Show me the Money

Happens, the Divorce Down Under podcast where we talk about anything and everything family law related. Welcome.

Two split happens, the Divorce Down Under podcast with me, Alex, and my legal colleague Liza. Liza, I thought today we might talk about some money issues in property cases, some things to do a around lottery wins and windfalls, inheritances gifts.

family loans, uh maybe a little bit about sort of what happens if somebody wastes money in the relationship and what happens if some of the behaviour of somebody is is of an impact if it's domestic violence. So show me the money. Let's talk about lottery.

Don't we all want to win them? Win big. So in terms of the lottery win, it's still a contribution in short. Mm-hmm. Um, but how it's actually received is going to Lovely line that I use in every single episode. Depends on the case. Yeah, it's very nuanced, isn't it? There's a lot of there are actually surprisingly um quite a few cases, decided cases about lottery wins. I think

That's isn't it, because they people do say that winning money changes a person. So maybe they win the money and they get divorced or they've just got divorced and they have Made things worse, so then they're gonna fight about it. They've got something to fight about then. Well the two thousand case that I think you were talking to me about earlier, Farmer and Brambly. Yeah, that's the one. That's where the parties they've been together for twelve years and they had one child.

They had no assets of any value when they separated. Um, during the early part of the relationship the husband was suffering from drug related problems and the wife supported him. um financially and emotionally and she also um financially supported him while he was studying and assisting him with some literacy skills and and he was ab able to eventually obtain some full time employment. But after separation. was mainly living with mum and had irregular contact with dad.

And so about eighteen months after the party separated, but before they did a property settlement, The husband had won about five million dollars in the lottery. Nice. Nice. Two thousand as well. I mean that's Yeah. So that's exactly right. Well, they had nothing. They've gone from nothing to five million. But this is hang on, a year and a half after they've separated. In terms of what happened was the wife then made an application for a property settlement and then he arranged for his

financial affairs to reduce his child support liability to Nil. Um he gambled over$100,000 and tried to claim that it was It wasn't him that won the lotto, but it was his mum. موسیقی He's gone down the path of fibbing about things which always Yeah. So um the judge in that case held that the post separation lottery win was available for distribution between the party.

Cause yeah, because of the wife's contributions. Now let's think back. So the wife was They contributed all of the non financial supportive contributions that didn't have a financial value when when they separated they had nothing. That's right. The time the property settlement was done. He had five million bucks. Well minus his spending. That's right. Hum his mum did. Um and all of course, um, so as it turned out, she was awarded seven hundred fifty. Okay.

So it's actually it's quite substantial. It's you know, when people think, Oh, okay, well overall, um, what does that work out? Quickly, Alex, do the maths. What does that work out as a percentage? Assume that the property pool was five million. Fifteen percent. fifteen percent. So that's not too that's not really too bad.

for her, um you'll ha you're gonna have a lot of people jumping up and down saying well She did all that stuff and she flannessed getting back to that episode that we talked about the other week about um the types of the types of outcomes for people it all depends on those contributions and and the amount of money that you're talking about. million dollars in two in the year two thousand was a lot more money than what it is.

Although if the lotti lottery gods are listening, I'd still be quite happy with the fight. Yeah, I'd be okay. And and my mum is not winning it. Yeah. It's just all mine. But in terms of um the that whole case of the the lottery win. The important thing is to that you need to take away from it is that until you are financially separated Or a binding financial. And therefore it's not a little bit.

It may not be given as much weight as what you would Still going to be taken into account So it's really important that You do go and get your finalise your that ho all of your property affairs by getting a property order or a or a binding financial Don't don't sit around because if you do end up with After the separation.

then at the time that a judge decides your property, the judge can only deal with what's in front of them on that day. And that would include that money. Yep. Even if you end up with a majority share of it, you still might feel somewhat aggrieved about having to give your ex any I mean the other boot on the other foot of course, you'd be saying in that case here in the farmer case. Well why shouldn't she get a a chunk? Because she's contributed, worked very hard over that time.

Um but of course they used to be. I mean lottery wins these days, I mean since the um I think the Zeit case in which was in the mid nineties, they used to be just classified as windfalls, they just land in somebody's lap. But now there is more of a uh a way of considering them to be contribution. Um interesting that uh that zeit case that I mentioned, the consideration there was how they um ended up their winning. The husband won after um I think I think it was about two years.

Yeah. Yeah, it was a couple of years afterwards and he he won It wasn't big by the by the time, you know this is a nineteen ninety five case, but ninety five thousand dollars. Still very nice to win of course, but The court really said that actually, do you know what? The money came from effectively like a shared pool of resources. So normally the courts these days will say, you know what, most most marriages, most relationships to factor relationships.

are one where the parties share a shared economic purpose and they might pull their money in and somebody might buy all the groceries, somebody might pay the mortgage payments, doesn't matter, or it might go into a joint account.

But if it's the kind of money you say, Oh, you know what, I'm just going to pick up a scratchy and you pull out a couple of bucks out of your pocket, it's the same couple of bucks that you might have otherwise bought, you know, some milk with or something like that. You go home with a loaf of bread, but you bought a lotto and that wins. It's a shared contribution. 'Cause it came from the shared funds, the joint

Again, if you're if you do decide to get separated, if that happens to you, our advice is generally gonna be saying, Do you know what? Tidy things up legally, go and see your solicitor, get it organised sooner rather than later and then Take a lot of things. Then then go and ask Mum if you could have some of that lottery that she amazingly won shortly after your separation. So All right, well yeah, I mean lottery wins. It's it's surprising the number of cases that there are out there. But

More common and this happens to a lot of people because, you know, death taxes and governments not necessarily telling the truth are some of the great certainties of life and that means that quite a few people inherit money. the grim reaper comes to all and but sometimes it can drop some coffers into one of the During the relationship or even afterwards.

Now, the courts are really quite ambiguous, you know, when you read through the cases as to how they should be determined the inheritances. But There was a case not so long ago when the full court said, uh this is in Caron, that there was absolutely no absolute rule how they sh how these inheritance should. And it it it said from the court, it said there is always discretion to treat inheritance differently from other aspects.

but never an obligation to to always exclude them from consideration. In fact, ordinarily, a trial judge should begin by identifying all of the parties existing legal and equitable property interests. And obviously that is So the courts themselves are saying Hm, yes, well we must take it into account. Even if the inheritance comes to you at the very end or even post separation, it's going to be a factor taken into account.

You know, the timing of the inheritance and the express purpose in the will that might be you know Uh a mum might leave money exclusively to her son and it's expressed in the will only to him and I don't leave anything to my daughter in law, it just makes makes no reference.

That's that can be quite persuasive in terms of it is very much a contribution by the person who receives the money. And therefore the timing of the contribution becomes But it doesn't take it out of the pool though, does it? Doesn't remove it from the pool. It exists, you know, as uh like the Karen case said, you know, it is an obligation of a judge to identify all of the equitable and legal properties. So it's gotta be in there somewhere. So it's gonna be in there. Um all a hundred percent.

By that party. You know th thi this guy is a decent guy or this guy has told lies throughout this, so I'm going to put rather less weight on it or I'm going to put rather more weight. Sometimes you'll have the case where um mother in law passes away after Wife has been you know caring throughout the relationship. heavily and gave her a lot of financial and emotional and in the same way that she might have given those made those Will become relevant.

um that to be made um made an issue in the proceedings. But Mm. So if you have the case where where you're you and your wife, for example, have separated and your mother is elderly, might be an idea to have some Any sort of be given some kind of weight or that the court can rely on as to what um the deceased intentions were and as to whether or not there's any merit to those suggestions. Yeah, this party to the marriage to the Mm.

that in that property pool. So it it's really it's treated An invested an investment property that you've got. I mean there was a very An oldish case now, nineteen ninety one, the case of Benici. Um the court then it was a late inheritance, it was right at the end of the relationship. And so what the court said in that case. Uh, The other person can't realistically be considered as having contributed significantly to that inheritance received very late.

Um as with all of these cases, everything turns on its facts because no two sets of families are ever the same. You'll be hard pressed to find a case that it f exactly fits on top of Yeah, sure your situation. So always get legal advice and go through it carefully when you get that advantage.

If you are concerned as a parent, you know, of a couple that might be warring and you worry that your inheritance might sort of end up being fought over by, you know, your your son or daughter and their partner. You have got options. I mean, go and see your solicitor about that. You can create what's called a testamentary trust inside your you know, your will. And that is then

And clearly you wouldn't have your son or daughter being the trustee of that, but get legal advice around it. Um this is purely by way of legal information as we stretch. There are ways of keeping that inheritance out of the hands of your child directly so that the courts can't then interfere with that arrangement. They will

Usually well my view is that the courts will or should take it into consideration at the very least as what's called a financial resource. That's right. So if you have the benefit of a huge chunk of money in a testamentary transaction then even if it's a discretionary trust testamentary trust testamentary trust

It's something that the court can't just close its eyes to. It's going to be aware of it, even if you you can't compel the trustee to pay you money. But if it has historically paid you money and it has bought these things for your benefit and that maybe remain in the name of Any wit about them, then it becomes quite tricky to unravel. But it's not something that a family court is going to ignore the existence.

because you might have um party A who has that financial resource um and party B who doesn't. So they're not going to be able to do that. Could be a a a very large adjustment made. Of whatever is left. Yeah. Interesting. One of the things just before we leave the inheritance. The topic, though, is that an inheritance inheritance at the start of the relationship. And if you've got a longer relationship, usually Taken as any other.

experience. I've I haven't really come across too many cases where say you've got a a twenty year relationship, whether it be a relationship or marriage, um, I haven't found too many cases whereby um in assessing contributions has said, oh no, that was an in inheritance, that's a sentimental thing. Um and you

There was a case back in nineteen eighty seven actually. A shoe ring. Right. And that dealt with a wife receiving a significant inheritance right at the start. Um and that was able to buy the p parties a house. Yeah. A it was actually another And when they did Добро пожаловать в наш канал! I don't know the money amount. No the money amount wasn't in the uh in the head note for that case.

But the period that they were together wasn't as important. Okay. They were together for quite some time. Um But he didn't do too much apart from a little bit of handyman work around the place. This investment property. And so when they did split up the court said, you know, we we're not going to wipe out very much of the initial contribution factor. So more weight was placed on it. But again, nuances with the with that case there is that perhaps the kind of the husband was not doing it.

So an inheritance. Result in category of lifestyle. Particularly if neither party really does anything more, then of course the Contribution.

Yeah. So we did touch on uh this is so tangentially related to inheritances, which is prospective inheritance. We we've mentioned that before, I know, on another podcast, but the Tullican White decision along the lines of I think the husband uh wanted to compel the wife's mum took up with a copy of her will. But mum yeah, Mum's mum's wife's mum was still alive. Go away. It's Rightly so. Rydyn ni'n mynd i'n mynd i'n mynd. Rydyn ni'n mynd i'n mynd i'n mynd.

So, again, if you have exceptionally wealthy and ageing in-laws... Yeah, is to buy flowers and be pleasant to your That's no reflection of mine also are lovely and anyway. I'm dead by since we were on the other day. Well you're always on the floor.

Oh my god, yeah. There you go. Tips for life. Um anyway, so well I we'll move on a little bit now'cause that's that's inheritance is clearly you need to get a little bit of advice. The timing of them is very important and the nuance of how the gift was intended will

Quite often we'll come across cases and I've had specific cases with documentation around this too where Maybe a parent of one of the parties has lent them money at the start of the relationship, perhaps as a deposit for a home or something like that. So when is a loan not a loan? If yeah, a f a loan from a family member, does that get taken into account? Do the do the judges look at those? Do they how do they get treated?

I I always smile when I see these cases because most of the time whatever it was intended as, it might have been intended as alone, but depending suits them to be at the time of the separation. It's then all of a sudden oh no it was a g Yeah.

It was a gift. I was I had a I received a gift. Or, um, if it was is trying to downplay and say, Oh no, I've got to pay all that back yet and then I wanna two hundred thousand dollar cash amount, that's gotta come off'cause I've got to repay that loan to my parents. So when is alone not alone? Well there there was a case a a long time ago now, um AF Peterson's and Judge Nye said of of those sorts of loans.

Uh he said, although a loan to a party by his or her parents may create a legally enforceable debt and maybe an obligation, if it is not in fact enforced and is not likely to be uh to have to be met, It should not be taken into account. And and that seems to still be good law. It's it might very well have a piece of paper that says this is a loan agreement. It might very well be possible to trace gone from that bank to this bank.

But do you know what? If that parent's not likely to sue the child for the return of the money, then it's not in any m meaningful way or anything apart from a gift, is it? I had one last year, a property case, and that's exactly how it was treated. It was The father of the wife, um, was alleging that there was a loan. and th those two hated each other so he was actually on on the same side as the husband and so he was

Was allegedly owed back to the to the father, get the wife to have to carry that debt. But in doing so, all it was doing was reducing. of the equation of the reducing And so it's It was actually a Because she it made it look like um she wasn't getting as much from the property pool when in reality, if she wants to take that. It's not necessarily going to be enforced by the father. There's no legal obligation, there's no judge. father to then pursue his own daughter for repayment of the debt. So

So stay in with your parents, everybody. Yeah. Interesting though because We had to we did cover all that case law in There's no guarantee that that's the same. I'm not going to treat it as if it Yeah. Yeah, which is i it's exactly on song, I think, with with Judge Lye back in the day. Nego is proud. For all your family law needs, call us on zero seven double five. Zero two. or visit our website at arbanlegal.com.au.

But yeah, I I've experienced that myself. I've even seen cases where there have been actual loan documents signed up by the children. Oh this stat decks, yeah. But no a a loan agreement drafted by solicitors that people entered into and it was such a long time ago that the wife had forgotten all about it. And it had never been pursued, never been enforced.

It was by the looks of things clearly done in order to be able to offset something about against tax a long time ago on behalf of the father in law. Anyway, to cut a long story short, the father in law had deceased and never pursued it, and neither did his estate, it had died weak.

We were able to obviate that one on that occasion. But get advice in case if you have been paying loan money back to a parent then it's very quite possible that it could in fact So when you just a l a lump of money is dropped into your account and say, Pay me back when you can that might be a sort of a a bit in the never never side.

Something we also hear quite a lot about is Of assets. So when somebody does something to the property pool to either diminish it or their conduct, their behaviour You get a lot less than you thought you had. Now you're you hail from New South Wales, so I've dug this case case up especially and you'll you'll you'll guess why in a moment. There was this is pre the de facto relationships between So this goes back to two thousand two when it was a Supreme Court of Solman and Selman.

The entertaining part that I found about it it's uh I know we've we've done another episode dealing But I I quite liked in a way this one because the wife said that the husband drank so much.

and even had her friend give evidence that on one occasion he had consumed six bottles of red wine. Now The judge didn't accept that evidence directly, but what he did end up saying was I am satisfied mister Solman drank fairly frequently and that the cost of his drinking was an item in the total weekly outgoing.

of the family of a suffice of a size sufficiently large for it not to be able to be ignored.'Cause just like to put things backwards. So this guy drank so much it was draining on the grocery bill every weekend so Therefore that was wastage. But I'm thinking waste? Not why? No, no, no. I think it goes to my waist. I guess it depends upon the nature of the wine, doesn't it? Yeah. It's red so it's the right colour to start with.

But there you go. So there you go. That was just for you. But that's an an indication as to um how how a wastage argument might be framed. That's a bit of a bit of a fun one. The big case If I had a dollar for every time Oh the we need to this money needs to go back to the pool. They've wasted all this money. If they've bought these shares or

Crypto pops up a lot these days. Oh you know, he spent all of this, he's got all this in crypto and I mean crypto being what it is, it's it's c it's like trying to nail jelly to a wall to ascertain what somebody's interest might really Kwali. I call I well, I call it Kowali. It's probably not It's kawali with a W on the end of it, so it's Kawali or Kawali but Yeah. So talk to me a little bit about that one. Big case, isn't it? Yeah, it was. It was from nineteen.

The judge in that manner stated that as a general principle, financial losses incurred by parties or either of them in the course of a marriage, whether it's as a result of from one of them or both of them, should be shared. Um so There were certain exceptions. Basically, it all reduced down to where one of the parties have embarked on a course of conduct designed to reduce or minimise the effective value or worth You're talking about some sort of intention.

Right. So somebody it's it's not yeah, it's the deliberate al element to that, isn't it? It's you have the state of mind to say, I'm gonna wipe this money down, I'm gonna ride off the I'm gonna drive this Ferrari into the tree so she can't have it type thing. But then the judge. to the list and saying, well or where one of the parties has acted recklessly, negligently, or wantonly with matrimonial acts. The overall effect.

of which has reduced the mini or minimized that value. So so basically the on the one hand they're saying If you're I think the only ones that are going to fall outside of that category, the only sort of decisions Yep. You really should invest all your savings. Oh my god. So I I remember going to a a seminar with uh some uh liquidators talking about these people who'd invested a lot of money in these plantations. The fact it was a liquid on the seminars probably tells you how well it went.

That's right. Oh no, so many people that have been affected by that. But anyway, but in terms of these the at at that time they're doing they're not being intentional to try and reduce the pull. Looking at it and they're getting they're taking advantage. Qualified person.

Yeah. You're taking that o that on board and now that person then goes invests all their money and there's nothing left and then you have the argument by one of the parties who is now aggrieved by that decision and'cause they've lost all they've lost everything and they're saying, Well They wasted all this money on the trees and da da da da da and Yeah.

But I don't think that really would get up if it was a a real case, if you've got someone that was actually had taken the time to get some And just because the investment goes wrong. It doesn't necessarily make it make it bad advice at the time if it's been delivered professionally. We all know now that it was all a bit of a scheme and whatever else. But at the time though uh receiving advice, albeit wrong.

and losing out. If the if it had have gone and skyrocketed and made them multimillion That the wife would be having the same argument. It would have been the the lottery contributions argument. Rydyn ni wedi'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i'i But it does get tricky when you're talking about, for example, gambling.

There's there's gonna be plenty of people out there. that there's a little bit of skill in reading the form guide and understanding the guide and understanding the odds. I yeah, I I'm the most inveterate gambler with my fifty cent and one dollar bets uh that I I put maybe once a month on very basically five. Well I I I've got a bet that actually it's an ongoing eight with my friend between the Broncos games and the Cornella Shark. And well different football but you're

the NRL and we bet fifty cents and we bet it every single time. We do need someone to actually tally that up. Who's winning? We don't know. We haven't worked it out. But we we we do want someone to um tally that up for us one day and we don't really remember what the bet was over, but the point is it's it was just fifty cents each time.

how it all came about. But anyway, that I digress. That's the that's the extent of my betting. But But gambling can be a way that people lose a lot of money very quickly. And you know you see all the time. They say that. If money is taken out of an account, turned into cash. Once money is in cash, you mean it could slip through fingers. hard to um trace that. Just gave me an idea. No, I'm kidding.

Yeah. Yeah. Waste arguments are i in the the ordinary course, most people use their bank accounts and their cards to buy and sell or to buy things with. in that disclosure process that you have to go through with a family law property. you'll soon spot uh where somebody is, you know

doing what Mr Solman used to do. Uh I've I've certainly seen that bank statements and you see it up until separation it's Dan Murphy's, Dan Murphy's, Dan Murphy's, BWS, lick along, lick along. And these vast amounts of money being spent Post separation, zero, nothing. But mysteriously cash did cash with Cash withdrawal. Yeah, as if I yeah, we're not gonna say that one at all. But so waste arguments exist but Nobody's really gonna In any meaningful. I tell you.

Anyone looked at my bank statements right there? Six bottles of red wine every night then I'm just signing you're still s walking around and standing up then yeah you probably Good on you. Yeah, you probably live in Adelaide and you might be related. Um apart from that. Ha ha ha. Rydyn ni'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd i'n mynd.

Um okay, so look, waste arguments uh you know, the the co uh Kawali, Koalu The the rule of thumb really is that it would need to be a kind of behaviour that was reckless, negligent type behaviour or deliberate behaviour. Otherwise, you know, a couple getting together, they have sort of a shared economic pathway with them and you rise and you fall together sort of. Oh I had one. And you may remember it. But the the husband He dec um he um he he only owed I think it was only a

Right. And w but he had the means to actually pay it and pay it off. Went bankrupt because he made a point. He said to his ex at the time, I will not be giving you one. and I will go bankrupt before And so he did. And so he did. And so of course the trustee in bankruptcy gets involved and He bought that at some And it's just a There's definitely. It was really, really bad. Insolvency and bankruptcy is an episode all on its own to be had at some point down the line.

We could all just go out and have a cup of coffee and um fall asleep. It is a it is a real thing. People try and avoid their obligations. They'll cut the nose off to spite the face. Absolutely driven by emotion and zero financial sense. Stupid. But anyway.

Talking of people's conduct, that brings me on probably to the last limb of this episode, which is when somebody's conduct is so poor in terms of their personal behaviour towards Will a court do anything about that when it's assessing property? I'm talking about family violence. Does that have any bearing on a financial?

So you've got to... I would have thought that if you're looking at A longer duration of time where you have like Or it could be um financial control and financial manipulation, um, where for example husband might say to wife, no No, you're not going out and getting a job. No, you've got here you go, you have two hundred fifty dollars each week to go and get the growth.

So that that controlling or abusive behaviour that prevents somebody from being able to you know maximize their income earning potential potentially through It forces them out of the workforce, they have no Ken Kennan is the case, isn't it? Yeah, we often talk about as family lawyers. Um and in that case.

yw'r yw'r yw'r yw'r yw'r yw'r yw'r Where there is a course of violent conduct by one party towards the other during the marriage, which is dem and this is key, which is demonstrated to have had a significant adverse impact upon that party's contribution to the marriage. Yn ymwneud hyn, mae'n gwneud hyn sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n sy'n That is a fact that a trial judge is entitled to take into account when assessing contributions.

So if that conduct is something that you can point to and demonstrate and again, this is what you were saying about it needs to be really sort of not just a one off occurrence. No, it has to be over a period of time. Unless it's like has beaten you to a pulp that's Yeah, put put someone in hospital. That's probably would fall under that, but I think it would fall under a whole range of other categories first before we worried about

Um but in terms of it does need to be a an i over an extended period of time. It's just that continual uh abuse. Although I don't think the cases really reference it being over a period of time easier way to show and to prove that you're unable to work is to show that this has all been happening and it's it makes more sense.

No you're not gonna have an argument with your you might feel a little bit fragile after it, but it's not necessarily going to affect you and stop you from being able to go off and go to work. Yeah, and look and that's in no way sort of condoning or thinking that behaviour's all right. It's it's just saying from a financial point of view, yeah, is there a l a link between the behaviour that's complained of?

Yeah, any diminution in your earning capacity or or in in your contributions, your ability to contribute. So that's the Kenan point really. But I mean get very specialist advice. Go and see a family of all. Really tricky. Mm. And apart from uh and this goes back to uh does I say nineteen ninety three, so a few years This was where the husband's behaviour ended up with um the wife being awarded um a monetary damages claim. She got seven thousand dollars.

back in nineteen ninety three would have been a little worth a bit more than it is now. Um for common law damages as w under some cross vesting legislation at the time. So Interesting that a court would be prepared to make that order sometimes, but I would be very reticent about putting that before the courts generally. It would need to be a very specific case. You need some pro. You'd need some very clear proof of that.

On causation. Because that's that's the har that's the hard thing. So there's that overlap between, you know, common law, um, and your personal injury sort of cases and in the family courts where they don't really But the causation is usually where people come unstuck. Those Kenan applications because you need to show that it's in fact caused that inability to work and earn an income and put you at it some

Okay, well I think that probably wraps us up today for those sort of slightly esoteric property cases. Thanks very much indeed for listening to Split Happens and we hope you'll join us again for a future episode.