Husband excluded from wife’s lottery windfall

When Mr and Mrs Eufrosin went to court to have the division of their assets finalised, the judge did not look favourably upon the husband’s claim to a portion of his wife’s $6 million in lottery winnings.

Facts of Eufrosin and Eufrosin [2014] FAMCAFC 191 * Full Court Family Court Appeal case

Mr Eufrosin and Mrs Eufrosin had been married for 20 years and had two adult children at the date of the hearing. Following their separation in 2009, Mrs Eufrosin purchased lottery tickets, funded by various sources, including amounts of around $20 and $50 from her sister. At the time the sister provided such funds to Mrs Eufrosin, the sister said to Mrs Eufrosin words to the effect: “If we win I expect to get something to help me pay off my mortgage.”

Subsequently, Mrs Eufrosin won a total prize of about $6 million. In accordance with her verbal agreement with her sister, Mrs Eufrosin provided to her sister the sum of $1 million and retained the balance, being $5 million.

In the initial Family Court proceedings to deal with the Eufrosins’ division of assets, Justice Stevenson did not include the lottery win in the asset pool. Justice Stevenson said a “significant issue” in the case was whether the husband had made any contribution to the ticket, as the wife had money from multiple sources, including her sister and funds from a family company.

“The money used by the wife to purchase the winning ticket could have come from any one of these sources or multiple combinations thereof,” Justice Stevenson said. “In my view, the husband cannot simply assert that the purchase money came from ‘joint funds’.”

Mr Eufrosin appealed the decision on the following grounds:

• (a) Justice Stevenson erred in not including the lottery winnings of $5 million into the asset pool;
• (b) Justice Stevenson erred in allowing the existence of a two asset pool approach, in effect excluding the lottery win from the asset pool available for distribution between the parties;
• (c) Justice Stevenson erred in assessing what, if any, adjustments should be made for the future needs of the parties.

Court decision

The Full Court of the Family Court dismissed Mr Eufrosin’s appeal, thereby upholding the decision made by Justice Stevenson. The court decided that:

• (a) The lottery win on behalf of Mrs Eufrosin following separation should be excluded from the total net asset pool;
• (b) In the circumstances of this case, it was appropriate for the Court to have a two pool approach to the available assets for distribution;
• (c) The assessment of future needs lies within the proper range of discretion.

The Full Court of the Family Court explained their decision: “What is relevant is the nature of the parties’ relationship at the time the lottery ticket was purchased. At the time the wife purchased the ticket, regardless of the source of the funds, the joint endeavour that had been the parties’ marriage had dissolved. There was no longer a common use of property. Rather, the parties were applying funds of their respective individual purchases.”

Streeterlaw comment

The Court’s decision makes it clear that the source of the funds to purchase the winning lottery ticket is irrelevant.

The court’s focus was on the nature of the parties’ relationship at the time the ticket was purchased. If the parties are living separately with no common intention, then the Court is likely to find that the non-winning spouse made no contribution to the win and thus, has no such entitlement to that asset in the property settlement.

However, the court may reassess the parties’ relevant “future needs” given that such lottery wins will likely give the winning party a better asset position.

For further information or advice, please contact the Family Law experts at Streeterlaw on 8197 0105 or email advice@streeterlaw.com.au.