Problem gambling can often be a root cause of marriage or relationship breakdowns. In family law matter where one party has reduced the asset pool available for division through spending on gambling, how will these losses be accounted for?
Prior to 2012 the Family Court would often undertake an exhaustive accounting process, tallying up a parties’ gambling losses and the resulting liabilities and making Orders that the responsible party re-pay these losses.
Since the decision of the High Court in Stanford & Stanford in 2012 the Family Court has moved away from ‘adding back’ items such as gambling losses (and other expenditures) to the matrimonial pool. The Court now deals only with existing assets and liabilities.
The bad news for a party separating from a spouse with a gambling problem is that this means the Family Court is likely to include liabilities such as credit card debts or personal loans run up by a spouse to pay for their gambling debts in the pool to be divided between the parties.
However, in cases where one party has significantly reduced the asset pool available for division via gambling losses, the Court may deem these losses as ‘wastage’.
In the 1981 case of Kowaliw and Kowaliw the Court established that where one party acts ‘…recklessly, negligently or wantonly with matrimonial assets’, effectively wasting a portion of the asset pool, their partner may be entitled to a greater share of the remaining asset pool as a result.
As such, while gambling losses may not be able to be clawed back from an ex partner, a party who has wasted a significant portion of matrimonial assets through gambling losses should not expect their spouse to pick up the tab.
If you are concerned that problem gambling or gambling debts may impact your entitlements during your separation you should seek specific advice from a specialist Family Lawyer.
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 contact our office on Freecall 1800 609 945 or email us now.