CITATION: Medanic v Chief Commissioner of State Revenue [2006] NSWADT 242 DIVISION: Revenue Division APPLICANT PARTIES: Dennis Medanic RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 056108 HEARING DATES: 8/12/2005 SUBMISSIONS CLOSED: 12/08/2005 DATE OF DECISION: 08/10/2006 BEFORE: Greenwood J - Judicial Member CATCHWORDS: Duties Act - First Home Plus Scheme - residence requirement MATTER FOR DECISION: Principal matter Duties Act 1997 LEGISLATION CITED : First Home Owner Grant Act 2000 Interpretation Act 1987 Calcaro v Chief Commissioner of State Revenue [2004] NSWADT 158 Chief Commissioner of State Revenue v Ferrington (2004) NSWADTAP 41 Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 CASES CITED: Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 Mawad v Chief Commissioner of State Revenue [2005] NSWADT 20 McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214 UH v Chief Commissioner of State Revenue [2005] NSWADT 284 APPLICANT G Kinsey, solicitor REPRESENTATION: RESPONDENT S Free, solicitor ORDERS: The decision of the Chief Commissioner of State Revenue is affirmed. Reasons for Decision The Facts 1 The applicant entered into a contract of sale to purchase a unit at 12/10 Kairawa Street Hurstville, the subject property, dated 22 October 2002 for the sum of $280,000.00. Completion and settlement of the sale occurred on 9 December 2002. 2 The contract of sale specified that the sale was subject to an existing residential lease for a period of 12 months and which expired on 13 February 2003. The lease was a form 110A of an EAC Multilist lease form which allowed for the continuation in accordance with the provisions of the Residential Tenancies Act 1987. 3 First Home Owner Grant (FHOG) application was made on behalf of the Applicant by an officer or employee of the applicant's Mortgagee and finance provider, Westpac on 18 November 2002, by "online email". The date of occupancy disclosed on the application was 3 December 2002.The grant was paid on the 22 November 2002 and in advance of the settlement of the contract. 4 The existing tenant was duly notified as to change of ownership in accordance with usual conveyancing practice and the Real Estate agent previously retained by the vendor, continued to provide lease management services to the applicant. The tenant paid his rent which was collected by the continuing agent and remitted to the applicant in accordance with the lease. 5 By a statement dated 1 December 2005, filed and tendered 8 December 2005, as exhibit A, at paragraph 9 the applicant acknowledged that he was aware of the condition of the FHOG which required him "to occupy the premises as my principal place of residence within 12 months of the date of settlement". 6 The period in which occupation of the subject property was to be taken up by the Applicant was as from 9 December 2002 and before 9 December 2003. 7 The agent issued to the tenant a letter and "No Grounds" Termination Notice dated 14 October 2003, requiring vacation of the premises by 21 December 2003. 8 The tenant after receipt of the Notice, initially requested to vacate the subject property on an earlier date, and then later requested an extension to vacate to the 10 December 2003, which he complied with. 9 The Applicant went into occupation of the subject property on 14 December 2003 for a period of 3 weeks. Thereafter the applicant moved back to his parents home, whilst he carried out renovations to the property. 10 The Applicant was selected for investigation as part of the Chief Commissioners random audit process in or about January 2004. As a result of that audit and the applicant's responses, the Chief Commissioner's office issued a Notice pursuant to S 45 First Home Owners Grant Act 2000 (FHOG Act) dated 6 August 2004 and a Notice of Assessment pursuant to Duties Act 1997 (the FHP Concession) dated 11August 2004 seeking repayment and interest. 11 The Applicant changed his address notification particulars and notified the respective government offices of his new address, (being the subject premises) to the Council, Sydney Water, RTA and the Energy Authority, service provider in 2004. 12 The Applicant lodged an objection with the Chief Commissioner's office by letter dated 3 December 2004, which was wholly disallowed by the Chief Commissioner. The Legislation 13 The Applicant must meet the criteria and conditions specified in First Home Owners Grant Act 2000, in order to be entitled to receive and retain the grant pursuant to S 7, which states: 7. Entitlement to Grant (1) A first home owner grant is payable on an application under this Act if: (a) the applicant or, if there are 2 or more of them, each of the applicants complies with the eligibility criteria, and (b) the transaction for which the grant is sought: (i) is an eligible transaction, and (ii) has been completed. (2) Despite subsection (1)(a), an applicant need not comply with the eligibility criteria to the extent the applicant is exempted from compliance by section 8A(2), 9(2) or 12(2). (3) Despite subsection (1)(b), a first home owner grant is payable before completion of the relevant eligible transaction, as authorised by section 20. (4) Only one first home owner grant is payable for the same eligible transaction. 14 The eligible transaction was the contract to purchase a home in New South Wales pursuant to S 13 (1)(a). 15 The Applicant must also comply with the 5 eligibility criteria as set out in S12 (1) of the FHOG Act: 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. 16 The completion date is significant, as the 12 month period runs from the date the contract of sale completes or "settles" and that date is also specified in the contract of sale and the final settlement process. The "Residence requirement" is defined in S 3 and the drafting and reference to it in the various sections throughout the FHOG Act signify it as a mandatory requirement and a timely one. 17 The Applicant is entitled to receive payment of the grant pursuant to S. 20(1)(b), prior to the occupation taking place, but subject to actual residence taking place within specified period or such longer period as approved by the Commissioner. 18 In addition the Applicant has the responsibility to notify the Commissioner within 14 days if residence is not taken up and to repay the grant pursuant to S. 20(3): S. 20(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. A failure to comply constitutes an offence, punishable by a maximum penalty of 50 penalty units (S. 20(4)). 19 The Applicant's entitlement to the First Home Plus Scheme (FHP Concession) pursuant to the Duties Act 1997 was subject to S. 74(1) and S 76 of the Duties Act 1997 as it applied at 9 December 2002, and these sections were also subject to the mandatory requirement and conditions of "eligible agreements or transactions" and occupation as a residence within 12months respectively. In this case and at this particular time the section as it then was: 74 Eligible agreements or transfers (1) The agreement or transfer must be for the acquisition of a first home or for the acquisition of a vacant block of residential land intended to be used as the site of a first home. 76 Residence Requirement (1) The home must be occupied or intended to be occupied by the person or persons who are acquiring it on or before settlement, or within 12 months after settlement, as the principal place of residence. 20 The Applicant made his application for the stamp duty concession by Statutory Declaration, and deposed to carrying out certain conditions. The exemption granted by the Chief Commissioner is subject to the conditions being fulfilled and determined solely at the discretion of the Commissioner pursuant to S79: S 79 Determination of applications An application is to be determined solely at the discretion of the Chief Commissioner whose decision is final. 21 It was contended on behalf of the Applicant, that as the Applicant did not move into his unit by 9 December 2003, that S36 of the Interpretation Act 1987 assists the applicant in that it provides for the period of occupation to be extended, notwithstanding the period of time has expired: Interpretation Act 1987 - S. 36 Reckoning of time … (2) If in any Act or instrument a period of time is prescribed or allowed for the doing of any thing and a power is conferred on any person or body to extend the period of time: (a) that power may be exercised, and b) if the exercise of that power depends on the making of an application for an extension of the period of time – such an application may be made, after the period of time has expired. 22 It was proposed by the Respondent that the section does not apply to the interpretation of the FHOG Act situation where a contrary intention appears in the FHOG Act and it is asserted such a contrary position is clearly made out, because a specific period is set and a 14 day period of grace is provided in s 20 (2) and S20(3). 23 Section 5(2) provides that the Interpretation Act 1987: "applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned". Consideration of the application of S36 of Interpretation Act 24 Until a request was made in submissions by the applicant's legal representative on the day of the hearing of this matter, no formal application for an extension of time to occupy was made within the 14 day period after 9 December 2002, or at any time after the expiry of the 14 day period was made by the Applicant. There were two letters written by the applicant's legal representative which vaguely refers to the issue, both well outside the time limit: a) Letter dated 3 December 2004 – indicates "dissatisfaction with the Commissioner's decision" (on page 1 of 2 pages) makes specific request to review the decision "Would you please review the decision" (on page 2 of 2 pages) b) Letter dated 31 January 2005 "We understand you office allows period of grace of approximately 14 days." (on page 1 of 1) 25 This now brings the Tribunal to consider the request and submission of the applicant, for the first time as no previous case in this Tribunal has considered the submission and contention that S. 36 of the Interpretation Act 1987 operates in this case and at the time of this grant, to allow to the Commissioner a power to extend the period of time to make an application for occupancy, notwithstanding the period of time has expired in S. 20 of FHOG Act. Further, that if the Applicant is successful in that argument, that the preservation of time in preserving the entitlement to a grant, must logically flow to the entitlement to retain the stamp duty (FHP concession) exemption. The argument put by Mr Kinsley, for the applicant is a valiant and novel one. 26 The Respondent's position (set out briefly) is that S 5 of the Interpretation Act 1987 sets a further limitation to S 36, in that S 36 does not apply to the interpretation of the FHOG Act situation where a contrary intention appears in the FHOG Act and it is asserted there is such a contrary position to this application of S 36 and it is clearly made out because a 14 day period of grace is specially provided in S 20(2) and S 20(3). 27 Accordingly, this is a matter of law which needs to be determined first, before deliberating on the remaining part of the application and which will be set out in some detail. In this regard the Tribunal is assisted with the historical overview submitted by Mr Free, for the Respondent. 28 The Tribunal has received in previous cases various submissions as to whether the Chief Commissioner had the power to extend time permitted for compliance with the residence requirement after expiry of the statutory 12 month period has elapsed or within a further period approved by the Commissioner as envisaged by S 12(1). History of the existing case law 29 In Mawad v Chief Commissioner of State Revenue [2005] NSWADT 20 the Tribunal found the Chief Commissioner's power to extend time for compliance with the residence requirement is a discretionary power and that "each application must be decided on its own facts having regard to the factors relevant to the exercise of the discretion" (at [37]). As to the content of those factors, the Tribunal suggested four relevant considerations (at [42]): "Having regard to the objects and purposes of the FHOG Act [the factors relevant to the exercise of the discretion to extend time within which to comply with the residence requirement], in my opinion, are: (a) the date on which the application for extension of time was made, in particular, whether the applicant, on realising that he/she will not satisfy the residence requirement of the grant has delayed in making the application, and where there has been a delay, whether there is a satisfactory explanation thereof; (b) date on which the applicant will or has made the property the subject of the grant his/her principal place of residence; (c) reasons why the applicant cannot or has failed to meet the s12 residence requirement – in particular, whether those reasons were due to matters unforeseen at the time of the applicant's application for a grant and are of such a nature that they reasonably prevented the applicant from complying with the residence requirement; and (d) whether in the circumstances having regard to all the facts and the provisions of the FHOG Act the extension of time will be contrary to the objects and purposes of the Act." 30 In this case the Tribunal decided the matter on the basis that a decision by the Chief Commissioner not to retrospectively extend the time period is reviewable and set aside the Commissioner's decision to refuse the application by Mawad for an extension of time. 31 The matter of McKenzie was heard before the Mawad case .In McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214: [16] It has been explained today that had the applicant made known his change of circumstances to the Commissioner within the twelve month period (or possibly within the extended period of twelve months and fourteen days: see s 20(2)) he may have received some benefit of the exercise of discretion and have avoided the situation in which he now finds himself. But the scheme of the Act does not appear to permit any possibility of achieving that result now. So it is a case which is unfortunate and highlights the difficulty that schemes with strict rules sometimes produce. … [20] The Parliament intended to set strict boundaries. The usual strict boundary is provided by the twelve months rule, that is, people can have the grant in advance but they must move in within twelve months. This view is borne out by the following provisions – s7(1)(b)(ii); s7(2); s12(1); and s20(2). [21] The scheme of the Act contemplates certainty as to the period within which a person must move in. Any change must be made known ahead of the expiry of what might be called the usual period. The period of permitted delay is either twelve months or such extended period as has been permitted ahead of the expiry of that period (plus fourteen days). … [23] There is nothing here to suggest that the applicant was at any time trying to escape the notice of the Commissioner. At the outset he said he will not be moving in for ten months. As it happened he has moved in at the thirteen month point. It is an unfortunate case but I think the submissions that have been made and the case law of the Tribunal is irresistible. At this point, the Commissioner is obliged to apply the rules and, as I see it, does not have any power to extend time. Once the taxpayer falls into default the position is irrecoverable and the only hope that one then has is that the Commissioner might not issue the notice; but the notice has issued in this case." 32 In the matter of UH v Chief Commissioner of State Revenue [2005] NSWADT 284 the issue of the two inconsistent decisions of Mawad and McKenzie was considered by President Judge O'Connor and UH was decided on the basis that Mawad should not be followed and the Tribunal should follow the position that the Chief Commissioner has no power to retrospectively extend the time period for compliance with the residence requirement, given the intention to set boundaries in the legislation. 33 In order for the applicant's contention that S 36 of the Interpretation Act 1987 applies in the current position to retrospectively extend the time period for compliance with the residence requirement in the FHOG Act, the applicant must show whether a contrary intention exists for it to apply. 34 The test is set out in Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 Mahoney JA held, at 512-3: "There is, of course, no simple formula for determining what is a 'contrary intention' for this purpose. Such an intention may be displayed where the definition provides that one thing shall be done and the Act or section in question provides that another shall be done: see, eg Bennett v Minister for Public Works (NSW)(1908) 7 CLR at 385; R v Brewer (1942) 66 CLR 535 at 550. But it is not limited to such a case. A definition section and its application must be considered in the context of the Act as a whole: see Lennon v Gibson & Howes Ltd (1919) 26 CLR 285 at 289-90; Stevens v Colonial Sugar Refining Co Ltd (1920) 28 CLR 330 at 340 (the "commanding effect of the general scheme of the Act"); Blue Metal Industries Ltd v R W Dilley [1970] AC 827 at 846. A contrary intention may be inferred from a particular provision if, were the definition to be applied, the provisions of or the procedure established by the section would not appropriately work: see Brown v Brook (1971) 125 CLR 275 at 276, 292 where, if the definition applied, it would require a lender to take specified steps in respect of his "business of money-lending" where he had no such business. It is, I think, not necessary that what is laid down by the section in question be impossible of operation; it is sufficient if the result of the application of the definition to a section results in the operation of the section in a way which clearly the legislature did not intend . Thus, in Dealex Properties Ltd v Brooks [1966] 1 QB 542 at 551, Harman LJ referred to the "fearful confusion" that would follow the application of the statutory definition. In the end, what the court does when it decides whether there is a 'contrary intention' is to decide whether it was the intention of the legislature that the statutory provisions as to interpretation or definition should apply to the particular section : see Gibb v FCT (1966) 118 CLR 628 at 635. The legislative intention may, perhaps, be more easily seen where the function of the interpretation section is, by providing a simple verbal formula, to avoid the repetition of a 'multiplicity of verbiage': or where the statutory definition adds to or subtracts from what, apart from the definition, would be the meaning of the particular word in the statutory command: see eg, R v Brewer (1942) 66 CLR 535 ; YZ Finance Co Pty Ltd v Cummings (1964) 109 CLR 395. The Privy Council has formulated and approved a method of determining the legislative intention which has a particular relevance in this case. It has been said the intention was that the statutory provision or definition shall not apply where, in effect, the legislature would, had its attention been directed to the question, have made clear that it should not … In Blue Metal Industries Ltd v RW Dilley [1970] AC 827 at 846, Lord Morris of Borth-y-Gest, in delivering their Lordships advice, said: 'Words in the singular will include the plural unless the contrary intention appears. But in considering whether a contrary intention appears there need be no confinement of attention to any one particular section of an Act. It must be appropriate to consider the section in its setting in the legislation and furthermore to consider the substance and tenor of the legislation as a whole: see Sin Poh Amalgamated (HK) Ltd v Attorney-General (HK) [1965] 1WLR 62. In that case a test was indicated which often may be helpful. In the judgment of the board delivered by Lord Pearce it was said (at 67): 'The Interpretation Ordinance was intended to avoid multiplicity of verbiage and to make the plural cover the singular except in such cases as one finds in the context of the legislation reason to suppose that the legislature, if offered such amendment to the Bill, would have rejected it.'" (emphasis added). 35 In this matter the FHOG Act and the language used in S 12 and S 20 of the FHOG Act was enacted after the S 36 of the Interpretation Act 1987 , and it is difficult to accept that a time limit would have been set, which would thereafter operate to be effectively "unlimited". Both sections are by their language initially prescriptive and definitive as it sets a period of "within 12 months" and it further indicates a specific intention to limit and qualify "a further period" of grace, namely "14 days after the end of the period allowed for compliance" as an intention to allow an extension of the initial 12 month period. This language when viewed against the overall purpose of the Act, indicates it was Parliament's intention to provide assistance to first home buyers with an intention to specify corresponding obligations by the recipient as to terms, conditions and obligations and to set specific time limits. In the Tribunal's view the 'contrary intention' of Parliament in the FHOG Act is clarified by the actual setting of time limitations and further clarified and strengthened by the imposition of a right to the Commissioner to demand repayment and then the creation of an offence, in subsections (3) and (4) of S 20. The specification of penalty units, for failure to comply is a "maximum penalty (subsection (4)): 50 maximum penalty points" and it is a definitive term. It is a clear indication that penalty is linked to failure to comply with time limits and it is prescriptive in nature. It is for this reason that the Tribunal must reject the applicant's contention that the period may be further extended by S 36 of the Interpretation Act 1987 , as when read with S 5, it does not assist the applicant in dispelling the 'contrary intention' test. The Evidence 36 The Applicant filed a considerable amount of material and gave some verbal evidence during the hearing. The applicant's material consisted of his statement as Exhibit "A", 9 photographs as Exhibit "B", a further 5 photographs as Exhibit "C", a Westpac Bank Housing loan statement as Exhibit "D". 37 The Respondent filed an Index of Documents pursuant to S 58 (Exhibit "1") which contained the correspondence and material submitted to the Chief Commissioner and material which passed between the parties during the audit process. 38 The Applicant contended that it was always his intention to take up residence in the subject property, but that he was frustrated in entering into occupation, firstly by the actions and delay of the tenant in vacating and secondly by the applicant's need to renovate the kitchen and bathroom himself because of his limited financial position and his lack of knowledge of the opportunity to apply to the Chief Commissioner for an extension of time to occupy. 39 It is clear on the face of the documents submitted into evidence that the sale of the subject property (in its existing state of repair and amenity) was of a sufficient standard to offer for rental and was conditional to a 12 month residential lease which expired on the 13 February 2003. 40 On settlement as at 9 December 2002, the lease was continued by the Applicant, who received the rent up to the lease expiry date of 13 February 2003, and thereafter to the date of vacation. The Applicant allowed the lease to continue and rollover for a further 12 months term (which effectively called into operation the continuation clause for a potential further 12 month period), finally issuing a "No Grounds - Notice to Terminate" on 14 October 2003. The date for vacant possession in the Notice was 21 December 2003, being a date outside the relevant conditional period required by the legislation. 41 The Applicant is responsible for his own predicament as he had entered into a sale contract which had an inbuilt conditions and limitations, due to inclusion of the residential lease which subjected the applicant to Residential Tenancy Act and legal obligations as the substituted Lessor. These lease obligations and time provisions had the potential to inhibit and frustrate compliance with the occupation time limitations and conditions imposed by the FHOG Act, if not properly managed. In this case the failure by the Applicant to issue his Termination Notice on or by 13 February 2003 contributed to his own circumstances and his failure to occupy within the 12 month period required by S 12, quite independently of his claim of delay by the tenant and that the unit required major renovations .In addition the Applicant received rent as from 9 December 2002 until 10 December 2003 in the sum of $400.00 per fortnight and the Tribunal notes that there was some financial inducement to the Applicant to allow the tenant to remain in occupation for as long as possible. The provision of the FHOG grant is to provide assistance to an applicant for a home, not for a commercial or financial opportunity for profit. 42 Indeed, the Applicant may have been subject to the tenant insisting on vacation of the subject property as at 13 February 2004 and remaining in occupation for a longer period, by virtue of the continuation of term clause in the lease, had the tenant pursued his rights. As it was the tenant vacated on 10 December 2003, one day short of the critical period and later than originally agreed. 43 The applicant gave evidence that he was not aware of the opportunity to make an application for an extension of time, however he was clear in his evidence that he was aware of the 12 month period limitation and he was also aware that there was no specific period in which to perform the occupation as a principal place of residence, leaving as he did, to the last minute any action to seek possession of the subject property from the tenant. The Applicant then lived at the property for about 3 weeks, after the expiry of the 12 month period. Thereafter he left the unit to live with his parents at their home, for the duration of the significant renovation work. The applicant described the renovation work as "the unit was completely gutted" and his photographs as entered into evidence indicate that the unit was not habitable as a principle place of residence nor could it be regarded as liveable or functioning like a home during the renovation period. Accordingly it is accepted by the Tribunal that the Applicant did not occupy the subject property as a principle place of residence within the prescribed period and even his statement exhibit "A" deposes to the fact that as at that date (1 December 2005). In the same statement he listed his address as 196 Fowler Road Illawong. At the time of the hearing, the Applicant has not even performed his deposed intention to occupy the property as a principal residence, almost 3 years after completion of the contract on 9 December 2002 and taking into consideration the fleeting three week period, the Tribunal is not satisfied that the principles set out to establish the nature of permanence on p42 of Chief Commissioner of State Revenue v Ferrington (2004) NSWADTAP 41, have been met. In this case the decision to totally "gut" the unit to use the applicant's description, was his own decision and was not out of his control. The decision not to give earlier notice to the tenant was within the applicant's control. Those two decisions did affect the state of permanence and the nature of actual occupation ultimately attained. The applicant gave evidence of difficulty financial circumstances, in completing the renovations at each stage. Similarly the late notice to the tenant disabling the Applicant from taking possession and performing the requisite occupation as a principal residence and fulfilling the condition of the grant was not out of his control. An applicant who applies for the FHOG benefits and the supplementary benefits of exemption from stamp duty etc as an entitlement and a restricted privilege, are also subject to the corresponding obligation to perform the conditions. The grant fund is money provided by other taxpayers pursuant to a scheme devised by the law makers which has attached to the payment, a corresponding obligation, terms and conditions which must be actually performed – an intention to do it, by itself, is not enough. 44 In the Appeal Panel's decision in Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41 set out the basic principles used in determining whether an applicant has occupied a home as a principal place of residence: [41] Care must be taken in applying the principles discussed in these diverse cases to the meaning of 'principal place of residence' under the First Home Owners Grant Act 2000 because each of them occurs in the context of differing legislation where that phrase has been used. There are, however, a number of common principles which are apparent from the approach taken in each case (the principles are separated in the quote below): [42] First, the words "principal place of residence" should be given their ordinary meaning in the context in which they appear: Dean v Commissioner of Stamp Duties; Commissioner of Taxation v Miller; Re Einav Kedem and the Secretary, Department of Community Services and Health; Re Mrs VG and Secretary to the Department of Housing; and Newman v Commissioner for ACT State Revenue. Thus the Commissioner's reference to the provisions of the Land Tax Management Act 1956 is of no assistance. Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling: Dean v Commissioner of Stamp Duties; Secretary, Department of Community Services and Health v Paul Theologidi; Secretary, Department of Community Services and Health v Andrew Theologidis; Re Stanley Parzatka and The Secretary, Department of Health, Housing and Community Services; Re Alison Lesley Gains and Secretary Department of Health, Housing and Community Services and Bates v Chief Commissioner of State Revenue. Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue: Secretary, Department of Community Services and Health v Paul Theologidi; Re Stanely Parzatka and The Secretary, Department of Health, Housing and Community Services; and Re Alison Lesley Gaines and Secretary Department of Health, Housing and Community Services. Fourthly, to occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose: Re Stanely Parzatka and The Secretary, Department of Health, Housing and Community Services, Fincher v Commissioner for ACT Revenue; Re Alison Lesley Gaines and Secretary Department of Health, Housing and Community Services and Tomasian v Chief Commissioner of State Revenue. Fifthly, the short length of a person's residence, while relevant, is not determinative of the issue: Re Alison Lesley Gaines and Secretary Department of Health, Housing and Community Services. This is so since a recipient's occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible, as Gaines demonstrates. Sixthly, the reasons for a person's departure from the home must be both reasonable and adequately explained when considered objectively in the light of their personal circumstances: Re Alison Lesley Gaines and Secretary Department of Health, Housing and Community Services. In Bates the Tribunal said that "whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant" was a factor to be considered. While that is undoubtedly correct, it should not be read as stipulating a requirement that the reasons for departure must be entirely out of that persons' control. The fact in Gaines illustrate that there are circumstances, peculiar to the individual concerned, which may, objectively viewed, adequately and reasonably explain a person's decision to move out of property, but which are not entirely out of the person's control. 45 In this matter the Chief Commissioner imposed a penalty of 20% pursuant to S 45(3) which is a lesser rate that the 50% rate applied in Calcaro v Chief Commissioner of State Revenue [2004] NSWADT 158 . In Calcaro , Judicial Member Molony took into account the following factors in imposing a 50% penalty: "a) the need to deter others from not complying the conditions of grant; b) the fact that [the applicant] provided incorrect information as to when he would be occupying the premises in his application to grant; c) the fact that (as I have found) [the applicant's] initial intention was to live in the premises as his own home at the end of the tenancy; d) the fact that [ the applicant's] original intention was frustrated by his own financial circumstances; e) the opportunity cost factor; f) the fact that [the applicant] showed little respect for matters of propriety and less attention to detail in his dealings with the Administrator; g) [The applicant's] failure to be candid with the Administrator and the Tribunal; h) [The applicant's] straitened financial circumstances". 46 Applying these principles, in particular the applicant's frankness and co-operation and his financial difficulties that delayed completion of the renovation work and actual occupation, on the facts, the evidence and the applicable legislation the Tribunal finds that there has been a complete failure by the Applicant to comply and meet the eligibility criteria of the sections of the FHOG Act and that a 20% penalty is appropriate as a deterrent to others from not complying with the conditions of the grant . FHP Concession 47 As the Tribunal has found the applicant failed to satisfy the residence test within the requisite period and that the intention to occupy has also not been satisfied on the material and actions taken by the applicant to the date of the hearing, it follows on the facts in this case that the applicant has also not satisfied the residence test for the purposes of S 76 of the Duties Act 1997, in that as at the date of the hearing his 'proposed intention' had still not been effected and his financial position may be expected to continue to prevent it. In any event the requisite intention needed has for this applicant, been "hijacked" by his actions to date and his actions have been dictated as they appear to have been from the beginning by his financial decisions, in allowing the tenant to remain in occupation and the extensive nature of the renovations and his decision to return to live with his parents. It is the finding by this Tribunal that the applicant's intentions are so closely linked to his finances, that he makes commercial decisions, and is likely to continue to do so. Accordingly the Commissioner's decision is final on this issue and is affirmed. 48 The Commissioner's decision is affirmed. 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.