IF WE’RE to learn anything about the recent $40 million Powerball hoo-ha, it’s that if you enter a syndicate with a bunch of your mates, be smart about your choices.

Because as we found out this afternoon, NSW Lotteries has handed out the $40 million prize to a group of Sydney factory workers who will share in a $2.85 million split, despite one worker claiming he’d been kicked out of the club.

Production manager Brendon King said he’d paid for his share in the Powerball syndicate before the Powerball lotto draw, but after the win he was swiftly ejected from the syndicate and wants his cut of the money.

He said he feels “betrayed that a work colleague I’ve been supportive of can openly do this” and “let down that the other members who know I am part of the work syndicate aren’t willing to stand up for what is right”.

It comes amid allegations from Mr King’s lawyers that a son of the registered ticket holder, who is not an employee of the company where the work syndicate was run, appears to have been included in the winning syndicate after the fact.

Ooh, how the plot thickens.

And this isn’t the first time we’ve seen a clash over cash. Last year, a group of workers in Geelong, Victoria, claimed they were cheated out of a $16.7 million Powerball win after the ticket holder, Gary Baron, allegedly ran off with their money.

Mr Baron said he won the $16.7 million first division prize with a personal $46.45 ticket.

He said he used numbers he had played 23 times since April 3, 2014, in a favourites setting in his Tatts account called MyPowerballBall.

The group eventually settled privately out of court.

Meanwhile in 2010, three mates squabbled so much over their share of a $13 million Lotto win, they admitted they have little to show for their good fortune.

Among other losses, they could have saved themselves $1.5 million in legal fees if they had reached an agreement over the winnings.

But that’s the problem with entering into a group syndicate, isn’t it? Trust plays a major part — and when it comes to big wads of cash, just how much could you trust your co-workers? Makes you think twice, doesn’t it?

So how can you be smarter when you buy into a group syndicate?

“If you have an agreement with your work mates or friends to put money in each week to buy a lotto ticket you have got a potentially legally binding agreement,” James Naughton, litigation lawyer at Slater and Gordon, told news.com.au.

“The question will be what the terms of that agreement were and what obligations flow from that. It’s up to the people involved to come to an agreement that everyone is happy with.”

The answer? In legal terms they call it a private agreement. A contract, if you will.

Basically, you’ve got to cover your own booty, because in a worst-case scenario, you could be looking at millions spent in court, and a whole lot of lost time.

“If they don’t do the right thing you have to fall back on your legal rights, and the strength of your case may depend in part on how easy it is for you to prove a contract, the terms of that contract, whether it’s in writing or what the circumstances are,” Mr Naughton said.

SO, YOU WANT TO ENTER A SYNDICATE. WHAT NOW?

“The best practice would be if you want to go in with your friends, put it in writing,” said Mr Naughton.

“Have an agreement you can rely on later if you need to about what the obligations are to pay for the ticket.”

That is, you must clearly identify the terms of your agreement between each member. For example, all parties pay an equal cost to enter the competition, and all winnings are split evenly if all tickets are paid for in advance.

The good news is if you’ve missed out on writing a contract, a court can look at written evidence, verbal evidence, and the context of the relationship between the parties to make a final decision, in case all goes belly up.

If somebody makes the big win the question would be what were the terms of the agreement?

The question is how do you prove that after the event?

WRITING A CONTRACT IS YOUR BEST DEFENCE

If you have something in writing it doesn’t have to be a detailed manifesto or an email. But it could be useful later on if you need to rely on that in court.

IS COURT THE ONLY OPTION?

“If you have an agreement with someone whether it’s written or verbal and you breach that then that person might bring a breach of contract claim against you,” said Mr Naughton.

“The court’s job is to identify whether a contract was formed, identify the terms of the contract and if there’s been a breach of that contract.

“They then provide damages and compensation to the person that’s been aggrieved by that breach.”

The bad news is how you deliver that information; if parties are not able to clearly point out or identify what the terms of the agreement were, then things get a little murky.

IT’S THIS SIMPLE

“These days it could be a group email that people email back, so long as it provides evidence that demonstrates what people’s intentions were, that identifies what happens if someone doesn’t put their money in for a particular week, or how it will be split up if someone wins the jackpot.

“It’s common sense, those simple ideas, putting them down in writing could save a lot of heartache later on.”

HARNESS THE POWER

If you buy the ticket, then all the money may go to you and you will be responsible for divvying the rest of the funds.

But, says Mr Naughton, “it will be subject to any contractual agreement you have with other parties”.

VERBAL CONTRACTS ARE BINDING, BUT THERE ARE STRINGS ATTACHED

“The question is going to be proving it, what we see quite often is a he-said-she-said situation,” said Mr Naughton.

But the problem with verbal contracts is it can be imprecise and difficult to prove.

“It becomes difficult in most circumstances for the court to determine what occurred,

it doesn’t necessarily mean the court won’t enforce it though.

“That’s the risk, if you have a verbal agreement and there’s ambiguity about it, the question is if you need to prove it in court later on how are you going to do it?

“You’re potentially talking about a large sum of money, ambiguity over who paid what or what was going to happen if the jackpot went in your favour, that’s when it becomes difficult.

“It’s like a lot of things with law, most of the time these issues don't come up, but when things do go wrong its about protecting yourself to make sure the terms of the agreement are clear and have been agreed — that’s the best protection you can have.”

— youngma@news.com.au