Verheyen v Chief Commissioner of State Revenue [2004] NSWADT 19

CITATION: Verheyen v Chief Commissioner of State Revenue [2004] NSWADT 19 DIVISION: General Division APPLICANT PARTIES: Mark Verheyen RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 033297 HEARING DATES: 15/12/2003 SUBMISSIONS CLOSED: 12/15/2003 DATE OF DECISION: 01/30/2004

BEFORE: Montgomery S - 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 : Administrative Decisions Tribunal Act 1997 First Home Owners Grant Act 2000 CASES CITED: DY-v-Chief Commissioner of State Revenue [220] NSWADT 259 Lawrance & anor -v- Chief Commissioner of State Revenue [2002] NSWADT 104 APPLICANT REPRESENTATION: L Rizos, solicitor RESPONDENT S Benjamin, solicitor ORDERS: Date of Orders: 15 December 2003; 1 The Chief Commissioner's decision to reverse a previous decision that Mr. Verheyen is entitled to the First Home Owners Grant and to request repayment of the amount of the $14,000 is affirmed.

1 On 21 October 2003, Mr. Mark Verheyen applied to the Tribunal pursuant to section 28 of the First Home Owners Grant Act 2000 ("the FHOGA") and section 38 of the Administrative Decisions Tribunal Act, 1997. Mr. Verheyen sought a review of the decision by the Chief Commissioner of State Revenue ("the Chief Commissioner") to reverse the original decision, under which Mr. Verheyen was paid an amount of $14,000 under the FHOGA, and to demand repayment of that amount. 2 Mr. Verheyen applied to the Chief Commissioner for a First Home Owner's Grant under the FHOGA in relation to a property at Gosford, ("the property"). The Grant was approved and paid in April 2002. 3 By Notice dated 18 July 2003 the Chief Commissioner advised Mr. Verheyen in the following terms: "I refer to the First Home Owner Grant that was transferred to your nominated account to assist with the purchase of 5/7 Broadview Ave, Gosford 2250 in April 2002. Section 45(1) of the First Home Owner Grant Act 2000 (the Act) authorises the Chief Commissioner of State Revenue, by notice in writing, to 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. Based on the information now available, and in accordance with section 23(1) of the Act, I have reversed the decision under which the grant was paid to you as you did not occupy the premises as your principal place of residence within 12 months of settlement of the property. Accordingly, I require you to pay to the Chief Commissioner the amount of $7000 for repayment of the grant. Please forward the payment of $7000 accompanied by the enclosed remittance advice, to the Chief Commissioner at the address shown on the advice." 4 By Notice dated 5 September 2003 the Chief Commissioner amended the amount sought to be recovered to $14,000 which was the full amount of the grant paid to Mr. Verheyen. 5 On 27 July 2003 Mr. Verheyen wrote to the Chief Commissioner objecting to the reversal of the decision that he was eligible for the grant, provided details of circumstances that had prevented him occupying the property and asked that his special circumstances be taken into consideration with a view to reinstating the original decision. On 30 September 2003 Mr. Verheyen sent further correspondence to the Chief Commissioner objecting to the Notice dated 5 September 2003. 6 The Chief Commissioner responded to 2003 Mr. Verheyen's objection by letter dated 17 September 2003 which stated: "To be eligible for a grant under the First Home Owner Grant Act 2000 (the Act), an applicant must occupy a residential property as the applicant's principal place of residence within 12 months of purchasing the property. Under sections 20(1)(b) and 20(3) of the Act, grant payments are made on the 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, give written notice of the fact to the Chief Commissioner and repay the amount of the grant. This condition is on the fact of non-compliance regardless of intention. Because you did not occupy the property as your principal place of residence within the required time, we are unable to allow you to retain the grant. In addition, the legislation does permit the imposition of penalties where the conditions of the grant have not been met and the grant has not been repaid. However, in recognition of your circumstances we did not impose any penalties. Finally, we confirm the contents of our letter of 5 September. Please make arrangements to repay the amount of $ 14,000." 7 Mr. Verheyen applied to the Tribunal for review of that decision. Applicable Legislation 8 Pursuant to section 23 of the FHOGA, the Chief Commissioner has power to vary or reverse an earlier decision. Section 23 states that: "(1) If the Chief Commissioner decides an application, and is later satisfied (independently of an objection under this Act) that the decision is incorrect, the Chief Commissioner may vary or reverse the decision. (2) A decision cannot be varied or reversed under this section more than 5 years after it was made." 9 The FHOGA authorises an applicant to object to a decision to reverse an earlier decision. Section 25(1) states 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 The FHOGA authorises the applicant to apply to this Tribunal for a review of the Chief Commissioner's decision. Section 28 states, in part, that: "(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." 11 The FHOGA requires an applicant to comply with certain eligibility criteria. One criterion is the "residence requirement." Section 12 states that: "(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." 12 The FHOGA authorises the Chief Commissioner to make payments in anticipation of compliance with the residence requirement. Section 20 relevantly states that: "(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) . . . (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. 13 The FHOGA authorises the Chief Commissioner to require the applicant to repay the amount of the grant if the decision to pay the grant is reversed. Section 45 states that: "(1) The Chief Commissioner may, by written notice, require an applicant (or 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." 14 Section 46 of the FHOGA authorises the Chief Commissioner to recover any amount an applicant is required to repay under the conditions of the grant. Issue and onus 15 The issue in this case is whether the Chief Commissioner made the correct and preferable decision in reversing the decision to approve the First Home Owner Grant. Under section 28(3) of the FHOGA, in an application for review to this Tribunal the applicant has the onus of proving their case. Evidence and Submissions 16 Pursuant to section 20(1)(b) of the FHOGA, Mr. Verheyen was paid a grant of $14,000 in April 2002. The grant was paid in advance subject to compliance with the residence requirement as set out in that section and section 12 of the FHOGA. That requirement was that Mr. Verheyen occupy the property as his principal place of residence within 12 months after completion of the purchase of the property. 17 In correspondence to the Chief Commissioner Mr. Verheyen submitted that he had intended to secure a job on the Central Coast and move into the property within the twelve-month period. However, he was unable to do so within the required time because of his work commitments in a job as a building manager with a Sydney based property developer. This required him to be on call 24 hours per day 7 days per week, being no further than 30 minutes drive from his building other than at times of leave. Therefore commuting from Gosford to Sydney was not an option for him. In March 2003 Mr. Verheyen was finally able to secure new employment in Gosford. This was one month before the end of the twelve-month cut off period to occupy the premises. He provided one month's notice to his employer and made arrangements to move into the property. 18 At the same time Mr. Verheyen's 86 year old Grandmother (who lives at Woy Woy) became incapable of looking after herself due to age, dementia and ill health. Mr. Verheyen asserts that he made arrangements for her to be placed into hostel care, however he was informed that it would take up 3 months before she would receive a room so he move into her home to care for her. She was provided with care accommodation in mid July 2003. Mr. Verheyen was therefore unable to move into the property until that time. A report from Dr Tony Ivits supports Mr. Verheyen's assertion regarding his care for his grandmother. 19 Mr Rizos made submissions on behalf of Mr. Verheyen and argued that Mr. Verheyen's circumstances should be taken into account and that the original decision be reinstated. 20 Mr Benjamin provided submissions on behalf of the Chief Commissioner. Essentially he relied on section 12(1) of the FHOGA. That provision states, in part, that "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". He argued that the residential requirements of the FHOGA are mandatory. Mr. Verheyen's intention is therefore not relevant. The scope and purpose of the FHOGA require strict compliance with the residential requirements. Section 20(1)(b) of the FHOGA permits the Chief Commissioner to authorise payment of the grant in anticipation of the residence requirement. In such circumstances, the onus is on the applicant to notify the Chief Commissioner if the conditions are not met. Mr. Verheyen did not, at any time, request an extension of time in which to occupy the property. 21 In these circumstances it is submitted, the decision by the Chief Commissioner was in accordance with the purposes of the Act, and was made with regard to the express provisions of the terms of the legislation. The decision should therefore be affirmed. Reasons and decision 22 The decision the Tribunal has jurisdiction to review is the Chief Commissioner's decision to reverse the initial decision under which the $14,000 grant was paid. In this case, the grant was paid in anticipation of compliance with the residence requirement. Pursuant to s 20(3), the payment is made on condition that if the residence requirement (or any longer period granted by the Commissioner) is not complied with, then the first home owner must repay the amount of the grant. The Chief Commissioner has the power to require an applicant to repay the grant if the Chief Commissioner reverses the decision under which the amount was paid. The Chief Commissioner did reverse the decision because he was satisfied that the decision was incorrect. 23 These provisions have been considered in several decisions of this Tribunal. In DY -v- Chief Commissioner of State Revenue [2002] NSWADT the Deputy President of this Tribunal considered a decision by the Chief Commissioner to reverse an earlier decision. The Deputy President stated: "Once the residence requirement was not complied with, and no longer period had been allowed by the Chief Commissioner, then the original decision could not stand. (See s 23(1) of the FHOGA.) Consequently, the decision of the Chief Commissioner to reverse the original decision was the correct and preferable decision." 24 A similar approach was adopted by the Deputy President in Lawrance & anor -v- Chief Commissioner of State Revenue [2002] NSWADT 104 . 25 The circumstances of this matter are comparable to those in DY and in Lawrance. Mr. Verheyen has not complied with the residence requirement under the FHOGA and the Chief Commissioner had allowed no longer period. Further, Mr. Verheyen did not provide written notice in compliance with his obligations under s 20(3)(a). Therefore, the original decision could not stand. 26 I agree with Mr Benjamin's submission that section 12(1) provides for a mandatory requirement of occupancy within the specified time period. I am not satisfied that Mr. Verheyen should be allowed to retain a grant to which he had no entitlement. It follows, in my view, that the Chief Commissioner's decision is the correct and preferable one. 27 Accordingly, the Chief Commissioner's decision to reverse a previous decision that Mr. Verheyen is entitled to the First Home Owners Grant and to request repayment of the amount of the $14,000 is affirmed.