Lottery wins and financial matters on divorce – and you never thought it would happen…

The recent case of S v AG relates to financial remedy (ancillary relief) proceedings issued by the husband against his former wife following her win on the National Lottery.

In brief, the parties had married in Columbia in 1984. They came to England with their two children in 1991. The marriage was unhappy from at least the mid-1990s. On 31st December 1999 the wife won £500,000.00 through a lottery syndicate. Majority of that sum was used to purchase and renovate a property which became the family home.

The parties separated in 2003. Husband applied for divorce in the UK but there were subsequent Columbian proceedings divorcing the parties and liquidating assets.
In 2006, husband applied for permission to apply for financial provision in England and Wales. By the time of the court proceedings, wife had transferred over £250,000.00 to a third party in response to husband’s application. By this stage, wife was living in a house worth £495,000.00 (with £305,000.00 mortgage) and had remarried.

The question for the judge (Mostyn J) was, amongst other things, whether or not the lottery wins should be regarded as matrimonial or non-matrimonial property.

Firstly, Mostyn J rejected wife’s assertion that the parties had been separated since 1996 and therefore that the lottery win had been post-separation. There was clear evidence that the parties separated in 2003.

Secondly, he also rejected wife’s claim that it was not her who in fact had won the lottery. The wife alleged that the monies had been won by her friend who then lent her some of the winnings.
Mostyn J then looked at the principle of need and found that husband had a need for a lump sum of £82,000 in order to provide for his old age. Such a sum would leave wife and her new husband with ample funds to provide for their own old age. In terms of whether or not the lottery win was classed as matrimonial or non matrimonial property was fact and case specific.

He stated that if the spouses were in a syndicate together (formal or informal) and both agreed to a purchase of the lottery ticket, then the prize would be joint and consequently equally shared. However, if one party acted out of their own accord (bought the ticket from their own income) and without the knowledge of the other, then the prize would be that party’s alone, thus considered as non-matrimonial.

In this case, the judge found that the initial lottery prize was non-matrimonial money. Wife was unilaterally playing the lottery, without husband’s knowledge, and bought the tickets from her own earned income. However, when wife invested her winnings into what was to become the new family home, she converted that part of her non-matrimonial assets into matrimonial property.
Nonetheless, given that the source of this matrimonial property was a non-matrimonial asset, and given the relatively short period in which husband actually lived in the house, equal sharing of that property would not be justified.

The judge decided that a share of 15 – 20% would be fair and ultimately awarded husband a lump sum of £85,000.00 on a clean break basis.

If you are in the process of getting divorced, or you are divorced but the financial matters are still outstanding, please do not hesitate to contact a member of the team at James Maguire & Co who would be happy to assist you.