By Gianna Huesch
Playing Lotto? If you don’t want to share your win with your ex, it may be wise to ensure you have kept your finances separate during your marriage…
A wife who had sought a third of the marital asset pool in property settlement proceedings has seen her appeal fail and her original 10% cash payout stand despite her husband’s hefty lottery win. The husband was found to have never intended his winning ticket purchase to be a joint matrimonial purpose, based on the fact that the couple had kept their financial affairs largely separate while wed.
In Elford & Elford, an ex-wife had sought 32% of the total matrimonial assets of $1.4 million, but the trial judge had ordered her ex-husband to pay her a sum of $51,000, or just over 10%. She had appealed this outcome but in a decision handed down last week, the full bench of the Family Court found there had been no error and the appeal was dismissed.
The husband had won almost $623,000 in a lottery after the couple had been living together for a year. He had put the sum into a term deposit in his name, and the term deposit had been included in the eventual marital asset pool on their divorce.
The trial judged had treated the lottery win as a contribution by the husband alone whereas the wife argued the lottery money should be treated as a joint contribution by the parties, based solely on the fact that they “had been in a relationship at the time”.
This was despite the wife acknowledging that the husband had bought the ticket using the same numbers he had played for decades prior to their marriage, and that she had not contributed to the purchase of the ticket.
Crucially, the couple had led largely separate financial lives, keeping assets and bank accounts separate, and never holding any joint bank accounts.
The trial judge had compared the case to other lottery cases where, even when a spouse had no involvement in buying the winning ticket, a couple had shared their finances and the ticket formed part of their ‘joint property’. In the case law, it was shown that the source of funds used to purchase a winning ticket should not exclusively determine how the funds were treated, but rather the nature of the couple’s relationship at the time the ticket was purchased was relevant. Importantly, the case law also established that what was critical was the manner in which a couple conducted their financial affairs at the time of a win.
In this case, the husband and wife kept all their finances separate for the entirety of the marriage, and the lottery win had been placed into an account in the husband’s sole name. So while the ticket purchase was initiated independently by the husband, consistent with his usual practice prior to the marriage, what was important was that he did not share the proceeds with his wife at the time of winning but instead, continued to treat the win as his property. The trial judge had noted that “the wife conceded that was the husband’s intention even if she was unhappy about it”.
It was not enough for the wife to argue that the marriage had been a partnership and everything during the marriage had accrued to the parties as a form of ‘community’ property. The appeal judges dispensed with this argument by showing that “there is no doctrine of community of matrimonial property under Australian law”.
On appeal the wife argued the trial judge had not given weight to her non-financial contributions as homemaker and parent, and when the husband became ill, as his carer. However, the appeal judges found this was not the case and that appropriate weight had been given to these factors. The wife had also argued the trial judge had not given enough weight to her future needs in respect of her children. The couple had lived with the wife’s three children from a previous relationship, and the husband had made various financial and non-financial contributions to their care, despite them not being his biological children. The appeal court however found the trial judge was correct in finding it was the children’s biological father who had the responsibility of financially contributing to their future needs.
As we have mentioned before, the problem with arguing errors in weight on appeal is the fact that courts have a great deal of discretion as to how to weight evidence, as long as it is exercised judicially. In this case, the appeal judges found no discretionary errors in the trial judge’s reasoning.
The wife ultimately argued the decision had been “plainly wrong and manifestly unjust” but the appeal judges demonstrated that what she was really seeking amounted to a second opinion on the amount of her payout, which is not the function of the appellate court. They found the original outcome was not unreasonable and could stand.
In one respect, the wife was arguably lucky: although she could have been ordered to pay her ex-husband’s costs in the appeal, the court took into account her limited financial circumstances (in having a dependent child and “meeting a mortgage with a significant gearing on a very modest home with a modest income”) and each party was ordered to bear their own costs.
Do you need assistance with a property settlement matter? Please call Cristina Huesch or one of our solicitors here at Alliance Family Law on (02) 6223 2400 for assistance—your first no-obligation conference is free.
