On January 31, 2008, my topic on Strictly Legal was taking a look at some of the unpleasant situations in which people find themselves after winning a lottery.  You probably thought that winning the lottery would make life easy.  Well, based on the cases I have seen, you might want to guess again.

In my book, “Strictly Legal,” I devoted a section of a chapter to the very interesting litigation that has developed around lottery winners.  Not only do winners end up fighting with their co-winners in the classic “who is in the winning group and who is not,” but they also end up fighting with spouses and ex-spouses, Revenue Canada, trustees in bankruptcy and lottery corporations, to mention only a few.  

On the program I mentioned a case that was reported out of the English courts earlier in January of 2008.  In that case, the court gave the victim of a sexual assault the right to sue a man who had won the lottery.  Twenty years previous this woman had been sexually assaulted by an attacker, Mr. Hoare.  He was jailed for life but (as is usually the case in these head-scratching cases) received day passes and was eventually released from jail.  While he was free on day parole in March of 2005, he won the lottery when he bought a ticket.  At the age of 59 he won the colossal sum of 7 million pounds in the national lottery.  His victim wanted to sue him for damages, now that he actually had some money with which he could pay them.  Unfortunately, there are laws that prohibit lawsuits after set periods of time.  These laws are known as “statutes of limitations” and they usually cut off the right to sue after fixed periods such as two years, four years, six years, and so on.  Interestingly, in this case, the English courts refused to deny the victim her day in court and said that the limitation periods did not automatically apply in such a case.  It is an interesting result. The assault occurred in 1987.  Mr. Hoare was sentenced to jail in 1989.  He was released in 2005 and, twenty years later, he may be required to compensate the person he injured with his assault.  Justice has a strange way of working sometimes.

In another lottery litigation case a man in Australia went to a newsstand to buy a lottery ticket.  He paid his money, but his ticket did not print correctly, so he asked for the operator of the newsstand to print him a new one.  The operator did so and, as fate would have it, that ticket turned out to be the winner of a $1.8 million dollar jackpot.  Unfortunately, when the retired gentleman went to claim his winnings, he learned that the operator of the newsstand had mistakenly cancelled the replacement ticket, not the original misprinted ticket.  The lottery corporation denied him his winnings.  However, he then sued the lottery corporation of New South Wales and the Supreme Court awarded him $1.8 million dollars in damages for negligence and for breach of contract.  Again, justice works in mysterious ways, especially when we consider that this gentleman bought his ticket in 1995 and the court did not give him his reward until 2008.

In the Canadian context, there are literally dozens of cases across Canada where we see co-winners suing each other, spouses being required to divide winnings as a component of their property and people getting into dust ups with Revenue Canada and trustees in bankruptcy.  In one case, a gentleman won the lottery on the eve of being discharged from bankruptcy.  The trustee refused to discharge the man and required him to use his winnings to pay his debts. Seems just to me.

In the family law context, winning the lottery will have an impact on any obligation to pay child or spousal support.  This would be the case whether the lottery was won before or after the separation.  The courts look at income from all sources when determining entitlement to child and spousal support.

While only assets acquired during the course of a marriage are supposed to be divided at the time of separation and divorce, for some reason, lottery winnings get a different treatment. Even if they are won after a separation, courts seem prepared to force the winner to share some of those winnings with ex-spouses.

The lottery topic was a lot of fun to discuss and we had many, many callers and a number of e-mails on the topic.  We did not hear from any lottery winners, but we certainly heard from people who were worried about what might happen if they win.   

Michael G. Cochrane, B.A., LL.B.

This entry was posted on Tuesday, July 15th, 2008 at 1:17 pm.
It is categorized under Lottery Law.
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