Randall and Albaugh - [2009] FMCAfam 475

FEDERAL MAGISTRATES COURT OF AUSTRALIA

RANDALL & ALBAUGH

[2009] FMCAfam 475

FAMILY LAW – Whether husband has interest in Tattslotto win – whether any interest of husband in Tattslotto win vested in bankruptcy trustee.

Family Law Act 1975 (Cth), ss.75(2), 90MT(1)(a), 90MZD
Family Law (Superannuation) Regulations 2001
Bankruptcy Act 1966 (Cth), s.58(1)(b)

Applicant:

MR RANDALL

Respondent:

MS ALBAUGH

File Number:

DGC 447 of 2008

Judgment of:

Phipps FM

Hearing date:

2 December 2008

Date of Last Submission:

22 December 2008

Delivered at:

Dandenong

Delivered on:

14 May 2009

REPRESENTATION

The Applicant appearing in person:

The Respondent appearing in person:

ORDERS

That within 7 days the wife provide a copy of this order to the trustee of the AMP Life Flexible Lifetime – Super superannuation fund for the purpose of according procedural fairness to the trustee pursuant to s.90MZD of the Family Law Act 1975 (Cth).
That within 28 days of providing the order in accordance with paragraph 1 the wife file an affidavit that she has complied with paragraph 1 and annex any reply from the trustee.
That the application is adjourned to 1 July 2009 on which day the order contained in the schedule will be made provided that paragraphs 1 and 2 have been complied with and subject to any objection by the trustee.

Schedule

Pursuant to s.90MT(1)(a) of the Family Law Act 1975 (Cth) whenever a splittable payment is payable in respect of the accumulation interest held by the husband Mr Randall (account number [9]) in the AMP Life Flexible Lifetime – Super superannuation fund the wife Ms Albaugh be paid an amount calculated in accordance with the Family Law (Superannuation) Regulations 2001, using a base amount in the sum of $25,000 at the operative date and that there be a corresponding reduction in the entitlement the husband would have received in the accumulation interest held by him in the fund.
The operative date for the purpose of these orders is seven days after a sealed copy of this order is served on the trustee.
The above orders bind the trustee or trustees from time to time of the AMP Life Flexible Lifetime – Super superannuation fund.
Otherwise each party is declared to have no interest in any property in the possession of the other party.

IT IS NOTED that publication of this judgment under the pseudonym <Name & Name> is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
DANDENONG

DGC 447 of 2008

MR RANDALL

Applicant

And

MS ALBAUGH

Respondent

REASONS FOR JUDGMENT

Introduction

The husband and wife separated, and then divorced after the husband was gaoled for misappropriating funds from his employer. They have agreement on the living arrangements for their one child. They disagree about property issues.
The issues are:
Does the husband have an interest in a $400,000 lottery win by his current wife?
Should the wife would receive half or three quarters of the husband’s superannuation?

Background

The wife was born in 1968 and is aged 40. The husband was born in 1969 and is aged 39. They married in April 1999 and divorced in January 2007. There is one child of the marriage [X] born in 1999 aged 9 years.
The husband was employed by [omitted] until early 2004, when it was discovered that he had embezzled a large amount of money, according to the wife about $1.2 million, and, again according to the wife, a further $1 million from a previous employer. He was imprisoned in December 2004 with a minimum term of two years and was released on home detention in June 2006. The wife visited him in prison with the child for some time. The husband says the marriage came to an end in 2005. The wife says it was early 2006.
At the time the husband's embezzlement was discovered the parties owned a house, but it, along with their two motor vehicles and other property was sold.
The net proceeds of sale of the house was about $150,000, and the wife was paid $70,000, after negotiations through solicitors. She used some of that for the husband’s legal expenses. The wife spent $12,000 buying a motor vehicle. Some money was spent to finish renovations to the kitchen of the house prior to sale. None of that money remains.
After the husband was imprisoned the wife took the child every week to visit him while he was at [L] Prison. He was transferred to [U] prison in September 2005. The wife says the distance made visiting difficult and facilities to help with the child were nonexistent. The relationship began to deteriorate and she says the parties agreed by late December 2005 that she would not visit.
The husband says the parties separated in 2005. The wife says it was early 2006. They were divorced in January 2007.
In 2002 the wife had chemotherapy and then surgery to remove a tumour. She has Crohn's disease. She returned to work in December 2005. She is employed as an administrative assistant by [C] earning $860 a week.
The husband was made bankrupt in 2006 and was discharged on

26 June 2008
. On 4 June 2007 he recommenced employment with his current employer, [D] as a [omitted]. He earns $900 a week.
The husband married Ms G on 17 November 2007. They have one child, [Y] born in 2009. Ms G has a child of the previous relationship, [Z], born in 1991.
On the 22 March 2008, the Easter weekend, Ms G purchased a Tattslotto ticket at Rosebud news agency. It won a First Division prize of $400,000. Ms G and the husband say that Ms G was the sole owner of the ticket. The wife says the circumstances show both the husband and Ms G were the owners of the ticket. The wife says that the husband should be ordered to pay her $100,000 being half what she claims is his share of the prize money.

Procedural history

The application was filed by the wife, acting for herself, in February 2008 applying for orders in relation to only the husband’s superannuation. On the first court date in March 2008 the husband, although served, did not appear, nor had he filed any material. The Registrar made orders that the husband file material and fixed a conciliation conference on 28 April 2008.
Both parties attended, unrepresented, at the conciliation conference on 28 April 2008. The husband had still not filed material. There was no agreement. The Registrar fixed the application for a defended hearing on 19 September 2008.
On 19 September 2008 the wife was self represented. The husband was represented by counsel. I heard the case on that day and reserved my decision.
Soon after the wife applied to reopen her case. This application was fixed for 21 October 2008. On that date a representative of the husband's bankruptcy trustee attended at court. He informed me that the trustee was still investigating the ownership of the Tattersall winnings.
The husband was represented by counsel on 21 October 2009. Objection was taken to the late receipt of the wife's material. Consequently I adjourned the application to reopen to 2 December 2008.
By letter addressed to the court dated 29 November 2009, the husband's Trustee in bankruptcy advised that he did not intend joining the proceedings.
On 2 December 2008 both bodies were self represented. I ordered that the wife have leave to file and rely upon the affidavit of Mr D sworn

29 September 2008, and that the husband have leave to file and serve an affidavit annexing documents he had received from Tattersalls. Both parties were self represented by this stage.
Mr D’s affidavit states that he is a public relations consultant for Tattslotto, that he telephoned the husband after the win and then prepared the news release which is referred to later in this judgment. The husband filed a further affidavit which is also referred to later in this judgment.

Does the husband have an interest in a $400,000 lottery win by his current wife?

At the hearing the wife gave evidence that she learnt of the Tattslotto win when she was alerted by a friend to an article in the Herald-Sun Newspaper. That led her to obtain a copy of the press release from Tattersalls. The press release was prepared by Mr D after he had spoken to the husband. The press release does not identify the husband, but it is common ground that Mr D spoke to the husband.
The press release purports to quote the husband as saying he used the playing numbers of Melbourne footballers Jared Rivers and Gary Lyon in the winning game. In part, the press release says:
In the winning game I put Jared's number, which is 27 and Gary Lyons, which is 3, two of our children’s birthday numbers, the husband who lives in [P] said
Then my wife added the rest which also related to our children's birthday numbers
Mr D telephoned the husband because Ms G had used the husband's Tatts Card when purchasing the ticket and so the husband’s address and telephone number was recorded with Tattersalls. The wife relies upon the press release and use of the Tatts card to support her claim that the husband is half owner of the winnings.
I consider that the evidence shows that Ms G purchased the ticket for herself and that the winnings are hers alone. I will deal with this aspect later in the judgment. However, the short answer to the wife's claim is that the husband could never have been an owner of the Tattslotto ticket or any of the winnings. Paragraph 58(1)(b) of the Bankruptcy Act 1966 (Cth) provides:
(1) Subject to this Act, where a debtor becomes a bankrupt:
(b)after acquired property of the bankrupt vests, as soon as it is acquired by, or devolves on, the bankrupt, in the Official Trustee or, if a registered trustee is the trustee of the estate of the bankrupt, in that registered trustee.
Consequently, if Ms G purchased the ticket on behalf of herself and her husband, neither an interest in the ticket, nor the winnings, ever belonged to her husband. As soon as she purchased the ticket, or as soon as the ticket became a winning ticket, the husband’s interest in the ticket and the winnings vested in his trustee.
The wife appears to consider that because the trustee has not claimed any part of the winnings, then the husband in some way retains his share. That is not correct. The trustee has not claimed half the winnings from Ms G. He may consider he has no claim. He may consider he has a claim, but that he has little chance of succeeding, or that the chance is not worth the cost of pursuing it. The creditors may not be willing to fund a claim. None of this can alter the effect of the Bankruptcy Act 1966 (Cth). The husband cannot ever have had any interest in the ticket or the winnings.
The ticket was purchased by Ms G at the Rosebud news agency. She and the husband and children were visiting the husband's parents in Rosebud. She drove with the husband to the news agency. Ms G in her evidence said she was to get a paper and she said to the husband that she would "get our Tattslotto ticket". The husband's evidence is "Ms G said I have to put our Tattslotto in" She used the husband's Tatts card.
The next morning the husband checked the numbers. In their evidence both the husband and Ms G used the expression "we won".
Ms G presented the ticket to Tattersalls who payed her $400,000 by cheque.
Pursuant to the leave I gave on 2 December 2008 the husband filed a further affidavit annexing a number of documents. These include a statutory declaration by the Senior Corporate Solicitor of Tattersalls. It is not an affidavit and so not a proper form to become evidence in the preceding. In any event I did not give the husband leave to rely on further evidence beyond the production of documents received from Tattersalls.
Attached to the statutory declaration are documents which do come within the leave. They include the Tattslotto Rules. The effect of those rules is that a Tattslotto ticket, described as an Entry Ticket in the rules, is a bearer document. Prizes are paid to the person who presents the winning ticket. Rule 9.2 states:
...... Tattersalls will recognize only the person by whom the Entry Ticket is surrendered as the absolute owner (and where more than one person, then in equal shares)….
Rule 11 deals with Tatts Cards. If a prize won by a ticket registered to a Tatts Card is unclaimed after four weeks, Tattersalls sends a cheque to the Tatts Card member. However, this does not affect the bearer of the ticket. This is made clear by rule 11.3. If the prize is paid to the bearer of the ticket before the Tatts Card holder is paid, Tattersalls has no liability to pay the Tatts Card holder.
Tattersalls can require the bearer of the ticket to sign a statutory declaration. That occurred in this case. Ms G signed a statutory declaration stating that she was the owner of the ticket.
Tattersalls paid Ms G, but this does not conclude the question of whether she had bought the ticket for both herself and her husband.
The evidence does not show that this is what occurred. Ms G knew that her husband was bankrupt. When she says she purchased “our ticket” the inference is that she intended to buy a ticket for her family. She did not intend to buy a ticket for herself and the trustee. She intended to buy a ticket which, if it won a prize, would benefit her family. Buying a ticket in which her husband had an interest would not achieve that end. Half the ticket would belong to the trustee. I find that Ms G purchased the ticket for herself alone and she is the sole owner of the $400,000.
The husband disputes he told Mr D that it was his ticket. Mr D was not cross examined and so it is difficult to make a finding of fact. However, the husband, by his own admission, has been grossly dishonest. He embezzled large amounts of money. He said he spent much of it on sports betting. He purchased expensive cars. It is easy to infer that he would boast about "his" Tattslotto win. Whether he did or not cannot change the conclusion that he did not at any stage have an interest in the Tattslotto win.
This means that the only matrimonial property is the husband’s superannuation.

Should the wife would receive half or three quarters of the husband’s superannuation?

The wife proposes that she receives 75% of the husband’s superannuation. The husband proposes 50%
The assessment of the party's contributions is difficult. The wife’s contribution as homemaker and carer for the child at the marriage is clear, particularly during the period after the husband’s criminal activity was discovered and after he was imprisoned.
The party's house, the former matrimonial home, was sold. This was before the husband's bankruptcy, but by that stage it was accepted that the husband’s share had to go to his creditors. The wife received $70,000, but some of that was used to complete renovations to the kitchen. Some was used to pay the husband's legal expenses. The wife says that was $30,000, the husband $19,000. In his trial affidavit the husband says $30,000 but changed it to $19,000 in his oral evidence. I accept the wife’s version.
The wife purchased a motor vehicle but otherwise has no benefit left from the $70,000.
The husband's financial contribution to the marriage is difficult to assess because much if it all was embezzled money. There is no direct evidence but I infer that the superannuation has accrued from employer contributions so that embezzled money has not gone directly into superannuation.
I do not consider that it is necessary to attempt an assessment of contributions. The difference between the parties, 50% to 75%, can be decided by looking at the needs factor.
The husband, because of his wife's Tattslotto win, now has a home. Although I have no direct evidence, it should be mortgage free or very close to it.
He has employment at $65,000 a year. He has a child to support plus there is his wife’s child. He pays child support to the wife.
The wife has a lesser income. She has no capital, she must rent a home. She has the child to care for. She has some health difficulties. The property pool is small. The wife's greater needs when considering s.75(2) matters, plus a consideration of what is just and equitable, outweigh any greater contribution whether to superannuation or otherwise that the husband may have made. This consideration justifies the wife's claim to 75% of the husband’s superannuation.
The husband’s superannuation information comes from his affidavit and financial statement. The balances are at various dates. His funds are:
a)AMP Life Flexible Lifetime – Super $27,037.53.
b)A fund which he describes as [D] Corporation Fund $10,950, and which in documentation from a financial advisor the husband retained has a different name.
c)[M] Employees Superannuation Fund $4,186.99. Contributions to this fund commenced in 2007, which is post separation. The wife has not contributed in any way to the superannuation and so I do not take into account.
The total of the pre separation superannuation is $37,997.53.
75% of $37,997.53 is $28,498.14. I do not have sufficient information concerning what the husband described as [D] Corporation Fund to make a splitting order. The AMP fund may have decreased. I will make a splitting order using a base amount of $26,000.
I have no evidence that the trustee of the AMP fund has been given procedural fairness. The orders contain the proposed splitting order as an appendix and an order that the wife serve a copy of this order on the trustee within seven days and within a further 28 days file an affidavit that she has done so and include a copy of any response she has received.

I certify that the preceding fifty (50) paragraphs are a true copy of the reasons for judgment of Phipps FM

Associate: Jan Smith

Date: 13 May 2009