Bates v Chief Commissioner of State Revenue [2004] NSWADT 13

CITATION: Bates v Chief Commissioner of State Revenue [2004] NSWADT 13 DIVISION: General Division APPLICANT PARTIES: Lauren Jane Bates RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 033115 HEARING DATES: 28/08/2003 SUBMISSIONS CLOSED: 08/28/2003 DATE OF DECISION: 02/19/2004

BEFORE: Higgins S - Judicial Member APPLICATION: first home owners grant - approval of application - First Home Owners Grant Act - first home owners grant - approval of application MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 First Home Owners Grant Act 2000 LEGISLATION CITED : Local Government Act 1919 Rates and Land Tax Act 1926 (ACT) Stamp Act 1894 (Qld) Council of the City of Newcastle v Royal Newcastle Hospital (1956) 96 CLR 493 CASES CITED: Dean v Commissioner of Stamp Duties [1996] 2 QdR 557 Re Newman and the Commissioner for ACT Revenue (1993) 93 ATC 2105 APPLICANT REPRESENTATION: A J McQuillen, barrister REPONDENT I Mescher, barrister ORDERS: 1. The decision of the Commissioner to dismiss Ms Bates' objection to his decision to request that she repay her $14,000 first home owner grant is affirmed; 2. The decision of the Commissioner to impose a penalty of $3,500 is set aside.

BACKGROUND 1 On 8 May 2003, Lauren Jane Bates ("Ms Bates") made an application to the Tribunal seeking a review of the decision by the Chief Commissioner of State Revenue ("the Commissioner") to dismiss her objections to his decision to request that she repay the $14,000.00 first home owner grant that she had been paid pursuant to the First Home Owner Grant Act 2000. The Commissioner also imposed a penalty of $3,500, which meant that Ms Bates was required to pay $17,500. 2 The basis of the Commissioner's decision was Ms Bates' failure to occupy the property, to which the grant related, as her principal place of residence within twelve months of having purchased the property. This was a requirement under s.12 of the First Home Owner Grant Act 2000. 3 The Tribunal has jurisdiction to hear Ms Bates' application by virtue of sections 25 and 28 of the First Home Owner Grant Act 2000 and s.38 of the Administrative Decisions Tribunal Act 1997. RELEVANT LEGISLATION 4 The relevant legislation is that contained in the First Home Owner Grant Act 2000 ("the Act"). That Act establishes a scheme to assist persons buying or building their first home by providing them with a grant of a described amount of money. To be eligible for a grant, an applicant must satisfy the five eligibility criteria that are contained in Division 2 of Part II of that Act and the purchase of the property for which the grant is sought must be an eligible transaction. 5 The relevant eligibility criteria in this application is the fifth criteria which is set out in s.12(1) of the Act and provides, so far as is relevant, as follows: "s.12(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 twelve months after completion of the eligible transaction or a longer period approved by the Commissioner." 6 S.13 of the Act defines the term an "eligible transaction" for the purposes of the Act. In this case, it is not disputed that the contract for the purchase of the property, by Ms Bates, was an "eligible transaction" under the Act. 7 Subsection 13(5) of the Act provides that where the transaction that relates to a contract for the purchase of a home, that transaction is completed when the purchaser becomes entitled to possession of the home under that contract. 8 S.20(1)(b) of the Act provides that the Commissioner may authorise the payment of a grant in anticipation of compliance with the resident's requirement, if the Commissioner is satisfied that the applicant who is required to comply, but has not complied, with the residency requirement, intends to occupy the home as his/her principal place of residence within twelve months after completion of the eligible transaction or a longer period allowed by the Commissioner. That is, under this paragraph the Commissioner is given power to issue a grant prior to an applicant occupying the property as his/her permanent residence. 9 The sub-section also gives the Commissioner power to extend the period within which the applicant must take up occupancy of the property as his/her principal place of residence. 10 Subsection 20(3) of the Act provides that where a grant is paid in anticipation of compliance with the "resident requirement", such payment is made on condition that, if the "resident requirement" is not complied with the applicant will within fourteen days after the end of the period allowed for compliance, give written notice of that fact to the Commissioner and repay the amount of the grant. The term "resident requirement" is defined in s.3 of the Act in similar terms to that contained in s.12. A failure to comply with subsection 20(3) constitutes an offence, which is punishable by a maximum penalty of 50 penalty units. 11 Section 23 of the Act gives the Commissioner power to vary or reverse a decision he has made in respect of an application for a grant where he is later satisfied that the decision is incorrect. However, he must do so within five years of the original decision having been made. 12 Section 24(1) of the Act provides that where the Commissioner decides to reverse an earlier decision on an application for a grant, the Commissioner is required to give the applicant written notice of the reversal and state in the notice the reasons for the reversal. 13 S.29(3) of the Act provides that an Applicant who seeks review of the Commissioner's determination of an objection, has the onus of proving the his/her case. That is, the onus of proof rests on the Applicant to establish, on the balance of probabilities, those matters, which he/she contends for. 14 Section 45 of the Act gives the Commissioner the power to request the repayment of the amount approved and paid under an application for a grant under the Act. That section, so far as is relevant, provides: "45(1) The Chief Commissioner may by written notice 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. (2) If, as a result of an applicant's dishonesty, an amount is paid by way of a first home owner grant, the Chief Commissioner may, by the notice in which repayment is required or a separate notice, impose a penalty not exceeding the amount the applicant is required to repay. (3) If an applicant (or a former applicant) for a first home owner grant failed to make a repayment required under this section or the conditions of the grant, the Chief Commissioner may, by written notice, impose a penalty not exceeding the amount the applicant is required to repay. (4) If an amount is paid in error on an application for a first home owner grant by a third party, the Chief Commissioner may, by written notice, require the third party to repay the amount to the Chief Commissioner". EVIDENCE 15 Mr McQuillen, on behalf of Ms Bates, relied on the material that had been forwarded to the Commissioner in support of Ms Bates' objection to the Commissioner's decision. In addition to this he called Ms Bates to give evidence. 16 Mr McQuillen also called Ms Bates to give sworn evidence and she was cross-examined by Mr Mescher, on behalf of the Commissioner. 17 Mr Mescher, on behalf of the Commissioner, tendered into evidence documents including the Commissioner's record of Ms Bates' application for the grant, the Commissioner's letter to Ms Bates dated 19 November 2002, requesting that she provide a statutory declaration confirming the date she took up residence, and the period of time she had lived in the property together with documentary evidence of her occupancy of the property and bills forwarded to Ms Bates in respect of the property for electricity and gas for the period August and September 2001. 18 The following facts were not disputed between the parties: (a) Ms Bates is 25 years of age; (b) prior to 4 August 2001, Ms Bates' principal place of residence was that of her parents; (c) on 28 March 2001, Ms Bates entered into a contract for the purchase of the property. This was a special eligible transaction by way of s.13A(1) of the Act and which entitled her to the $14,000.00 grant; (d) on 26 July 2001, Ms Bates made an application for a grant under the Act; (e) on 1 August 2001, Ms Bates settled on the purchase of the property; (f) on 3 August 2001, the Commissioner paid the $14,000.00 grant to Ms Bates under the Act; (g) on 4 August 2001, Ms Bates took up residence at the property; (h) on 3 October 2001, Ms Bates ceased residing at the property and again resided with her parents; (i) on 10 October 2001, a rental bond was lodged by the tenant of the property; (j) on 1 August 2002, the 12 month period, as required by s.12 of the Act, had expired; (k) on 15 November 2002, the Commissioner undertook a rental bond search which identified the payment of the rental bond on 10 October 2001 together with no refund of such a bond as at the date of the search; (l) on 19 November 2002, the Commissioner wrote to Ms Bates requesting the following: "Please provide: · a statutory declaration confirming the date you took up residence and the period of time you lived in the grant property. · documentary evidence (for example electricity and telephone accounts and council rates notices) of your occupancy of the property for three months within twelve months of settlement". The letter went on to state that if Ms Bates had not lived at the grant property during the 12 month period after settlement, she was requested to advise the Commissioner of the reasons why this did not occur and the date on which she expected to occupy the property; (m) on 26 November 2002, Ms Bates made a statutory declaration in which she declared the following: "(a) the above property purchase was settled on 1st August, 2001; (b)I took up residence at the above address on 4th August, 2001 and resided there until 3rd October, 2001 when I returned to my parents' residence on a temporary basis; (c) my reasons for returning to my parents' address were both financial and personal; (d) it is my intention to resume residency in my property at the end of March, 2003. (n) on 12 December 2002, the Commissioner entered a Notice under s.45 of the Act advising Ms Bates that he had decided to reserve his earlier decision to make the grant and he requested repayment of the amount of the grant together with interest; (o) on 20 December 2002, Ms Bates, through her solicitors, sought reconsideration of the Commissioner's decision. This request was treated as a written objection under s.25(1) of the Act. This letter stated the following: "Being a young person with limited financial resources, Lauren Bates did not install a telephone to the property however, has continued to make use of her mobile phone for all telecommunications with her friends and family. Endeavouring to minimise her financial outlay as she was a new university graduate at the time of acquisition of the property, she thought that she would spend some time with her parents with the intention of reviewing her residency in March 2003. Lauren Bates did however live at the premises up to October 2001." Enclosed with the solicitor's letter were copies of bills and correspondence from AGL, Energy Australia and Auburn Council." (p) on 12 December 2002, the Commissioner wrote to Ms Bates advising her that, pursuant to s. 23(1) of the Act, he had decided to reverse the decision under which the grant had been paid and that he had decided to impose a penalty of 25% of the amount of the grant. 19 In her oral evidence Ms Bates stated the following: (a) she has resided in the property since March 2003. She was married in April 2003 and has continued to live there with her husband Christopher Cook; (b) she has been employed at Arnott's since about 2000; (c) the building in which her unit was located was being refurbished and this was why it took several months after the contract for the purchase of the property was signed before she was able to settle on the property and move in; (d) at the time she signed the contract for the purchase of the unit, it was her intention to live in the unit together with her girlfriend. That is, she had planned to rent out the second bedroom to her girlfriend. However, in July 2001, her girlfriend decided to go overseas. As her girlfriend was no longer able to move in with her, Ms Bates and her boyfriend decided to move into the property together. Ms Bates' family and Mr Cooks' family were not very happy about them living together so Ms Bates contacted the Commissioner's Office in the beginning of September 2001 and inquired about her obligations in respect of the grant and residing in the property. She stated that she was advised by an employee of the Office of the Commissioner that as long as she satisfied the requirements that she had lived there this was all she needed to do. She stated that her mother also telephoned and received the same response; (e) Ms Bates and Mr Cook became engaged in December 2001 and decided to marry in April this year; (f) Ms Bates did not try to get someone else to share the unit with her when her girlfriend decided to go overseas as she did not want to live with anyone she did not know; (g) Ms Bates purchased furniture so that she was able to move into the unit. When she left the unit she stored this furniture at her parents' place; (h) Two weeks after moving into the unit, Ms Bates informed the Electoral Office of her new location. She did not alter this after she left the unit. (i) When Ms Bates received the letter from the Commissioner, dated 19 November 2002, Ms Bates again telephoned the Office of the Commissioner and was told: "Three months is our guideline to prove that you were in primary residence". Ms Bates acknowledged that she made this telephone call without identifying herself and that she had not retained a file note of the particular conversation. ISSUES 20 There are two issues in this application. The first issue is whether Ms Bates satisfied the resident requirement that is set out in s.12 of the Act. 21 The second issue arises only if it is found that Ms Bates had failed to satisfy the resident requirement of s.12 of the Act. This issue is whether the Commissioner is required to request for the return of the amount granted where one of the eligibility criteria had not been met. SUBMISSIONS 22 Both parties provided written submissions. These were supplemented by oral submissions made at the hearing. 23 Mr McQuillen, of behalf of Ms Bates, submitted that the material before the Tribunal establishes that the resident requirement contained in s.12 of the Act had been met. That is, the material establishes that Ms Bates intended to reside in the property as her principal place of residence and she did so as soon as she was able. The fact that circumstances changed after she had taken up residence, should not be taken by the Tribunal as being evidence of her failing to meet the requirement. He noted that the statute was silent on how long an applicant was required to occupy premises as his/her principal place of residence, all the Act prescribed was that such occupation should be taken up within twelve months of receiving the grant. 24 Mr McQuillen also submitted that the Tribunal should find, from the terms of the correspondence written by the Commissioner on 19 November 2002, together with the conversations that Ms Bates had with members of the Commissioner's office, that the Commissioner is satisfied that the resident requirement is met where an applicant is able to establish that he/she has resided in the premises for a period of three months, so long as that period of three months commences within the prescribed twelve month period. He went on to submit that had Ms Bates been informed of this she would have stayed the additional month. 25 If the Tribunal were to find that Ms Bates had failed to meet the residential requirement of s.12 of the Act, Mr McQuillen submitted that the circumstances in this case were such to warrant the exercise of the Commissioner's discretion not to request repayment of the money pursuant to s.45(1) of the Act. The reason for exercising the discretion in favour of Ms Bates, he submitted, was the fact that Ms Bates had always intended to make the property her principal place of residence and this she has in fact done since March 2003. Furthermore, the reason she did not make the property her principal place of residence earlier was because the arrangements she had made to share the costs of living there had changed and she had been led to believe by the Office of the Chief Commissioner that she had met the resident requirements by residing in the property between August and October 2001. That is, Ms Bates at no stage had any intention to avoid meeting her obligation in respect of the residency requirement and she has ultimately met that requirement even though it is outside the twelve month period. 26 Mr Mescher, on behalf of the Commissioner, submitted that the material before the Tribunal was not sufficient to satisfy the resident requirement under s.12 of the Act. He argued that the Tribunal must examine the events as they happened during the whole of the twelve month period following the date on which the grant was paid together with what had happened subsequently. On this material, it was his contention that the Tribunal can only find that Ms Bates took up occupancy of the property as her principal place of residence in March 2003, which was well outside the prescribed twelve month period that ended on 1 August 2002. He also pointed out that Ms Bates, at no time sought extension of the resident requirement period. 27 In respect of the evidence about the time Ms Bates resided at the property between August and October 2001, Mr Mesher pointed to the fact that the electricity bill for this period was extremely low ($39.68), for this time of the year. The inference to be drawn from this was that Ms Bates did not spend much time at the property. 28 In respect of the Commissioner's discretion under s.23(1) and s.45 of the Act, Mr Mescher submitted that the Commissioner has no discretion in those circumstances where a decision was made to approve a grant and it was subsequently discovered that the applicant had failed to meet any one of the eligibility criteria for that grant. REASONS AND DECISION 29 The role of the Tribunal is to determine whether the Commissioner's decision is the correct and preferred decision having regard to all the relevant facts and the applicable law (see s.63 of the Administrative Decisions Tribunal Act 1997). While there is generally no onus of proof in a merits review of an administrator's decision, as mentioned above, in this case s.29(3) of the Act places the onus on Ms Bates to establish those matters which she contends for. In this case, the relevant matters are the fact that she met the resident requirement under s.12 of the Act and the circumstances on which she relies as supporting her contention that the Commissioner should not have exercised his discretion under s.23(1) or s.45 of the Act in a way that was unfavourable to her. 30 The Tribunal has carefully examined all the material, including the written submissions that were placed before it. The Tribunal finds that Ms Bates was a truthful witness and that she resided at the property for the period 4 August 2001 to on or about 3 October 2001. That is, she resided there for a period of about two months. 31 However, the critical issue is whether this satisfies the requirement in s.12(1) that she "occupied" the property as her "principal place of residence". The Act contains no definition of these terms and guidance must be obtained from the ordinary meaning of those words, the context in which those words are used and the meaning attributed to those words by other case law. 32 The Concise Oxford Dictionary (5th edition) defines the word "occupy" as follows: "Take position of (country region, town, strategic position) by military force or settlement; hold (office), reside in, tenant; take up or fill (space, time), reside or be in (place, position)…" (underlining added) 33 The courts have held that the word "occupy" must be construed in its legislative context. 34 The High Court considered the word "occupied" as it appeared in s.132(1)(d) of the Local Government Act 1919 (NSW) in the case of Council of the City of Newcastle v Royal Newcastle Hospital (1956) 96 CLR 493. The statutory provision in question provided that all land in the municipality or shire was rateable except land, which belonged to a public hospital and was "used or occupied" by the hospital for the purposes as a hospital. The question at issue was whether the defendant hospital, who used a particular area of land, was rateable under s.144 of the Local Government Act, 1919. In that decision Williams J stated the following at page 501: "As to "occupation" I feel no doubt. It was not "occupied" as the word is used in rating law. As was pointed out by Isaacs J in Knowles v Newcastle Corporation (1909) 9 CLR 534 at p.544 "occupation" is not synonymous with mere legal possession. It includes possession, but it also includes something more (1956) 1 LGRA at pp.23, 24. His Honour referred to the well known passage in the judgment of Lush J in Reg v St Pancras Assessment Committee (1877) 2 QBD 581:- "The owner of a vacant house is in possession and may maintain trespass against anyone who invades it, but as long as he leaves it vacant he is not rateable for it as an occupier. If, however, he furnishes it, and keeps it ready for habitation whenever he pleases to go to it, he is an occupier, though he may not reside in it one day in a year" (1877 2 QBD at p.588). But it must be remembered that Lush J was there dealing with the meaning of rateable occupation in England where, to be rateable, the occupation must be beneficial, and his Lordship was discussing what constitutes beneficial occupation of a house and there is a great difference between what constitutes the occupation of a house and the occupation of vacant land". 35 In that same decision, Kitto J, stated that great care must be taken in using the English authorities as to rateable occupation out of context. Kitto J went on to comment that the relevant statutory provision in the case before the Court required not only proof of occupation but also proof of actual and continuous possession directed to the specific purposes as set out in that provision. 36 In my opinion, s.12 has a similar requirement in that it must be established that the applicant not only occupied the property the subject of the grant within a 12 month period, that occupation must also be proven to have been as the applicant's "principal place of residence". 37 The term "principal place of residence" was considered in the decision of Dean v Commissioner of Stamp Duties [1996] 2 QdR 557. This case related to relief from the imposition of stamp duty under the Stamp Act 1894 (Qld) in respect of a person's principal place of residence. At page 566, Fryberg J stated the following: "It seems to me that the Act regards occupation as being occupation by way of residence. That seems to me to follow from the context in which the term "occupation" is used in the Act. That is, occupation as and for the person's principal place of residence, and also from the apparent policy underlying the Act. That, it seems to me, is a policy designed to give relief in relation to stamp duty payable of a substantial margin which is inexplicable by reason of the fact that large numbers of people are affected by such duty and with increasing inflation are likely to be exposed to large levels of duty in the absence of a concession in respect of their own home. … It also seems to me that the word "principal" in the definition allows a wide range of factors to be taken into account, and also implies an objective test of what is the principal place of residence. That is not to say that the intention of the person acquiring the residence is not relevant. Indeed, Mr Logan for the Commissioner conceded that intention can be taken into account as a factor in the assessment. It seems to me that intention is relevant, but not dominant. That view also seems to me substantially to be the test which was applied by the respondent in the present case". 38 In Re Newman and the Commissioner for ACT Revenue (1993) 93 ATC 2105; 26 ATR 1379 at 1381 the Australian Capital Territory Administrative Appeals Tribunal considered the meaning of the terms "occupy" and "principal place of residence" under section 22B of the Rates and Land Tax Act 1926 (ACT). Under that Act, tax is payable on all premises in the Territory unless the premises are exempt under s.22B of that Act. That section exempts premises from land tax if the premises are residential premises and the premises are the principal place of residence of the owner of the land. The section also provides that, in certain circumstances, land does not lose the benefit of the exemption by reason only of the owner not occupying the premises. In that decision at 1381 the Tribunal stated the following: "That the term "principal place of residence" has its ordinary meaning in the Act and does not extend to include a place from which one is absent for a period of time but with the intention of returning there to live is amply illustrated by the fact that the Act provides special consideration for those persons who, for one reason or another, are away from their Canberra houses". 39 Although the legislative provisions considered in the abovementioned cases differ to that which is contained in the Act that is the subject of this application, the following principles of general application also apply in this application: (a) The terms "occupy" and "principal place of residence" should be given their ordinary meaning having regard to the objects and purposes of the Act. That purpose being similar to the abovementioned tax rating cases in that the legislative scheme of the Act is to provide first home owners some relief towards the cost of purchasing their first home. Accordingly, in the context of this Act, in my opinion, "occupy" means to reside in the property. However, that residence must also be such that it is the person's "principal" place of residence or to use the terms of the title of the legislation, the persons "home". This in my opinion, requires the occupation to be ongoing and involves an element of permanence; (b) Whether an applicant has "occupied" the property as his/her "principal place of residence", as prescribed under the Act, is a question of fact that is to be assessed objectively having regard to all the circumstances. The intention of the applicant is relevant but it is not determinative of the issue. Nor is the fact that the applicant resided in the property for a short period of time during the relevant period. These matters, if established, must be considered in light of all the evidence including, where the applicant resided otherwise during the relevant period, the reasons given by the applicant for not residing or continuing to reside at the property, whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant and the nature of the applicant's residence at the property. This list is by no means exhaustive as each case must be considered in the context of its own particular facts. 40 In this case, when assessed objectively, in my opinion, the evidence does not establish that Ms Bates met the residential requirement of the Act. I accept that it was Ms Bates' intention, when she applied for the grant to make the property her home or principle place of residence. Such an intention is of course not sufficient to meet the requirements of the Act. What is required is proof that she in fact "occupied" the property as her "principle place" of residence during the prescribed period. 41 On her own evidence Ms Bates' intention was based on her friend sharing the expenses related to her purchase of the property. Subsequently, but before the grant was paid to her, her friend had decided to go overseas. This left Ms Bates with the alternative of sharing expenses with her then boyfriend, whom she subsequently married. It was Ms Bates' evidence that she was not prepared to remain in the property without someone sharing her expenses and that she was not prepared to live with someone she did not know. Accordingly, when she and Mr Cook decided that they would not continue living in the property because of concerns expressed by their respective families, Ms Bates of her own volition decided not to continue to reside at the property. She could have chosen to remain there and obtain another border but did not wish to reside with a stranger. When these facts are considered together with the fact that her principle place of residence prior to and immediately after the period she resided at the property was that of her parents, in my opinion it cannot be said that Ms Bates period of residence at the property from August to October 2001 was for the purpose of making it her home. During the relevant period, in my opinion, her home or principle place of residence remained that of her parents. 42 I do not accept Mr McQuillen's contention that the Chief Commissioner's letter of 19 November 2002 is evidence of the fact that the Commissioner accepts occupation of a property for a period of three months within the prescribed period as being sufficient to meet the resident requirement of the Act. Nowhere in that letter does the Commissioner make a statement to this effect. The letter requested Ms Bates to provide a statutory declaration as to when she took up residence at the property and the time she lived at the property. The letter also requested that she provide documentary evidence of her occupation at the property. The fact that the Commissioner only requested such documentation for a three month period does not give rise to the conclusion contended for by Mr McQuillen. 43 Nor do I accept Mr McQuillen's contention that the Commissioner is in some way estopped from asserting that Ms Bates had not satisfied the resident requirement as a result of the telephone conversations that Ms Bates and her mother had with officers of the Office of the Commissioner. It is well accepted that the concept of estoppel does not apply in such circumstances. An administrator is bound by the terms of the legislation and if that legislation specifies that certain criteria are to be met before the administrator exercises his/her power under the legislation, then those criteria must be satisfied unless the legislation expressly provides that the administrator has a discretion in that regard. In this case the Act gives the Commissioner no discretion in respect of the resident eligibility criteria when considering an application for a grant under the Act. The only discretion that the Commissioner is given is in respect of reversing a decision to make a grant under s. 23 of the Act. This discretion is a limited one and is discussed below. 44 For the reasons stated above, in my opinion the decision of the Commissioner that Ms Bates had failed to satisfy the resident requirements of s.12 of the Act was correct. 45 On the basis of this finding, s.20(3) of the Act requires Ms Bates to repay the amount of the grant. This requirement is independent of the Commissioner's discretion to reverse his decision in making the grant and his decision to request the repayment of the monies advanced. 46 In respect of the Commissioner's powers to reverse his decision under s.23(1) of the Act and his discretion to request a refund of the monies advanced (s.45(1) of the Act), I do not agree with Mr Mescher's contention that the Commissioner has no discretion in this regard. Both sections expressly use the term "the Commissioner may", indicates that Parliament intended that the Commissioner has a discretion in this regard. However, that discretion must be exercised in accordance with the policy and purposes of the Act. As mentioned above, that policy and purpose is to provide first home owners with assistance in purchasing their first home and the eligibility for such assistance is expressly stated to include a requirement that the applicant occupies the property the subject of the grant as his or her principal place of residence within twelve months of a grant. That is, the Act does not provide assistance where an applicant fails to occupy the premises within the requisite period and rents out that property notwithstanding the applicant's intention to ultimately make the property his or her permanent place of residence. 47 Having regard to the purpose and intention of the Act, where the Commissioner subsequently ascertains that the resident requirement eligibility criteria has not been met, in my opinion, Parliament intended the Commissioner to exercise his powers under s.23(1) and s.45 so as to deprive the applicant of any benefit that he or she was not entitled to, unless there are exceptional circumstances which warrant him not to exercise such a discretion. 48 In my opinion, this is not such a case. Penalty 49 This leaves the issue concerning the penalty imposed by the Commissioner pursuant to s.45 of the Act. This decision is equally reviewable by the Tribunal. As mentioned above the basis on which such a penalty may be imposed is contained in sub-sections 45(2) and (3) of the Act. Sub-section 45(2) only applies where it has been established that the applicant has acted dishonestly in his/her application for a grant under the Act. In this case there is no such evidence and the Commissioner was not entitled to impose a penalty under that sub-section. 50 Sub-section 45(3) of the Act applies in two circumstances. The first circumstance is where the applicant has failed to make a repayment as required under s.45(1) of the Act. The second set of circumstances are those where the applicant has failed to make a repayment of the grant as required under the conditions of the grant. As is mentioned above, s.20(3) of the Act provides that where an applicant fails to meet the resident requirement under the Act, the applicant is required to repay the amount advanced within fourteen (14) days "after the end of the period allowed for compliance". 51 In this case, the Commissioner included the penalty in his request for repayment of the grant. In my opinion, the imposition of the penalty was premature having regard to the terms of sub-section 45(3) of the Act. In any event, if I am incorrect, in my opinion having regard to the material before the Tribunal, this was not a case which warranted the imposition of any penalty. Ms Bates clearly did not wish to avoid her obligations under the Act and she endeavoured to ascertain what her position was by contacting the Office of the Commissioner at the time she decided to move back to her parents' home. I accept that she understood the advice she had received to be that she met the resident requirements of the Act and this was a basis on which she made her decision to again continue to reside with her parents. Accordingly, if I am incorrect in my interpretation of s.45(3), in my opinion, the decision of the Commissioner to impose a penalty under s.45 of the Act is not the correct and preferred decision. 52 The Tribunal orders: 1. The decision of the Commissioner to dismiss Ms Bates' objection to his decision to request that she repay her $14,000 first home owner grant is affirmed. 2. The decision of the Commissioner to impose a penalty of $3,500 is set aside.