29 Mar 2015

Given the extremely remote chance of having a large lottery win surely a party would never need to worry about what treatment the Family Court might give to these winnings in the event they have separated from their partner or spouse. Perhaps surprisingly, this is not the case.

When considering the possible treatment of post separation lottery winnings it is important to note that the Family Law Act 1975 (Cth) (“the Act”) does not define “matrimonial property.” Rather, s 79 of the Act grants the Family Court the power to make property related orders “with respect to the property of the parties to the marriage or either of them…” including assets acquired after the parties relationship has ended.

As such, just because a winning is received by a party post separation it does not mean it will be automatically excluded from the asset pool available to be divided in any Family Law property settlement.

In the recent matter of Eufrosin and Eufrosin [2014] FAMCAFC 191, Thackray, Murphy and Aldridge JJ were asked to consider this exact proposition on appeal.

Mrs Eufrosin received a considerable lottery winning ($6 million) after the parties had been separated for 6 months, leading Mr Eufrosin to make an application to the Family Court submitting the winnings should be ‘added back’ to the matrimonial asset pool as the ticket was allegedly purchased using joint funds.

Their Honours considered the earlier case of Anastasio and Anastatsio  (1981) FLC 91-093 in which Baker J said of lottery tickets purchased during a marriage “Although the ticket was purchased by the husband, it was so purchased with the object and hope of achieving a matrimonial objective and I propose therefore to regard same as a matrimonial asset.”

However, their Honours upheld the findings of the trial judge noting by the time Mrs Eufrosin purchased her winning lottery ticket (regardless of the source of the funds) there was no longer a “common use“ of property between herself and her husband. Rather, the parties were applying funds for their respective individual purposes. As such, in the words of the trial judge, it would be “pure sophistry“ to credit the husband with any contribution to the funds used to purchase the lottery ticket.

As such any claim Mr Eufrosin might have had to his ex wife’s lottery winnings was limited to an adjustment the Court might make when considering relevant factors under s75(2) of the Act which can broadly described as factors which may effect the ‘future needs’ of a party.

In this case, the Court decided to award Mr Eufrosin $500,000 from his wife’s lottery winnings in recognition of the fact he was 62 years old and nearing the end of his working life, lacked any significant formal qualifications and was operating a company at a loss.

In light of the above, should a party be lucky enough to receive a lottery windfall following separation it is entirely possible their former spouse may be entitled to a portion of these winnings. 

This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please see our family lawyers and contact our office on Freecall 1800 609 945 or email us now.

 

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