A whole lotto luck for Mr Elford as Judges decide not to divide winnings to wife

Cases about lottery winnings often draw attention perhaps in part due to the large sums of money that can be involved but also because they require some very particular and detailed attention to be paid to how parties in a dispute have organised their lives during their relationship, before and after the win.


In a recent case, known as Elford and Elford (http://www.austlii.edu.au/au/cases/cth/FamCAFC/2016/45.html), a Wife appealed orders that provided for her to, by and large, not receive the benefit of a lotto win that happened very early in the relationship.


Ordinarily, you might think that if a lotto ticket is bought by one person in a relationship and the winnings are received during the relationship then those funds should be put into the parties’ joint assets and simply divided.


This is not necessarily the case though.

In a case known as Zyk  and Zyk (1995) FLC 92-644, the Court said that it was preferable to approach the issue as one of “contribution” rather than as a “windfall”.

That is, the Court should look at how the ticket was purchased, how were the funds used to buy the ticket were sourced and were generally or otherwise used, and what happened with the winnings afterwards.

It should also look at how the parties’ relationship was structured at the time to determine their intentions.

Applying these principles, the Court in this case noted that the parties had kept their finances very  separate throughout their ten year marriage; they had separate accounts and kept no joint accounts; the Husband purchased the ticket from his money that was not mingled together with the Wife’s; that the parties did not ‘hand each other’ their pay at the end of each fortnight; and when the Husband received an inheritance during the relationship, he deposited that inheritance into his own account with the lotto winnings and kept the monies separate.

In total, the parties’ conduct seemed to demonstrate that they very much kept their finances their own and separate both at the time of the win, and afterwards.

The way the parties organised their affairs was so clearly separated that it does appear to be notably different to the majority of cases that family lawyers would see.

This justified the Husband receiving a very large recognition for his contribution of both his lotto winnings and the inheritance.

The Wife was provided with an Order that meant she received 10% of the total assets.

Missed in much of the online commentary about this case is that the Husband had also suffered a stroke some 12 months before the separation that left him blind, unable to drive or read and required kidney dialysis three times a week.

The case means that lawyers and parties should very carefully and realistically assess what actually happened in a relationship and not look to simply say that all of each other’s property is shared.

Our experienced family lawyers know the questions to ask you to keep you informed and up to date with these issues.

You can contact us on 03 9614 7111 or Melbourne@nevettford.com.au to discuss your situation.

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How do you divide property when a relationship breaks down? Consider the family law four step!

It is with regularity that family lawyers are buttonholed at social events to provide some impromptu advice to someone going through a property division.

What is consistent through these conversations is how little many people understand of the process, how much people cobble together their own solutions based on what is ‘fair’, and how infrequently lawyers are consulted at an early stage to provide some guidance and frameworks for discussions between parties.

 

I can recall a matter that was brought to me where the parties had been spending an inordinate amount of time dividing and ascribing value to each and every item of furniture or household appliance and dividing these in a way that was reflective with their respective incomes; but had no idea that they might be entitled to some of each others’ superannuation, a significant oversight that would have resulted in one party missing out on almost $100,000 of superannuation.

 

So what is the broad overview of the process that family lawyers will apply?

1. Identify your assets, liabilities and superannuation as at present. This is commonly called the ‘asset pool’
2. Identify what contributions were made into the relationship, including both financial and non-financial contributions. This will mean knowing what you had at the beginning, what you had at the end, and how you got between those points.
3. Identify what your and your partner’s future needs are – whether they relate to income disparity, care of children, ill-health and medical costs, or your age.
4. Determine whether it is just and equitable to proceed with any alteration of your existing legal rights at all, as well as whether the final result as determined by the above 3 steps results in an outcome that is just and equitable and also practical.

These steps are simple in some senses but as with everything, the devil is in the detail of the implementation and the ‘edge cases’.

Consulting a family lawyer early for guidance to inform your discussions, identify any problematic issues and define your expectations is one of the most sensible investments of your money post separation you can make.

Call our family law team on 03 9614 7111 or email Melbourne@nevettford.com.au.

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