Lottery winnings are best considered as windfalls when assessing the contributions

A lottery win by one party to a relationship constituted an equal contribution by both parties to their final property pool available for the division at the conclusion of their relationship.

The case involved a de facto couple aged in their late 20’s who had both immigrated to Australia, separately, from overseas. The parties lived together in a de facto relationship, as defined by Section 4AA of the Family Law Act 1975 (the Act) for sporadic periods over the course of five and a half years.

There was no contest between the parties as to whether a “relationship” existed as governed under the Act, as in the case of Jonah & White[1], referred to in my colleague, Ms Ludeke's article titled ‘De Facto Relationship or Not?’ [2].

The evidence before the Court was to the effect that during the relationship, the parties had varying periods of separation. The last brief period of separation, before the parties' final separation, concluded with the parties reconciling in September 2008.

Following that reconciliation, the de facto Wife, as she claimed to do religiously, purchased a lottery ticket on 22 October 2008. The lottery was drawn on 25 October 2008, and the de facto Wife subsequently learnt that she had won $3million.

Due to the de facto Wife's difficulties conversing in English, she called upon her de facto Husband's assistance in claiming the winnings, which included the parties travelling together from Adelaide to Melbourne to personally collect the cheque from Tattersalls for the winnings.

The cheque was made payable to the de facto Husband solely, presumably on their joint instructions to Tattersalls and was after that deposited to a bank account in the sole name of the de facto Husband.

The parties applied the sum of $800,000 each to separate purchases, with the balance of the winnings being used to purchase a home and two (2) investment properties.

The parties continued their de facto relationship for a further year, before they finally separated in December 2009, the relationship spanning a total period of approximately five and a half years, as referred to above.

At the time of trial, the parties’ net asset pool comprised a total of $3.1million, such that the lottery winnings and the assets having been purchased from that place, were in essence, the only property available for division.

The de facto Wife's position was that she ought to be entitled to the entirety of the asset pool because she was the purchaser of the winning ticket. The de facto Husband disagreed. His position was that as he had assisted the de facto Wife, including in teaching her how to enter the lottery at the beginning of the relationship, together with the assistance he provided the de facto Wife in retrieving the winnings from Tattersalls, the Court should assess the winnings as an equal contribution by the parties.

Federal Magistrate Lindsay in deciding the case had regard to the case of Zyk & Zyk[3] wherein the Full Court of the Family Court that lottery winnings are best considered as windfalls when assessing the contributions of the parties during step one (1) of the four (4) step process. The Full Court stated, in that case, the following about assessing the lottery win, which in that case occurred some six (6) years before Mr and Mrs Zyk separating:-

"...windfall is used to describe a chance or unexpected benefit which the people involved neither anticipated nor made any effort towards...It is not a product of any particular skill, but it is the product of the chosen expenditure of a small amount of money..." [4]

After referring to that case and various citations therein, Federal Magistrate Lindsay went on to say "...the conclusion to be drawn depends on the closeness to the end of the marriage..."[5]

The Court ultimately held that the lottery winnings ought to be deemed an equal contribution by the parties given the source from which it was purchased, being joint funds, together with the parties conduct the following learning of, and receiving, the winnings.

On a side note, the de facto wife received a slightly higher entitlement to the property pool than the de facto Husband. However, that was as a result of the disparity in their incomes, when the Court evaluated the future needs of the parties.