Hou v Chief Commissioner of State Revenue [2006] NSWADT 192

CITATION: Hou v Chief Commissioner of State Revenue [2006] NSWADT 192

DIVISION: Revenue Division

APPLICANT PARTIES: Yunhua Hou RESPONDENT Chief Commissioner of State Revenue

FILE NUMBER: 056116

HEARING DATES: 03/04/06, 02/06/06

SUBMISSIONS CLOSED: 06/02/2006

DATE OF DECISION: 06/22/2006

BEFORE: O'Connor K - DCJ (President)

CATCHWORDS: Review of objection decision

MATTER FOR DECISION: Principal matter

LEGISLATION CITED : First Home Owner Grant Act 2000

CASES CITED: McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214 Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41

APPLICANT In person REPRESENTATION: RESPONDENT S Benjamin, solicitor

ORDERS: Decision under review affirmed.

REASONS FOR DECISION 1 The applicant has applied for review of a decision by the Chief Commissioner of State Revenue (the Commissioner) requiring her to repay a grant of $10,000 made under the First Home Owner Grant Act 2000. The Commissioner did not impose any penalties or interest, having regard to the circumstances placed before him by the applicant. 2 The applicant purchased a one-bedroom strata unit (without car space) located in Alexandria off the plan on 2 May 2002. The sale was settled on 29 September 2003. The purchase price was $332,500. The applicant did not move into occupation immediately. It was a condition of the grant that the applicant take up occupation of the property as his or her principal place of residence within 12 months from the date of settlement: see s 12, as in force prior to 31 December 2003, read in conjunction with s 7. 3 The Commissioner formed the opinion, following audit, that the applicant had not entered into occupation within the time required. He moved pursuant to s 45 to recover the grant. The applicant has been open about her circumstances. She says in a letter to the Tribunal (written, the Tribunal assumes, on her behalf) that she purchased the unit 'in the hype' of a boom in property prices. According to her, she brought no money of her own to the initial contract. She used a deposit bond. She lost her job in June 2003 (she worked at a restaurant). She says that she has been unemployed since then, and has continued to live in rental accommodation. She is seeking to avoid repayment of the grant on the basis that she is in desperate financial circumstances: she has no job and she has no equity in the flat. In fact, she believes, she is facing a substantial loss on resale. She said at hearing that the current market value of the unit was about $280,000. She referred to recent comparable sales; and placed before the Tribunal a current sales advertisement for her unit, placed by a well known real estate agency, giving a price range of $280,000-$300,000. 4 The Act does not allow for relief from repayment on hardship grounds. The Act is strict in its terms. The Tribunal has now dealt often with first home owner grant cases, and has consistently taken the view that non-compliance with the time limit for moving into occupation must result in repayment. See, for example, McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214 at [13]. 5 This applicant's application for review first came on for hearing on 3 April 2006. The applicant is of Chinese background and has been assisted by an interpreter. She had with her at that hearing her adult son who spoke English well. He said that his mother had, in fact, moved into the unit for a short time. This information had not appeared in any of the correspondence with the Commissioner, and was a relevant matter. At the time of this grant, the requirement as to occupation did not have any time limit. So it was possible that a relatively short duration of occupancy of a property might be enough to meet the eligibility requirement. Section 12, as expressed at that time, provided merely that '[a]n 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'. In Chief Commissioner of State Revenue v Ferrington (GD) [2004] NSWADTAP 41 the Appeal Panel held that a short period of occupation could suffice provided the applicant was able to demonstrate that he or she had occupied the residence as the 'principal place of residence'. 6 The Tribunal adjourned the hearing on 3 April 2006 to enable the applicant to place before the Commissioner any evidence she had as to the duration and nature of her occupation of the unit. The hearing resumed on 2 June 2006 to consider the applicant's further evidence. 7 The evidence is thin. There is a statement from her son dated 22 April 2006 in which he says that his mother 'appeared to have moved out' of the rental accommodation they both occupied at Kensington either at the end of November or early December 2003. He said that once a new tenant moved in, she returned to Kensington. This statement broadly accords with the applicant's version that she decided to move into the unit at a time when one tenant had left and her agent was seeking to find a new tenant. There is also a statement from her rental agent giving a history of tenancies. It states that in the period 9 December to 19 December 2003 the owner collected the keys from the agent, and that the unit was relet on 27 December 2003, and again on 10 June 2003 (with the latter tenant having given notice effective 27 April 2006). 8 In her statement to the Tribunal, dated 23 April 2006, the applicant says that she moved into the unit on 9 December 2003 as it represented better accommodation than living in a garage belonging to the Kensington flat (as she said she was at this time, unemployed and struggling to meet mortgage and other commitments), but that on 19 December she moved back to the garage at Kensington. She goes on in her statement to make a number of other points, including giving an explanation as to why it was essential for her economic survival to keep Alexandria rented out. She also seeks to meet criticism as to why she did not inform the Commissioner previously of her occupation of the property. 9 The Tribunal accepts the applicant's evidence that she had a short period of occupation (10 days) of the unit. But this was in circumstances where she was still a tenant of the property at Kensington. She only went to live in the unit, the Tribunal considers, because it represented a more comfortable living environment. She still had the unit available for rent. These circumstances do not, even remotely, permit a finding that she occupied the unit as her 'principal place of residence'. The unit was used as a form of temporary accommodation. There is nothing to suggest, unlike the circumstances in Ferrington, that the applicant was making a permanent move. 10 Accordingly, the application must be dismissed, and the decision under review affirmed. 11 The applicant is liable to repay the grant. Order Decision under review affirmed.