S v AG: Dealing with a lottery prize on divorce

Lottery prizes have been much in the news this week, and today the High Court got in on the act, in the case S v AG (Financial Remedy: Lottery Prize) [2011] EWHC 2637 (Fam).

The Facts: H and W are both Colombian, but moved to this country in about 1991. They were married in 1984, and there are two children, both now grown up. In December 1999 W and her friend MEM entered into a written syndicate agreement for the National Lottery Big Draw 2000, and their ticket won £1 million. A cheque for that amount was issued to MEM and on 10 January 2000 £500,000 was paid into an account in the name of W.

In May 2000 W purchased the former matrimonial home in her sole name for £275,000. On 1 January 2004 H was removed from the property by the police in the context of an episode of serious domestic violence. The parties have not lived together since. On 20 October 2005 H registered a Notice of Matrimonial Home Rights against the property.

In August 2006 H issued divorce proceedings here and W countered this by issuing divorce proceedings in Colombia. The marriage was then dissolved by the Columbian court.

On 9 April 2010 H applied under s12 and 13 MFPA 1984 for leave to apply for financial relief following an overseas divorce. Leave was granted in June 2010.

Held: Mr Justice Mostyn rejected two contentions by W, namely that she and H had been de facto separated, albeit under the same roof, since 1996, and that W had not, in fact, won £500,000 on the lottery, as her participation was just a charade sought by MEM.

He then considered the present financial circumstances of the parties, and concluded (at paragraph 35) that H had a need for a lump sum of £82,000 for pension provision.

With regard to the sharing principle, he held (at paragraph 36) that the initial receipt of the lottery prize was non-matrimonial property, but that when W purchased the matrimonial home she converted that part of her non-matrimonial assets into matrimonial property. He did not consider that H was entitled to half of the matrimonial property, or anything like it (paragraph 37), but judged that a sharing of 15% - 20% would be fair, which would give H £72,000 - £96,000. Applying both the sharing and needs principles he concluded that a lump sum award of £85,000 was the right result.