It has often been said that Australia is a nation of gamblers. From time to time, in family law property settlement proceedings, a client will raise the question of what should be done about the other party’s gambling habit.
There is authority that covers the situation of one party having a spending habit. The case is Kowaliw from 1981. The case has two limbs, as follows:
That one party has either:
- Embarked upon a course of conduct designed to reduce or minimize the effective value or worth of matrimonial property; or
- Acted recklessly, negligently or wantonly with matrimonial assets the overall effect of which has minimized or reduced their value.
It is the second limb which covers the loss of money through gambling. The decided cases have only taken gambling into account when a significant amount of money has been lost through gambling. What is significant will depend on the parties’ circumstances. For most professional earners, a gambling habit of $100 per week would not be significant. However, for minimum wage earners, that could represent 10% of the worker’s income and may well be taken into account.
Kowaliw is a case about what is known as waste. The way the court usually treats waste is to add the lost asset back to the pool of assets as “notional property” and then to treat the party committing the waste as having already received the amount by way of premature property distribution. It is often hard to do that in gambling cases, as the precise amount that has been lost through gambling is unclear. If the non-gambling party is able to produce evidence of the amount lost on individual occasions, the court will do its best to calculate the total loss.
The other way the loss can be taken into account is in the assessment of contributions. Once again, it is often difficult to demonstrate to the court the precise amount that has not been available to contribute to joint expenditure or saving, but if the evidence is that a significant portion of the party’s wages were gambled, then the court can adjust the percentage contributions findings that it makes by a percentage amount.
The evidence that might be available to show the amount of money that has been spent on gambling can include bank records showing cash withdrawals from ATMs on race days and registered club records for members who are registered for gaming.
Of course, the really tragic cases where one party has a gambling addiction and gambled away a significant amount of the parties’ savings are easier to prove, although getting an adjustment out of the remaining assets is often difficult.
Written by
Stephen Rugendyke
Special Counsel
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