings.
Crown counsel Marie Grills said despite Ms Devereux's estranged husband's conviction for defrauding the Otago District Health Board of $16.9 million, her lifestyle had continued "basically as it has always been".
The Crown was yesterday seeking restraining orders against 16 respondents in Proceeds of Crimes Act proceedings against Swann by the Solicitor-general. The restraining orders, if granted by Justice French, will replace interim restraining orders granted by Justice Lynton Stevens.
Barrister Len Andersen, who was representing Ms Devereux, said she was "a victim".
Ms Devereux had no issue with Swann's property being restrained, but "family chattels" in the Dunedin home, Ferntree Lodge, and the Wanaka holiday home had been purchased by her and were "outside the scope of the restraining orders".
Mr Andersen asked that she continue to receive the rental income, which was what she was living on "from week to week", and sought legal costs.
Ms Devereux had not applied for legal aid, he said.
Ms Grills said to describe Ms Devereux as a victim was "really not valid in these circumstances".
Ms Devereux had clearly used cheques signed by Swann, and while she did not know then the money had been obtained by fraud, she "certainly knows now", Ms Grills said.
"The question has to be asked whether there is an obligation on the Solicitor-general to provide for a lifestyle for Ms Devereux, who has been separated from Mr Swann for effectively two years now, when provision for that lifestyle is coming out of proceeds of offending."
However, the Crown had never indicated it would remove Ms Devereux from Ferntree Lodge, and was happy for her to continue living there and use the furniture and chattels, she said.
No issue would be taken with her continuing to receive the rental income, "although it is a questionable entitlement".
However, she opposed granting legal costs.
Ms Grills questioned how Ms Devereux could claim ownership of the chattels.
"There is no evidence she has had the moneys to make purchases of any sort."
Ms Devereux has told the court previously she had not worked for the past 14 years and received no income other than Swann's health board salary.
The Crown had traced the purchase of some household furniture and found it had been paid for using Computer South Ltd cheques, which contradicted Ms Devereux's assertions she owned the chattels and they were not "tainted".
Computer South was a company set up by Swann, into which his friend and business associate Kerry Harford, who was also convicted of fraud, would deposit money defrauded from the health board.
Personal, non-valuable property from the holiday home would be returned to Ms Devereux, Ms Grills said.
Mr Anderson said it upset Ms Devereux "that the Crown is continually saying she is telling lies".
Barrister Jon Beck said Swann was not objecting to the Crown application.
Justice French reserved her decision.
