Family Court Finds No Error in Treating Husband’s Lottery Winnings as Soul Contribution of the Husband

Keywords:  Property settlement; section 79 of the Family Law Act;  lottery winnings; contributions;

Introduction

In the matter of Elford [2016] FamCAFC45 (29 March 2016) the Full Court of the Family Court consisting of Bryant CJ, Murphy CJ, Murphy & Cronin JJ, heard the wife’s appeal against a property order made by Judge Roberts that the husband must pay the wife a sum of $51,000, an amount which, combined with the net value of a mortgaged home purchased by the wife after separation equalled approximately 10% of the $1.4 million asset pool.

 Facts

The husband was 22 years older than the wife and had three children from a previous relationship. He won $622,842 in lottery 12 months into their 10-year relationship. The husband invested his winnings, along with his savings, into a term deposit account consisting of $650,000 in his own name. Both the husband and wife led largely separate financial lives. The husband inherited $190,000 from his mother’s estate which he also kept separate.

The Full Court said that the judge correctly considered the husband’s savings and investments as contributions on his part. The first point of appeal by the wife, however, was that the lottery win of $622,822 was incorrectly treated as a contribution by the husband. The wife argued that the lottery win should be treated as a joint contribution by the parties.

In arguing that the husband’s lottery was a joint contribution, the wife acknowledged that the husband bought the ticket and deposited the money into his account. The wife believed that the lottery winnings should have been considered as a joint contribution on the basis that they were also in a relationship. Despite being in a relationship, however, the wife said that they each maintained separate bank accounts as this is what the husband wanted. The wife argued that the trial judge incorrectly applied the decisions of Zyk v Zyk (1995) FLC 92-644 and Eufrosin & Eufrosin [2014] FamCAFC 191 by giving undue weight to the financial aspects of the purchase of the ticket and the financial relationship of the parties rather than the “joint endeavour” (being that the ticket was purchased during the parties’ relationship).

 Finding at First Instance

The Court held at first instance that in addition to noting that the lottery money had been retained separately along with the $190,000 that the husband inherited in 2007 from his mother’s estate, it was clear that the parties kept their assets and finances separate from each other. They each had separate bank accounts and the wife attested to this when she responded that it was always her husband’s request that their respective accounts be kept separate and that the husband never wanted a joint account. The Court found that the husband’s weekly lottery purchase was not intended to be a “joint matrimonial purchase”. Further, the wife did not have practical control of the family finances.

The Full Court

According to the Full Court, it was better to approach the issue as one of a ‘contribution’ rather than a ‘windfall’ for the simple reason that the latter isolates the asset into a special category outside the traditional approach family law property proceedings (applying section 79 of the Family Law Act) dealing with the contribution of the parties.

The Full Court perceived the critical question in such cases to be ‘who is the contribution made by’. In ordinary marriages, the ticket would be purchased by one of the parties to the marriage with money that he or she happens to have at that particular time. Therefore, it is widely acknowledged that irrespective of the parties’ financial positions or otherwise, the purchase of a ticket would be regarded as a purchase from joint funds in the same way as any other purchase within that context and would be treated accordingly. It would equally apply if one party was working and the other was not as it is the type of partnership selected by the parties.

The Court explained that generally this approach would be adopted, however, there are times and situations where this is not the practicality of the matter at hand. The Full Court in Eufrosin & Eufrosin [2014] FamCAFC 191 adopted a similar approach. In this case the wife had purchased a winning lottery ticket six months after the parties had separated. The winnings were $6,000,000 of which the wife gave her sister $1,000,000 and kept the remaining $5,000,000.

According to the Court, the origin of the funds should not determine the issue of how a lottery win should be treated for the purposes of section 79 of the Family Law Act (which deals with contributions of the parties). What is critical here is the nature of the parties’ relationship at the time the lottery ticket was purchased.

Conclusion

The Full Court found that the purchase was initiated by the husband independently of the wife, consistent with a lengthy practice of the husband’s alone that pre-dated the relationship by about eight years. Rather than share or utilise any of the proceeds with the wife, the husband continued to treat his property as his solely. The wife accepted that this was the husband’s intention even if she was dissatisfied with this.

The wife’s appeal was dismissed with the contribution being recognised as one by the husband and not a joint contribution.

Mother Granted Recovery Order for Children after Father Unilaterally Relocated to US in  Shared Parental Responsibility Matter

Introduction

In the case of Bondelmonte [2016] FamCAFC 48 (8 April 2016) the Full Court consisting of Ryan, Aldridge and Le Poer Trench JJ heard a father’s appeal against orders made by Watts J in a relocation case involving two boys. The matter considered what should be regarded as the ‘primary’ and ‘additional considerations’ of the children are pursuant to s 60 CC (2) and (3) of the Family Law Act 1975 (Cth) (“the Act”).

Background

This case involved a unilateral relocation to the US sought by the father while on holiday with his two sons of almost 17 and 15 years of age. The two boys wished to reside with their father whilst their 12-year-old siblings continued to reside in Australia with their mother. The existing orders made in 2014 were for equal shared parental responsibility and the three children were to live with the mother and father as agreed between the parties or at the children’s own election.

The family lived in Australia until January 2016 when the father took both sons for a holiday to New York with the mother’s consent. During the course of the holiday, the father expressed to the mother his intentions of remaining in New York indefinitely with the two sons.

The father gave evidence under oath that the boys expressed their wish to remain in New York with their father. The children claimed they had an estranged relationship with their mother, therefore, did not wish to return. The mother was granted a recovery order and the father’s appeal was dismissed. The Court reinforced in relation to a child’s view that “context is critical”.

Central Issue in the Case

The central issue in this matter was whether the children’s views should be taken into consideration. In this case “context was considered to be critical”. The Court ruled that the children be returned to their mother and that a report was required that dealt with more than simply the boys’ views.

The Court ruled the report was required to assess the dynamics of the sibling relationships and their respective relationships with their parents.

Considerations

Ryan and Aldridge JJ in the majority held that the primary judge was satisfied it was in the best interests of the two boys to return to Australia pending a determination about whether, in the long-term, they would continue to reside in Australia or relocate to the United States.

If the father decided to return to Australia with the two boys, they were to continue living with him, however, if he remained in New York, the boys would live with the mother in Australia. As the boys had a strained relationship with their mother, the Orders provided that the mother and boys could make arrangements for the boys to stay with nominated third parties without the father’s approval.

His Honour mandated that a report which dealt with more than simply the boys’ views was necessary as the Court would not examine such factors as to the dynamic of the sibling relationship and also each sibling relationship with their parents. The report was ordered to take place in Australia where all family members were able to participate.

His Honour expressed disdain in the father’s breach of the orders and in doing so the father demonstrated poor judgement as a parent and ‘as a role model to the boys’. For the Court to agree with the father’s behaviour would fail to acknowledge what might be considered appropriate parental behaviour.

CONCLUSION

Section 60CC(2) and (3) of the Act requires consideration of the following:

· the boys’ expressed views as against the damage currently done to the mother’s relationship with both sons;

· the father and daughter relationship; and

· the daughter’s relationship with her brothers by the unilateral action of the father.

These factors need to be considered alongside the history and family dynamics and any identified risk factors.

If not for the mandated order to return both children to Australia, the Court raised concern that the above relationships will be irretrievably damaged. Therefore, the Court found it in the best interests of all three children to make the orders for the return of the boys to Australia.

Father’s Grounds for Appeal

As there was an order for equal shared parental responsibility pursuant to s 65DAA, the father relied on the ground of appeal that the Court was obliged to consider whether or not an order for an equal or substantial and significant time was in the best interests of the children and reasonably practicable prior to ordering the return of the boys to Australia. However, the Court did not accept that an application for an order that a child lives exclusively with one or another parent is an application for a substantial and significant time.

Section 65DAA (2)(b) of the Act requires that the Court consider whether the child spending time with each parent would be in the child’s best interests. The father also contended that sufficient weight was not given to the children’s views.

However, in the case of Maldera, it was found that it is not a requirement for a judge in his Honour’s position to make orders consistent with a child’s stated views. Instead, a primary judge is required to consider the weight to be given to such views.

Factors Giving Weight to a Child’s Expressed Views

The Court stated there is a range of factors that may affect the weight given to a child’s expressed view which include age and level of maturity of the child in question. Therefore, context is critical as it is a matter for the judge to determine how giving effect to a child’s stated view aligns with the best interests of the child.

The case of R & R (Children’s Wishes) [2002] FamCA 383 illustrates this point. The parties and the Court were satisfied that each child could choose who they would live within Australia. The children, however, were not permitted to make other significant long-term decisions as that power remained vested in the parties jointly. The majority dismissed the father’s appeal and ordered that the father pay the independent children’s lawyer’s costs.

Allowing the Appeal

Le Poer Trench J allowed the appeal on the basis that the hearing should have been adjourned with the mother required to provide additional information about the proposal for the children to live with the volunteers.

Furthermore, the independent children’s lawyer should have been given an opportunity to investigate the proposal in the usual way that it is carried out. The father should have also been required to notify the Court of his intentions to accompany the boys on the trip back to Australia in the event the order sought by the mother is granted.

Le Poer Trench J also believed the father should have been given an opportunity to put forward a proposal to house the boys in Australia pending the determination of the mother’s parenting application and any simultaneous parenting application he would be entitled to make. Le Poer Trench J believed there was no urgency in the matter that should have disregarded these requirements.