Divorce

Life’s a Lottery – some you win some you lose

There is a first for most things and recently the High Court had to tackle the issue of how to deal with a National Lottery win in the context of a financial application. Mr. Justice Mostyn in S v AG (Financial Remedy: Lottery Prize) concluded that a lottery win was to be treated as non matrimonial property. The Court in financial applications has to distinguish what should be considered as matrimonial property which in broad terms is defined as assets that the parties have built up together during the marriage and have been treated by them both as assets of the marriage. The home they shared is generally always considered to be a matrimonial asset irrespective of whose name it may be registered in. Non-matrimonial assets are generally those assets that either the parties had pre-marriage or which may have been inherited prior to or during the marriage and those assets acquired post separation.

The above case in summary involved a claim brought by the husband in relation to a significant win that his former wife had won on the National Lottery.

The parties had married in Columbia in 1984 and came to the UK. They had two children. The wife was part of a lottery syndicate and all her Christmases came at once when the syndicate won £1 million in the December of 1999. The money was shared out and the wife’s slice was £500,000.00. The wife went on to use most of the money to purchase and do up a property which became the family home.

The wife’s case had been that in her eyes the marriage had been on the slippery slope for some time and her and her husband had been separated since 1996, therefore the win should be treated as a post separation asset and nothing to do with the marriage. The Judge rejected the argument that the parties had been separated since 1996. On the evidence it was clear that the parties had not separated until 2003 although he accepted that the marriage had been an unhappy one for some time.

The Judge said that the wife had, off her own bat, been playing the lottery for some time. She had not informed the husband she had been buying tickets out of her own earned income. He came to the conclusion accordingly that the initial win of £500,000.00 was to be treated as a non-matrimonial asset. However as she then went on to put part of the money into a house which then became the matrimonial home she in effect invested that proportion of the  money into the marriage and therefore part of the winnings had to be treated as a matrimonial asset.

The Judge in considering what the husband should receive looked in the first instance at the needs of the parties. He concluded that the husband had need of a lump sum of £82,000.00 in order to provide for his old age. Such a sum would leave the wife more than enough to meet her reasonable needs in her old age.

He did not consider that sharing the matrimonial home between the parties equally was justified. He said that:

‘given that the source of the matrimonial property was not joint endeavour but rather non-matrimonial property of the wife’s and given the relatively short period that the husband lived in 108 A Road, I do not believe that the husband is entitled to an equal sharing of it, or anything like it. I judge that a sharing of 15-20% would be fair. The value of the property after costs of sale (but ignoring the mortgage) is £480,150. My assessment of the application of the sharing principle gives a range of award to husband of £72,000 – £96,000’

The Judge went on to say that he thought the right result would be to award the husband £85,000.00.

It is interesting that the wife in her evidence did not endear herself to the Judge. The wife initially had argued that she had not in fact won £500,000. She said that it was her close friend who had won and out of the kindness of her heart had agreed to share her winnings with the wife. It was quite apparent from the evidence produced that the wife had been a co-winner and her attempts to mislead the husband and the court were clumsy and clearly misconstrued.

The judgment is interesting because we come back to the thorny question of what assets should be ring fenced and why those assets should not go into the pot in their entirety for sharing between the parties. One can perhaps understand assets that were brought into the marriage being ring fenced if the needs requirement has been met without recourse to them or indeed assets which one party may have acquired or built up through their own efforts alone. It hardly takes a great deal of effort or contribution to buy a lottery ticket yet it would seem that in itself was enough for the court to treat this asset as one, the bulk of which, the wife should retain.

The moral of the story clearly is if you want to share a lottery win with your estranged winning spouse  ensure that the ticket comes out of joint funds otherwise the promise of a champagne lifestyle will remain something of a distant dream.

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