CITATION: Prager v Chief Commissioner of State Revenue [2007] NSWADT 23 DIVISION: Revenue Division APPLICANT PARTIES: Valoha Prager RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 056126 and 066053 HEARING DATES: 15/09/2006 & 17/01/2007 SUBMISSIONS CLOSED: 17 January 2007 DATE OF DECISION: 23 January 2007 BEFORE: Block J - ADCJ (Judicial Member) CATCHWORDS: Land tax exemption - principal place of residence MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Land Tax Management Act 1956 Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP41 2004, CASES CITED: Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 APPLICANT In person REPRESENTATION: RESPONDENT S Free, solicitor ORDERS: The decisions under review are set aside in respect of the 2000 and 2002 land tax years and affirmed in respect of the 2001 and 2003 land tax years. REASONS FOR DECISION Part A: Preliminary and Background. 1 The decisions which are under review relate to the land tax years 2000 to 2003 (both years inclusive). The term "relevant years" refers collectively to all four land tax years; a relevant year is referred to individually by reference to its particular year. The Applicant objected to assessments of land tax referable to property owned by her at 26 Oak Street, Schofields ("the Schofields property" or "Schofields"). Her objections were disallowed and she seeks the review of the Respondent's decisions disallowing her objections. The Applicant contends that in respect of all of the relevant years, the Schofields property was her principal place of residence ("PPR") and that she was thus entitled, in respect of the Schofields property, and in relation to the relevant years, to the PPR exemption provided by the Land Tax Management Act 1956 ("the Act"). 2 It should be noted at the outset that the hearing was referable to case number 056126 (which relates to all of the relevant years other than the 2003 year) while case number 066053 relates to the 2003 year. An assessment dated 1 November 2004 was issued in respect of the relevant years other than the 2003 year, while a revised assessment was issued, on 2 March 2006, in respect of the 2003 year. 3 Although there were two separate applications they were, as a matter of convenience, and by consent, heard together. The Tribunal had before it the documents lodged pursuant to section 58 of the Administrative Decisions Tribunal Act 1997 in respect of each of the two applications. Written submissions were received from the parties. 4 The hearing was originally set down for the afternoon of 15 September 2006. That period proved to be insufficient and a resumed hearing took place on 17 January 2007. Nearly all of the time on both hearing days was taken up by the oral evidence by the Applicant, who was permitted to give evidence despite the fact that she had not produced a statement setting out the evidence which she intended to give. 5 It is convenient at least as a starting point to commence with the brief "Factual Background" contained in clauses 7 to 14 inclusive of the 's written submissions, reading as follows: Factual background 7. The factual background regarding the use and occupation of the Schofields property is set out in the documents filed by the respondent and in the submissions and documents filed by the applicant. The following is a summary of the relevant facts as distilled from the filed documents and submissions. 8. The applicant purchased the Schofields property in 1960. In 1963 the relevant local government authority, Blacktown City Council, permitted the building of one residence on the Schofields property. The applicant occupied the Schofields property as her principal place of residence from November 1963. 9. In 1985 the applicant and her husband, Peter Prager, purchased Unit 103 of 1-9 Marian Street Redfern ("Redfern property") as joint tenants. The applicant and her husband operated a film production business from the Redfern property. The business was conducted through a company called "Videogram Communications Corporation Pty Ltd" ("Videogram"). The 2002 Annual Return for Videogram gives the address of the Redfern property as the "principal place of business". The Schofields property is recorded in the Annual Return as the registered office address. Videogram was wound up on 23 October 2002. 10. Throughout the relevant period, neither the Schofields property nor the Redfern property has been formally leased to any other person. 11. In 1987 the applicant and her husband changed their registration on the electoral roll to record their place of residence as the Redfern property. In April 2005 the registrations were changed back to record the applicant and her husband as residing at the Schofields property. From 1987, the driver's licences of both the applicant and her husband showed the Redfern property as their home address. In May 2005 the applicant varied the details of her driver's licence to record the Schofields property as her address. 12. In 1993, a shed on the Schofields property was converted into a "granny flat". From 12 February 1993, electricity supply to the Schofields property was split between the main residence (26 Oak Street) and the granny flat (1/26 Oak Street). The telephone connection was also split in 1993. The applicant's two children, Lisa Prager and Robert Prager, resided at various times in the granny flat and the main residence of the Schofields property. From 1995 until December 2002 the main residence of the Schofields property was used and occupied by the applicant's son, Robert Prager, his partner Teresa Ashworth and their two children. After December 2002 Lisa Prager moved into the main residence from the granny flat. The applicant has indicated that her children paid the electricity and telephone bills for the Schofields property in lieu of board. In December 2002 the applicant took over payment of the electricity supply to 26 Oak Street Schofields when her son and his family moved out. 13. The applicant has further indicated that during the relevant years she paid water bills and insurance for the Schofields property. The property itself was insured but the applicant did not hold contents insurance for the Schofields property. 14. The applicant's husband suffers from a number of severe medical conditions for which he requires "frequent specialised medical monitoring and hospitalisation at the Prince of Wales Hospital, Randwick". Since 2000, the applicant has acted as her husband's on-call carer. 6 Abbreviations contained in the Respondent 's submissions as quoted in the preceding clause are utilised in these reasons on the basis that they have the same meanings. The term "husband" refers to the Applicant 's husband, Mr Peter Prager; the unit in Redfern is referred to not only as the Redfern property but also as "Redfern" or as the "Redfern unit". Part B. The evidence of the Applicant; evidence in chief 7 Because of the lapse of time between 15 September 2006 ("first hearing day") and 17 January 2007 ("second hearing day") I thought it desirable to obtain a transcript of the first hearing date evidence. Extracts from that transcript included in these reasons should be construed as references to the Applicant's evidence in chief on the first hearing day. In respect of the second hearing day my notes of the evidence were sufficient and so that a transcript was not necessary. 8 The Schofields property was purchased by the Applicant in 1960 in her maiden name and prior to her marriage. The Applicant married her husband, Mr Peter Prager in 1961. The husband was prior to his retirement a producer of television commercials; he was also a photographer. The Applicant herself is a registered nurse. 9 The Applicant and her husband have two children, Robert born in 1964 and Lisa, born in 1969 (and who was adopted). 10 Videogram commenced in 1974; it engaged from that time in the main, and probably entirely, in the production of television commercials. The role of Videogram was essentially that of a coordinator; see TS 9 in which the Applicant furnished the following description of the relevant activities: He gets all the paper together. He doesn't actually stand there and direct the people acting either, but he makes sure that all the aspects of the production are there. Like, all the, all the so-called what they call talent ah hmm, he would be involved in actually choosing the talent and he would line up all the things down to catering for the meals. So he actually produced the event. And the other people had specific roles within that and he had to make them all come together and work. 11 The Applicant's husband was in addition a photographer and over many years he took numerous photographs. When the husband turned 70 in 1996, (and which occurred prior to the relevant years), the television commercial business fell away. As she explained it the production of television commercials is generally performed by young people. She explained (atTS10) as follows: Q. And how big a part in his life did photography play, just taking photographs? A. Minimal probably. It was mainly weekend type stuff, you know, that sort of - because that's all he had time for. Q. It wasn't weddings et cetera? He didn't-- A. No, no. Not that sort of photography, no. Q. All right. A. Just, just his own. Q. And was photography more then, had it become more of a hobby than anything else or did he exhibit? A. It was just a skill that he kept up I would say. No, he never exhibited but he had slides that he could sell -- 12 The. Redfern property was purchased in particular because the Schofields property was adjacent to land owned by a Mr Attard, who raised pigs and moreover raised far more in number than was legally permitted. The proximity of the Attard pig operation was such that for Videogram to conduct its television commercial business from the Schofields property was no longer viable. The Redfern property is a unit in Redfern which has secured parking. Redfern was selected as convenient in part because of its proximity to Redfern station and thus permitting easy access to public transport. The Redfern property was such that it could be used both as a place in which the Vidoegram television commercials business could be operated and it could also be used as a residence. 13 In 1999 the husband became ill and in January 2000 he was admitted to hospital (the Prince of Wales Hospital in Randwick) in order to have a bowel resection for cancer. 14 During the period, which commenced in January 2000 and until August 2000, the husband was in hospital for a considerable part of the time. When not actually in the hospital he had to be near his medical advisers, who were either consultants at the Prince of Wales Hospital or general practitioners in Redfern. It was necessary in consequence for the husband to live in the Redfern property and it was equally necessary for the Applicant as his wife and as his carer (and he needed very considerable care) to be with him on a constant basis. By this time, according to the Applicant s evidence Videogram's business was "practically non-existent". 15 The Applicant's evidence was that until October 2000 she and her husband (in the case of her husband when not in hospital) lived in the Redfern property but after that their position became more flexible. See TS17 as follows: Q. Let's take a given week from 2000 onwards. A. Right. Q. Would you be at Redfern at night? A. Right up until about October, yes. Q. So all right. We're in 2000. Up to October-- A. October. Q. Right. Redfern at night? A. Yes. Q. And weekends? A. Weekends, whenever possible, at Schofields. Q. And when was it possible? A. Well, about, about October that, that year, 2000. About October 2000 but not constantly living - because he was still, he still had problems with his heart and he still had problems with his wound from the operation. So he still had times when we would have to spend more than, more than days at Redfern. Q. I've got you up to October 2000. A. Ah hmm. Q. Take me from there if you would. A. Okay. October 2000 we lived at Redfern but after that it became more flexible. We could spend time at Schofields. -- 16 In cross-examination on the second hearing day, but not in examination in chief on the first hearing day, the Applicant said that she and her husband spent about two thirds of their time at the Schofields property as from November 2000. There was also evidence in cross-examination which would indicate that in fact the move to the Schofields property took place in March 2001. This aspect will be referred to again later in these reasons. 17 The Applicant said that in 2002 she obtained work first at Mascot and then in Sydney, and in the latter case with Pharmaceutical Research Associates. She and her husband as a result lived in the Redfern property during the week but spent weekends at the Schofields property. As to when precisely weekends at the Schofields property became regular is not altogether clear. 18 In 1993 the Applicant converted a shed on the Schofields property into a granny flat. Robert and his partner and their child lived in the main house on the Schofields property while Lisa and her child lived in the granny flat. When Robert moved out of the main house at the end of 2002 Lisa moved into the main house. She said at TS 22: - A. That's right. So because I was working I took out a mortgage and, and I really started working at Schofields really hard on getting the repairs done after my son moved out at the end of 2002. 19 Arrangements were made (in relation to the main house and the granny flat) for separate accounts in respect of both electricity and telephone expenses. Robert paid the expenses referable to the main house until he moved out at the end of 2002. Lisa paid his expenses in respect of the granny flat; during cross-examination the Applicant explained that even after Lisa moved from the granny flat into the main house she paid these expenses in respect of the granny flat. 20 The Applicant explained that while she was working first at Mascot and later in Sydney it was necessary for her and her husband to live in the Redfern property; see TS 25 and 26 as follows: - Q. But by this stage he wasn't well enough to work any more was he? A. No. Q. So he was going to Redfern during the week for medical attention? A. He was in Redfern so that I could look after him because I could not leave him on his own at Schofields. Q. I see. A. He was in Redfern because I needed to work in the city and he needed to be looked after. Q. So when I had to work in the city, I had to look after him. A. Yes. Q. But during the day you would be going off to work at either the airport medical centre or Pharmaceutical. A. Yeah. Q. Your husband didn't go with you. A. But the, at the airport was only part-time and I wasn't happy with it, that's why I got the full-time job in, in Sydney because it was only five minutes away and because it was in the units, I had two neighbours who could keep an eye on him. … Q. And I was five minutes away. And what did he do all day in the unit in Redfern? A. Well, he worked on the computer or he read books or he - actually, because of his illness he spent a little bit in bed sleeping because he wasn't, you know, sort of physically ah hmm, up to doing a lot physically. Q. When - I've got the clear impression that the Videogram business tailed off from the time he was 70. That's correct isn't it? He stopped getting work really-- A. It tailed off, it tailed off from being really viable to almost nothing, yeah. Q. Business tailed off from when he was 70-- A. In '96. 21 The Applicant said also that the Redfern property was used as a base at which to catalogue her husband's photographs and from which to sell them. Her husband himself attended to some of the computer requirements. When asked why the photographs could not be sold from the Schofields property she said at TS 27 Q. You say there wasn't a place in Schofields? A. Well, all, all the business houses that you're selling to locally are in Sydney. So you would have a lot of travelling to do if you did it from Schofields. 22 The Applicant and her husband lived on the basis set out previously in the Redfern property until 2005 when she retired. It was at that time that she and her husband returned to live in the Schofields property. 23 When asked whether her husband would be giving evidence, the Applicant said that this would not be possible; see TS29 as follows A. He can hardly walk. He walks in a walker and that's only from the lounge room to the, to the bathroom because of his - because of his diabetes he's got what's called ah hmm, neuropathy in his legs. He can't feel anything. Part C, the evidence of the Applicant; cross-examination. 24 The Applicant said that her husband became ill in September 1999; he was, she said, suffering from a bowel problem but then amended that evidence so as to refer to an intestinal problem. 25 At the end of December 1999 the Applicant and her husband lived at the Schofields property and went into Redfern for the purpose of work on the photographs. She said that it was necessary to catalogue the photographs and to label them and it was also necessary to computerise them and her husband furnished assistance in particular in this latter context. (Although not specifically stated, she was presumably referring to a period after the television commercial business conducted by Videogram had effectively collapsed). During this period she and her husband went into Redfern only for work purposes and, so she said, on about two days in each week. 26 From January 2000 the husband suffered from various serious medical conditions necessitating lengthy periods in hospital. She said that "we stayed in Redfern and went sometimes to Schofields at weekends" and "somebody had to be with him and that was me." 27 The Applicant said that the husband's condition stabilised in August 2000 although he suffered a number bowel abscess in October 2000 necessitating a further short stay in hospital. The Applicant said that she did not ever leave her husband in Redfern and go to Schofields alone. She said also that she and her husband stayed in the main and to the extent of two thirds in the Schofields property but that they went to Redfern because her husband needed an interest and also in order to obtain medical advice. She, the Applicant, took him everywhere because he could not drive. As to when precisely the move back to the Schofields property took place is, on the evidence before me unclear, and there are some significant areas of discrepancy. There was evidence that this occurred in November 2000; equally and significantly there was evidence that it occurred in March 2001, and at a time when her husband was under the care of his cardiologist and "local doctor" in Redfern. That latter evidence went on to state that 'after March 2001 he was sleeping mainly at Schofields and going into Redfern. He needed an interest and worked on the computer. He also needed to see doctors" and "After March 2001 there were days when he needed to stay in Redfern for medical purposes." (As to when exactly the move back to Schofields took place may be academic; this aspect is dealt with in more detail later in these reasons.) 28 In 2002 the Applicant needed to obtain work in order to support herself and her family; interviews, and there were a considerable number of them, commenced in February 2002; she eventually obtained a position as a practice manager at the Airport Medical Centre in April 2002. Redfern was near to Mascot and at all events much nearer than Schofields. From about February 2002 she and her husband lived at the Redfern property. In July 2002 she obtained a pharmaceutical research position with Pharmaceutical Research Associates in Castlereagh Street, Sydney opposite to the Central railway station. That latter position was retained until March 2005. Throughout all of this period she and her husband stayed at the Redfern unit going to Schofields at weekends and where she worked on repairs. (Other evidence was to the effect that the repairs commenced after her son vacated the main house on the Schofields property at the end of 2002). 29 When asked about her husband's health, she said that it was good especially after his gallbladder was taken out on the recommendation of his cardiologist, in 2003. 30 The Applicant said that separate wardrobes were maintained for each of her and her husband in each of the Schofields property and the Redfern property; similarly separate sets of personal belongings of various kinds were maintained at each of the properties. She said moreover that bills were sent to her at the Redfern property and then amended that evidence so as to say that bills were sent (as they had been sent for some considerable time previously) to a post office box in North Sydney. It was convenient to collect post at a post office box which was situated between Redfern and Schofields. (Other evidence suggested that trips to Schofields were made in the main by train and so that the location of the post office as a convenient in-between place for this purpose might be less relevant than was suggested). 31 It was put to the Applicant that she and her husband changed their electoral roll address to that of the Redfern property in 1987. She said that they did so because it was more convenient. She agreed that they also changed their addresses at the RTA in respect of their driving licences to that of the Redfern property. She said that they did so because the car (which was a company car) was most often at the Redfern property in secured parking. She said also that they often went to Schofields by train when travelling from Redfern to Schofields and were met in Schofields at the station by one of their children. 32 As to the photographs, the Applicant said that altogether and over a period of some time about a hundred in all were sold and at prices averaging $200 per photograph. There was no little evidence as to the period involved or as to whether these endeavours could be said to be profitable. 33 The Applicant said "we were living on an inheritance from my mother. I got it in 1992. The amount was $110,000 and my husband had a good credit rating. He did not worry about money but I did and that is why I got the two jobs." 34 The Applicant's evidence as to the state of health of her husband was in some respects contradictory; she said, as she had said on the first hearing day that he was too ill to give evidence but she also said that his health had stabilised especially since diabetes was diagnosed and that his last colonoscopy in November 2006 "was clear". 35 She described the main house on the Schofields property as having two bedrooms and 2 other "sleep-out rooms" which were also described by her as verandas. 36 The Applicant said that it would not have been possible for her and her husband to have lived at the Schofields property while she worked "because it was too isolated". Part D. Analysis of the evidence. 37 I have come to the conclusion that despite some discrepancies and despite the fact that certain aspects of it were in some respects sparse, the evidence of the Applicant was largely, but not entirely, credible. She said that her son and daughter could not give evidence because they were busy working; that was hardly an acceptable excuse although, and given that she was an unrepresented applicant I am reluctant to draw an adverse inference. Much the same could be said in respect of the fact that the husband did not give evidence. Her evidence contained a number of discrepancies as to when precisely relevant events occurred and I think it quite likely that at least some of her evidence was coloured for the purposes of her case. I consider nevertheless that I can accept that although her husband became ill towards the end of 1999 it was not until January 2000 that his state of health had become so serious that it became necessary for them to live (in the case of her husband when not in hospital) at the Redfern property. This state of affairs continued until November 2000 or March 2001 (and having regard to the serious nature of her husband's medical problems, the latter date appears to be more likely) when it became possible for them to spend a major part of the time in the Schofields property, coming in to the Redfern property as necessary for the purpose of medical advice and, so the Applicant said, in connection with the photographs. The television commercial business had collapsed some time previously and the photographic business was probably little more than something for the husband to do to while away time; her evidence was that it was run for the most part to give her husband an interest. Notwithstanding the very considerable size of the section 58 documents, there was, as I have said, little evidence as to just what was involved in the photographic endeavour and the extent, if any, to which it was profitable. It is relevant that both she and her husband changed their addresses for electoral roll and driving licence purposes to that of the Redfern property and there was never any real or sufficient explanation of why this was so. During closing submissions the Applicant said that in the course of business it was sometimes necessary to furnish driving licences and that to finish a Schofields address driving licence was inadvisable because no one would know where Schofields was; that reason was clearly unacceptable. Apart from any other considerations it is hard to understand why and for what purpose driving licences would be required by persons with whom business was conducted. From November 2000 or March 2001 until February 2002 she and her husband lived to the extent of two thirds of the time in the Schofields property and as to the remainder in Redfern. But from February 2002 onwards the Applicant and her husband lived in the Redfern property because, put quite simply, there was no realistic option. The Applicant was (and is) plainly devoted to her husband and to leave him in Schofields while she worked in either Mascot or Sydney was not a viable option. It was quite clear having regard to the nature of the evidence presented and the manner in which she presented her case that she regarded the Redfern unit as secondary in importance in relation to the Schofields property. During closing submissions, the Applicant complained about the method of valuation for land tax purposes in Schofields, and it was necessary to point out to her that this aspect had nothing whatever to do with the case. Both sets of submissions furnished by the Applicant contain allegations to the effect that the Schofields property was exempt for (somewhat complex) environmental reasons but those contentions were not pursued. I accept that the Applicant and her husband were constrained by circumstances to reside in the Redfern property and that it was probably always within their contemplation that when circumstances permitted, they would return to the Schofields property; in fact that is what happened in March 2005. The fact that they may have had, on a subjective basis, such an intention could not detract from the fact that for significant and lengthy periods they resided in the Redfern unit and the fact that they might have done so through force of circumstance cannot alter that fact. There were periods ex facie the Applicant's own evidence when the Schofields property was "the weekender". 38 Just prior to closing submissions, the Respondent asked for a brief adjournment which was granted, and at the end of which he advised the Tribunal, and that he would not pursue the assessment in respect of the 2000 year. The Respondent was prepared to accept that on the 31st December 1999 and for the period of 6 months preceding that date, the Schofields property was occupied by the Applicant as her PPR and even though in January 2000 it became necessary to move to the Redfern property. That concession was in my view properly made; it is noteworthy though that it was made despite the electoral roll and drivers licence address changes which had occurred years earlier and to which I have referred previously in these reasons. Mr Free in answer to a question on this aspect contended, and in my view correctly, that the address aspects constituted one only of a number of relevant factors. This arose in the context of submissions in respect of the other relevant years. 39 Having regard to the statutory provisions referred to in Part E below and in particular the 'principal place of residence' definition contained in the Act and although there was no discussion during the hearing of this aspect, I note if only for the sake of completeness that during the period February 2002 to March 2005 and also for the period from January to November 2000 or March 2001 the Redfern unit was on the evidence used either mainly or only for residential purposes; by the commencement of the first of these periods the Videogram business had effectively ended; the endeavours as regards photographs amounted on consideration to something approximating a hobby for the sake of giving the husband something to do. Part E. Statute and case law 40 In clauses 15 to 18 under the head of "Applicable Legislation" the Respondent in his written submissions noted: Applicable legislation 15. Pursuant to ss. 7 and 8 of the LT Management Act, land tax is chargeable on the taxable value of the land at the Schofields property for the 2000, 2001, 2002 and 2003 land tax years based on the ownership of that land as at midnight on 31 December of 1999, 2000, 2001 and 2002 respectively. As at each of those dates, the land was owned by the applicant. As such, the applicant is prima facie liable for land tax in respect of those land tax years based on the taxable value of that land, except to the extent it can be shown that the land was exempt from land tax. The applicant contends that the land should be exempt from land tax on the basis that it was, at each of those relevant dates, her principal place of residence. 16 As at 31 December 1999, the taxing date for the 2000 land tax year, s. 10 of the LT Management Act relevantly provided: "10 Land exempted from tax (1) Except where otherwise expressly provided in this Act the following lands shall, subject to sections 10B, 10D, 10E, 10F, 10G and 10P, be exempted from taxation under this Act: … (r) with respect to taxation leviable or payable in respect of the year commencing on 1 January 1998 or any succeeding year, land that has a land value in respect of the year of less than the premium tax threshold and that is used and occupied as the principal place of residence of the owner of the land (or, if there are joint owners, as the principal place of residence of one or more of them) and for no other purpose (except as provided by subparagraph (iii)), being: (i) a strata lot, or (ii) a parcel of residential land, or (iii) a parcel of residential land on which there is also one of the residential occupancies referred to in subsection (1D) (b) (ii) (A)–(F), unless the owner or all of the joint owners who so used and occupied the lot or parcel (as appropriate) is such an owner by reason only of being a trustee … (1D) In paragraph (r) of subsection (1) residential land means land that is used and occupied for residential purposes and for no other purpose, that use and occupation being use and occupation of a building or buildings designed, constructed or adapted for residential purposes: (a) not being land that: (i) is owned by a company, (ii) is owned by or on behalf of a company and is land of which a mortgagee or person by way of security for money is in possession, (iii) is held by a trustee for or on behalf of a company, or (iv) in respect of which a company is jointly assessed with any other person, and (b) not being a building or buildings: (i) comprised of lots within a strata plan or residential units, (ii) containing (out of the total of all rooms in the building or buildings) occupancies other than that of the owner and any one of the following residential occupancies: (A) one room, (B) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy, (C) one flat, (D) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy, and one room, (E) one flat and one room, (F) 2 rooms, each of which is separately occupied, or (iii) from any part of which income is derived otherwise than as the consideration for one (but not more than one) of the residential occupancies referred to in subparagraph (ii) (A)–(F)." 17. Section 3 of the LT Management Act , as it applied in respect of the 2000 tax year, relevantly provided: "3 Definitions (1) In this Act, unless the context or subject-matter otherwise indicates or requires: … principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person. … (3) For the purposes of this Act, in respect of any year in respect of which taxation is leviable or payable, land or a flat is not used or occupied as the principal place of residence of a person unless: (a) that land or flat and no other land or flat has, since before the first day of July that last preceded the commencement of that year, been continuously used and occupied by that person for residential purposes and for no other purpose, or (b) in any other case, the Chief Commissioner is satisfied that the land or flat is used and occupied by that person as the person's principal place of residence." 18. Although various amendments were made after 31 December 1999 affecting minor aspects of the above provisions, for present purposes no relevant changes were made until the State Revenue Legislation Further Amendment Act 2003 took effect on 31 December 2003. Relevantly, since the introduction of those amendments, if members of a family own more than one residence used and occupied by any of them as a principal place of residence, it is open to the family to elect which one of those places of residence shall be treated as the "principal place of residence of all members of the family" in respect of a particular tax year (cl. 12(2) of Sch 1A of the LT Management Act). The amendments which took effect on 31 December 2003 are not retrospective. They apply only to the 2004 land tax year and subsequent years and do not affect existing liabilities (cl. 35(1) of Sch 2 of the LT Management Act). Accordingly, the provisions set out above are the provisions that were applicable in respect of the 2000, 2001, 2002 and 2003 tax years. 41 The decision of the Appeal Panel of this Tribunal in Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP41 2004, notwithstanding that it was decided in relation to different legislation, is in my view relevant in this context. Clauses 30 (and following) deal in some detail with the concept of what is meant by the term "principal place of residence", and it is not necessary to include them in these reasons. In particular clause 42 (omitting citations and breaking its content into paragraphs) provides as follows: First, the words "principal place of residence" should be given their ordinary meaning in the context in which they appear. Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling. Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue. Fourthly, to occupy a home as her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose. Fifthly, the short length of a person's residence, while relevant, is not determinative of the issue. This is so since a recipient's occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible. 42 Referring in particular to the provisions of the Act in its form in respect of all of the relevant years, it is clear that in respect of a given parcel of real property, the PPR exemption was available in relation to a given land tax year if, and only if, it was occupied by the taxpayer concerned as his or her PPR on the 31st December immediately preceding the commencement of that land tax year. Where the taxpayer did not so occupy that parcel at that date, the PPR exemption was not available. So much is clear having regard to Commissioner of State Revenue v Aldridge [2003] NSWADTAP 50 43 However the relevant statutory provisions (again as applicable to all relevant years) made it clear that occupation of the relevant parcel as a PPR on a 31st December is not sufficient; that parcel must have been so occupied for the preceding 6 months. This arises from the provisions of section 3(3)(a) of the Act the wording of which is repeated (with emphasis added) for purposes of convenience as follows: that land or flat and no other land or flat has, since before the first day of July that last preceded the commencement of that year, been continuously used and occupied by that person for residential purposes and for no other purpose. 44 It is a relevant to note that the Respondent was vested with a discretion and pursuant to which relief could be granted, in accordance with section 3(3)(b) of the Act. Section 3(3)(b) allowed for the exemption to be granted where the period of occupation was less than 6 months. Although the latter subsection is not specifically qualified in the manner applicable in respect of the immediately preceding subsection, it must be read in the context of that subsection and so that the discretionary relief will probably not be available where another parcel of real property was, during that period of 6 months occupied as a PPR. It is not necessary or desirable for me to express a view or to come to a conclusion on this aspect since there was no suggestion that in respect of any relevant year discretionary relief in accordance with section 3(3)(b) would be appropriate, and so that it would not be in accordance with the principles of natural justice for me to make any findings in this particular context. 45 The Respondent referred in his submissions at some length to McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 and if only for the sake of completeness, and because of the importance attributed to it by the Respondent, I include clauses 24 and 25 of his submissions as follows: 24. In McNally & Anor v Commissioner of State Revenue [2003] NSWSC 1118 the Supreme Court considered the application of the principal place of residence exemption in circumstances where the taxpayers owned and occupied two residences at the relevant times. The plaintiffs, Mr and Mrs McNally, owned a residence at Greenwich and a residence at Noraville (on the Central Coast). The Chief Commissioner issued a land tax assessment for the 1998 to 2002 tax years requiring the payment of land tax in respect of the Noraville property. The Chief Commissioner had determined that the Greenwich property was exempt from land tax on the basis that it was the principal place of residence of Mr and Mrs McNally. The plaintiffs argued in the Supreme Court that the principal place of residence exemption also applied to the Noraville property, on the basis that Noraville was the principal place of residence of Mr McNally. There were a number of indications consistent with this contention: "[8] During 1994, Mr McNally changed his residential address on his driver's licence, his motor vehicle registration and the electoral roll. Electricity bills for both premises were addressed to Mr McNally at Greenwich. He said all bills for the three properties were addressed to him at the Greenwich residence because he paid them from there. All telephone bills were addressed to his company at the Greenwich residence and the entry in the telephone book listed his address at Greenwich. Mr McNally maintains separate wardrobes at the Greenwich residence and at the Noraville residence. Objects bought jointly by the plaintiffs were kept at the Greenwich residence. A few ceramics and souvenir plates acquired overseas, Mr McNally kept at the Noraville residence. … [10] After his consultancy with Hall Chadwick came to an end, Mr McNally used the office to attend to the affairs of a few remaining clients and family investments. For the last few years, Mr McNally has worked in his office at the Greenwich residence all day on Thursdays. The plaintiffs drive to the Noraville residence on Sunday morning, unless Mr McNally has completed his round of golf early on Saturday in which event they occasionally drive to Noraville on Saturday afternoon or evening. [11] While they occasionally drive in separate motor vehicles, the norm is that the plaintiffs travel to Noraville together. They normally return to the Greenwich residence on Tuesday evening. Thus, on average, the plaintiffs together spend four days at the Greenwich residence and three days at the Noraville residence. [12] The plaintiffs spend their holidays at the Noraville residence and Mr McNally spends about a week there, in the absence of Mrs McNally, with golfing friends. Mr McNally estimates that in the period from January 1998 to December 2002 he has spent about two to three weeks more than one half of his available time not spent travelling, living at Noraville. The Noraville residence is not used or occupied for other than the above described residential purposes." 25. It was common ground between the parties that the Noraville residence was in fact used and occupied by the plaintiffs as a place of residence and for no other purposes. The only matter in dispute was whether it was the principal place of residence of Mr McNally. Gzell J held that it was not: "[38] In light of Mr McNally's knowledge of the principal residence exemption, the fact that he changed his address to the Noraville residence is not as significant as otherwise might have been the case. Nor, in my view, is the circumstance that Mr McNally, on average, resided in the Noraville residence for two to three weeks longer than he resided in the Greenwich residence, determinative of the issue. That evidence must be considered in light of the further evidence that on average Mr and Mrs McNally resided together in the Greenwich residence for four days per week and resided together in the Noraville residence for three days per week. [39] I do not regard the address to which bills were sent as denying Mr McNally the argument that Noraville was his principal place of residence, although the lack of a listing of the Noraville address in the telephone book, tells somewhat against the proposition. [40] In the end, what tips the balance against the plaintiffs, in my view, is the fact that they cohabited together at both residences. [41] Had Mr McNally spent four days per week by himself in the Noraville residence and then joined Mrs McNally in the Greenwich residence for the remainder of the week, the result might well have been different. [42] Here we have a married couple spending a majority of their time per week in what had indisputably been the principal place of residence of both of them in the past and an extended weekend in premises enjoyed by them for their annual holidays. [43] The Land Tax Management Act 1956 requires a decision to be made as to which of the premises so used is to be regarded as the principal place of residence. In my view, the plaintiffs have not discharged their onus of establishing that Mr McNally had relinquished Greenwich as his principal place of residence and had adopted the Noraville residence in its stead. I am of the view, therefore, that the plaintiffs have failed to establish their principal proposition." 46 It is my view that McNally while relevant, is of limited relevance. This is so having regard to the factual distinctions between the circumstances obtaining in McNally and the circumstances obtaining in this case. In McNally, a husband and wife were at times and although not estranged, living in different properties. The evidence before me in this case is altogether to the effect that the Applicant and her husband were not, except when he was in hospital, apart at nights. Part F; the 2000 year. 47 As I have indicated, the Respondent during the course of the hearings conceded in respect of the 2000 year. Again as set out previously, he did so having regard to the fact that on 31 December 1999 and for the preceding period of 6 months the Schofields property was occupied by the Applicant as her PPR. As noted, this concession was made (and properly in my view) and notwithstanding the change of address provisions to which I have referred previously. Part G; the 2001 year 48 The health of the husband was such that the Applicant and her husband were able (during the whole or part of the 2001 year, and depending on when the move back to Schofields took place) to live in the Schofields property in such circumstances that it was occupied by them for two thirds of the time and so that the Redfern property was used periodically as medical circumstances required and having regard to the photographic interest to which I referred earlier in these reasons. On that basis, and assuming that I could accept that the Schofields property was occupied as the Applicant's PPR on 31st December 2000, (the critical date for the purposes of the 2001 year) the Applicant must fail simply because she could not comply with the provisions of section 3(3)(a) of the Act, and there was no suggestion that section 3(3)(b) of the Act could or should apply. For the reasons set out previously I doubt whether section 3(3)(b) could apply given that another property (the Redfern unit) had been occupied as a PPR during the period of 6 months prior to the critical date. If the correct date for this purpose is March 2001, the decision in Aldridge (supra) has the effect that section 3(3)(b) of the Act is irrelevant and because the Schofields property was not her PPR as at 31 December 2000. It follows then that in either event the Applicant cannot succeed in respect of the 2001 year and so that the decision under review in respect of the 2001 year must be affirmed. As regards interest, the Respondent reduced the rate to the market rate only and there is no basis for a further reduction. Part H. the 2002 year. 49 On 31st of December 2001 the Applicant and her husband occupied the Schofields property as their PPR and had done so since the preceding first July. Although the change in address aspects referred to earlier in these reasons are against her, I do not think that they are conclusive. It follows then that in respect of the 2002 year the objection decision under review must be set aside. Part I. the 2003 year. 50 On 31st of December 2002 the Applicant and her husband were living in the Redfern property and had in fact been doing so ever since February 2002. It follows that in accordance with Aldridge (supra) the Applicant cannot succeed in respect of the 2003 year and so that the objection decision in respect of the 2003 year must be affirmed. The provisions of part G as to interest must again apply. Part J: Conclusion 51 Although the Applicant was not represented at the hearing, her written submissions indicate that she received some considerable (probably professional) assistance. Those submissions do not suggest that in respect of any relevant year a claim for relief in accordance with the section 3(3)(b) discretion would be appropriate. 52 It is clear enough that it is possible for a person to have more than one place of residence but in such event and having regard to the statutory definition, one only can be the PPR. It is also conceivable that the property which is the PPR can alter from time to time. This is exactly what, compelled by changes in circumstances, occurred in this case. 53 Accordingly and in respect of the 2000 year and also in respect of the 2002 year the objection decision under review is set aside; in respect of the 2001 year and also in respect of the 2003 year the objection decision under review is affirmed, and on the basis that interest having been reduced to the market rate only, there is no basis for any further reduction. 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