CITATION: UH v Chief Commissioner of State Revenue [2005] NSWADT 284 DIVISION: General Division APPLICANT PARTIES: UH RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 053239 HEARING DATES: 08/11/05 SUBMISSIONS CLOSED: 11/08/2005 DATE OF DECISION: 11/08/2005 BEFORE: O'Connor K - DCJ (President) APPLICATION: First Home Owners grant - reversal of original decision MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 First Home Owner Grant Act 2000 Mawad v Chief Commissioner of State Revenue [2005] NSWADT 207 CASES CITED: Taylor v Chief Commissioner of State Revenue [2004] NSWADT 36 DY v Chief Commissioner of State Revenue [2002] NSWADT 259 APPLICANT REPRESENTATION: In person RESPONDENT S Free, solicitor ORDERS: Application dismissed. DELIVERED EX TEMPORE REASONS FOR DECISION Background 1 The applicant seeks review of the respondent's dismissal of her objection to an assessment requiring repayment of the amount of a First Home Owner Grant made to the applicant on 19 June 2003. The payment was made before completion of the eligible transaction, that transaction being the purchase of a residential property, settlement taking place on 9 July 2003. 2 The basis for the Commissioner's decision was that the applicant had not met a mandatory requirement of the grant – occupation of the property as her principal place of residence within 12 months: First Home Owner Grant Act 2000 (FHOG Act), s 12 criterion 5. The applicant acknowledged that she had not occupied the property within the 12 month period. She sought the exercise of any discretion in her favour to give her an extended time to comply. In March 2005 she moved into the property. She stated that her inability to move into the property within the 12 month period had resulted from insuperable domestic circumstances that arose during that time. The Commissioner expressed sympathy for the applicant's situation, but did not consider that there was any discretion available to be exercised. In recognition of the circumstances to which the applicant referred he did not impose any interest on the outstanding amount. Domestic Circumstances 3 The Commissioner did not dispute the account of her circumstances given by the applicant as to why she had not been able to move into the property (a flat) within the 12 month period. In light of the ultimate decision of the Tribunal it is not necessary to set those circumstances out in detail. They are recorded in a statutory declaration given to the Commissioner by the applicant and dated 20 January 2005. They are also set out at some length in a letter to the Commissioner sent earlier in January 2005. 4 In brief, the applicant had been married for approximately 5 years at the time of the purchase. She was experiencing marital problems. Those problems had been a motive for her buying a property in her own name. Her husband left her, went to New Zealand and later to Turkey. (The applicant and her husband were both of Turkish background.) In an attempt to reconcile, she gave up her job as a pharmacist, and followed him to New Zealand and then to Turkey. In the meantime she rented out the flat on a 26 weeks lease. The rental income was applied to the mortgage loan. The attempts at reconciliation failed. The applicant said that during the time she was in Turkey she was unable to send a letter or make a phone call. She said she was held like a hostage. The applicant and her husband divorced in July 2004. According to her brother, who made a statement to the Tribunal at hearing, he and others had to rescue her surreptitiously at night from a remote Turkish village after learning that she was in a perilous situation. She returned to Australia in August 2004. She could not afford to move back to the flat straightaway, and stayed with her sister for a few months. The flat continue to be rented out. In January 2005, once her finances had recovered and she had obtained a secure job in Sydney, she gave notice to the tenants to quit the property. They had held over on a month to month basis. 5 Relevant Provisions as at date of grant ' 12 Criterion 5—Residence requirement (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 Chief Commissioner. (2) If an application is made by joint applicants and at least one (but not all) of the applicants complies with the residence requirement, the non-complying applicant or applicants are exempted from compliance with the residence requirement. … 20 Payment in advance, subject to statutory conditions (1) The Chief Commissioner may authorise payment of a first home owner grant: (a) before completion of the relevant eligible transaction, if the Chief Commissioner is satisfied that it is appropriate to do so in particular circumstances, or (b) in anticipation of compliance with the residence requirement, if the Chief Commissioner is satisfied that each applicant who is required to comply, but has not yet complied, with the residence requirement, intends to occupy the home as his or her principal place of residence within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner, or both. (2) If a first home owner grant is paid before completion of the relevant eligible transaction, the payment is made on condition that, if the transaction is not completed within 12 months of the commencement of the transaction or a longer period allowed by the Chief Commissioner, the applicant must within 14 days after the end of the period concerned: (a) give written notice of that fact to the Chief Commissioner, and (b) repay the amount of the grant. (3) If a first home owner grant is paid in anticipation of compliance with the residence requirement, the payment is made on condition that, if the residence requirement is not complied with, the applicant must within 14 days after the end of the period allowed for compliance: (a) give written notice of that fact to the Chief Commissioner, and (b) repay the amount of the grant. (4) A person who fails to comply with the condition prescribed by this section is guilty of an offence. Maximum penalty (subsection (4)): 50 penalty units.' 6 There was also reference in the course of argument to: ' 22 Death of applicant (1) An application for a first home owner grant does not lapse because an applicant dies before the application is decided. (2) If an applicant dies before the application is decided, the following provisions apply: (a) if the deceased was one of 2 or more applicants and one or more applicants survive, the application is to be dealt with as if the surviving applicants were the sole applicants, (b) in any other case, a first home owner grant, if payable on the application, is to be paid to the estate of the deceased. (3) If a deceased applicant for a first home owner grant had not, by the date of death, occupied the home to which the application relates as the applicant's principal place of residence but the Chief Commissioner is satisfied that he or she intended to do so within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner, the residence requirement is satisfied. Subsequent Amendment 7 The Act was amended late in 2003. On 1 January 2004 a broad relief discretion commenced operation, s 12(1A)(b): '(1A) However, if the Chief Commissioner is satisfied there are good reasons to do so, the Chief Commissioner may: … (b) exempt the applicant from the requirement to comply with subsection (1).' Recent Case 8 There was also reference in the course of the submissions to the decision of the Tribunal in Mawad v Chief Commissioner of State Revenue [2005] NSWADT 207. There the Tribunal had received a submission from the Commissioner that the Commissioner had formed the opinion, contrary to his previous position and previous Tribunal authority, that he had a power during the relevant period to extend time for compliance with the residence requirement even after 12 months and 14 days had passed. The Commissioner has now recanted, and returned to his previous opinion. 9 As a result of the Commissioner's concession, the Tribunal in Mawad examined the circumstances that had led the applicants in that case not to move in within 12 months, and granted them relief. The relevant passage for present purposes in the Tribunal decision is para [33]: '33 The Tribunal has previously held that the Commissioner has no power to grant an extension of time to comply with the residence requirement, where the applicant is in default as set out in s.20 (3) of the FHOG Act: see Taylor v Chief Commissioner of State Revenue [2004] NSW ADT 36 at [19] and [20] and DY v Chief Commissioner of State Revenue [2002] NSWADT 259 at [18] and [19]. However, at the hearing of this application Ms Baker, who appeared for the Commissioner informed the Tribunal that the Commissioner had now formed a contrary view and conceded that ss 12 and 20 of the FHOG Act could not be construed so as to limit the Commissioner's power to grant an extension of time to applications that are made during the prescribed 12 months period from the date of settlement of the property the subject of the grant. Accordingly, there is no dispute that the Commissioner has power to consider the applicants' application for an extension of time.' 10 The foregoing provides the background to the following reasons for decision delivered at the close of hearing. Decision 11 HIS HONOUR: My view is, given that there is no substantive explanation by the Tribunal for its ruling at para [33] of Mawad (it uncritically accepts the Commissioner's submission), I should continue to apply the considered views that have been expressed on the matter in the earlier Tribunal decisions. Ultimately we have got to get the law right rather than follow the latest precedent. Normally we would like to think that we are acting – to use a word that is used in the legal system – on the basis of comity, that is, give effect to other like decisions. 12 So from your point of view, Ms UH, this is an unfortunate state of affairs and this is the danger of course of what happened in Mawad. You have now got the understandable grievance that someone else got through, got an order in their favour and you did not. That is not good from our view of point. That does not look good, obviously. 13 But all I can really say to you today is that I think it is clear law that powers to extend time must be clearly conferred in schemes of this kind, especially schemes that have to do with the protection of the revenue in particular. Here the subject of liability is addressed in a particular way and then the only variation that seems to be allowed prior to the amendment that took effect in 1 January 2004, is for the calamity of death. So the legislation as it then stood does seem to have looked at the question of whether there any possibilities that lie outside the situation where the Commissioner has failed to give an extension within the permitted period and ought to be addressed. I have to accede to the submissions that Mr Free's put. 14 It is obviously an unfortunate case and it illustrates the harshness with which rules can operate. But all I can say to you, Ms UH, is you have fallen on the wrong side of the timeline in relation to your communication with the Commissioner. There is nothing in the rules to allow the Commissioner or the Tribunal to give relief to that set of circumstance. 15 I might add that if you look at the Administrative Decisions Tribunal Act 1997, s 63 it does require the Tribunal making the 'correct' and 'preferable' decision. This provision may give some encouragement to applicants to think that they can get a favourable decision even where the rules don't seem to allow it – let's call it the 'preferable' decision. We, the Tribunal, have still got to make that decision within the framework of the law. We cannot make a decision which is not permitted by law. So it is whatever is the preferable decision as permitted by law. The difficulty with this case is that decision you seek is not a decision within the range of those that are permitted by law. For those reasons I have to dismiss the application which means that you remain liable to the payment. 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.