One of the common questions we get asked at Family Focus Legal is whether gambling has an impact on a family law matter, such as whether the non-gambling party should be liable for any gambling debts. or whether an adjustment should be made for the gambling parties wastage.
Ordinarily, liabilities that are incurred during a relationship are seen as joint liabilities, even if they are not in joint names. This includes mortgages, credit cards, car loans and other personal loans.
In circumstances where one party has established a gambling debt, the Federal Circuit and Family Court of Australia would consider the liability to be solely the liability of the gambling party in circumstances where it can be established that the gambling party has:-
- Embarked on a course of conduct designed to reduce or minimise the value of the asset pool; or
- Acted recklessly, negligently or wantonly with matrimonial assets, of which reduced or minimised the asset pool.
Whether an adjustment of the division of matrimonial assets should be made in favour of the non-gambling party, depends on the circumstances surrounding the gambling, including:-
- Whether the other party was aware of the gambling;
- The amount that had been gambled;
- Whether the parties had benefited from any wins;
- The income that the gambling party earned during that period;
- Whether it resulted in a significant reduction in assets; and
- Whether they were suffering from any condition that caused the gambling.
For example, in circumstances where a party’s income is significantly greater than the amount that was gambled or was sporadic, the Court may consider to be a legitimate entertainment expense and no adjustment would be made in favour of the non-gambling party. In contrast, if a party had withdrawn significant funds from savings and gambled those funds, the Court would be more likely to make an adjustment in favour of the non-gambling party.
Each matter is different and the scope of the gambling and the impact that it may have on the division of assets is a complex area. If you have any questions or require any advice in relation to this, please do not hesitate in contacting our office and one of our team members will be able to help you.