Orozco & Bonilla
[2023] FedCFamC1F 1018
•11 December 2023
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Orozco & Bonilla [2023] FedCFamC1F 1018
File number(s): WOC 201 of 2021 Judgment of: CURRAN J Date of judgment: 11 December 2023 Catchwords: FAMILY LAW – PROPERTY – Where parties were in a de facto relationship of 28 years – Whether the presumption of advancement applies – Whether presumption of advancement has been rebutted – Where presumption of advancement applies and has been rebutted – Whether a property was held on trust by the first respondent on behalf of her parents – Whether a resulting trust existed – Where value of the applicant’s inheritance is unknown – Whether applicant’s post-separation inheritance should be treated as property – Where applicant has failed to make full and frank disclosure – Where applicant earned an income and the first respondent was a homemaker – Where post-separation contributions require an adjustment – Where assessment of s 90SF(3) factors require an adjustment – Where orders made for division of net assets 52.5% to the applicant. Legislation: Family Law Act 1975 (Cth) ss 90SL, 90SM, 90SF, 90XT, 106A, 106B, 117, 117B
Family Law (Superannuation) Regulations 2001 (Cth) Pt 6
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) rr 6.06, 10.13
Cases cited: Black and Kellner (1992) FLC 92-287
Bonnici and Bonnici (1992) FLC 92-272
Bosanac v Commissioner of Taxation (2022) 275 CLR 37
Calverley v Green (1984) 155 CLR 242
De Angelis & De Angelis (2003) FLC 93-133
Dickons v Dickons (2012) 50 Fam LR 244
Gibbs & Gibbs [2023] FedCFamC1A 37
Hall and Hall (2016) 257 CLR 490
Hickey and Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143
Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94-006
Holland & Holland (2017) FLC 93-798
Kannis & Kannis [2002] FamCA 1150
Lovine & Connor and Anor (2012) FLC 93-515
Marcin & Marcin (2020) FLC 93-956
Marsh & Marsh (2014) FLC 93-576
Mayne & Mayne (No 2) (2012) FLC 93-510
Napier v Public Trustee (WA) (1980) 32 ALR 153
NHC & RCH (2004) FLC 93-204
Pierce v Pierce (1999) FLC 92-844
Singerson & Joans [2014] FamCAFC 238
Stanford v Stanford (2012) 247 CLR 108
Trevi & Trevi (2018) FLC 93-858
Trustees of the Property of John Daniel Cummins v Cummins (2006) 227 CLR 278
Weir and Weir (1993) FLC 92-338
White & Tulloch & White (1995) FLC 92-640
Division: Division 1 First Instance Number of paragraphs: 270 Date of hearing: 9-13 October 2023 Place: Sydney Counsel for the Applicant: Mr Scarlett Solicitor for the Applicant: Johnson Vardanega Lawyers Counsel for the First Respondent: Mr Alexander Solicitor for the First Respondent: Litigant in Person Counsel for the Second and Third Respondents: Mr Lawrence with Ms Angus Solicitor for the Second and Third Respondents: Maguire & McInerney Lawyers ORDERS
WOC 201 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MR OROZCO
Applicant
AND: MS BONILLA
First Respondent
MR B BONILLA
Second Respondent
MS C BONILLA
Third Respondent
ORDER MADE BY:
CURRAN J
DATE OF ORDER:
11 DECEMBER 2023
THE COURT ORDERS THAT:
1.It is declared pursuant to section 90SL of the Family Law Act 1975 (Cth) that the property located at D Street, Suburb E in the state of New South Wales was held on trust by the first respondent, Ms Bonilla, for the benefit of the second and third respondents, Mr B Bonilla and Ms C Bonilla, from 11 November 1995 until 25 February 2021.
2.It is declared that the legal and beneficial interest in the property located at D Street, Suburb E in the state of New South Wales is held by the Second and Third Respondents, to the exclusion of the applicant and the first respondent.
3.Pursuant to section 90XT(4) of the Family Law Act 1975 (Cth), a base amount of $125,477 is allocated to the first respondent out of the applicant's interest in the Superannuation Fund 1 (Member number …).
4.Pursuant to section 90XT(1)(a) of the Family Law Act 1975 (Cth), whenever the Trustee of the Superannuation Fund 1 makes a splitable payment out of the applicant's interest in the Fund, the Trustee shall:
(a)Pay to the first respondent, or her personal legal representative, the entitlement calculated in accordance with Part 6 of the Family Law (Superannuation) Regulations 2001 (Cth); and
(b)Make a corresponding reduction in the entitlement of the applicant would have had in the Superannuation Fund 1 but for this order.
5.Order 4 has effect from the operative time.
6.The operative time for these orders is four (4) business days after service of the sealed orders on the Trustee.
7.The Trustee of the Superannuation Fund 1 shall do all acts and things and sign all documents as may be necessary so that, in accordance with the obligations set out under the Family Law Act 1975 (Cth) and the Family Law (Superannuation) Regulations 2001 (Cth), the Trustee can calculate the entitlement of, and make payments to, the first respondent in accordance with Order 4 of these orders.
8.This order binds the Trustee of the Superannuation Fund 1.
9.Within 120 days of the date of these orders the applicant shall pay the first respondent the sum of $79,832.
10.Pursuant to section 117B of the Family Law Act 1975 (Cth) and rule 10.17 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth), interest shall accrue on the amount payable in Order 9 from 60 days after the date the order takes effect until the date it is paid.
11.Within 14 days of the date of these orders the applicant do all things and sign all documents to transfer all his right, title and interest in Motor Vehicle 1 NSW registration …, currently registered in his name, to the name of the first respondent.
12.Other than as set out in these orders:
(a)Each of the applicant and the first respondent have sole right, title and interest in any property which is, at the date of these orders, in their possession, in their name or under their control; and
(b)Each of the applicant and the first respondent be solely liable for, and indemnify the other against, any liabilities in their respective names.
13.The applicant and the first respondent do all acts and things and give all consents and execute all documents necessary to give effect to these orders within 7 days of a request in writing to do so.
14.In the event that either party refuses, fails or neglects to do any act or thing or execute any document to give effect to these orders, a Registrar of the Federal Circuit an Family Court of Australia (Division 1) be appointed pursuant to section 106A of the Family Law Act 1975 (Cth) to do any such act or thing or execute any document necessary to give effect to these orders.
15.Within 28 days of these orders, any party seeking costs is to file an Application in a Proceeding with an affidavit in support, with any directions as to filing further material to be determined in Chambers.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonym Orozco & Bonilla has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
CURRAN J:
INTRODUCTION
The application for determination is for alteration of property interests under s 90SM of the Family Law Act 1975 (Cth) (“the Act”) following the conclusion of the 28 year relationship of Mr Orozco (“the applicant”) and Ms Bonilla (“the first respondent”).
There was dispute as to the identity and value of the assets, superannuation, liabilities, and financial resources of the parties, particularly in respect of the treatment of a property at D Street, Suburb E (“the Suburb E property”) which had been the parties’ home for the majority of their relationship.
The issues in dispute were: whether the parties had a beneficial interest in the Suburb E property or whether, as contended by the first respondent’s parents, Mr B Bonilla and Ms C Bonilla (the second and third respondents), the first respondent held it on trust; the treatment of the applicant’s recent inheritance from the estate of his late mother and the inclusion and value of a number of assets and liabilities.
The parties each sought property adjustment orders but were not in agreement as to the appropriate adjustment.
The first respondent discontinued her application for an order for spousal maintenance.
BACKGROUND
The applicant and the first respondent commenced a relationship and cohabitation in or around 1991 and separated in 2019. There are two adult children of the relationship. The applicant is employed and earns $220,000 per annum. The first respondent has been a homemaker from shortly after the birth of the parties’ second child and has not been in paid employment since that time. Other than the claim in respect of the Suburb E property, the parties’ assets are modest with the most significant assets being the applicant’s accumulated superannuation and a post-separation inheritance from his late mother’s estate.
Overview of issues for determination
The preliminary question for determination is who holds the legal and beneficial interest in the Suburb E property.
The applicant contended that the Suburb E property was advanced to him and the first respondent as a gift from her parents and accordingly should form part of the property of the parties available for distribution under the Act, notwithstanding her transfer of it to her parents in 2021.
The first, second and third respondents contend that the Suburb E property was held on trust by the first respondent for the benefit of her parents until its transfer in 2021. Accordingly, they each seek a declaration that the legal and beneficial interest in the property is held by the second and third respondents to the exclusion of the applicant and first respondent.
The second question for determination as between the applicant and first respondent is of the treatment of the applicant’s recent inheritance from the estate of his late mother, in circumstances where he failed to provide disclosure. It is agreed that he has an entitlement as a beneficiary under the will.
The third question is to determine the property of the parties where the value of several assets and liabilities are in dispute.
The final question is whether, following the statutory pathway, there should be a division of property, and if so, what division of property is just and equitable in the circumstances of this case.
Conduct of second and third respondents in dealing with other properties
It is contended that the conduct of the second and third respondents in dealing with other properties supports their contention that the Suburb E property was held on trust for them.
The Suburb G property
In late 1971, the second and third respondents purchased a property at F Street, Suburb G (“the Suburb G property”) for $8,200. The purchase was funded by the second and third respondents without the need for finance.
In mid-1990, the second respondent transferred his 50 per cent share of the Suburb G property to his three children on trust on the advice of his accountant.
From 1992 until 1996, the applicant and the first respondent lived in the Suburb G property.
In early 1997, the Suburb G property was sold for $250,000 and the second and third respondents received all sale proceeds. The adult children of the second and third respondents did not receive any funds from the sale despite being on title.
The applicant consented to the declarations sought by the second and third respondents in relation to the Suburb G property on 13 October 2023.
The Town J property
In early 1979, the second and third respondents purchased a block of land at H Street, Town J (“the Town J property”) for $10,750 to build a holiday home. On the advice of his solicitor, the property was purchased in the name of the second respondent’s brother-in-law Mr K.
In late 1984, the Town J property was transferred into the first respondent’s name to allow Mr K to obtain the pension on his retirement.
In 2005, solicitor Mr L prepared a deed for the purpose of recording that the first respondent held the Town J property on trust for the second and third respondents. This trust deed cannot be located but it was not disputed that it was prepared and executed.
In early 2021, the second respondent directed the first respondent to transfer the Town J property into the second and third respondents’ names as beneficiaries of the legal trust. This transfer was without the applicant’s knowledge or consent and occurred after the applicant had commenced the current application for property adjustment naming his former partner and in‑laws as the respondents.
The applicant consented to the declarations sought by the second and third respondents in relation to the Town J property in October 2023.
The Suburb E property
In late 1995, the second and third respondents purchased the Suburb E property at auction for $125,000. The Suburb E property was purchased in the name of the first respondent and settlement occurred in early 1996.
The applicant and first respondent resided in the Suburb E property from early 1996 until a period of separation in 2005, and then from the resumption of the relationship in 2005 until final separation in 2019.
In October 2005, solicitor Mr L prepared a deed executed by the second respondent on his and the third respondent’s behalf pursuant to a power of attorney, recording that the first respondent held the Suburb E property on trust for their benefit.
In early 2021, the first respondent transferred the Suburb E property into the second and third respondents’ names as beneficiaries of the legal trust. This transfer was without the applicant’s knowledge or consent and occurred after the applicant had commenced the current application for property adjustment naming his former partner and in-laws as the respondents.
THE LAW
Declarations
Section 90SL of the Act provides the Court the power to make a declaration of interests in property for parties to a de facto relationship.
On 13 October 2023, a declaration was made by consent that the Town J property was held on trust for the second and third respondents by Mr K from 1979 until 1984, and thereafter, by the first respondent until early 2021. A further declaration was made by consent that the first respondent held her 1/6th interest in the Suburb G property on trust for the second and third respondents from mid-1990 until early 1996.
Adjustment of property interests
Before the Court can analyse whether it would be just and equitable to adjust the interests of the parties in the property of either or both of the parties, it is necessary to determine the assets, liabilities and superannuation of the parties, and to determine any financial resources which either party may hold by determining their existing legal and equitable interests in the property.
Once findings are made about the composition of the pool of assets and liabilities of the parties and the value ascribed thereto available for adjustment, s 90SM of the Act requires an assessment of the contributions to the acquisition, conservation or improvement of any of the property and an assessment of any non-financial contributions made by the parties.
The Court cannot make an order unless it is satisfied that, in all of the circumstances, it is just and equitable to make the order pursuant to s 90SM(3) of the Act.
The High Court of Australia in Stanford v Stanford (2012) 247 CLR 108 (“Stanford”) identified the principles to be applied in property settlement proceedings. The consideration of whether it is just and equitable to make an order should not be considered by reference only to the matters in s 90SM(4). It is necessary to give separate consideration to s 90SM(3) and (4) and not to ‘conflate’ the two subsections.
No submission was made in relation to the ratio arising from the decision of Stanford, and each party sought orders adjusting their property interests.
The approach to be adopted in a financial adjustment case pursuant to s 90SM of the Act is to follow the four-step process identified in the case of Hickey and Hickey and A-G for the Commonwealth of Australia (Intervener) (2003) FLC 93-143 (“Hickey”).
It is necessary to first identify the legal and equitable interests of the applicant and first respondent, consider what (if any) liabilities each of them has, and consider any superannuation and financial resources of either of them at the date of the hearing.
It is necessary to then assess the contributions of the parties and determine a contributions-based entitlement, having regard to the matters set out in s 90SM(4) of the Act insofar as they are relevant to the facts in this case. The assessment of contributions is to be approached in a holistic fashion.
The third step is for the Court to identify and consider relevant matters under s 90SF(3) to determine whether adjustment as is necessary to the contributions-based entitlement. It is necessary to reach a conclusion about what (if any) adjustment is appropriate having regard to the findings in the case.
The final step requires the Court to consider the effect of the findings and must then determine whether the orders are just and equitable in all of the circumstances.
The presumption of advancement and declaration as to trust
In this case it is necessary to have regard to the guiding principles which emerge from the decisions in Napier v Public Trustee (WA) (1980) 32 ALR 153 (“Napier”), Calverley v Green (1984) 155 CLR 242 (“Calverly v Green”), Bosanac v Commissioner of Taxation (2022) 275 CLR 37 (“Bosanac”), and Trustees of the Property of John Daniel Cummins v Cummins (2006) 227 CLR 278 (“Cummins”), about the presumption of advancement.
Per Calverly v Green, the presumption of advancement arises where property has been purchased by one party in the name of another, or transferred to another, and the relationship between the purchaser and such other person gives rise to a presumption that the purchaser intended to give the other person a beneficial interest in the property.[1] The relationship between parent and child is such a relationship which attracts the presumption.
[1] Calverly v Green (1984) 155 CLR 242, 246 (Gibbs CJ).
In similar circumstances, where property has been transferred by the purchaser into the name of another person for no consideration but where no such relationship exists between the purchaser and the other person, there is a presumption that the other person holds the property on trust for the purchaser, as reflected in the decision of Napier.
The presumption of advancement can be rebutted through evidence of the actual intention of the purchaser, being the person or people who provided the purchase money, before or at the time of the purchase.[2] The assessment of intention, as has been recently confirmed by the High Court in Bosanac at [32], is “entirely one of fact” in relation to each individual case. Subsequent statements of intention are inadmissible to rebut the presumption of advancement, though evidence of subsequent dealings and surrounding circumstances may be received.[3] Consideration can also be given to the history of the parties’ dealings, as stated in the reasons of Kiefel CJ and Gleeson J in the decision of Bosanac at [33], “[t]here is no direct evidence as the intention of either Ms or Mr Bosanac. The question is what inference is to be drawn from the available facts and in particular the history of the parties’ dealings with property”.
[2] Calverly v Green (1984) 155 CLR 242, 251 (Gibbs CJ).
[3] Trustees of the Property of John Daniel Cummins v Cummins (2006) 227 CLR 278, 300 (Gleeson CJ, Gummow, Hayne, Heydon and Crennan JJ) citing Malyan Credit v Jack Chia-MPH Ltd [1986] AC 549, 559–560.
The presumption of advancement applies in this instance. These principles are to be applied in determining the competing applications in this case by a consideration of the facts to determine whether the presumption is rebutted.
Non-disclosure
In this case it is also necessary to have regard to the guiding principles which emerge from the decisions of Black and Kellner (1992) FLC 92-2872 (“Black and Kellner”) and Weir and Weir (1993) FLC 92-338 (“Weir”).
Parties have a duty to make full and frank disclosure of their financial circumstances pursuant to r 6.06 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”) which is, per the decision of Briese and Briese (1986) FLC 91-713 at 75,180, “at the very heart of cases concerning property and maintenance”. The consequences of failing to make full and frank disclosure are significant, on account of the significant disadvantage that it places upon both the innocent party and the Court by hindering the achievement of a just and equitable property settlement.
It is well established under the principles that arise from Black and Kellner and Weir that in circumstances where there has been non-disclosure, “the Court should not be unduly cautious about making findings in favour of the innocent party. To do otherwise might be thought to provide a charter for fraud in proceedings of this nature”.[4] This embodies the salient principle on what follows from the failure of a party to make full and frank disclosure and was cited and applied by the Full Court in Hicks & Trustee of the Bankrupt Estate of Hicks (2021) FLC 94‑006.
[4] Weir and Weir (1993) FLC 92-338, 79,593.
Once satisfied that there has been non-disclosure, the Court is empowered to make adverse findings against the party who failed to make adequate disclosure, and such findings can include that an asset pool is greater than demonstrated, as set out in Weir at 79,593:
The court’s jurisdiction to make an order going beyond the identified property arises once there is sufficient evidence to support a finding that the party has not made a full disclosure of his or her assets.
Further, as set out in Kannis & Kannis [2002] FamCA 1150 (“Kannis”) at [51]:
Whether the non-disclosure is wilful or accidental, is a result of misfeasance, or malfeasance or nonfeasance, is beside the point. The duty to disclose is absolute. Where the Court is satisfied the whole truth has not come out it might readily conclude the asset pool is greater than demonstrated. In those circumstances it may be appropriate to err on the side of generosity to the party who might be otherwise be seen to be disadvantaged by the lack of complete candour.[5]
[5] This paragraph is not extracted in either (2003) FLC 93-135 or (2002) 30 Fam LR 83.
It is not in dispute that the applicant failed to disclose any details of the estate of his late mother.
PROPERTY ADJUSTMENT SOUGHT
I find it is just and equitable to make an order adjusting the property interests of the parties. They were in a long relationship of 28 years. They separated in 2019. There is no longer common use of their property. Other than the claim in respect of the Suburb E property, the parties have superannuation, the applicant has an interest in his late mother’s estate, and there are modest chattels, furniture, and vehicles.
THE PROPERTY POOL
The parties’ assets and liabilities were captured in a document (Exhibit 4) in the proceedings, with the areas of disagreement identified where the values differ.
By the time of submissions on 13 October 2023, the pool was as set out below:
OWNER DESCRIPTION APPLICANT VALUE 1st RESPONDENT VALUE ASSETS W D Street Suburb E $1,075,000 $0 H Motor Vehicle 2 $8,500 $8,500 H Motor Vehicle 1 $3,000 $3,000 Motor Vehicle 3 $8,000 $0 H ANZ Access Advantage acc ending …42 $2,241 $2,241 H ANZ Online Saver acc ending …77 $480 $480 H ANZ Online Saver acc ending …69 $372 $372 W Westpac Debit Card …96 $62 $62 H Inheritance from estate of Ms N $0 $150,000 TOTAL $1,097,655 $164,655 LIABILITIES W Westpac Credit Card $8,000 $8,000 H ANZ Platinum credit card ending …23 $2,318 $2,318 H JJ Financial Services Account ending …03 $1,650 $1,650 H ANZ Loan – legal costs $30,015 nil TOTAL $41,983 $11,968 SUPERANNUATION H Superannuation Fund 1 (as at 30.06.2022) $209,128 $209,128 H Superannuation Fund 2 (as at 30.06.2022) $30,498 $30,498 H Superannuation Fund 3 (as at 30.06.2022) $29,520 $29,520 TOTAL $269,146 $269,146 FINANCIAL RESOURCES/NOTIONAL ASSETS H Inheritance from estate of Ms N $NK $0 H Funds sent to support Ms M sought as “an addback” $0 $45,000 TOTAL $NK $45,000 NET ASSETS & SUPERANNUATION $1,366,801 $478,801 NET LIABILITIES $41,983 $11,968 ASSETS LESS LIABILITIES $1,324,818 $466,833
These areas of dispute as between the parties required determination for the Court to arrive at a balance sheet of assets, notional assets, liabilities, superannuation and financial resources.
On the second day of the hearing, the applicant abandoned his claim that the Town J property should also be included in the balance sheet and consented to the orders sought by the second and third respondents. He continued with his claim in respect of the treatment of the Suburb E property.
It is an agreed fact that the Suburb G and Town J properties were held on trust for the benefit of the second and third respondents.
THE ISSUES FOR DETERMINATION
The issues for determination were agreed as:
(a)Whether the Suburb E property, as asserted by the applicant, was gifted to the parties in 1996 when it was purchased or whether it was held on trust for the benefit of the second and third respondents?
(b)Whether the presumption of advancement applies, and if so, has it been rebutted?
(c)Whether the applicant’s liability of $30,015 incurred for legal costs should be included in the balance sheet as a liability of the parties?
(d)Whether Motor Vehicle 3 registered in the name of the first respondent is held on trust for the parties’ adult daughter Ms O?
(e)What orders, if any, should be made in respect of the furniture and chattels of the parties?
(f)What is the value of the applicant’s post-separation inheritance?
(g)What orders, if any, should be made in respect of the applicant’s post-separation inheritance?
(h)Whether the sum of $45,000 should be notionally added back to the pool or otherwise taken into account arising from the allegation that the applicant had wasted $45,000 by transferring $300 per week overseas to a woman in Country P?
(i)What are the relevant s 90SF(3) factors?
(j)What, if any, adjustment will result in a just and equitable division of property?
THE SUBURB E PROPERTY
Was the Suburb E property gifted to the parties as contended by the applicant?
In late 1995, the Suburb E property was purchased by the second and third respondents at auction in the name of the first respondent. It is not in contest that the second and third respondents paid the costs, stamp duty, and obtained bridging finance for the purchase and later paid out the mortgage on the property.
Representations relied upon by the applicant
The applicant asserts the Suburb E property was an asset of the parties and contends that representations were made to him by the first, second and third respondents as to the property being a gift, and that it was a gift. His evidence was that there were two representations that he relied upon to support the conclusion that the property was beneficially gifted to him and the first respondent at the time of its purchase.
Representation by Ms C Bonilla – two months prior to purchase
The applicant deposed that around two months prior to the purchase of the Suburb E property, Ms C Bonilla said to Mr B Bonilla, “Why don’t you buy a house for [Ms Bonilla] and [Mr Orozco]? You have plenty of money?” The applicant contended that this conversation occurred in the presence of the first respondent and himself.
The applicant does not assert any response was made by Mr B Bonilla at the time of the conversation or that at the time there was anything more than the question asked by Ms C Bonilla.
The first respondent denies any such conversation occurred in her presence.
The second and third respondents deny any such conversation.
There is no other evidence of such a representation being made.
In order for the purchase of the Suburb E property to be completed, bridging finance was taken out which included a guarantee being provided by the adult sons of the second and third respondents. The mortgage that was taken out was ultimately discharged by the second and third respondents with the sale proceeds of the Suburb G property.
That bridging finance and guarantees by the second and third respondents’ adult sons were required to purchase the Suburb E property, is inconsistent with the contention that they had, and believed they had, “plenty of money”.
Due to the evidence of the necessary financial arrangements to enable the purchase, together with the parties’ denial of the conversation, I cannot be satisfied on the balance of probabilities that the conversation as alleged occurred. Even if I had been so satisfied, a suggestion by a party as to having “plenty of money” with a question as to purchasing a house for the parties would not be sufficient to find that the parties intended to gift a property to the applicant and the first respondent, or to the first respondent alone.
Discussion about the alleged representations by the first respondent
The applicant deposed that “it was my understanding from discussion between [Ms Bonilla] and I at the time that [Ms Bonilla’s] parents had purchased the property as a gift for us”. There was no specific evidence from the applicant in his affidavit evidence about conversations between he and the first respondent that caused him to form that view.
In cross-examination the applicant agreed he had not discussed the conversation he alleges he heard between the second and third respondents, with the first respondent. His evidence was the first time he had a conversation with the first respondent about her parents purchasing them a house was when they arrived at the property for the first time, after it had been purchased.
He later gave evidence that there must have been conversation between him and the first respondent prior to their attendance at the Suburb E property because they were moving out of the Suburb G property, although he could not recall the substance of any such conversation.
This evidence does not support a finding that the Suburb E property was a gift or that there was a representation to that effect.
Representation by Ms C Bonilla and Mr B Bonilla at the Suburb E property on the day the keys were collected
The applicant’s evidence was that he and the first respondent attended the Suburb E property with the second and third respondents after it was purchased and that the second and third respondents said, “This is your new home, you can do as you like with it to raise the kids”.
No other evidence was called from the applicant as to any conversation or representations made to him upon which he relied to support his contention that the Suburb E property was a gift.
The first respondent denied the conversation occurred. The first respondent denied the contention that she knew it was intended to be a home purchased for her and gave evidence that it was purchased by her parents, intended to be a childcare centre. She explained in cross‑examination that the property was purchased in her name, as far as she understood, as her parents were “travelling overseas constantly and they wanted to do the day care centre. So I was just going to do the council stuff for them”.
The second respondent maintained that it was purchased by him and the third respondent and that their intention was to use it as a childcare centre. His evidence was that he always retained the keys to the side gate and attended as he liked. This is also consistent with the evidence of the parties’ adult daughter as to the maintenance and gardening, and frequency of attendances of the second respondent.
The third respondent said there was a conversation that took place when the parties attended the Suburb E property after purchase, during which the second respondent said, “Go in there and live and be happy” but that was not indicating a gift of the property.
Prior to the purchase, the parties had lived in the Suburb G property. The applicant said that rent was paid at $80 per week. The second respondent said no rent was paid. There was no evidence of any payment being made. On moving to the Suburb E property, the second respondent’s evidence was that he and the applicant had agreed that the applicant would pay rent of $250 weekly, that there was no written rental agreement but rather it was a “gentleman’s agreement”. The applicant said he did not pay rent as he considered the property had been gifted.
In relation to the Suburb E property, the second respondent’s evidence was that rent was to be paid by the parties but never was. The applicant denied that any conversation occurred in relation to paying rent for the Suburb E property, as the house was gifted to them. The first respondent said there was no agreement that she pay rent to her father, but that there was for the applicant.
The issue of the intention as to payment of rent is not a matter about which I can make a finding, nor do I need to. There was no independent evidence, for example of bank statements, of the applicant paying any sum directly to the second respondent by way of rent in respect of either the Suburb G or Suburb E properties.
The first respondent’s evidence is that there were no representations made as alleged and that she understood that, as with the Suburb G and Town J properties, the Suburb E property, although held in her name, was held on trust for her parents. The arrangement for the parties to live there was on the same basis as had previously occurred with the Suburb G property, which was as a property in which they could live, although rent was not paid.
There must have been conversations about the parties moving to live in the Suburb E property. The parties were moving from Suburb G to Suburb E to live at the property and raise their children there.
I accept the evidence of the third respondent that there was a conversation about living in the property and being happy. I am not satisfied on the balance of probabilities that the conversation deposed by the applicant about the move, if it occurred, amounted to a representation that the Suburb E property was intended to be a gift, rather that the ongoing arrangement, as it was with Suburb G, was the parents has provided a property in which the family was able to live by way of family support.
The use of the words “you can do as you like with it to raise the kids” or words to that effect, as deposed to by the applicant, seems likely. The parties had a young child, Mr Q, aged four at the time of the move, and their second child Ms O was born in 1997 around the time the parties moved into the Suburb E property.
Both adult children of the parties swore affidavits that were admitted into evidence without contest. The daughter’s evidence was that when her father lost his temporary job in industry from time-to-time, her father and mother said to each other in her presence “we don’t have to pay a mortgage and we will be okay, as [Mr B Bonilla] owns the property”. She also deposed that she and her brother used to tell their parents as children “you can’t tell us what to do, as it is Pop’s house”. She was not required for cross-examination, and I accept her evidence.
It was submitted by counsel for the applicant that the two representations were sufficient to find the property was intended to be, and was communicated as being, gifted to the applicant and the first respondent. The two alleged representations were the only representations that were alleged to have been made and relied upon to make a finding that the property was gifted.
I am not satisfied that the representations, if they had been made, provide evidence of a gift. The first was no more than a suggestion to which there was no reply. The second conversation does not support a finding that the property was a gift. In the context where the parties had lived in the previous home at Suburb G and owned by the second and third respondents, there is nothing that persuades me on the balance of probabilities that the ongoing provision of a home at the time of the parties being young parents constituted a gift.
Does the conduct of the parties support a conclusion that they treated the Suburb E property as their own because it had been gifted to them as contended by the applicant?
Other than the alleged representations made by the second and third respondents, the applicant relied upon other evidence and factual circumstances which he contends demonstrates that the Suburb E property was gifted to himself and the first respondent.
Applicant’s assertion of payment of rates and outgoings on both the Suburb E and Town J properties
The applicant’s evidence was that he paid $300 per week to the first respondent for payment of the council rates for the Suburb E and Town J properties, as well as the water and electricity bills for the Suburb E property. His contention was that this alleged payment supported his assertion that the properties were gifted to them by the second and third respondents. After the conclusion of his oral evidence, he abandoned the claim in respect of the Town J property.
A large bundle of bank statements of an ANZ Access Advantage account ending in …95, in the name of Ms Bonilla, was tendered into evidence and marked as Exhibit 14. The bundle demonstrates that from the period of March 2014 until November 2019, there was a weekly transfer of $140 and later $170 into that account. It was not in contest that the sums were transferred by the applicant.
There is no evidence to support a finding that the applicant transferred $300 per week in payment of these expenses as alleged, and I do not accept the applicant’s evidence that he paid the $300 per week.
The first respondent was not in employment from the time of the birth of their second child and the applicant was the sole income earner for the family. A transfer of funds regularly in such circumstances does not establish it was for the purpose of payment of rates and outgoings supporting his contention that the Suburb E property was gifted. The first respondent’s evidence was that it was in effect for housekeeping and living expenses.
The applicant contended that the funds were to pay both the Suburb E and Town J rates, and other expenses as referred to above. This is not supported on the evidence as addressed below.
The applicant claimed rates notices for both the Town J property and the Suburb E property were sent to the Suburb E property address. His evidence was in respect of the Town J property that “the rates notice has always been sent to [Ms Bonilla]”, and in respect of the Suburb E property, “Over the years, from time to time I saw council rates notices being posted to the house which were issued in [Ms Bonilla’s] name. The rates notice arrived every quarter in [Ms Bonilla’s] name and I paid those rates”. In cross-examination he maintained that the rates for the Suburb E and Town J properties were mailed to the Suburb E property address and asserted that “[Mr B Bonilla] never paid for any of the rates”.
The first respondent’s evidence was that the Town J rates notices were not sent to the Suburb E property address and were not paid by her. She gave evidence that the Suburb E rates notices were sent to the Suburb E property address, and she passed them on to her father for payment.
The second respondent gave evidence that he paid the rates and outgoings for both properties and always had, as he considered they were his properties. The Rates Instalment Notices for the Town J property were addressed to the first respondent and sent to the second and third respondent’s address at R Street City S. These notices were dated 16 April 2019, 14 October 2019, and 28 January 2020, and were marked as Exhibit 16. These accounts corroborate the evidence of the respondents in respect of where the notices were sent in 2019 and do not support the evidence of the applicant.
The second respondent relied upon two letters from T Council in relation to the Suburb E property dated 1 and 9 June 2020, and two letters from T Council in relation to the Town J property dated 4 and 15 September 2008, addressed to the first respondent at the R Street address of the second and third respondents.
That the notices for the Town J property were being sent to the second and third respondent’s address in City S, does not support the contention that the rates notices or other correspondence was sent to the Suburb E property address and does not support the contention of the applicant that the rates were paid by him and the first respondent.
I accept the applicant’s evidence that he transferred money each week to the first respondent and accept that he did not know what it was being used for. I accept the first respondent’s evidence that she used the funds for housekeeping. She otherwise did not have any other income source. Although he maintained that he transferred $300 per week, the financial records show a transfer of between $140 and $170 per week. The applicant’s evidence under cross-examination was that he did not know what the first respondent did with the money. I am not satisfied that the money was for the payment of rates and outgoings as that conclusion is against the weight of the evidence.
The applicant ultimately abandoned his claim to the Town J property during the hearing. However, his evidence that he paid the rates and outgoings for that property in circumstances where the notices were sent to the address of the second and third respondents, and the address held by the T Council was that of the second respondent, makes his assertion of receiving the notices something that I do not accept on the independent evidence.
The first respondent’s evidence about the rates notices accords with the independent records from 2008 and 2019–2020. Accordingly, I prefer and accept her evidence in respect of where the notices were sent and the arrangement for payment. I accept that the notices for the Suburb E property were sent to address at Suburb E, and that, in the absence of any contrary evidence, the first respondent passed the notices on to her father for payment as she deposed. These records do not support the applicant’s evidence that he transferred $300 per week, or any amount, to the respondent for the purpose of paying the rates and outgoings at the Town J and Suburb E properties.
The childcare centre plans and development application
The applicant contended that that he and the first respondent had plans to develop the Suburb E property into a childcare centre and there were conversations between him and the first respondent in relation to those plans, although he could not recall the conversations. He attended with first respondent for plans to be drawn. His evidence was, “[Ms Bonilla] and I lodged the development application with council, as we had discussed opening a childcare centre at the property. The development application was not lodged by [Ms Bonilla’s] parents”. He said that he attended with the first respondent upon an architect to draw up plans in furtherance of that business and dwelling venture and recalled attending at an office near a train line for that purpose. No independent evidence supported his contention and for the reasons that follow, I do not accept his evidence as to this project being his and the respondents.
Mr U, builder and architect of V Company, prepared a Development Application for the conversion of the building at Suburb E into a childcare centre and dwelling in around mid‑1997. The invoice for the Development Application and drawings were addressed to “[W Pty Ltd] at [D Street] [Suburb E]”. The invoice was marked to the attention of “[Ms Bonilla]”.
It was not disputed by the applicant that the second respondent paid this invoice.
The first page of a letter from the S Council to V Company dated early 1998 became Exhibit 6. It advised that, subject to certain conditions, the council had approved the development application. Exhibit 24 was the architect’s drawings of “[D Street] [Suburb E] for [W Pty Ltd]”.
The third-party records, including the Development Application and the architect’s drawings, being addressed to and paid by the second respondent, supports the respondents’ cases that the childcare business was the plan of the second and third respondents, not of the applicant and first respondent.
Further supporting this conclusion was the third respondent’s evidence that she had cooking qualifications, and that the plan between she and her husband, the second respondent, was that she would prepare the food for the centre. The second respondent’s evidence was that the plan for the residence located in the floor above the childcare centre was a dwelling, which would become their own residence and it was, at the time, his intention to employ staff to run the childcare centre.
There were no records and no other evidence that supported the applicant’s contention as to the childcare centre being the proposed business of him and the first respondent.
This evidence is inconsistent with the invoice for the Development Application and plans being made out to and paid by the second respondent, and is inconsistent with the drawing of the proposed project being addressed to W Pty Ltd. For those reasons, I prefer the evidence of the respondents in respect of the genesis and plans for the childcare centre at the Suburb E property. The childcare project ultimately did not proceed.
Mr X residing at Suburb E
The uncontested evidence was that the first respondent’s brother, Mr X, lived at the Suburb E property either in the late 1990s or early 2000s. His uncontested evidence was that he was permitted to live there by his father and it was agreed that in exchange he would renovate the garage to turn it into a one-bedroom flat with a bathroom and laundry. The evidence is that he sought permission from his father, not the applicant or the first respondent, to reside there following his divorce. His evidence was consistent with that of the respondents. This evidence was not challenged and was not disputed by the applicant during his cross-examination.
This supports the conclusion that the Suburb E property was considered by the parties and the extended family as property of the second and third respondents and is inconsistent with the applicant’s contention that it had been gifted.
Mr X gave evidence in respect of renovation work he had undertaken at the Suburb E property. He was a frank and direct witness who gave evidence of the tasks he undertook. Where he had no direct knowledge as to who had undertaken certain tasks at the home his answer was “unaware”. He accepted that some works, in particular plastering, were undertaken by the applicant.
I accept the evidence of Mr X that he undertook the following works over the period from 1996 until 2021:
(a)Constructed a one bedroom flat in the garage with a bathroom and laundry;
(b)In “[Mr Q’s] room”, removed timber seating and two toilets, cut the plumbing, sealed it from leaking and reset them by cutting the brick wall for plaster, cut a window out of the brick wall and purchased the windows and an arch bar;
(c)In the “front bathroom”, removed an electrical water heater and four timber shelves, installed all plumbing and PC items purchased from Y Company, and installed a gas water heater to service two bathrooms in the house;
(d)Assisted in assembling a flat-pack kitchen;
(e)Purchased a heater and sink for the kitchen from Y Company, installed the sink and did the plumbing works in the kitchen;
(f)Purchased and installed the ensuite, fittings, plasterboards and windows in the “end room off main bedroom and ensuite bathroom”; and
(g)Erected the TV roof antenna.
His evidence, which I accept, is that he did the work for no payment as the property belonged to his parents who had permitted him to reside there. At other times he undertook renovation work for no payment for the benefit of his parents. He also undertook certain renovation work at the Town J property.
I accept Mr X’s evidence in respect of the tasks that he undertook. The detail he gave was consistent with the evidence of the respondents and the children of the parties, Ms O and Mr Q. He readily made concessions about tasks that he had no knowledge of, and provided detail about the works he did, including where the materials were sourced, which also persuades me to accept his evidence.
This evidence that the Suburb E property was always considered by him to be the property of his parents supports the cases of the respondents.
The applicant did not contest that Mr X moved in after being given permission by the second respondent subject to undertaking the renovations for the area in which he lived. This lends weight to the conclusion that the property was held on trust for the second and third respondents.
Mr X also gave evidence that he currently resided in a unit in Suburb Z. This unit was purchased by him, funded by a mortgage serviced by his income from his work as a tradesman. His evidence was that his parents had not purchased a property for him and nor was there any property owned by his parents in his name.
The renovations to the Suburb E property
The applicant gave evidence that he had undertaken significant work to the Suburb E property.
Mr Q was not cross-examined. I accept his evidence and find that the applicant did undertake certain work on the property including plastering and painting, gardening and general maintenance. Mr Q, who lived at the Suburb E property until he purchased his own property in 2021 at age 28, gave evidence, which was not in challenged, that:
[Mr Orozco] did some mowing of the lawns and daily maintenance around the house at times, but when it came to any alterations to the [Suburb E] Property [Mr B Bonilla] was responsible for paying for any supplies and organising the work to be carried out. I recall seeing [Mr B Bonilla] give [Uncle Mr X] his credit card to pay for supplies.
Ms O also gave uncontested evidence which I accept that “Pop always came to the [Suburb E] property each weekend. Pop would attend to gardening, cleaning, mowing, edging and fixing the fence when it fell down. [Mr Orozco] never appeared to do not much in the way of maintenance to the [Suburb E] Property”.
There was no evidence as to the value or basis upon which the applicant or second respondent arrived at the figures that had been claimed as to the value of the works performed. Each asserted particular figures as the value of work undertaken. There is no basis upon which I can make any finding as to the value of any of the tasks undertaken, nor do I need to.
The first respondent agreed the applicant did work on the Suburb E property, including installing plasterboard and gyprocking walls, but she also performed the works and purchased materials, as did her father.
The works claimed to have been done by the applicant were put to the second respondent, who agreed the applicant did not complete some works and that the applicant assisted him in completing other tasks.
Given the weight of the evidence from not only the first, second and third respondents, but also the unchallenged evidence of the parties’ adult children and Mr X’s evidence about tasks he undertook, I do not accept the applicant’s evidence in respect of the extent of the tasks he claims to have undertaken. I accept, however, that the applicant did undertake some maintenance and renovation works on the Suburb E property during the years that the parties lived there.
The 2005 separation
It is agreed between the parties that the applicant and first respondent separated in 2005 for a short period. The applicant contends the separation was for two weeks. The respondents contend the separation lasted six months. On the respondents’ case, this separation spurred the decision to have trust deeds prepared to record the existing trust arrangement between the first respondent and the second and third respondents in relation to the Suburb E and Town J properties.
The 2005 Deeds of Trust
In 2005, the second respondent engaged his solicitor Mr L to prepare a Deed of Trust in respect of the Town J and Suburb E properties to record the existence of the trusts.
Mr L is an accredited specialist in property law. He gave evidence by audio-visual-link during the final hearing while on holiday in Europe. He had not been aware he would be required to give evidence until after he had left for Europe and did not have his file or the affidavit he had prepared in 2021 with him.
His evidence was that in 2005, when consulted by the second respondent, he prepared two deeds for the purpose of recording the fact of the existing trusts. His evidence was that, in respect of both the Town J and Suburb E properties, the trusts were already in existence and the purpose of the deeds prepared in 2005 was to record the existence of the trusts.
He sent a letter to the second respondent explaining that as he had not acted on the Town J purchase, it was necessary for the second respondent to satisfy the Stamp Duties Office that he provided all funds for the purchase in order to stamp the trust and pay the normal duty of $200. He did not need that to occur in respect of the Suburb E property.
The Deed in respect of the Town J property was not able to be located but the Deed prepared in relation to the Suburb E property was tendered into evidence and marked as Exhibit 25.
The evidence of Mr L as to his instructions to record in the Deed the trust arrangements that were already in existence in respect of the Town J and Suburb E properties was not challenged. I accept the evidence of Mr L. This evidence supports the finding that in 2005 when Mr L was instructed to prepare the deeds, the respondents considered the properties to have always been held on trust. There is also no doubt that the catalyst for that action was the separation that had occurred in 2005.
It was not contended that the deeds constituted a new trust, but that they recorded trusts that was already in existence. The deeds are not relied upon to rebut the presumption of advancement but were evidence of the parties’ understanding of the arrangements at the time of the deeds being executed. It is also significant that the applicant ultimately accepted the trust arrangement in respect of the Town J property.
The 2005 conversation between the parties after the trust deeds were signed
The respondents’ evidence was that a conversation occurred between the applicant and respondents around the kitchen table at the Suburb E property in or about late 2005, after the parties reconciled. The evidence of the second respondent is that he said to the applicant, “I arranged for deeds of trust to be prepared and signed by us under which [Ms Bonilla] acknowledges that the [Suburb E] Property and the [Town J] properties were the property of [Ms C Bonilla] and myself before you can move back in”. The second respondent’s evidence was that the applicant said words to the effect of, “Yep, [Mr B Bonilla]. I know that the properties are yours and [Ms C Bonilla’s]. It is a good idea to put the trust into place as the properties are going to [Mr Q] and [Ms O] in the future”.
The applicant denied the alleged meeting occurred at all. His evidence was “at no time throughout my relationship with [Ms Bonilla] did anyone allege to me that our home belonged to anyone else”.
The applicant denied completely that any conversation had occurred wherein he acknowledged that the Suburb E and Town J properties belonged to the second and third respondents. When asked whether the respondents are simply lying about the conversation occurring, his answer was “blatantly and I will keep saying it until the day I die”.
The first respondent’s evidence in cross-examination was that in 2005, the parties sat at the table at the Suburb E property and spoke about the property being held on trust, specifically the exchange was as follows:
And what did you understand your father meant when he said that he had put a trust on the properties?--- A trust that stops – that belongs to them but it’s in my name.
Right. Because the properties had always been in your name or had been in your name for years, hadn’t they? --- Yes.
The second respondent’s evidence in relation to the conversation occurring between the parties in 2005 was not challenged in cross-examination.
The third respondent’s evidence in cross-examination was that there was a meeting with the four parties and there was conversation about trust deeds for both the Town J and Suburb E properties but that she often left these matters up to her husband.
The deeds were entered into in 2005 and were prepared by Mr L at the request of the second respondent. It is clear that following the 2005 separation, the second and third respondents instructed their solicitor to prepare documents to record the trust arrangement that had been in place. Their conduct in 2005 in having the existence of the trusts recorded by their solicitor by deed is consistent with the fact of that trust arrangement previously existing and I make that finding.
The timing of the transfer of the Suburb E and Town J properties to the second and third respondents
The parties separated on a final basis in November 2019. The applicant commenced these proceedings by filing an Initiating Application on 24 February 2021, naming the three respondents as parties.
The following day the first respondent transferred the Suburb E property to her parents as joint tenants for the nominal sum of $1.00. The second respondent’s evidence was that the initiative to undertake the transfer came from his then solicitor.
It was contended by the applicant that the transfer of the Town J and Suburb E properties into the names of the second and third respondents in February 2021 was intended to defeat the applicant’s claim to the properties in these proceedings. I reject this contention.
The timing of the transfers aligns with the commencement of the proceedings, however, the second and third respondents were named as parties to the proceedings in the Initiating Application. If it were the case that the properties had been transferred to the second and third respondents prior to them being joined to the proceedings, the submission by the applicant may have merit. However, the proposition that the parties were attempting to effectively hide the property from the applicant by transferring it into the names of the second and third respondents fails when one considers that they have been parties to the proceedings since their initiation.
I make no finding that the fact of the transfer or timing of the transfer has material impact on this matter. The Court is empowered to set aside the transfer under s 106B of the Act in any event had the finding as sought, been made.
Has the presumption of advancement been rebutted?
In determining whether the presumption has been rebutted, it is necessary to examine the intentions of the second and third respondents before and at the time of the purchase of the Suburb E property, as well as the historical and subsequent dealings of the parties and the objective facts of surrounding circumstances at the time of the purchase. In considering all of these factors as detailed herein, the presumption has been rebutted.
Intention of the parties
The second and third respondents’ evidence is that they attended the auction of the Suburb E property together in 1995, where they purchased the property for $125,000 and, upon completion, it was placed into the name of the first respondent. The second and third respondents gave evidence that their intention at the time of purchasing the property was to build a business and dwelling for them to live in. They paid for the property and all expenses associated with its purchase. There was no suggestion or evidence that the suitability of the property or its features were discussed with any other person, particularly the applicant and first respondent, prior to the decision to purchase it.
The evidence of the first respondent was that she understood the Suburb E property was being transferred into her name as her parents were frequently travelling around Europe so that she could “do the council stuff for them” in respect of the business. This evidence was supported by the third respondent.
The first respondent agreed when asked in cross-examination whether she had said to her parents “you and mum are the true owners” and “one day you will ask for the property to be returned to you”. This is evidence that she gave in her trial affidavit.
The second respondent gave evidence of the same conversation in his trial affidavit, and during cross-examination, explained that he put the property in the name of the first respondent under his lawyer’s advice, in essence for asset protection.
The evidence of the applicant as to the representations made to him by the second and third respondents to the effect of “this is your place and you can do what you like with it” was not accepted by me as indicating the parties intended to gift the property, for reasons set out above.
The preparation of the deeds as referred to above in 2005 does not rebut the presumption but is evidence of subsequent dealings with the properties.
Parties’ history of dealings
It was the second respondent’s evidence in cross-examination that he placed properties into the names of his children to “safeguard them” from “devious people”. The historical dealing with real property by purchasing or transferring property in the names of family members held on trust was the modus operandi of the second and third respondents on several prior occasions.
The second respondent transferred his 50 per cent interest in the Suburb G property to each of his three children, causing them to hold a 1/6th interest in the property on his behalf.
Following the sale of the Suburb G property in 1997, the first respondent did not receive any of the sale proceeds as it was her parents’ property. The evidence of the second respondent is that he communicated to his three children that his half of the Suburb G property would be transferred to them, but that it was not a gift, and he would take the proceeds of sale.
The evidence of the applicant in cross-examination was that he and the first respondent were living there at the time, and it was his understanding that the Suburb G property was then owned by the second and third respondents who were letting them reside in the property. At the time, the first respondent held a 1/6th interest in the property on title.
The Town J property was purchased by the second and third respondents and placed in the name of Mr K, the second respondent’s brother-in-law, to hold on trust on their behalf. That arrangement ceased in 1984, at which time the property was transferred into the name of the first respondent to hold on trust for the second and third respondents. The evidence of the respondents is that this property was held on trust for the second and third respondents, not the first. The first respondent did not have a key to the property and the only time they attended the property was when the second and third respondents were also at the property. The rates notices and other correspondence was sent to the address of the second and third respondents.
During the hearing, it was accepted by the applicant that the Town J property was beneficially owned by the second and third respondents and had been held on trust by the first respondent. The evidence supported such a conclusion and accordingly declarations to that effect were made on 13 October 2023.
The parties’ evidence as to conversations that occurred before and at the time of the purchase of the Suburb E property is the primary evidence that goes to their intentions, aside from the evidence of their historical dealings.
It was submitted by counsel for the second and third respondents that there is a dearth of evidence that anybody acted inconsistently with the intention to create a trust in the years subsequent to the purchase, and I accept that submission relying particularly upon the evidence of each of the parties’ conduct as set out at herein.
Discussion and findings in respect of the Suburb E property
The issue of whether the Suburb E property was held on trust for the second and third respondents requires an examination of the parties’ intentions at the time of the purchase, the parties’ recollections of conversations, and an examination of third-party records. I prefer the evidence of the respondents where it conflicts with that of the applicant for the reasons that follow.
The first respondent gave evidence consistent with third-party records and remained so when challenged in cross-examination, particularly as to the payment of relevant expenses in respect of the Suburb E and Town J properties.
The second respondent was a direct witness who was able to make concessions and acknowledged when he did not have knowledge of matters being put to him, for example, of the renovations. His evidence also aligned with the third-party records.
The third respondent was both an honest and a frank witness. I accepted her evidence. She gave frank evidence about matters to which she had direct knowledge and said she otherwise left financial matters to her husband.
Mr X was a frank and responsive witness, who made appropriate concessions and readily stated he was “unaware” if he did not have the direct knowledge to answer any question put to him. I accept his evidence.
The applicant’s evidence as to the claim he made about payments made in respect of the Suburb E and Town J properties was unsupported by any documentary evidence, notices or bank records. He abandoned his claim to the Town J property after he had been cross-examined and shown documents inconsistent with his evidence about receipt and payment of the rates notices.
In respect of inconsistencies in his evidence and failure to make disclosure, the applicant did not recall the substance of the conversations he alleges occurred and contended that any inconsistencies and errors in his evidence, such as in respect of his current income, belonged to his solicitors as he had provided documents and it is his lawyers who are implied to have failed to disclose them. I do not accept that evidence. The applicant pursued his claim for the Town J and Suburb E properties and swore as to the accuracy of his affidavit and financial statements, which on cross-examination it was revealed were, in a number of respects, inaccurate.
The following are two examples of numerous inconsistencies that arose from the applicant’s evidence during the final hearing, which cause me to reject his evidence where it has not been accepted by the other parties or supported by independent evidence.
Ms M
A fact which had no bearing on the property matter that was in contention was the nature and extent of the applicant’s relationship with Ms M, a woman he met in Country P whilst on a holiday. The first respondent contended that the applicant had been sending Ms M $300 per week, though this was not substantiated. The first respondent also contended that the applicant had been married and had children with Ms M. This was also not substantiated.
However, the following exchange occurred during cross-examination of the applicant:
Just want to go over a brief bit of history. Perhaps before I do that, you accept, don’t you, that there has been funds that you have sent to [Country P]?---That’s correct.
For whom was that sent?---To a – a girl named [Ms M] (sic).
And she was a woman with whom you had a relationship?---Only personal. I’ve never – never married her, nor do I have children with her.
Right. When you say “only personal”, do you mean by that that she was a lover?---Incorrect.
Well, you mean by that that you had a sexual relationship with her?---That’s incorrect.
Do you mean she was a friend?---Yes, she was.
Exhibit 43 is a letter dated 26 March 2020 from Johnson Horsley Lawyers, as it was at the time, to the first respondent’s then legal representatives Mr BB. That letter states, “Whilst our client admits that, in the past, he has had a relationship with a woman from [Country P], he certainly never married her and has not had any children with her”.
This letter was shown to the applicant in cross-examination and the following exchange occurred:
MR ALEXANDER: When you say:
I have never had a wife or girlfriend in [Country P].
Is that accurate?---That’s correct.
When you go on to say:
I deny that I sent money to any female in [Country P].
?---When did I say that? When – is that there?
Want to have a look?---Yes, for sure, because they’ve got that wrong as well, then, obviously.
Page 14, paragraph – what appears as 25?---Sorry, which paragraph is it?
It’s the paragraph that’s numbered 25 on that page - - -?---Yes.
- - - that it was open at. See the last sentence?---Yes. Yes, it’s there for sure, but I can tell you now I – I admit that, and I’ve admitted it, but I don’t know why that says that, and only - - -
When you say - - -?---Yes, go on.
When you say you’ve admitted it, in that affidavit – you read your affidavit before you signed it?---I’ve been – I’ve been – okay. I’ve read that much I don’t know what I’ve read, to tell you the truth, but I – yes.
Before you swore that affidavit, did you read it through?---Obviously not.
You were given an opportunity to read it through, which you declined; is that right?---I wouldn’t say that. No. I probably – maybe rushed through it, and obviously, yes, I – I – honestly, I do not know how that – that line has come about.
This exchange demonstrates, at best, a lack of care as to the accuracy of his evidence. The same inaccuracy is demonstrated in the sworn evidence as to the applicant’s income, which was significantly understated. Contrary to the sworn evidence in his affidavit and financial statement sworn 11 September 2023, less than a month prior to the hearing, that he was earning $150,000, he accepted in cross-examination that he had earned $220,000 in the last financial year but said, “I don’t think my lawyer has updated it”.
Payment of council rates for the Suburb E property
The applicant’s evidence was that the council rates notices for the Suburb E and Town J properties arrived at the Suburb E property address and that he paid those rates. In evidence and in cross-examination, he maintained he paid the first respondent $300 per week which was for rates, electricity, and water and other expenses. As set out above, there was no transfer of $300 per week, but between 2014 and 2019, there was evidence of payments of between $140 and $170 per week from the applicant to the first respondent.
The evidence of the first and second respondents is consistent, in that the first respondent would receive the council and water rates notices for the Suburb E property at that address and pass them onto her father for him to pay them, and that the Town J property rates and notices were not received at the Suburb E property address.
The applicant ultimately accepted in cross-examination that he did not know how much the rates were for the Suburb E or Town J properties, and significantly he that he did not know what the first respondent did with the monies he provided to her, although contrary to the bank records in evidence, he maintained it was $300 per week. He stated that, “All I can tell you is I’ve transferred money to [Ms Bonilla]. What she did with those funds I don’t know, but all I know is rates had to be paid, electricity, water”.
The applicant’s evidence was that he paid the rates but agreed in cross-examination that he did not attend to payment of the council rates and his explanation as to why he did not personally pay them was “[b]ecause [Ms Bonilla] didn’t work. I worked. So that was just what she did”.
Although he accepted that he did not know what the first respondent did with the monies he provided to her each week, he maintained, “I paid the bills, as in went to work and paid the bills”. When asked about the inconsistency, being that he stated he paid the rates when he really meant that he gave the first respondent money for outgoings he, once again, deflected to his lawyers:
So you say nothing about that in your affidavit, do you – that that’s what you meant by having paid rates?---That – I couldn’t tell you. I just – as I said, I’ve – you would have to discuss these things with my lawyer, because I’ve just told, in my affidavit, what I believe is true and correct to what I’ve done over 29 years.
That the applicant gave evidence that he paid the council rates for the Suburb E and Town J properties, knowing that to be inaccurate, is damaging to his credibility. As such I am reluctant to accept his evidence where it has not been corroborated.
Conclusion in respect of the Suburb E property
Having regard to all of the evidence in relation to the intention of the parties at the time of the purchase as detailed in these reasons, as well as the historical organisation of the second and third respondents’ properties at Suburb G and Town J referred to in these reasons, I find that the presumption of advancement is rebutted.
Taking into account the evidence of all the surrounding circumstances including the independent third-party documentary evidence such as the rates notices and development plans, I find that the Suburb E property was not intended to be gifted to the first respondent or both the applicant and first respondent. The evidence supports the conclusion that the Suburb E property was held on trust by the first respondent for the benefit of the second and third respondents from the time of purchase until it was transferred into their names in early 2021.
Accordingly, the Suburb E property is not included in the balance sheet as an asset of the parties.
WHAT ASSETS ARE INCLUDED IN THE BALANCE SHEET?
Did the applicant waste $45,000 as asserted by the first respondent, and if so, should it be notionally added back to the pool?
The first respondent asserted that the applicant was sending $300 per week to Ms M, and that she calculated and sought $45,000 be added back to the pool.
The Full Court in Trevi & Trevi (2018) FLC 93-858 has set out the guidelines for addbacks in relation to property and expenditure other than on legal fees as follows at [27]–[30]:
The Full Court held in AJO & GRO that addbacks fall into “three clear categories”: where the parties have expended money on legal fees; where there has been a premature distribution of matrimonial assets; and “waste” or wanton, negligent, or reckless dissipation of assets.
However, the Full Court also made it clear that an addback does not necessarily occur whenever “a party has expended money realised from the disposition of assets that existed as at the date of separation”, the Full Court describing such a proposition as “unduly simplistic”. An earlier Full Court made the same point, saying that adding back is “the exception rather than the rule”.
The fundamental precept that addbacks are exceptional, reflected in the decisions just referred to, also mirrors what has been said in earlier decisions of the Full Court that, for example, “the Family Court must take the property of a party to the marriage as it finds it” at trial. An important parallel proposition is that the parties do not “go into a state of suspended economic animation” after separation. Thus, reasonably incurred expenditure does not usually come within accepted categories of addback.
Two fundamental premises emerge from AJO & GRO and the authorities preceding it. First, “adding back” is a discretionary exercise. When the discretion is exercised in favour of adding back, it reflects a decision that, exceptionally, in the particular circumstances of a case, justice and equity requires it. The second premise is its corollary: in cases that are not “exceptional” justice and equity can be achieved, not by adding back, but by the exercise of a different discretion - usually by taking up the same as a relevant s 75(2) factor. Indeed, it has been said that the latter is “a course which is, perhaps, technically more correct” than adding back to the list of existing interests in property.
The evidence that was accepted by the applicant was that he had possibly sent a total of $300 to Ms M and her brother-in-law Mr CC for support of their family after he had met them and seen the poor conditions in which they lived during a visit to Country GG.
There were alleged to be messages from Ms M to the first respondent which said, “I have been with [Mr Orozco] for 10 years”, “I have a […] business […] … [Mr Orozco] all gave money to me”, and “my husband’s husband 15 years ago we got married and we have 3 children“, amongst other things. The first respondent believed the applicant was married and had children with Ms M on the strength of these messages. There was no other evidence to support this.
The applicant denied he was married to or had children with Ms M and did not call any evidence from Ms M. His evidence was that he had not had contact with Ms M in some time and denied having a sexual relationship with her. His evidence was that she was a friend and that he had sent $100 to her and her brother-in-law Mr CC two or three times, totalling $300.
There was no documentary or other evidence to support a finding that the applicant had wasted $45,000 during the relationship. Had there been evidence of withdrawals from accounts or other transfers of funds the records, if they existed, should have been produced.
I cannot be satisfied on the balance of probabilities that the applicant has transferred the funds as alleged other than that he conceded he had transferred of $300 and accordingly, I make no order as to inclusion of the $45,000 as a notional asset of the parties.
Inclusion of the applicant’s loan of $30,015 as a liability on the balance sheet for legal fees
The treatment of funds used to pay legal fees are a matter of discretion as set out in NHC & RCH (2004) FLC 93-204.
The applicant borrowed $30,015 to meet his legal costs of the proceedings. His evidence in cross-examination, contrary to the sworn evidence in his affidavit and financial statement sworn 11 September 2023 that he was earning $150,000, was that he earned $220,000 in the last financial year. His evidence was that he had the capacity to save around $1,000 per week. He explained his lack of savings, despite this income, because he had legal fees to pay.
The applicant’s costs notice disclosed that he had incurred $66,282.97 in costs, as well as $2,000 for work not billed, with prospective costs for his counsel and solicitor’s attendance at final hearing in the amount of $71,350. The applicant has no savings, pays no spousal maintenance or no child support and he has borrowed $30,015.
I accept that the applicant borrowed $30,015 for the purpose of meeting his legal fees.
Legal fees attributable to property proceedings should not be included as liabilities in determining the net property pool as to do so would see the respondent bearing some responsibility for them, contrary to the usual rule established under s 117 of the Act that each party should pay their own costs. To include this liability in such circumstances would, in effect, result in the first respondent contributing to the legal costs of the applicant. This is not appropriate and the borrowings to meet his legal costs are to be met by the applicant alone. I note the debt of the applicant but decline to include this as a liability of the parties in the balance sheet.
Motor Vehicle 1
The parties agreed to a valuation of $3,000 for Motor Vehicle 1, contained at item 3 of the agreed balance sheet (Exhibit 4). It is also agreed that Motor Vehicle 1 is registered in the name of the applicant. The first respondent gave evidence that it is in her yard, “but it’s a 10 wreck. It’s – it hasn’t been registered for two years because he refuses to give me the registration papers. … And I don’t think – it’s 16 years old so I don’t think it will be registered again.” The applicant concedes that he had not provided the registration to the first respondent.
As agreed, I find that Motor Vehicle 1, currently registered in the name of the applicant is valued at $3,000.
Ownership of Motor Vehicle 3
The first respondent’s case was that Motor Vehicle 3 was purchased by the parties’ daughter Ms O using monies she borrowed from her paternal grandmother and Mr Q. Ms O deposed to having repaid her grandmother the funds she borrowed:
At the time, I obtained a loan from my grandmother, [Ms N] for approximately $10,000. It was a verbal agreement to repay it when I could and there was no interest to be paid. It took me about one year or 18 months to repay the money to my grandmother by instalments.
The applicant’s case is that he borrowed $10,000 from his parents to purchase Motor Vehicle 3 and paid them back. The evidence shows that the applicant had been transferring his parents funds around the time of Motor Vehicle 3’s purchase. Exhibit 9 demonstrates $5,000 being transferred from the parties’ joint account to the applicant’s parents Ms N and Mr HH, comprising of payments of $1,000 per day from 11–14 and 17 September 2018.
It was put to the applicant that Ms O repaid the paternal grandmother by paying the $10,000 back to her father and his answer was “that’s news to me then”.
Ms O was not required for cross-examination.
The applicant’s evidence was that he had taken a loan from his mother and father and that he gifted the car to the first respondent “the day we bought it”. He said, “[Ms O] would – didn’t want – didn’t want to drive Motor Vehicle 3, and so [Ms Bonilla] had ownership of it so they could both go to their business and so on”.
His evidence was that Ms O drove Motor Vehicle 1 which was registered in his name. The first respondent’s evidence is that Ms O was scared to drive the vehicle when it was first purchased, not being familiar with driving large vehicles, but that she “drives it all the time now”.
The first respondent’s evidence was that Motor Vehicle 3 was registered in her name because:
My daughter was just turned 18. She walked off to have a look at the cars and I went in to ask then about getting a number so we could bid on it and I filled out the forms and when you fill out the forms they automatically register it in your name. I didn’t know that at the time.
The first respondent’s evidence supported the contention that Ms O purchased the vehicle using money borrowed from the paternal grandmother, her evidence being that Ms O had worked since the age of 15 and in sales, and that she borrowed $10,000 from the paternal grandmother and $4,000 from her brother Mr Q.
A photo was shown to the applicant in cross-examination showing the back of Motor Vehicle 3 with a fit out for products. He accepted that Ms O used Motor Vehicle 3 for her business, but his evidence was that the fit out could be removed and that the first respondent used Motor Vehicle 3 for many purposes including taking items, such as beach shelters and surfboards, to the beach.
Whatever the differences, the evidence of Ms O was not challenged. I accept the unchallenged evidence of Ms O as to the fact that she paid for Motor Vehicle 3, and it was her vehicle. I accept the explanation of the first respondent as to the circumstances of the purchase of the vehicle at Pickles auction and the reason the vehicle was placed in her name. Accordingly, Motor Vehicle 3 will not be included in the balance sheet as an asset of the parties.
Furniture and chattels
There was no evidence as to the value of any of the parties’ furniture and chattels other than in the parties’ financial statements.
Around the time of separation, the applicant’s evidence was that he attended the Suburb E property on an occasion with a small truck to collect furniture. It was his evidence that he was allowed to take “very few” items. It was not in dispute that the second respondent was there at the time he attended and did not permit him entry to the home, as it would be “trespassing” and because his daughter was home. It was agreed that he was provided with his clothes and sporting equipment, and furniture including a table and chair set, two two-seater lounge chairs, a refrigerator and washing machine.
It was put to the first respondent that the applicant was not allowed to take many items and her response was, “If you take your clothes, your [sporting equipment] and half the furniture there’s not much more left”. It was put to her that he was given faulty items including a refrigerator and her response was “mine is broken too”. A similar contention was put to the second respondent, that the applicant was given old appliances and old lounges, and the second respondent’s response was “everything in the property was old”.
There is no evidence of any chattels or furniture of any value for inclusion in the assets of the parties. I accept the evidence of the parties that there was a division of the modest chattels that existed, and I order that each party retain the chattels in their respective possession.
DD Bank account of the first respondent
There is no evidence that establishes the first respondent has an DD Bank account as alleged.
The applicant included in his Case Outline that the first respondent held an DD Bank Everyday Account ending in …26 containing $1,477. It was put to him in cross-examination that the first respondent does not have a DD Bank Everyday Account and his response was that she is lying. When asked what informed his instructions that she did hold such an account, his answer was “no idea, sorry”. There is no evidence available for me to find that the first respondent does have a DD Bank Everyday Account or any account with a balance of $1,477 and I do not include that sum in the balance sheet of assets of the parties.
ALLEGATION OF LACK OF DISCLOSURE BY THE APPLICANT
It was alleged by the first respondent that the applicant had not made any meaningful disclosure since 2021. It was put to him in cross-examination that he had not provided any updated bank statements since 2021, any tax returns, any updated superannuation statement since May 2021, or any updated payslips since March 2020. The applicant’s answer to each question was that he had provided everything that had been requested to his lawyer for production.
The applicant’s Financial Statement sworn on 11 September 2023 recorded his income as $150,000 per annum. It became apparent in cross-examination that his income for the last financial year was $220,000. When asked why his Financial Statement did not reflect that figure, he again contended that his lawyer must not have updated it.
As referred to later in these reasons, the applicant did not disclose the detail of his interest in the estate of his late mother.
The applicant failed to comply with his duty to make full and frank disclosure, particularly in respect of his inheritance and his income, and I make that finding.
THE APPLICANT’S POST-SEPARATION INHERITANCE
The late mother of the applicant, Ms N, died in 2023. Her will, produced during the hearing, became Exhibit 7. The applicant is a beneficiary under the will. The applicant made no disclosure of the will nor provided any detail of his interest in the estate. The applicant was aware the issue of his entitlements under the will would be relevant to these proceedings. He had not enquired as to the value of the estate because he said he was still in mourning but gave evidence that his sisters, who are the executors of the estate, had sent documents to his lawyer.
How should the applicant’s post-separation inheritance be treated?
It was submitted on behalf of the applicant that the applicant’s inheritance should be treated as a financial resource of the applicant rather than property.
The High Court in Hall and Hall (2016) 257 CLR 490 at 506–507 set out the position in regards financial resources as follows:
The reference to “financial resources” in the context of s 75(2)(b) has long been correctly interpreted by the Family Court to refer to “a source of financial support which a party can reasonably expect will be available to him or her to supply a financial need or deficiency”. The requirement that the financial resource be that “of” a party no doubt implies that the source of financial support be one on which the party is capable of drawing. It must involve something more than an expectation of benevolence on the part of another. But it goes too far to suggest that the party must control the source of financial support. Thus, it has long correctly been recognised that a nominated beneficiary of a discretionary trust, who has no control over the trustee but who has a reasonable expectation that the trustee’s discretion will be exercised in his or her favour, has a financial resource to the extent of that expectation.
Here the issue is whether or not the monies are within the applicant’s control. If so, then they will be regarded as property and included in the assets of the parties. As the evidence emerged in cross-examination of both the applicant and his sister, the applicant has a 1/5th interest in the estate of his late mother and is entitled to claim that interest. For the reasons that follow I accept the first respondent’s submission that the interest the applicant has in the estate is at least $150,000.
In both De Angelis & De Angelis (2003) FLC 93-133, and White & Tulloch & White (1995) FLC 92-640 the Full Court set out the relevance of an expected inheritance must depend upon the nature of the claims being put forward and the facts of the particular case, and that there is no absolute rule in respect of prospective inheritances to be determined noting the wide discretion the court has under section 79 of the Act. In Bonnici and Bonnici (1992) FLC 92-272 at 79,020 the Full Court has distinguished property from financial resources as follows, “The expression “resource” [or, we would respectfully add, “financial resource”] is and should be confined to those interests which do not fall into the definition of property as such to which the parties have a present entitlement”.
It was submitted on behalf of the first respondent that, pursuant to Holland & Holland (2017) FLC 93-798 (“Holland”), the applicant’s inheritance is property that he is presently entitled to and should be considered an asset of the parties. I am persuaded by that submission.
It was submitted on behalf of the applicant that the present case can be distinguished from Holland, on the basis that the value of the property in that case was known and that the husband had already received the funds.
The applicant relied upon evidence of his sister Ms EE. She gave evidence by telephone as she was on holiday in City FF. She agreed she was the executor of her late mother’s estate but was unable to give evidence with any particularity about the entitlement or likely entitlement of the applicant as she was unaware how much money was involved. It was agreed that the will bequeathed to the applicant a 1/5th entitlement, as it did for each of Ms N’s children as beneficiaries. Ms EE initially could not give even a ball-park figure of what the applicant’s 20 percent entitlement of the estate would amount to despite being an executor and despite the matter being in the hands of a solicitor.
When giving evidence, Ms EE said the amount of the estate to be received was “not my business” and she could not recall the name of the solicitor in Queensland looking after the estate. After further cross-examination, she said that her late parents had to sell their property to make a payment for a Residential Accommodation Deposit in an aged care facility of possibly around $700,000. Ms EE stated that her sister and co-executor was more familiar with the details.
The applicant did not make any disclosure as to his inheritance in circumstances where it would have been a simple task to disclose the status of probate and schedule of expected assets of the estate. The value of the applicant’s inheritance is not known is due to the applicant’s failure to disclose.
As such, I find that the applicant’s inheritance is property to which he has a present entitlement, is not a financial resource, and is to be included as an asset of the parties in the determination of the competing applications. In the circumstances of this case I find it would be unjust to ignore the inheritance. I note, however, that the applicant’s inheritance from his late mother’s estate is property of the applicant, which he is inheriting three years post-separation, to which the first respondent made no contribution.
The failure by the applicant to make disclosure in relation to the estate of his late mother was on the basis that he was “still grieving” and that his evidence was, “I feel it is too soon to make that request”. Whatever his reason for non-disclosure the authorities are clear that his duty to disclose is absolute. The failure to comply with his ongoing obligations of disclosure and his failure to seek and provide the reasonably available information via the executors is the basis upon which I find that it is appropriate to “err on the side of generosity” in determining the value of the inheritance, as I am not satisfied the whole truth has come out in relation to the applicant’s inheritance.
I am satisfied that there is some evidence of value of the estate, the estimate of the estate likely comprising $700,000 being the estimate given by Ms EE in her evidence that, “It would’ve been around about $700,000 … Yes, they had other funds I have no idea how much”. Her evidence was a rough guess the estate would be “$150,000 each”. The fact that the precise amount is not before the Court is because the applicant failed to provide that evidence.
In all of the circumstances, I find that the amount to be included in the balance sheet in respect of the funds to be received by the applicant is not less than $150,000 and that sum as contended by the first respondent should be included on the balance sheet.
Is it just and equitable to make an adjustment to the applicant’s inheritance?
The Full Court in the decision of Marcin & Marcin (2020) FLC 93-956 determined that there was no error in the primary judge’s finding that to alter the interests of the wife as to her inheritance would not be just and equitable in circumstances where the husband made no contribution to the acquisition of that property. Similarly in the present case, there was no evidence or submission that the first respondent has made any contribution to the inheritance soon to be received by the applicant.
In Mayne & Mayne (No 2) (2012) FLC 93-510 (“Mayne”), as to the achievement of a just and equitable result in the context of property proceedings where the bulk of the asset pool consisted of two properties purchased using the inheritance of the wife, and superannuation, May J (supported by Faulks DCJ and Strickland J) stated at [103] and [106]:
103.The parties were married for a significant period, 23 years, during which time both made significant financial and non-financial contributions. In my view, a just and equitable result in such circumstances requires that the division of property ensure both parties receive some non-superannuation and superannuation assets.
106.… a division of property where the husband receives no tangible property assets is a result where the requirements of justice and equity between the parties in these circumstances would not be met.
In my view, the facts of this case and the facts of Mayne are analogous. If no order is made in relation to the applicant’s inheritance, the first respondent will receive only superannuation following a long relationship where both parties have each made significant but different contributions. A just and equitable result on the facts of this case requires each party to receive some non-superannuation and superannuation assets. As such, it is just and equitable to alter the interests of the applicant as to the inheritance, particularly in circumstances where it is the only tangible asset of value.
ASSETS AND LIABILITIES OF THE PARTIES
Having determined the areas of dispute in relation to the pool, I find that the assets and liabilities of the parties are as follows:
OWNERSHIP DESCRIPTION VALUE ASSETS Applicant Motor Vehicle 2 $8,500 Respondent Motor Vehicle 1 $3,000 Applicant ANZ Access Advantage acc ending …42 $2,241 Applicant ANZ Online Saver acc ending …77 $480 Applicant ANZ Online Saver acc ending …69 $372 Respondent Westpac Debit Card …96 $62 Applicant Inheritance from estate of Ms N $150,000 TOTAL $164,655 LIABILITIES Respondent Westpac Credit Card $8,000 Applicant ANZ Platinum credit card ending …23 $2,318 Applicant JJ Financial Services Account ending …03 $1,650 TOTAL $11,968 SUPERANNUATION Applicant Superannuation Fund 1 (as at 30.06.2022) $209,128 Applicant Superannuation Fund 2 (as at 30.06.2022) $30,498 Applicant Superannuation Fund 3 (as at 30.06.2022) $29,520 TOTAL $269,146 Is it just and equitable to make an order?
The applicant and the first respondent both contend it is just and equitable to make an order.
The applicant sought an order that he receive 50 per cent of the total net assets of the parties (Exhibit 15). He submitted that his inheritance should not form part of the pool of assets, which, for the reasons referred to above, I do not accept.
The first respondent sought an order that there be a split of 60 per cent of the Superannuation Fund 1 in her favour and a 50 per cent adjustment of the inheritance of the applicant.
The parties separated over four years ago and there has not thereafter been the common use of property by the parties. Additionally, “the express and implicit assumptions that underpinned the existing property arrangements have been brought to an end by the voluntary severance of the mutuality of the relationship”. In such cases, the “just and equitable requirement is readily satisfied” as enumerated in Stanford. Noting that each party seeks orders for property adjustment, I am satisfied in this case that it is just and equitable to make orders adjusting the parties’ interests.
WHAT WEIGHT SHOULD BE AFFORDED TO THE MYRIAD OF CONTRIBUTIONS MADE BY THE PARTIES OVER THE RELATIONSHIP PERIOD OF 29 YEARS AND THE FOUR YEARS POST-SEPARATION?
I am obliged to undertake a holistic assessment of the parties’ contributions across the course of the relationship and in the post-separation period until the point of assessment (see Pierce v Pierce (1999) FLC 92-844; Singerson & Joans [2014] FamCAFC 238; Dickons v Dickons (2012) 50 Fam LR 244 (“Dickons”); Marsh & Marsh (2014) FLC 93-576; Lovine & Connor and Anor (2012) FLC 93-515).
The Court is concerned with a “holistic” assessment of the “myriad” of contributions made by each party throughout the relationship. The parties each seek a different approach to the post-separation inheritance of the applicant. The applicant contends that at best it is a financial resource, and the first respondent contends it is an asset. There can be no dispute that the contribution is from the applicant and that the first respondent did not contribute. The Full Court has emphasised in numerous cases that trial judges should avoid placing too much weight on any particular contribution, at the expense of the “myriad” of contributions made by parties over the duration of a relationship. It is also important not to place undue value on any particular contribution. The Court is required to identify, weigh, and assess all contributions made by each party such that the nature, form, and extent of all types of contributions are considered within the circumstances of their relationship.
Initial contributions
It was submitted by counsel for the first respondent that I would find neither party had any initial contribution of substance. The applicant’s evidence was that the first respondent owned the Town J property at the time of cohabitation, but this contention was later withdrawn. There is no evidence that the applicant had any assets at the time of cohabitation. As such, I find that neither party made any initial contributions.
Contributions during the relationship
In considering the myriad of contributions made by the parties throughout the relationship, I note that the parties entered the relationship as a young couple who were both employed. The applicant continued to be employed for a large portion of the relationship. The first respondent ceased her employment coinciding with the birth of the parties’ second child. It is agreed that the first respondent played a greater role as homemaker and parent after that time and the husband applicant played a greater “breadwinner” role. The parties had the assistance of the applicant’s family for accommodation in the early years of their relationship but then were provided with long-term assistance with housing by the first respondent’s family, first at Suburb G then at Suburb E. Both parties assisted with maintenance and upkeep of the homes and attended to some renovations. Each party, on the evidence, contributed to the best of their ability for the benefit of the family. The first respondent’s contribution included her family providing housing for a significant period of the relationship.
The applicant was employed earning around $30,000 per annum at the commencement of the relationship and that the first respondent was earning a similar amount. The first respondent ceased paid employment at the time of the birth of the parties’ second child in 1997.
The parties resided with the applicant’s parents for a period of time in their residence prior to them residing in the Suburb G property owned by the second and third respondents from 1992 until 1995. There is no agreement about whether they paid rent. The applicant contends the rent paid was $80 per week. The first respondent and her father say it was to have been paid but never was. It is not necessary to make a finding in respect of the intention as to whether rent was to be paid. There is no evidence that rent was paid. I accept the parties lived mostly rent free and accept that the applicant undertook some maintenance work at the properties in which they lived. The provision of housing was a contribution of the first respondent, by her parents for the benefit of the parties that continued until separation.
The first respondent took on the majority of homemaking and parenting duties and the applicant was the primary income earner.
The parties both undertook various tasks from time-to-time including plastering and painting, general home maintenance and gardening at the Suburb E property.
What contributions have been made since the parties’ separation and should there be an adjustment in favour of either party?
The first respondent has continued to live at the Suburb E property rent free with the adult children. She is not in paid employment. The applicant continues to work full time earning $220,000 in the past financial year and has presumably continued making contributions to his superannuation.
The applicant’s post-separation contributions include the late inheritance that makes up almost all of the non-superannuation assets of the parties and his post-separation contributions to his superannuation since 2019 as he has continued to be employed. There is no evidence of the balance at the time of separation, but it is not disputed that the applicant has remained employed and accordingly has received his superannuation entitlements.
Both the applicant’s recent inheritance from his late mother’s estate, which I have found is not less than $150,000, and his superannuation, of which some was earned after separation, are significant post-separation contributions to an otherwise modest pool. I give some weight to both the estate and superannuation post-separation contributions made by the applicant.
Conclusion on contributions
The contributions of the parties over this long relationship were many and varied. There were a “myriad” of contributions. Each party made direct and indirect financial contributions throughout the relationship, including to the applicant’s superannuation. The first respondent also made a contribution in respect of the housing assistance from her family over many years. Each party also made contributions to the welfare of the family, although the first respondent’s contribution likely exceeded that of the applicant. The applicant’s post-separation contributions, in particular his recent inheritance and post-separation contributions to superannuation, is superior to the first respondent warranting an adjustment in his favour.
In the main, each party contributed to the best of their abilities in their respective roles. I have considered that the de facto relationship was a long one, and in assessing all of the contributions, financial and non-financial, direct and indirect, both during the relationship and subsequent to separation, including the housing assistance provided by the first respondent’s family for 23 years and the applicant’s post-separation inheritance and superannuation, I find the contributions to be 55 per cent to the applicant and 45 per cent to the first respondent. I note that this assessment requires making a leap from qualitative to quantitative, and I have considered the relatively modest pool of assets and the make-up of the assets in reaching this assessment.
SHOULD AN ADJUSTMENT BE MADE TO EITHER PARTY HAVING REGARD TO S 90SF(3)?
The first respondent has not been in paid employment since the parties’ daughter was born in 1997. She was a homemaker and parent. She occasionally assists her daughter Ms O where she works but does not derive any income. There was no suggestion that the first respondent has an earning capacity. The first respondent is 58 years of age and is in reasonable health.
The applicant is employed in industry and, in cross-examination, gave evidence that he earned $220,000 last financial year. He been employed in industry over many years. He is 58 years of age. The applicant contends he has various health issues and asserted that as his job was physical, he did not expect to be able to maintain his current working capacity for too much longer. He takes medication to treat high blood pressure, anxiety, and depression.
The evidence supports, and I find, that the applicant has a superior earning capacity which he will continue to have until his retirement. I accept his evidence that his job is a physical job but note that he is currently able to work despite his health issues for which he is medicated.
It was accepted by the applicant that there will continue to be an earning disparity favouring him, however, he contended for an adjustment of five per cent on account of a possible future decline in his income. I reject that submission.
The first respondent has been provided subsidised or free housing from her parents for virtually the whole of her adult life. Since separation in 2019, she has continued to live at the Suburb E property with her daughter Ms O. There was no suggestion that her parents would cease to provide their support by way of continuing to permit her to reside in the Suburb E property. I take this factor into account under s 90SF(3)(r).
The applicant is currently residing in a private rental in City S at the cost of $400 per week and will be required to continue to pay for his accommodation from his income.
There is a significant income disparity between the parties that will continue until the applicant’s retirement, but it is noted that he is 58 years of age, and he is in the twilight of his working life in a physical job in industry. The first respondent has no assets other than modest furniture and has a credit card debt of $8,000. She has no income.
Conclusion on s 90SF of the Act
In considering all of the factors above, I am of the view that a modest adjustment in favour of the first respondent on account of the earning disparity which will be ongoing for at least several years, is warranted, and that such adjustment is appropriate taking into account the assets as found in these reasons.
Various factors have been weighed in determining that a further adjustment is appropriate, including as identified above, the earning disparity between the parties and the first respondent’s family continuing to provide housing for her benefit. On balance, when considering and weighing all factors in accordance with s 90SF(3), I conclude that an adjustment of 2.5 per cent should be made in the first respondent’s favour given the disparity in earnings and earning capacity.
Considering the modest overall pool, and the factors identified in these reasons pursuant to ss 90SM and 90SF of the Act, a division of 52.5 per cent to the applicant and 47.5 per cent to the respondent is, in my view, just and equitable.
THE OUTCOME
The applicant sought a 50 per cent division overall but excluding the post-separation inheritance, which was not accepted by me.
The first respondent sought a 60 per cent split of the applicant’s Superannuation Fund 1, 50 per cent of the inheritance and each party retain what they otherwise hold.
The property of the parties, or either of them, will be divided to achieve an outcome which reflects the applicant receiving 52.5 per cent of the net overall asset pool as set out in the table below. For the reasons set out herein I find that this is a just and equitable outcome.
The first respondent will receive a 60 per cent superannuation split from the applicant’s Superannuation Fund 1, being $125,477, as sought by her and the applicant will retain the balance of his total superannuation benefits. I accept that the superannuation figure may have changed since the agreed June 2022 figures relied on for the purpose of the hearing, however, I am satisfied that even with a modest increase in the superannuation balance that may have occurred, the overall outcome is one that is just and equitable.
Doing the best I can, from the figures in the table, the overall outcome is as set out herein..
Number Ownership Description 1st Resp to retain App to retain ASSETS 1 App Motor Vehicle 2 $8,500 2 1st Resp Motor Vehicle 1 $3,000 3 App ANZ Access Advantage acc ending …42 $2,241 4 App ANZ Online Saver acc ending …77 $480 5 App ANZ Online Saver acc ending …69 $372 6 App Westpac Debit Card …96 $62 7 App Inheritance from estate of Ms N of $150,000 $79,832 $70,168 Total Gross Assets $82,894 $81,761 LIABILITIES 8 1st Resp Westpac Credit Card ($8,000) 0
9 App ANZ Platinum credit card ending …23 0 ($2,318) 10 App JJ Financial Services Account ending …03 0 ($1,650) Total liabilities ($8,000) (3,968) Net total assets $74,894 $77,793 SUPERANNUATION 11 App Superannuation Fund 1 (as at 30.06.2022) Accumulation $125,477 $83,651 12 App Superannuation Fund 2 (as at 30.06.2022) Accumulation $30,498 13 App Superannuation Fund 3 (as at 30.06.2022) Accumulation $29,520 Total superannuation $125,477 $143,669 NET TOTAL POOL $200,371 $221,462
The applicant will retain the assets and liabilities listed on the balance sheet above and will be required to pay the first respondent $79,832 to achieve the ordered outcome. The respective positions of the parties are reflected in the table.
I am satisfied that the proposed property settlement achieves a just and equitable outcome. The applicant will have 120 days in which to pay the cash sum to the first respondent, after which interest will accrue pursuant to the Act and the Rules. I do not have evidence as to when the inheritance was to be paid to the applicant, but this time frame will allow the applicant to make arrangements to make the payment required pursuant to these orders.
Having determined that the net pool should be divided as indicated it follows that a superannuation splitting order, splitting a base amount of 60 per cent of the applicant’s Superannuation Fund 1 as sought by the first respondent to the first respondent is necessary to achieve a just and equitable outcome between the parties. The most recent and agreed valuation of the applicant’s Superannuation Fund 1 is $209,128. Therefore, 60 per cent of that entitlement will equate to $125,477.
The parties agree that Motor Vehicle 1 has a value of $3,000 and is currently registered to the applicant. I find it is just and equitable to order that the applicant transfer the registration of such vehicle to the first respondent, in circumstances where it is at her property and has been at the first respondent’s residence unregistered for two years.
COSTS
In these proceedings each party sought that the opposing party pay their costs of and incidental to these proceedings. I will make orders for the parties to file any application for costs within 28 days. I will make provision for determination of any costs issue in chambers if the parties consent.
I certify that the preceding two hundred and seventy (270) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Curran. Associate:
Dated: 11 December 2023
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