Set aside by Appeal : Set aside on 16/7/03 without considering any submissions or reaching any conclusions as to the underlying decision CITATION: Gregoriou -v- Chief Commissioner of State Revenue [2003] NSWADT 145 DIVISION: General Division APPLICANT PARTIES: Dean Gregoriou RESPONDENT Chief Commisioner of State Revenue FILE NUMBER: 023236 HEARING DATES: 19/03/2003 SUBMISSIONS CLOSED: 03/19/2003 DATE OF DECISION: 05/07/2003 BEFORE: Higgins S - Judicial Member APPLICATION: first home owners grant - approval of application - First Home Owners Grant Act - first home owners grant - approval of application MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 First Home Owners Grant Act 2000 CASES CITED: APPLICANT REPRESENTATION: J O'Donnell, solicitor RESPONDENT G van Emmerik, agent ORDERS: Orders made 19 March 2003; The decision of the Chief Commissioner is set aside. EX-TEMPORE BACKGROUND 1 Mr Gregoriou has made an application seeking review of the decision by the Chief Commissioner of State Revenue ('the Commissioner') to reverse his decision in respect of giving him a first home owner grant and to request that he repay the $7000 grant that he had been paid. The basis of the Commissioner's decision was that Mr Gregoriou had failed to take up residence in the property, to which the grant related, within 12 months of the grant being paid. This was a requirement under section 12 of the First Home Owner Grant Act 2000. 2 The Tribunal has jurisdiction to hear Mr Gregoriou's application by virtue of sections 25 and 28 of the First Home Owner Grant Act and section 38 of the Administrative Decisions Tribunal Act, 1997. RELEVANT LAW 3 The relevant law is that contained in the First Home Owner Grant Act 2000. Division 2 of Part II of that Act sets out five eligibility criteria for a first home owner grant. The fifth eligibility criteria is set out in section 12(1) of the Act which provides, so far as is relevant, as follows: Section 12(1) - An applicant for a first home owner grant must occupy the home to which the application relates as the applicant's principal place of residence within 12 months after completion of the eligible transaction or a longer period approved by the Commissioner. 4 Section 23 of the First Home Owner Grant Act gives the Commissioner power to vary or reverse a decision he has made in respect of an application for a grant where he is later satisfied that the decision is incorrect. However, he must do so within five years of the original decision having been made. 5 Section 24(1) of the First Home Owner Grant Act provides that where the Commissioner decides to reverse an earlier decision on an application for a grant, the Commissioner is required to give the applicant written notice of the reversal and state in the notice the reasons for the reversal. 6 Section 45 of the First Home Owner Grant Act gives the Commissioner the power to request the repayment of the amount approved and paid under an application for a grant under the Act. That section, so far as is relevant, provides: 45(1) - The Chief Commissioner may by written notice require an applicant (or a former applicant) for a first home owner grant to repay an amount paid on the application if: (a) the amount was paid in error, or (b) the Chief Commissioner reverses the decision under which the amount was paid for any other reason. EVIDENCE 7 The evidence that has been presented before the Tribunal has primarily been material that was previously filed with the Tribunal, in particular the application of Mr Gregoriou and the documents attached to it. 8 Mr O'Donnell, on behalf of Mr Gregoriou, also called Mrs Gregoriou, the applicant's mother, and Mr Gregoriou, the applicant, to give oral evidence. They were both cross-examined by Mr van Emmerik. 9 On the basis of the material filed and the oral testimony of Mrs Gregoriou and Mr Gregoriou, the applicant, the Tribunal finds the following: (a) On 6 August 2000, Mr Gregoriou made an application for a first home owner grant in respect of a property he wished to purchase. Mr Gregoriou was 18 years of age and wanted to purchase a home to live in. He had left school in Year 10 and worked two jobs in order to save to buy a home. He has a learning difficulty but is handy with his hands and wanted to show that he could buy a home. He also wanted to have his own space as his parents' home was very small. Mr Gregoriou's learning difficulty is related to an attention disorder, which has resulted in him having difficulty in reading and writing. (b) On 17 December 2000, Mr Gregoriou became the owner of the property to which the first home owner grant related. There were tenants in the property at that time and they stayed a few weeks after settlement had taken place. After the tenants vacated the property, Mr Gregoriou immediately commenced renovations as he described the house as not being fit to live in. It needed painting throughout, work to be done in the kitchen and a good clean-up in the house and the surrounding garden. (c) In January 2001, Mr Gregoriou lost his job. He immediately began looking for another job but was not able to find one until July 2001. In the meantime he continued to look for work on a daily basis and when his grandfather was available, to renovate the property. He and his grandfather slowly renovated it to make it habitable. (d) On 7 February 2001, Mr Gregoriou was paid his first home owner grant of $7000 in respect of the property. (e) In March 2001, Mrs Gregoriou, on behalf of her son, the applicant, approached Raine & Horne, a real estate agency, to rent the premises as Mr Gregoriou had not been able to find any work and his financial means to pay off the mortgage were running out. Mrs Gregoriou's instructions to Raine & Horne were to rent the property until late November, early December 2001, so that Mr Gregoriou could take up residence in the property within the 12 month period as required by the grant. (f) In June 2001 Raine & Horne entered into a tenancy agreement in respect of the property. The term of the lease was from 8 June 2001 to 7 December 2001. In the intervening months, from January 2001, Mr Gregoriou and his grandfather had painted the house, and renovated the kitchen. Mr Gregoriou had also purchased and installed a new stove and a refrigerator. When doing the renovations, Mr Gregoriou stayed at the property on several nights. He had brought a collapsible bed and basic furniture to the property so that he could live there for short periods of time. He also had friends over for parties at the property during this time, but at all times continued to live with his parents. (g) On 12 November 2001, Raine & Horne issued a notice to the tenant of the property to terminate the lease. The tenant, however, did not leave the property as required. (h) On 27 March 2002, the Commissioner wrote to Mr Gregoriou requesting that he advise when he took up residency of the property. This was a standard audit request that is made by the Commissioner following the issue of a grant. (i) On 9 May 2002, Mr Gregoriou responded to the Commissioner's letter and advising him of his circumstances and the fact that the property had been tenanted since March 2001 and that the tenant had refused to leave. After this time (March 2001) Mr Gregoriou was successful in regaining employment, which involved working in Penrith and living in Penrith during the week. This was a requirement of his employer. He came home every weekend and at all times wanted to return to live at the property and had wanted the tenants to leave by the end of November, early December, 2001. (j) On 14 May 2002, Raine & Horne lodged an application with the Consumer Trader & Tenancy Tribunal seeking orders for the termination of the lease and that possession of the property be given to Mr Gregoriou. Those orders were subsequently made and in June 2002 the tenants vacated the property. (k) Both Mrs Gregoriou and Mr Gregoriou stated that the state of the property at the time the tenant vacated it was such that nobody could live in it. It required substantial clean up and minor renovation. Mr Gregoriou commenced doing this as soon as the tenant had vacated the property, however his ability to do so was limited because of his work situation. Accordingly, he was only able to work there on one day of the weekend as he worked six days a week and it took him until October 2002 to have the property in such a condition that he was able to move in his furniture and take up occupancy of the property as his principal place of residence. It is accepted that since that time the property has been his principal place of residence. SUBMISSIONS 10 Mr O'Donnell, on behalf of Mr Gregoriou, submitted that the Commissioner's decision is not the correct and preferred decision as it had always been Mr Gregoriou's intention to reside at the property within the 12 month period. The reason he had not done so arose from matters outside his control. In the alternative, he submitted that the period in which Mr Gregoriou resided in the property between January and June 2001 was sufficient to satisfy the requirement of section 12 of the First Home Owner's Grant. Further, in the alternative he also submitted that Mr Gregoriou's letter of 9 May 2002 constituted an application for an extension of time within which to take up occupancy of the property and in the circumstances it was an application that should have be granted. 11 Mr van Emmerik, on behalf of the Commissioner, on the other hand submitted that Mr Gregoriou had failed to comply with section 12 of the First Home Owner Grant Act, which is cast in the terms of a "must". Having not satisfied the residence requirement as set out in that section the Commissioner was obliged to form the view that his decision in granting the application was incorrect. However, Mr van Emmerik conceded that the Commissioner had a discretion under sections 23 and 45 of the First Home Owner Grant Act as to whether he would or would not reverse the original decision. 12 He also submitted that the occupation by Mr Gregoriou of the property, in the period January to June 2001, before the property was tenanted did not satisfy the requirements of section 12 of the First Home Owner Grant Act. He also pointed out that Mr Gregoriou had failed to comply with section 20 of the Act when he became aware of the fact that he had not complied with the residency requirements. That is, after December 2001 and before 9 May 2002, Mr Gregoriou was required to inform the Commissioner that his circumstances had changed and that he had not taken up occupancy within 12 months. This, Mr Gregoriou, had not done. REASONS AND DECISION 13 The Tribunal found Mr Gregoriou and his mother to be truthful witnesses and there is no suggestion that Mr Gregoriou has acted dishonestly in any way. The Tribunal also finds that the evidence does not establish that Mr Gregoriou took up residence of the property as his principal place of residence during the period January to June 2001. He clearly continued to use his parents' place as his principal place of residence. 14 The Tribunal also finds that Mr Gregoriou's letter of 9 May 2002 did not constitute an application for an extension of time. 15 In the opinion of the Tribunal the issue in this application is primarily whether the Commissioner, in exercising his discretion under sections 23 and 45 of the First Home Owner Grant Act has made the correct and preferred decision. In exercising his discretion under these provisions the Commissioner is required to take into account the objects and requirements of that Act and the matters put forward by the applicant. 16 It is clear that the objects of the First Home Owner Grant Act is to assist persons who are purchasing their own home. It is not there for those who wish to purchase a home that is to be an investment property. It is for these reasons that Parliament has specifically described the criteria, which makes persons eligible for a grant. These criteria include a requirement that the applicant must reside in the property as his/her principal place of residence within 12 months of receiving the grant (see section 12 of the Act). 17 In this case the Tribunal finds that Mr Gregoriou has not complied with the requirements as set out in section 12 of the First Home Owner Grant Act. However, as I have already mentioned the power vested in the Commissioner in section 23 and 45 of the Act is a discretionary one. That is, Parliament has not vested in the Commissioner a power, which requires him to reverse an earlier decision to give a grant on the basis that the criteria as set out in section 12 of the Act has not been met. 18 In this application, the Tribunal accepts that the circumstances in which Mr Gregoriou purchased the property was such that he at that time and at all times intended to make the property his principal place of residence. At the time he purchased the property he intended to make the property his principal place of residence once it was renovated. He only decided to rent it out in March 2001 after he had lost his job and was not immediately able to find another. However, when renting the property, he still intended to make the property his principal place of residence within the required 12 month period. Regrettably he was not able to do so and it would appear that one of the reasons for this was the inaction of his real estate agent. Notwithstanding this, it is clear that the tenants themselves were difficult. 19 There is no question that Mr Gregoriou now resides at the property as his principal place of residence. Had he been able to do so previously he would have done so. Accordingly, having regard to the discretion available to the Commissioner, on the facts of this particular case, in the opinion of the Tribunal, the Commissioner's decision is not in these circumstances the correct and preferred decision. 20 The Tribunal orders that the Commissioner's decision be set aside. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.