Orozco & Bonilla

Case [2023] FedCFamC1F 1018

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…

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AGLC
Orozco & Bonilla [2023] FedCFamC1F 1018
Case
[2023] FedCFamC1F 1018
Decision Date

CaseChat Overview and Summary

Orozco & Bonilla involved a dispute between the applicant, Mr Orozco, and the first respondent, Ms Bonilla, who had been in a de facto relationship for 28 years and separated in 2019. The case was heard in the Federal Circuit and Family Court of Australia. The primary issue was determining the ownership of a property located at D Street, Suburb E, and whether it was gifted to the couple by the first respondent’s parents, or held on trust for them. Other issues included the treatment of the applicant’s inheritance from his late mother, the division of the couple’s assets, and the impact of the applicant’s failure to disclose information.

The court examined the principle of presumption of advancement, which arises when property is transferred to another for no consideration, particularly in parent-child relationships. The court also considered the impact of non-disclosure by the applicant. The court found that the property was held on trust by Ms Bonilla for her parents until its transfer in 2021. Consequently, the legal and beneficial interest in the property was held by the second and third respondents, excluding the applicant and Ms Bonilla. The court further ordered that a base amount be allocated to Ms Bonilla from the applicant's superannuation, with specific provisions for payments to be made upon a splitable payment from the superannuation fund. Additionally, the applicant was ordered to transfer a motor vehicle to Ms Bonilla and to pay her a specific sum within 120 days. The court also made provisions for the division of other assets and liabilities, and ordered that a Registrar be appointed if either party failed to comply with the orders.

This case underscores the importance of clear evidence in establishing property ownership and the consequences of non-disclosure in family law proceedings. The court’s decision highlights the application of legal principles regarding trust and presumption of advancement, and the necessity for full disclosure in achieving a just and equitable outcome.

Orders

Orders of the court

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.

Background

Background to the litigation

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.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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”.

Ratio Decidendi

Legal Principle Established

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”).