Taylor v Chief Commissioner of State Revenue [2004] NSWADT 36

CITATION: Taylor v Chief Commissioner of State Revenue [2004] NSWADT 36 DIVISION: General Division APPLICANT PARTIES: Ania Janina Taylor RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 033205 HEARING DATES: 12/12/2003 SUBMISSIONS CLOSED: 12/12/2003 DATE OF DECISION: 02/20/2004

BEFORE: Needham J - Judicial Member APPLICATION: first home owners grant - reversal of original decision - First Home Owners Grant Act - first home owners grant - reversal of original decision MATTER FOR DECISION: Principal matter LEGISLATION CITED : First Home Owners Grant Act 2000 CASES CITED: DY v. Chief Commissioner of State Revenue, [2002] NSW ADT 259 Lawrance & anor v. Chief Commissioner of State Revenue, [2002] NSW ADT 104 APPLICANT REPRESENTATION: In person RESPONDENT D Martin, advocate ORDERS: The Chief Commissioner's original decisions:-; a) to require repayment of the grant and to impose a penalty of 30%; and; b) to refuse approval of a longer period to comply with the residence requirement;; are affirmed.

Facts 1 Ms Ania Janina Taylor ("Ms Taylor" or "the applicant") applied for a grant under the First Home Owner Grant Act 2000 ("the Act") on 15 March 2001. The application sought a grant in order to purchase a property at 50/1 Macdonald Street, Potts Point. The purchase of the property settled on 16 February 2001, and the purchase price was $164,500.00. 2 It is not in dispute that the only basis of eligibility which is in contest is whether Ms Taylor complies with Eligibility Criterion number 5 (s 12 of the Act), being the requirement to occupy the home to which the application relates as the applicant's principal place of residence within 12 months of the settlement of the purchase – that is, by 16 February 2002. It is common ground that she occupied the studio apartment on 21 February 2002. 3 When Ms Taylor purchased the apartment, she intended to move into it. She found the apartment and started the purchase process in December 2000. At about that time she was offered the opportunity to study at a political sciences university in Paris, the Fondation Nationale des Sciences Politiques. She received an acceptance from the university on 25 January 2001 to commence study in Paris on 17 February 2001. At that time the projected period of study was six months, but at the end of that time she was invited to stay in Paris and undertake a Diploma in the International Program. She chose to stay and to complete her exams. The exams, however, did not finish until after 15 February 2002 and thus she was unable to occupy the studio until 21 February 2002, beyond the one-year requirement of the grant. She then occupied the studio for three months, before moving back to her residence with her mother due to work and study commitments. 4 On 30 January 2003 the Chief Commissioner of Stamp Duties wrote to Ms Taylor seeking a statutory declaration as to the fulfilment of the "residence requirement" (s 12) of the Act. The applicant replied setting out the facts as summarised above, and the Chief Commissioner, taking the view that the occupation did not satisfy s 12, sought, by notice under s 45 of the Act, repayment of the amount including a penalty of 30% for the failure to provide the information prior to the Chief Commissioner's request, a total of $9,100.00. 5 When this matter first came before the Tribunal for hearing on 21 October 2003, the applicant indicated that she wished to avail herself of the provision in s 12(1) which permits occupancy of the premises within 12 months or … "a longer period as approved by the Chief Commissioner". Although it was indicated at the hearing that such an application was unlikely to be granted due to the Commissioner's policies, an adjournment was granted for the making of that application. The application was refused, and the application for review of that decision as well as from the primary decision under s 45(1) came before me for hearing on 12 December 2003. Consideration 6 Section 12 of the Act requires the applicant to comply with the "residence requirement" as follows:- "(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." 7 There are two parts of this sub-section which need to be considered in the context of this case. Firstly, does Ms Taylor's occupation comply with the sectoin? Secondly, should the Commissioner have granted the application for approval of a longer period in which to occupy the premises? 8 As to the second part, it was not contended before me that I should not determine that part pursuant to s 28 of the Act. I note that in a decision of Deputy President Hennessy, DY v. Chief Commissioner of State Revenue, [2002] NSW ADT 259, the President said, in the context of an application for an extension of time, that "The Chief Commissioner's decision not to allow a further period (beyond the two months already allowed) for the applicants to occupy the home, is not a decision that the Tribunal has jurisdiction to review" (par 18). From the terms of that decision, the question of jurisdiction as it applies to approval of longer periods does not appear to have been fully argued before the Deputy President. 9 With the greatest of respect to the learned Deputy President, I do not agree that the powers of the Tribunal are limited so as to exclude consideration of the decision not to allow further time for compliance with the residence criterion.. Section 25 of the Act provides that:- "(1) An applicant who is dissatisfied with the Chief Commissioner's decision on the application (including a decision to reverse or vary an earlier decision) may lodge a written objection with the Chief Commissioner" 10 Section 26 goes on to deal with the Chief Commissioner's powers on receipt of "the objection" (which term refers back to s 25(1)). Once an objection has been dealt with, s 27 invokes the Tribunal's jurisdiction in the following way:- "27(1) An objector may apply to the Administrative Decisions Tribunal for a review of the decision (the "original decision") to which the objection was made if: (a) the objector is dissatisfied with the Chief Commissioner's determination of the objection, or (b) 90 days have passed since the objection was lodged with the Chief Commissioner and the Chief Commissioner has not determined the objection. (2) The applicant's and respondent's cases on an application for review are not limited to the grounds of the objection." 11 Section 25 does not restrict the terms of the written objection to the Chief Commissioner's decision on the substantive application for a grant. The terms of s 25, which trigger both the Chief Commissioner's powers in s 26 and the Tribunal's powers in s 27, refer to only to the "decision on the application". Accordingly, I find that I have jurisdiction to consider the question of the application for the approval of an extension of time given that the Chief Commissioner has disallowed the application and Ms Taylor has sought to include that matter in this particular application, which course was not objected to by Mr Martin who appeared for the Chief Commissioner. Residence Criterion 12 Unfortunately for Ms Taylor, there is no basis upon which it can be said she complies with the 12 month residence requirement. She sets out a number of discretionary matters (such as the unexpected invitation from the University, and the later than usual examination timetable) but none of those matters have the effect of extending the residence criteria. If she did not occupy the studio within twelve months of the relevant date, that is, by 16 February 2002, she did not comply with the requirements of 12(1) of the Act. 13 In support of her position, Ms Taylor raises an argument that "requiring repayment of the grant is inconsistent with the intention of the Act. The intention of the act is to offset the impact of the GST on the purchase of someone's first home, and not to help purchase an investment property. At all times my intention was to use the McDonald Street property as my home …" (Ms Taylor's written submissions, filed 28 November 2003). She also raises issues of miscommunication between the OSR and her parents when queries about the residence requirements were made during her stay overseas. 14 While I accept Ms Taylor as a witness of truth, who gave her answers honestly and was backed up in most areas by other evidence, the matters raised by her do not go to the heart of the legislative provision, which requires an actual occupation as the principal place of residence as a condition of the grant. The intention of Parliament in framing the Act was to define eligible "first home" purchases as those in which actual occupation as a principal place of residence took place within 12 months of purchase. In the absence of a valid approval of a longer period, Ms Taylor's occupation, even though it commenced less than a week later, does not comply. Further, the fact that her parents were given information which may have been less than clear does not create some kind of estoppel which would bind the Commissioner in a way which takes Ms Taylor's application outside the statutory requirements. 15 Accordingly, unless the decision not to grant a longer period for occupancy is overturned, the decision to require repayment of the grant must stand.. Application for extension of time to comply with residence criterion 16 As to the second part of the appeal – whether a longer period should have been approved – Mr Martin, for the Chief Commissioner, provided a copy of Business Rule 2.2, headed "Extension of the period for occupation". The Business Rule appears to be the internal policy document governing consideration of applications for extension of time. It shows that the Chief Commissioner considers the following to be relevant factors:- a) Interstate/Overseas employment; b) Hospitalisation; c) Tending to sick relatives; or d) Any other unforseen circumstance which prevents occupation within 12 months. 17 It appears that the absence of Ms Taylor on an exchange programme between the University of Sydney and the French university could have been a factor to ground an extension had her application for extension of the occupation period be made within 12 months and 14 days after the completion of the purchase. The Business Rule provides that "provided the above circumstance/s exist, the period for compliance with the residence requirement can be extended at any time up to 12 months after the completion of the transaction". A "note" provides:- "Where an application for extension has not been made within 12 months and 14 days from the completion of the eligible transaction, the residence requirement cannot be extended as the applicant would already be in breach of s 20(3) of the FHOG Act 2000". Section 20(3) provides that if payment of a grant is made in advance, and the residence requirement is not complied with, the applicant must notify the Chief Commissioner of that fact within 14 days after the end of the twelve months and must then repay the grant. 18 Mr Martin referred me to the decision of Deputy President Hennessy in Lawrance & anor v. Chief Commissioner of State Revenue, [2002] NSW ADT 104, in which the applicants were unable to move into the property in question due to an extension of the first applicant's contract to work overseas. In paragraph 15 of that decision, the Deputy President considered s 20(1)(b) (in which the words under consideration "a longer period allowed by the Chief Commissioner"appear) and held that:- "In my view the phrase "a longer period allowed by the Chief Commissioner" in s 20(1)(b) refers to a longer period allowed prior to the Chief Commissioner authorising payment of the grant." 19 The practice of the Chief Commissioner's office does not seem to be in accordance with this statement as, from the Business Rule, it appears that applications for approval of a longer period could be received or considered up to 12 months and 14 days after the date of settlement. I do, however, accept Mr Martin's submission that if an application for extension of the time for compliance with the residence criteria is received after the 12 months and 14 day period allowed for notification of the Chief Commissioner under s 20(3), the applicant is in breach of his or her conditions of the grant and the grant has become liable to be repaid. From an analysis of s 45, it is not the case that the grant is automatically repayable at the expiration of the period of 12 months and 14 days without compliance with the residence criteria or notification of the non-compliance, as the section uses the word "may" and provides a discretion to the Chief Commissioner as to whether to seek repayment or not. The more important aspect is that the applicant is in breach of the conditions of the grant if he or she does not, within 12 months, occupy the premises as his or her principal place of residence and does not, within 14 days after that date, notify the Chief Commissioner of that fact. 20 In the facts of this case, as I have said, the applicant does not comply with the residence requirement. On the basis of both Lawrence and the terms of s 45 of the Act, her application for approval of a longer period to comply with the residence requirement, some year and a half after the 12 month period ended, was properly refused by the Chief Commissioner. 21 Section 45(3) allows a penalty up to the amount of the grant to be imposed. As no separate argument was raised by the applicant in relation to the amount of the penalty (30%), the Chief Commissioner's decision to impose the penalty is affirmed. Orders 22 The Chief Commissioner's original decisions:- a) to require repayment of the grant and to impose a penalty of 30%; and b) to refuse approval of a longer period to comply with the residence requirement; are affirmed.