CITATION: Band v Chief Commissioner of State Revenue [2007] NSWADT 185 DIVISION: Revenue Division APPLICANT PARTIES: Lucy Lydia Band RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 066080 HEARING DATES: 13 February 2007 SUBMISSIONS CLOSED: 14 August 2007 DATE OF DECISION: 17 August 2007 BEFORE: Seve J - Judicial Member CATCHWORDS: Duties Act - First Home Plus Scheme - residence requirement - First Home Owners grant - reversal by administrator MATTER FOR DECISION: Principal matter Administrative Decisions Tribunal Act 1997 Duties Act 1997 First Home Owner Grant Act 2000 First Home Owner Grant Act 2000 (Vic) LEGISLATION CITED : Intergovernmental Agreement Implementation (GST) Act 2000 Interpretation Act 1987 Real Property Act 1900 State Revenue Legislation Amendment Act 2004 Taxation Administration Act 1996 Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 Australian Fencing Hire v Chief Commissioner of State Revenue [2005] NSWSC 1286 Bailey v Chief Commissioner of State Revenue [2007] NSWADT 19 Commissioner of Stamp Duties v Permanent Trustee Company limited (1987) 9 NSWLR 719 Commissioner of State Revenue v Harrison [2006] VSC 227 CPT Custodian Pty Ltd v Commissioner of State Revenue; Commissioner of State Revenue v Karingal 2 Holdings Pty Ltd [2005] HCA 53 at 26 Cullen v Chief Commissioner of State Revenue [2007] NSWADT 12 David Securities Pty Ltd v Commonwealth Bank of Australia (1991-1992)175 CLR 353 Edwards v Chief Commissioner of State Revenue [2006] NSWADT 204 Goon v Chief Commissioner of State Revenue [2007] NSWADT 17 CASES CITED: Gregoriou v Chief Commissioner of State Revenue [2003] NSWADT 145 Hafza v Chief Commissioner of State Revenue [2006] NSWADT 116 ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697 J A Pye (Oxford) Ltd and Others v Graham and Another [2002] 3 All ER 865 McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214 Powell v McFarlane (1979) 38 P & CR 452 Scurry v Chief Commissioner of State Revenue [2006] NSWADT 28 Snow v Chief Commissioner of the State Revenue [2005] NSWADT 278 Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792 United Starr-Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331 Western Australia v Ward (2002) 191 ALR 1 APPLICANT RD Band, agent REPRESENTATION: RESPONDENT H El Hage, solicitor ORDERS: The reviewable decisions are set aside and in substitution is made the decision to affirm the original decisions of the Commissioner to pay the $7,000 grant under the FHOG Act to the Applicant and to approve the Applicant's application for the First Home Plus Scheme concessions under the Duties Act and assess the Transfer and the Mortgage each with nil duty. REASONS FOR DECISION 1 This application is for review of decisions of the Respondent ("Commissioner"): (1) to recall a grant of $7,000 paid to the Applicant under the First Home Owner Grant Act 2000 ("FHOG Act") in respect to the purchase of a property at 101 Havannah Street, Bathurst ("the Property") and impose a penalty under the FHOG Act; and (2) to reverse First Home Plus concessions previously approved by the Commissioner under the Duties Act 1997 ("Duties Act") and assess transfer duty on a transfer of the Property to the Applicant ("the Transfer") and mortgage duty on a mortgage of the Property ("the Mortgage") under the Duties Act, plus interest and penalties. 2 The Tribunal had before it, documents lodged pursuant to s 58 of the Administrative Decisions Tribunal Act 1997 ("ADT Act") and written submissions on behalf of each of the parties filed prior to and, on orders from the Tribunal, after the hearing. The Tribunal also heard oral submissions on behalf of each of the parties at the hearing on 13 February 2007 and subsequently, in a telephone directions hearing on 22 March 2007. Background Facts 3 The following are the background facts which are not in dispute: (1) The Transfer was dated 26 May, 2004 and was a transfer of the Property (a home) by the brother of the Applicant to the Applicant for a consideration of $160,000. There was no evidence of any prior contract for sale. There was no evidence that the Transfer was signed by each of the parties on a date other than 26 May, 2004. (2) The Mortgage was dated 27 May 2004 and was made by the Applicant in favour of the ANZ Bank and assisted the financing of the purchase of the Property by the Applicant under the Transfer. (3) At the time of the Transfer, the Property was subject to a fixed term lease in favour of three tenants, for 11 months, due to expire just over seven months after the Transfer, on 31 December 2004, ("the Lease"). The Lease was not required to be and was not registered. (4) The Lease was not noted on the Transfer, however there is no dispute that the Applicant was aware of the Lease and accepted the Transfer of the Property from her brother, subject to the Lease. (5) The Applicant completed and lodged with the Commissioner, a standard OSR form of Application for First Home Owner Grant Scheme dated the date of the Transfer, 26 May 2004 ("the FHOG Form") for a grant under the FHOG Act. The FHOG Form included the following: (i) In the box opposite "Date of completion" in Part C of the FHOG Form, the Applicant inserted the date of the Transfer, 26 May 2004. (ii) The instructions in the FHOG Form on how to complete Part C of the FHOG Form included the following: "Date of completion for: established property – date of settlement (emphasis added) owner builder – date the building is ready for occupation as a place of residence contract to build – date the building is ready for occupation as a place of residence". (iii) On page 1 of the FHOG Form, the Applicant marked "Yes" in response to the question: "Will at least one of the Applicants be occupying the home as their principal place of residence within 12 months of either settlement or completion of construction?" (iv) Part E of the FHOG Form included the following under the heading "Applicant declaration": "4. I will be occupying the home as my principal place of residence within 12 months of the date of settlement or within 12 months of the date of completion of construction. …….11. I acknowledge that under the First Home Owner Grant Act 2000, penalties will apply for making a false or misleading statement in or in connection with an application for a first home owner grant". (v) The FHOG Form did not make provision for disclosure of any lease of the Property and the Applicant did not disclose the existence of the Lease in the FHOG Form. (6) The Applicant made an application for First Home Plus concessions under the Duties Act in respect to the Transfer and the Mortgage which application was approved. The Transfer was stamped with nil duty (on 28 May 2004) and the Mortgage was stamped exempt from duty, under the Duties Act. (7) The Transfer was registered and the Applicant became registered as the proprietor of the Property on 1 June 2004. (8) By letter dated 23 June 2004, the Commissioner requested the Applicant to provide proof that the Applicant paid for the Property. In response, by letter dated 30 June 2004, the Applicant forwarded to the Commissioner, certified copies of 2 letters to the Applicant from the ANZ Bank and from a law firm. Those letters indicated that the Applicant had paid for the Property but that settlement of the purchase occurred on 28, not 26, May 2004. (9) By letter dated 19 July 2004 from the Commissioner, the Applicant was advised that her application for the grant of $7,000 had been successful. The letter included the following: "If you lodged your application with a financial institution, payment will be available for settlement. If your home is being built under a comprehensive building contract, your grant can be used against the first progress payment. Please contact your financial institution if payment is not received within these times. If you have already settled or completed your home, or you lodged your application with the Office of State Revenue (OSR), payment will be made within five working days of this letter. Please check your account before contacting OSR. The grant is paid on the condition that the Applicant will occupy the home as their principal place of residence for a continuous period of six (6) months, commencing within 12 months of settlement or completion of the home (emphasis added). Once an Applicant has occupied the home for at least six (6) months, please complete and return the attached statutory declaration ….. If the residence requirement is not met, or if the transaction does not proceed, you must advise the Chief Commissioner in writing and repay the grant in full within 14 days. Please note there are substantial penalties for making false or misleading statements" (emphasis added). (10) The Lease terminated on its expiry and the tenants vacated the Property on 31 December 2004. After the Lease expired, the Applicant arranged for renovations of the Property to be undertaken including the installation of a new kitchen and updating of the premises. The Applicant did not lease the Property or earn any income from it during the period after the Lease expired to when the Applicant commenced occupation of the Property as her principal place of residence in late November 2005. (11) By letter dated 29 November 2005, 18 months after the date of the Transfer, the Commissioner advised the Applicant that one of the conditions for receiving the grant is that at least one applicant must occupy the home as their principal place for a continuous period of 6 months, commencing within 12 months of settlement or completion of construction of the home. The letter stated that "As this period has now passed the Office of State Revenue (OSR) requires you to confirm that the residency requirement for the grant has been met". (12) The Applicant responded to the Commissioner in letter dated 13 December 2005, by advising that at the time of settlement of her purchase of the Property on 28 May 2004, the Property was tenanted under an existing Lease expiring in December 2004 and that from December 2004 to March 2005 the Property remained vacant and that construction/renovation commenced in March 2005 and that due to insufficient funds, the work was done progressively over stages finishing in November 2005 and that throughout the construction period the Property remained vacant and from late November 2005, the Applicant commenced occupation of the house as her principal place of residence and will continue to do so for the foreseeable future. The Applicant enclosed copies of gas and electricity accounts in her name and a home and contents insurance certificate of currency in her name for the Property. (13) By letter dated 13 January 2006, the Commissioner advised the Applicant: "Information held by this Office indicates you did not meet the eligibility criteria where: An Applicant will occupy the home as their principal place of residence commencing within 12 months of completion of the eligible transaction (emphasis added). We have reversed the decision to pay the grant. As a result of this, you must repay the full $7,000 amount to the Chief Commissioner under s 45 of the FHOG Act. The Office of State Revenue has also imposed a penalty of 20% of the grant amount. …The payment should be forwarded within 21 days of the date of this notice to avoid further penalties." (14) A FHOG Notice of Assessment dated 13 January 2006 was enclosed with the letter from the Commissioner, in the total amount of $8,400 itemised as: (a) FHOG to be repaid - $7,000; plus (b) penalty of $1,400. (15) By another letter dated 13 January 2006, the Commissioner advised the Applicant that: "Based on the information now available we have reversed the decision to offer you the First Home Plus concession……In addition interest and penalty has been imposed in accordance with the Act as you did not notify this Office that you failed to meet the eligibility criteria to maintain the concession. As a result, you are required to pay the Chief Commissioner the full dutiable amount of $7,905.58." (16) A Duties Notice of Assessment dated 16 January 2006 was issued to the Applicant in the total amount of $7,905.58 itemised as: (a) transfer duty of $5,667 plus penalty of $1,133 plus interest of $297.25; and (b) mortgage duty of $583 plus penalty of $116.20 plus interest of $109.13. (17) On behalf of the Applicant, the Applicant's father, Mr Band wrote to the Commissioner in letter dated 20 February 2006, requesting that the Commissioner reconsider and reverse his decision, for the reasons given in that letter. The letter advised that the Applicant had innocently and mistakenly interpreted the words in the letter from the Commissioner dated 19 July 2004 of "occupy….within 12 months of settlement or completion of the home" to mean completion of the home in terms of renovations (as distinct from completion of construction of a new home) which did not occur until November 2005. The letter stated that had the Applicant been aware of the point, she would have applied for an extension of the 12 month period but that she did not know that an extension was available or necessary. (18) In letter dated 7 March 2006, the Commissioner advised Mr Band that the account "is still outstanding" and that "you should pay the liability before the due date to avoid paying interest". Mr Band `issued a letter in response dated 4 April 2004, advising that the Applicant is a student working part time to put herself through University, paying HECS fees and a mortgage and "does not have the $15,000 to repay the Grants and Fines so her parents are forced to pay to prevent accrual of penalty interest". (19) In letter dated 12 April 2006 to Mr Band, the Commissioner requested that documents be provided to enable determination of the objection, including a copy of all tenancy agreements for the Property, specific dates when the Applicant occupied the Property, copies of gas, electricity and telephone bills, a copy of the Applicant's University timetable and course details, a copy of the development application and copies of receipts for renovations. (20) Mr Band responded, in letter dated 8 May 2006 to the Commissioner, enclosing various documents, including a copy of the lease agreement dated 11 January 2004 relating to the Lease and a Rental Bond Lodgement Notice dated 2 April 2004 and copies of a Charles Sturt University Student card for the Applicant and course details of the Applicant and a receipt for Charles Sturt University accommodation and gas and electricity invoices addressed to the Applicant and various other invoices and quotes and receipts relating to renovations to the Property, including for a new kitchen. (21) In letter dated 31 May 2006, the Commissioner advised Mr Band that "we have unfortunately decided to disallow your daughter's objection" (emphasis added). The letter included the following: "Section 12(1) of the FHOG Act states that an Applicant for a first home owner grant must occupy the home to which the application relates (101 Havannah Place, Bathurst), as their principal place of residence for a continuous period of at least 6 months starting within the first 12 months after completion . In your daughter's instance, she did not occupy the property for a continuous period of at least 6 months within the stipulated 12 month period and therefore she did not satisfy the residency requirement. Accordingly the decision by the Chief Commissioner of State Revenue to recall the grant was correct (emphasis added). …To claim the First Home Concession, an Applicant must occupy the property as their principal place of residence for a continuous period of at least 6 months, starting within the first 12 months after the completion of the agreement or transfer. Because your daughter purchased the property on 26 May 2004 and did not occupy the property until November 2005, she did not satisfy this requirement (emphasis added)." (22) On 28 July 2006, the Applicant applied to the Tribunal for review of the Commissioner's decision to recall the FHOG with penalty, and to reverse the First Home Plus concessions and assess transfer duty on the Transfer and mortgage duty on the Mortgage plus interest and penalties. Proceedings 4 Before the hearing in this matter but subsequent to a directions hearing for the matter on 5 September 2006, by letter dated 25 October 2006 from the Crown Solicitor's Office on behalf of the Commissioner, the Tribunal was advised that the Commissioner had "failed to apply his mind to the exercise of his discretion pursuant to s 12(1A) of the FHOG Act in this matter". The letter requested that the matter be remitted to the Commissioner pursuant to s 65 of the ADT Act "so that the Chief Commissioner may turn his mind to the exercise of his discretion as to whether or not to modify the 'residency requirement' in this matter". On 9 November 2006, the Tribunal formally remitted the matter to the Commissioner for reconsideration pursuant to s 65 of the ADT Act. 5 By letter dated 11 (should have read, "1") November 2006, the Crown Solicitor's Office advised the Tribunal that the Commissioner had now exercised his discretion pursuant to s 12(1A) of the FHOG Act in such a way as to affirm his original decision. By letter dated 1 November 2006, the Commissioner advised the Applicant that he had considered the discretion available under s 12 of the FHOG Act, having regard to the particular circumstances, and determined that the discretion should not be exercised for the following reasons: "You did not occupy the property within the timeframe permitted under the Act and did not request an extension of time be considered for taking up residence. Your reason for failing to occupy the property was that you misunderstood the provisions of the Act, which is not conceded. You have received rental income from the property since you purchased it until the property underwent some minor refurbishment and as such the property does not in any respect satisfy the character of being a "first home" within the spirit of the Act. The exercise of the discretion in your circumstances would defeat the primary object of the Act." 6 At the hearing, the Commissioner did not dispute that: (1) the Transfer was or was made pursuant to an "eligible transaction" within the meaning of the FHOG Act; (2) the Applicant accepted the Transfer subject to the Lease; and (3) the Applicant commenced occupation of the Property as her principal place of residence in late November 2005 and occupied the Property as her principal place of residence continuously for a period of at least 6 months from that time. 7 At the hearing, the agent for the Applicant, the Applicant's father, Mr Band, advised that the Applicant was studying in the USA on a scholarship and accordingly, was unable to attend the hearing in person. 8 Shortly after the hearing, it came to the attention of the Tribunal that the submissions of the parties did not address the definition of "completed" in the FHOG Act and in s 76(5) of the Duties Act which, in the Tribunal's view, was relevant to the matter. By letters dated 20 February 2007 to the representatives for each of the partiers, the Tribunal directed the Commissioner to file and serve within 14 days, submissions on the definition in that legislation and directed the Applicant to file and serve within a further 21 days, submissions in response. 9 In response to the Tribunal's directions: (1) the Commissioner filed undated written submissions in respect to the definition of "completed" in the FHOG Act and in s 76(5) of the Duties Act, received by the Tribunal on 6 March 2007; and (2) the Applicant filed written submissions dated 5 March 2007 in respect to the definition of "completed" in the FHOG Act. 10 After the Tribunal made the directions in the letters dated 20 February 2007, the Tribunal formed the preliminary view that the versions of s 76 and s 76A of the Duties Act cited by the Commissioner as applicable in this case were in fact, inapplicable. By letter dated 8 March 2007 to the representatives for each of the parties, the Tribunal advised that submissions in respect to s 76(5) of the Duties Act were no longer required because of the preliminary view that, based on paragraphs 38(2) and 38(3) of Part 15 of Schedule 1 (Savings, Transitional and Other Provisions) of the Duties Act, s 76(5) of the Duties Act and s 76A were inapplicable in this case. Paragraphs 38(2) and 38(3) of Part 15 of Schedule 1 operate to apply an earlier version of s 76 (as in force immediately before 4 April 2004 and without any s 76A of the Duties Act) to transfers on or after 4 April 2004 but before 1 July 2004 and to mortgages over land the subject of such transfers, as were the Transfer and the Mortgage in this case. The letter dated 8 March 2007 of the Tribunal also proposed a telephone conference with the parties to discuss the Tribunal's preliminary view. 11 A telephone directions hearing was held on 22 March 2007. At that directions hearing, the representative for the Commissioner said that he agreed completely, with the preliminary view of the Tribunal regarding the version of s 76 of the Duties Act applicable in this case and apologised for referring the Tribunal to inapplicable provisions of the Duties Act. With the consent of the parties, the Tribunal made the following orders at the directions hearing: (1) Pursuant to s 65 of the ADT Act, the decision of the Commissioner in respect to s 76 of the Duties Act and interest and penalty in connection therewith is remitted for reconsideration by the Commissioner as follows: (a) the Commissioner to file and serve by 5 April 2007, advice to the Applicant as to information relevant to the application of the correct s 76 of the Duties Act to the circumstances and giving the Applicant opportunity to furnish information to the Commissioner in connection with the Commissioner's reconsideration of his decision in respect to s 76 of the Duties Act and interest and penalty in connection therewith, by 20 April 2007; (b) the Applicant may file and serve submissions in response by 20 April 2007; (c) the Commissioner to reconsider his decision and file and serve the reconsidered decision by 27 April 2007; (d) the Applicant may file and serve submissions in response to the reconsidered decision of the Respondent by 11 May 2007; (e) the Commissioner may file and serve counter submissions by 18 May 2007; (2) the Commissioner to file and serve submissions in respect to s 20(2) of the FHOG Act by 29 March 2007; (3) the Applicant may file and serve submissions in response to the submissions of the Commissioner referred to in 3 above, by 17 May 2007. 12 The Commissioner did not make any written submissions in respect to s 20(2) of the FHOG as referred to in the orders of 22 March 2007 and it follows that no submissions in response were made by the Applicant. 13 Although at the hearing on 13 February 2007, the agent for the Applicant advised that the Applicant was studying in the USA on a scholarship, the Commissioner issued the Commissioner's response to the order referred to in 1(a) above, in letter dated 28 March 2007, to the address of the Property in Bathurst, instead of the address of the Applicant's agent in Manly. The Commissioner later issued a follow up letter dated 9 May 2007, again to the address of the Property in Bathurst. Finally, the Commissioner issued a letter dated 14 May 2007, with copies of the 2 letters enclosed, to the address of the agent for the Applicant in Manly. This delayed the submission from the Applicant in response, following which the parties applied to the Tribunal for new orders with an extended timetable in connection with the reconsideration by the Commissioner of his decision in respect to s 76 of the Duties Act. Representatives for each of the parties signed proposed Consent Orders dated 26 May 2007 which did not include opportunity for the Applicant to make submissions in response to the Commissioner's decision regarding s 76 of the Duties Act. Those proposed Consent Orders included that the Commissioner file and serve by 17 July 2007, submissions in reply to the Commissioner's own decision on s 76 which did not make sense. 14 On 28 May 2007, the Tribunal made orders as proposed under the signed Consent Orders with the exception that the Tribunal ordered that the Applicant, instead of the Commissioner, file and serve submissions in reply to the Commissioner's decision on s 76, by 10 July 2007 (instead of 17 July 2007). The orders of the Tribunal of 28 May 2007, were: 1. The Commissioner is to provide the Applicant with a copy of the Commissioner's letter to the Applicant dated 28 March 2007, by 25 May 2007; 2. The Applicant is to file and serve any further submissions and/or evidence by 12 June 2007; 3. The Commissioner is to provide the Applicant and the Tribunal with the Commissioner's decision regarding s 76 of the Duties Act by 26 June 2007; 4. The Applicant is to file and serve submissions in reply by 10 July 2007. 15 The Commissioner's letter to the Applicant dated 28 March 2007 quoted the correct version of s 76 of the Duties Act applicable in this case and invited the Applicant to make representations to the Commissioner addressing the requirement of s 76, that the home be occupied or intended to be occupied by the Applicant on or before settlement or within 12 months after settlement, as the principal place of residence. 16 In letter dated 12 June 2007, the agent for the Applicant made written submissions in response to the letter dated 28 March 2007 from the Commissioner. 17 By letter dated 26 June 2007 to the agent for the Applicant (filed with the Tribunal), the Commissioner provided the Commissioner's reconsidered decision on s 76 of the Duties Act which was as follows: "In response to your father's letter of 12 June 2007 as well as the information provided to the Office of State Revenue previously, I advise that the Chief Commissioner is unable to accept your father's assertions that you intended to occupy the property within the twelve month period. In order to claim the concessions you must have occupied or intended to occupy the property within 12 months after settlement. The Chief Commissioner has on the information available maintained that you did not meet this condition and as a consequence you are not entitled to the concessions." 18 The agent for the Applicant filed and served written submissions in response in letter dated 4 July 2007. 19 Three and a half weeks after the Tribunal made its orders on 28 May 2007, by letter dated 22 June 2007 from the Crown Solicitor's Office to the Tribunal, the Commissioner applied for an order that the Commissioner be allowed 2 weeks, to 24 July 2007, to file and serve submissions in response to the Applicant's submissions in response the Commissioner's decision on s 76. On 28 June 2007, the Tribunal amended its orders of 28 May 2007 to include an additional order that the Commissioner file and serve submissions in reply by 17 July 2007. 20 On 17 July 2007, the Crown Solicitor's Office for the Commissioner, filed and served supplementary submissions in reply. 21 Later, the agent for the Applicant, Mr Band, filed and served further written submissions dated 23 July 2007, in response to the reconsidered decision of the Commissioner, which included a copy of a letter from the ANZ Bank dated 23 July 2007 and a statement by Mr Band that a sworn statutory declaration of the Applicant consistent with the submissions would be lodged with the Tribunal by 3 August 2007. By letter dated 30 July 2007 to the Tribunal from the Crown Solicitor's Office, the Commissioner objected to further evidence being filed and served by the Applicant. On 3 August 2007, the agent for the Applicant filed with the Tribunal, a letter of further submissions dated 2 August 2007 with a statutory declaration sworn by the Applicant in Sydney on 1 August 2007 and another copy of the letter from the ANZ Bank. 22 The further submissions and evidence of the Applicant filed with the Tribunal on 23 July 2007 and 3 August 2007 were respectively filed 13 days and 23 days out of time. However, the Tribunal considered that such submissions and evidence may be relevant factual material to this matter and in the interests of finalising the matter, on 7 August 2007, the Tribunal allowed such submissions and evidence and ordered that apart from the Commissioner being allowed 7 days within which to file and serve submissions in reply, no further submissions be lodged by any of the parties. 23 On 14 August 2007, the Crown Solicitor's Office for the Commissioner, filed and served written submissions in reply. Format of Decision 24 As the application in this matter relates to decisions of the Commissioner: (1) under the FHOG Act; and (2) under the Duties Act and the Taxation Administration Act 1996 ("TAA"), this decision will deal with each separately commencing with the decision under FHOG Act and then, the decision under the Duties Act and the TAA. FHOG Act - Legislation 25 Section 3 of the FHOG Act provides that in the Act: "'completed' – for completion of an eligible transaction, see section 13 (5). "terms contract" means a contract for the sale or purchase of land under which the purchaser: (a) is obliged to make 2 or more payments to the vendor after the execution of the contract and before becoming entitled to a conveyance or transfer of the land, and (b) is entitled to possession or occupation of the land before becoming entitled to a conveyance or transfer of the land." 26 Section 13(5) of the FHOG Act provides: "An eligible transaction is completed when: (a) in the case of a contract for the purchase of a home: (i) the purchaser becomes entitled to possession of the home under the contract, and (ii) except in the case of a terms contract, if the purchaser acquires an interest in land under the contract that is registrable under a law of the State—the purchaser's interest is registered under that law, or (b) in the case of a contract to have a home built—the building is ready for occupation as a place of residence, or (c) in the case of the building of a home by an owner builder—the building is ready for occupation as a place of residence." 27 Sections 12(1),(1A) and (1B) of the FHOG Act as they relevantly apply state 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 for a continuous period of at least 6 months. (1A) However, if the Chief Commissioner is satisfied there are good reasons to do so, the Chief Commissioner may: (a) approve a shorter period, or (b) exempt the Applicant from the requirement to comply with subsection (1). (1B) The period of occupation required under subsection (1), or the shorter period approved under subsection (1A) (a), must start within 12 months after completion of the eligible transaction or a longer period approved by the Chief Commissioner (emphasis added)" 28 Section 20 of the FHOG Act provides: "(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 for a continuous period of at least 6 months commencing within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner, or both. (2) If a first home owner grant is paid before completion of the relevant eligible transaction, the payment is made on condition that, if the transaction is not completed within 12 months of the commencement of the transaction or a longer period allowed by the Chief Commissioner, the Applicant must within 14 days after the end of the period concerned: (a) give written notice of that fact to the Chief Commissioner, and (b) repay the amount of the grant. (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." 29 Section 21 of the FHOG Act provides: "(1) The Chief Commissioner may authorise the payment of a first home owner grant on conditions the Chief Commissioner considers appropriate. (2) A condition imposed by the Chief Commissioner (under this section or any other provision of this Act) may require a person on whose application the first home owner grant is paid: (a) to give notice of non-compliance with the condition within a period stated in the condition, and (b) to repay the grant within a period stated in the condition. (3) In the case of a joint application … (4) A person who fails to comply with a condition imposed by the Chief Commissioner (under this section or any other provision of this Act) is guilty of an offence. Maximum penalty (subsection (4)): 50 penalty units." Commissioner's Submissions on FHOG Act 30 The Commissioner's undated submissions received by the Tribunal on 6 March 2007 included the following: "6. A registered proprietor of land has a prima facie right to possession: see Powell v McFarlane (1979) 38 P & CR 452, at 470. A person can be in possession of land without being in occupation: see for example Western Australia v Ward (2002) 191 ALR 1, at para [518] per McHugh. At common law, where land is purchased subject to a lease, the purchaser will be in possession of the Property once he or she becomes entitled to receive rents and profits. This reflects the common law meaning of the concept of "possession", namely, control or use of land which enables [the purchaser] to enjoy its profitable use and returns" see P Butt, The Standard Contract for Sale of Land in New South Wales , LBC, 1998 (2nd Ed.) at para 1.3, pp 183-184 … 7. Consistently with the common law meaning, Ms Band became entitled to possession of the home on 28 May 2004 (indeed, at common law, she was in possession). On that date, Ms Band became the registered proprietor of the Property. She also assumed the right to (or at least became entitled to) receive its rents and profits. It follows, that the Applicant became entitled to possession of the home for the purposes of s 13(5)(a)(i) of the FHOG Act on 28 May 2004. 8. This is consistent with the definition of "possession" under the Conveyancing Act 1999. Under s 7(1) of that Act, possession, when used with reference to land "includes receipt of income therefrom"; see also s 66 K(2). Thus, for the purposes of the Conveyancing Act, Ms Band was in possession of the home on 28 May 2004. The Tribunal should adopt an interpretation of "possession" for the purposes of s 15(3)(a)(i) which is consistent with the meaning of that term under the Conveyancing Act, particularly given that the Act applies to regulate the conveyance of land in New South Wales. Such an approach, which maintains a consistency between relevant applicable legislation, is to be preferred: see the comments of Kirby J in Commissioner of Stamp Duties v Permanent Trustee Company limited (1987) 9 NSWLR 719 at 723-724 and 727. 9. The Chief Commissioner notes that such an approach is also consistent with the position under a standard contract for sale. Had the Applicant and he brother entered a standard contract, Ms Band would have been in "possession" of the Property on 28 May 2004 for the purposes of various clauses under the contract (and, in turn, for the purposes of s 13(5)(a)(i)) when she became entitled to receive the rents and profits: see Butt at paras [1.3], [18.18] & [19.23]. Again, an interpretation of possession for the purposes of s 13(5)(a)(i) which is consistent with the meaning of that term under a standard contract for sale is to be preferred. 10. The Commissioner further submits that in considering the meaning of "entitled to possession of the home" within s 13(5)(a)(i), the Tribunal must adopt an interpretation which is consistent with the purpose and object of the FHOG Act: s 33 of the Interpretation Act 1987 (NSW)… 11. An interpretation of s 13(5)(a)(i) to mean that, in the circumstances where the property is purchased subject to a lease, the purchaser becomes entitled to possession of the home after the lease expires (or, more accurately, when the tenant vacates the property, since a tenant may remain in the property after the lease term "expires") would be inconsistent with the objective of the FHOG Act to encourage and assist home ownership by establishing a scheme for the payment of grants to first home owners: see Long Title. In particular, such an interpretation would allow an applicant to purchase a property that is subject to a lease and retain the property as an investment property whilst the tenant remains in the property for a number of years. The 12 month period in s 12(1B), within which the applicant must commence occupation of the property as his or her principal place of residence, would commence only when the tenant vacates the property (perhaps a number of years after the date of purchase). Clearly, such an approach would be inconsistent with the purpose and objective of the legislation as it would allow applicants to use the First Home Owner Grant to fund the purchase of investment properties. 12. Such an interpretation would also be inconsistent with previous decisions of the Tribunal which have accepted that, in the case of a property purchased subject to a lease, the 12 month period within which the applicant must commence occupation of the property as his or her principal place of residence starts on the day of settlement: see for example Gregoriou v Chief Commissioner of State Revenue [2003] NSWADT 145 and Goon v Chief Commissioner of State Revenue [2007] NSWADT 17. 13. For the reasons above, the Chief Commissioner submits that, for the purposes of s 13(5)(a)(i) of the FHOG Act, Ms Band became entitled to possession of the home on 28 May 2004. It follows that the period of 12 months referred to in s 12(1B) commenced on the same day." Decision on FHOG Act 31 The submissions of the Commissioner on the FHOG Act are not accepted for the following reasons. 32 The definition of "completed" in s 3 of the FHOG Act refers to s 13(5), so that for the purposes of the FHOG Act, if paragraph (ii) of s 13(5)(a) is applicable, a contract for purchase of a home is "completed" when both of paragraphs (i) and (ii) of s 13(5)(a) are satisfied. This means that if paragraph (ii) of s 13(5)(a) is applicable, a contract for purchase of a home is "completed", within the meaning of the FHOG Act, on the last of the dates upon which the events referred to in each of paragraphs (i) and (ii) of s 13(5)(a) occur, since it is only from the last of such dates that both of paragraphs (i) and (ii) of s 13(5)(a) are satisfied. 33 The eligible transaction in this case was not a terms contract (as defined) and the interest in the Property that was acquired by the Applicant under it was registrable under a law of the State, namely, the Real Property Act 1900. Therefore, paragraph (ii) s 13(5)(a) is applicable in this case. The Applicant's interest was registered under the Real Property Act 1900 on 1 June 2004 (s 36(6A) of the Real Property Act 1900) and accordingly, that is the date for the purposes of s 13(5)(a)(ii) of the FHOG Act in this case. Paragraph 7 of the Commissioner's undated submissions asserted that the Applicant became the registered proprietor of the Property on 28 May 2004 however, this is not accepted on the agreed facts and in the context of s 13(5)(a)(ii) of the FHOG Act. 34 When did the Applicant become "entitled to possession of the home under the contract" within the meaning of s 13(5)(a)(i) of the FHOG Act? If the Applicant became "entitled to possession of the home under the contract" on or before 1 June 2004, then, for the purposes of the FHOG Act, 1 June 2004 was the date upon which the contract in this case was completed. If the Applicant became "entitled to possession of the home under the contract" after 1 June 2004, then, for the purposes of the FHOG Act, the contract in this case was completed on that later date. 35 Section 13(5)(a)(i) of FHOG Act refers to "possession", not an "estate in possession" (such as is used in s 14(2)(b) of the Real Property Act 1900 and s10(a) of the Land Tax Act 2005 (Vic)). Although from the point of view of the doctrine of estates, a freehold owner of land that is subject to a lease is still an owner of an "estate in possession" (Land Law by Peter Butt, Fourth Edition, at paragraph [622]), the freehold owner is not in "possession" of the land during the term of the lease. The expression "freehold estate in possession" (in s10(a) of the Land Tax Act 2005 (Vic)), has been held by the High Court to include present enjoyment of the fruits of the estate (CPT Custodian Pty Ltd v Commissioner of State Revenue; Commissioner of State Revenue v Karingal 2 Holdings Pty Ltd [2005] HCA 53 at 26). However, this is not relevant to "possession". 36 "Possession" is an entirely different concept to an "estate in possession" which is a doctrine of ownership. In Land Law by Peter Butt, Fourth Edition, at paragraphs 501 and 502, it is stated: "[501] English law has long distinguished between ownership and possession of property. Nowhere is this more evident than in land law. … [502] Essentially, possession is a fact, independent of other facts and of legal rules. Ownership on the other hand, is the creation of law….". 37 In s 13(5)(a)(i) of the FHOG Act, the expression that is used is "entitled to possession". As such, both law and fact are involved. The issue is "entitled at law to possession in fact". On an ordinary interpretation, and in the scheme of the FHOG Act referred to hereunder, the entitlement the subject of 13(5)(a)(i) of the FHOG Act must be a present entitlement. 38 Powell v McFarlane (1979) 38 P & CR 452 ("Powell v McFarlane") referred to in the submissions of the Commissioner, was an English decision of Justice Slade, relating to adverse possession. That decision was later described by Lord Browne-Wilkinson (with whom the other Lords agreed) in the House of Lords in J A Pye (Oxford) Ltd and Others v Graham and Another [2002] 3 All ER 865 as "a remarkable judgment at first instance" because "Slade J traced his way successfully through a number of Court of Appeal judgments which were binding on him so as to restore a degree of order to the subject and to state clearly the relevant principles". Lord Browne-Wilkinson agreed "entirely" with the statement of the law as to the common law meaning of "possession" at p 469 of the decision of Justice Slade which was as follows: "Possession of land, however, is a concept which has long been familiar and of importance to English lawyers, because (inter alia) it entitles the person in possession, whether rightfully or wrongfully, to maintain an action of trespass against any other person who enters the land without his consent, unless such other person has himself a better right to possession. In the absence of authority, therefore, I would for my own part have regarded the word 'possession' in the 1939 Act as bearing the traditional sense of that degree of occupation or physical control, coupled with the requisite intention commonly referred to as animus possidendi , that would entitle a person to maintain an action of trespass in relation to the relevant land; …" 39 In Powell v McFarlane, Justice Slade, restated a few basic principles relating to the concept of possession under English law, reciting firstly the principle that: "(1) In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land, as being the person with the prima facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner." 40 The Commissioner's submissions cited the decision of Justice Slade in Powell v McFarlane as authority for the principle that "a registered proprietor of land has a prima facie right to possession". However, this is not the principle stated by Justice Slade in Powell v McFarlane. The principle, as stated by Justice Slade in Powell v McFarlane is not without caveat. It begins with the words "in the absence of evidence to the contrary". Furthermore, Justice Slade indicates that the law will ascribe possession "to persons who can establish a title as claiming through the paper owner". 41 It is not disputed in this case that the Applicant accepted title to the Property subject to the Lease. This is "evidence to the contrary" for the purposes of the principle stated by Justice Slade. The lessee under the Lease in this case is a person to whom possession of the Property can be ascribed at law during the term of the Lease, since the lessee is a person "who can establish a title as claiming through the paper owner", by virtue of s 42(1)(d) of the Real Property Act 1900. 42 Section 42(1)(d) of the Real Property Act 1900 provides: "(1) Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall, except in case of fraud, hold the same, subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded except: (a)..(b)..(c)..;and (d) a tenancy whereunder the tenant is in possession or entitled to immediate possession, and an agreement or option for the acquisition by such a tenant of a further term to commence at the expiration of such a tenancy, of which in either case the registered proprietor before he or she became registered as proprietor had notice against which he or she was not protected: Provided that: (i) The term for which the tenancy was created does not exceed three years, and (ii)….." 43 Since the Lease was for a term less than 3 years and the tenants under the Lease were in possession of the Property at the date of the Transfer and the Applicant was aware of the Lease before she became registered as proprietor of the Property, under 42(1)(d) of the Real Property Act 1900, the Applicant's estate in the Property was subject to the Lease (Alcova Holdings Pty Ltd v Pandarlo Pty Ltd (1988) 15 NSWLR 53 at 58-59). 44 The decision of Justice McHugh in Western Australia v Ward (2002) 191 ALR 1 referred to in the Commissioner's submissions is a minority judgement in a case involving native title. The referral of the Tribunal by the Commissioner to the decision seems obscure. Furthermore, in my view, the paragraph (518) of the decision relied upon by the Commissioner, does not assist the Commissioner's submissions. Paragraph 518 of the decision relied upon by the Commissioner reads as follows: "In determining whether a legal right to exclusive possession has been given, it is important to distinguish between exclusive possession and occupation or sole occupation. The failure to do so is one reason why, in my respectful opinion, the reasoning of the majority Justices in Wik went askew. A person may retain legal possession - exclusive possession - even though some other person has sole physical occupation of land. Possession and occupation - even sole occupation - are different concepts [575]. As Windeyer J pointed out in Radaich v Smith [574], "persons who are allowed to enjoy sole occupation in fact are not necessarily to be taken to have been given a right of exclusive possession in law." In Chrystall v Ehrhorn [575], Edwards J pointed out that giving exclusive use and occupation of land to a contractor was not the same as giving the contractor a lease of the land. Although the agreement in that case gave the contractor "the sole use of at least 140 acres" of land to graze the employer's cows, the agreement was merely a contract by the employer to employ the contractor "to perform certain services"[576]." 45 In the above quoted paragraph, Justice McHugh treats the legal right to possession, or, "legal possession" as synonymous with "exclusive possession". This does not conflict with and by necessary implication supports a finding that a person is not entitled to possession of land when another person has the right to exclusive possession of that land under a lease. 46 The authorities cited by the Commissioner do not support the Commissioner's submission that: "At common law, where land is purchased subject to a lease, the purchaser will be in possession of the Property once he or she becomes entitled to receive rents and profits". 47 Where land is purchased subject to a lease, although the purchaser may be entitled to receive rents and profits, the purchaser does not have a present entitlement to possession of the property during the currency of the lease see: Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792 at 45 - 49. The Trust Co of Australia case involved a registered lease, however, the same reasoning should apply in respect to an unregistered lease not required to be registered, of which the purchaser was aware, as is the case in this matter (United Starr-Bowkett Co-operative Building Society (No 11) Ltd v Clyne (1967) 68 SR (NSW) 331). 48 The definition of "possession" in s 7(1) of the Conveyancing Act 1919 provides: "'possession', when used with reference to land, includes the receipt of income therefrom". 49 This supports that the receipt of income from land is not of itself, "possession". Were it so, it would not need to be expressly included in the definition of "possession" in s 7(1) of the Conveyancing Act 1919. 50 The opening words of s 7(1) of the Conveyancing Act 1919 are: "In the interpretation of this Act, and of any rules or regulations made thereunder". The FHOG Act is neither part of the Conveyancing Act 1919, nor a rule or regulation made thereunder. Although the definition of "possession" in s 7 (1) of the Conveyancing Act 1919 is applicable to that Act and the rules and regulations made thereunder, it is not applicable to the FHOG Act. 51 There is no equivalent in the FHOG Act, to the definition of "possession" in s 7 (1) of the Conveyancing Act 1919. Neither is there anything else in the FHOG Act that includes the receipt of income within the meaning of "possession" in the FHOG Act. To the contrary, the scheme of the FHOG Act points to "entitled to possession", where used in the definition of "completed" in s 13(5)(a)(i) of FHOG Act, as being intended to have its ordinary meaning and not a meaning that includes the receipt of income. Such scheme is observed from the following provisions of the FHOG Act: (1) Paragraph (b) of the definition of "terms contract" in s 3 of the FHOG Act distinguishes between "entitled to possession or occupation" and "entitled to a conveyance or transfer". This indicates that absent a contrary intention elsewhere, "entitled to possession or occupation" is not intended to be synonymous with "entitled to a conveyance or transfer" in the FHOG Act. (2) s 5(3)(a) of the FHOG Act provides that subject to subsection (4), an interest is not a relevant interest at a particular time unless the holder of the interest has, or will have within 12 months after that time (or a longer time allowed by the Chief Commissioner), a right to immediate occupation of the land (emphasis added). This provision effectively deems a right to occupy within 12 months after a particular time, to be a right to immediate occupation at that time, for the purposes of s 5 of the FHOG. Absent anything to the contrary elsewhere, this indicates that a right to immediate occupation of land is important and is in focus for the purposes of the FHOG Act. (3) Subsection (a)(ii) of the definition of "completed" in s 13(5), which (as aforementioned) relates to where a purchaser's interest is registrable, does not apply to a terms contract. This indicates that where entitlement to possession or occupation precedes entitlement to a transfer (as is the case under a terms contract), entitlement to possession (which, as aforementioned, must be possession in fact) or occupation, as distinct from entitlement to the conveyance or transfer, is paramount for s13(5) of the FHOG Act. 52 In Commissioner of Stamp Duties v Permanent Trustee Company limited (1987) 9 NSWLR 719 referred to in the Commissioner's submissions, Justice Kirby held that it is proper for courts to endeavour to so construe "interrelated" statutes as "to produce a sensible, efficient and just operation of them in preference to an inefficient, conflicting or unjust operation". Even if the FHOG Act and the Conveyancing Act 1919 are regarded as interrelated statutes, construing "possession" as having its ordinary meaning in the FHOG Act (including in s 13(5)(a)(i)) whilst having a different, defined meaning in the Conveyancing Act 1919, does not give the statutes inefficient, conflicting or unjust operation. To the contrary, in the scheme of the FHOG Act aforementioned, ascribing the defined meaning of "possession" in the Conveyancing Act 1919 (that includes the receipt of income) to "possession" in s 13(5)(a)(i) of FHOG Act, instead of its ordinary meaning, results in an unjust operation of the FHOG Act. This is because, on the Commissioner's interpretation, if an applicant acquires a home subject to a lease that expires shortly before expiry of the 12 month period, the applicant will only have a very short period (instead of the 12 month period contemplated) within which to satisfy s 13(5)(a)(i) of FHOG Act. 53 The standard contract for sale concept of "possession" is inapplicable in this case as the Applicant and her brother did not enter into any standard contract for sale. In any event, for the same reasons as stated in respect to the Conveyancing Act 1919 definition of "possession", the defined meaning of "possession" in the standard contract for sale does not apply to the FHOG Act. 54 Section 33 of the Interpretation Act 1987 referred to by the Commissioner provides that: "In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object". The purpose or object of the FHOG Act as stated under the long title to the FHOG Act is relevantly "to encourage and assist home ownership, and to offset the effect of the Goods and Services Tax on the acquisition of a first home, by establishing a scheme for the payment of grants to first home owners". 55 Similarly, the object of the FHOG Act, as stated in the Explanatory Notes to the Bill which on enactment became the FHOG Act was: "to set up the first home owner grant scheme for New South Wales, under the general administration of the Chief Commissioner of State Revenue. The scheme is designed to encourage and assist home ownership and to offset the effect of the Goods and Services Tax (GST) on first home buyers. The core principles are as agreed to by the Commonwealth, States and Territories in the Intergovernmental Agreement on the Reform of Commonwealth-State Financial Relations in June 1999. The Bill provides for a maximum payment of $7000 to first home owners on and after 1 July 2000, if they satisfy certain criteria and other requirements set out in the Bill and described below". 56 Schedule 1 to the Intergovernmental Agreement Implementation (GST) Act 2000 sets out the Intergovernmental Agreement. Clauses 15 and 16 of the Intergovernmental Agreement provide as follows: "15 To offset the impact of the introduction of a GST, the States and Territories will assist first homebuyers through the funding and administration of a new uniform First Home Owners Scheme. 16 This assistance will be provided to first home owners consistent with Appendix D to this Agreement." 57 Paragraph D1 of Appendix D to the Intergovernmental Agreement provides that the States and Territories will make legislative provision for the First Home Owners Scheme (FHOS) from 1 July 2000 which will incorporate programme criteria consistent with principles listed in that paragraph including: "(vii) An eligible home must be intended to be a principal place of residence and occupied within a reasonable period. The home must be located in the State or Territory in which the application is made. Applicants who have entered into a financing mechanism which involves a shared equity arrangement will be eligible." 58 Paragraph D3 of Appendix D to the Intergovernmental Agreement provides that "Further details concerning eligibility criteria consistent with the above principles are to be agreed between the Commonwealth and each State and Territory". 59 The Tribunal is not aware of any agreement between the Commonwealth and NSW pursuant to Paragraph D3 of Appendix D to the Intergovernmental Agreement on further details for the residence requirement of the eligibility criteria. 60 Interpretation of "entitled to possession" in s 13(5)(a)(i) of the FHOG Act as "presently entitled at law to possession in fact" promotes the purpose and object underlying the FHOG Act, to encourage and assist home ownership consistent with the principles agreed under the Intergovernmental Agreement, in a way that the construction proffered by the Commissioner does not. This is because, as aforementioned, on the Commissioner's interpretation, if an applicant acquires a home subject to a lease that expires shortly before expiry of the 12 month period, the applicant will only have a very short period (instead of the 12 month period contemplated) within which to satisfy s 13(5)(a)(i) of FHOG Act. For this reason, under s 33 of the Interpretation Act 1987, it is the former interpretation that is to be preferred over the latter and not vice versa as submitted by the Commissioner. 61 The Commissioner submitted that an interpretation of s 13(5)(a)(i) to mean that, where property is purchased subject to a lease, the purchaser becomes entitled to possession after the lease expires, would allow an Applicant to purchase a property subject to a lease and retain the property as an investment property whilst the tenant remains in the property for a number of years and would be inconsistent with the purpose and objective of the FHOG Act. This submission over-looks s 20(2) of the FHOG Act which provides that if a first home owner grant is paid before completion of the relevant eligible transaction, the payment is made on condition that, if the transaction is not completed within 12 months of the commencement of the transaction or a longer period allowed by the Commissioner, the Applicant must within 14 days after the end of the period concerned: (a) give written notice of that fact to the Commissioner, and (b) repay the amount of the grant. 62 Section 20(2) of the FHOG Act limits the period in respect to which the purchase of a property subject to a lease may continue to be out of the possession of the purchaser, to 12 months after the commencement of the transaction or to a longer period allowed by the Commissioner. This is consistent with s 5(3)(a) of the FHOG Act which provides that an interest is not a relevant interest at a particular time unless the holder of the interest has, "or will have within 12 months after that time (or a longer time allowed by the Chief Commissioner), a right to immediate occupation of the land". Accordingly, the Commissioner's submission can not be accepted. 63 Regarding earlier decisions of the Tribunal referred to by the Commissioner, the definition of "completion" in s 13(5)(a)(i) of FHOG Act appears not to have been raised by any party to earlier decisions of the Tribunal and has not been previously considered by the Tribunal. 64 In Gregoriou v Chief Commissioner of State Revenue [2003] NSWADT 145 and Goon v Chief Commissioner of State Revenue [2007] NSWADT 17 referred to in the Commissioner's submissions, s 13(5)(a)(i) was not of significance (as it is in this case) for the outcome of those cases on their facts. In Gregoriou, the tenants under the lease ("original lease") that was in existence at the time of purchase of the subject property vacated the property a few weeks after settlement of the purchase and the Applicant re-let the property some months later, such re-letting still being in existence after the expiration of 12 months after termination of the original lease. The Tribunal set aside the Commissioner's decision to recall the grant in Gregoriou however, in McKenzie v Chief Commissioner of State Revenue [2005] NSWADT 214, the President of the Tribunal stated [at 19]: "I agree with Needham JM that Gregoriou was wrongly decided" but this was in the context of the interpretation in Gregoriou of s 45(1) of the FHOG Act as conferring a discretion on the Commissioner, not in connection with s 13(5)(a)(i) of FHOG Act which was not considered in McKenzie. In Goon, the tenants under the lease that was in existence at the time of purchase of the subject property vacated the property less than 2 months after settlement of the purchase and, like Gregoriou, the Applicant re-let the property for more than 12 months after the expiration of that lease. 65 Section 13(5)(a)(i) of the First Home Owner Grant Act 2000 (Victoria) is in identical terms to s 13(5)(a)(i) of the FHOG Act with the exception that the Victorian section also refers to "(or a nominee of the purchaser)". The Victorian s 13(5)(a)(i) was considered in Commissioner of State Revenue v Harrison [2006] VSC 227. In that case, Justice Hollingworth observed [at 29] that: "The construction of s 13(5) does not appear to have been the subject of judicial consideration, in Victoria or elsewhere under the national grant scheme". The construction of s 13(5) in Victoria and its equivalent nationally, does not appear to have been considered again since Justice Hollingworth's decision. Justice Hollingworth held [at 41] that on a proper construction of s 13(5)(a)(i), it applies "when the purchaser first becomes 'entitled to possession under the contract'" (emphasis added). 66 In this case, since the Transfer was accepted by the Applicant subject to the prior existing Lease of the Property, the Applicant first became presently entitled at law to possession in fact under the Transfer (or, if applicable, under the eligible transaction pursuant to which the Transfer was made), immediately after the Lease terminated. The Lease terminated upon its expiry on 31 December 2004. Accordingly, both of paragraphs (i) and (ii) of subsection (a) of s 13(5) were satisfied and "completion" (within the meaning of the FHOG Act) of the eligible transaction in this case, occurred on 1 January 2005. 67 Since "completion" of the eligible contract in this case occurred on 1 January 2005 and it is not disputed that the Applicant occupied the Property as her principal place of residence continuously for a period of at least 6 months from late November 2005 (within 12 months after "completion" on 1 January 2005), the Applicant satisfied s 12(1) of the FHOG Act in this case. 68 For the foregoing reasons, there was no obligation on the Applicant to give any written notice to the Commissioner or to repay the grant to the Commissioner under s 20(3) of the FHOG Act. 69 This conclusion means that the grant was actually made by the Commissioner before completion (as defined). However, the condition in s 20(2) of the FHOG Act was satisfied because the eligible transaction was completed on 1 January 2005, within 12 months of the commencement date (as defined) of 24 May 2004. 70 The grant was paid on the condition (which the Commissioner has power to impose under s 21(1) of the FHOG Act) set out in the letter from the Commissioner of State Revenue to the Applicant dated 19 July 2004, that "the Applicant will occupy the home as their principal place of residence for a continuous period of six (6) months, commencing within 12 months of settlement or completion of the home". On its face, this requirement (the "Commissioner's requirement") was different to the "residence requirement" as defined in the FHOG Act since the residence requirement in s12 of the FHOG Act uses the expression "completion" as defined in s 13(5) and not "settlement" which is not defined or even used in the FHOG Act (and was not defined in the letter). It might be argued that "settlement" in the letter was intended to mean "completion" as defined in the FHOG Act but this is unclear. 71 Section 21(2) of the FHOG Act provides that "A condition imposed by the Chief Commissioner (under this section or any other provision of this Act) may require a person on whose application the first home owner grant is paid: (a) to give notice of non-compliance with the condition within a period stated in the condition, and (b) to repay the grant within a period stated in the condition". 72 The letter from the Commissioner of State Revenue dated 19 July 2004 included the statement: "If the residence requirement is not met, or if the transaction does not proceed, you must advise the Chief Commissioner in writing and repay the grant in full within 14 days". 73 I find that the last-mentioned statement in the letter dated 19 July 2004 was a summary of the Applicant's obligations under s 20 of the FHOG Act rather than a new requirement imposed by the Commissioner under s 21(2) of the FHOG Act. This is because: (1) the statement in the letter refers to the "residence requirement" which is an expression defined in the FHOG Act and not defined or even elsewhere referred to in the letter; (2) the statement in the letter refers to: "If the residence requirement is not met, or if the transaction does not proceed" whereas, the Commissioner's requirement only refers to "the Applicant will occupy the home as their principal place of residence for a continuous period of six (6) months, commencing within 12 months of settlement or completion of the home" without any mention of the transaction not proceeding; and (3) the statement in the letter does not refer to "notice of non-compliance with the condition" as contemplated by s 21(2) of the FHOG Act. 74 Accordingly, even if the expression "settlement" in the letter was intended to have its ordinary meaning (and not a meaning synonymous with "completed" as defined in the FHOG Act) such that the Commissioner's requirement was different to the "residence requirement" as defined in the FHOG Act, failure to comply with the Commissioner's requirement: (1) did not mean that the Applicant was required to repay the grant under the FHOG Act; but (2) did mean that the Applicant could be exposed to a penalty under s 21(4) of the FHOG Act, although, the Applicant's confusion as to the meaning of the Commissioner's requirement might be a mitigating factor. However, as this is not an area within the jurisdiction of the Tribunal, s 21(4) of the FHOG Act is not considered any further. 75 For the foregoing reasons, s 12(1A) of the FHOG Act is not relevant to this case. 76 If I am wrong, and the submissions of the Commissioner on the FHOG Act are to be accepted (although, for the abovementioned reasons, I don't believe that they can be), in my view: (1) for the reasons that I have given in Cullen v Chief Commissioner of State Revenue [2007] NSWADT 12 at 21-44, the Commissioner had power to extend the 12 month period referred to in s 12(1B) of the FHOG Act after such period had expired; and (2) for the reason which follows, on the material before the Tribunal, the Commissioner should have favourably exercised his discretion under s 12 (1B) of the FHOG Act and extended the 12 month period in this case, by 6 months, to the date when the Applicant commenced occupation of the Property as her principal place of residence in late November 2005. 77 The reason why the Commissioner should have favourably exercised his discretion under s 12 (1B) of the FHOG Act and extended the 12 month period under that Section in this case (assuming s 12(1B) was otherwise not complied with) is: (1) the Applicant gave reasonable grounds for the extension, consistent with intended occupation of the Property as her principal place of residence, namely, renovations to the Property, which could not reasonably have been commenced during the term of the Lease to which the Applicant's interest in the Property was subject, nor reasonably have been undertaken during occupation of the Property by the Applicant (e.g. installation of a new kitchen); (2) the Applicant did not re-let the Property; (3) the Applicant's conduct was not inconsistent with the Applicant intending to occupy the Property as her principal place of residence; (4) the period of the extension of 6 months was not excessive or disproportionate in the circumstances; and (5) the Applicant gave reasonable grounds for her failure to apply for an extension, namely, that she had misinterpreted the residence requirement and was unaware of the Commissioner's power to grant an extension. 78 For the foregoing reasons: (1) the Applicant has discharged her onus of proving her case, as required by s 28 (3) of the FHOG Act; and (2) the decision of the Commissioner to reverse the decision for the grant and to require the Applicant to repay the grant plus a penalty was incorrect. Additional Points regarding FHOG Act 79 A point to be noted is that if the Applicant did not have an estate in fee simple but only an estate in reversion, until the Lease expired, in the absence of an exercise of the Commissioner's discretion under s 5(4) of the FHOG Act, the Applicant did not have (and nor did any other person have) a "relevant interest" (as defined in s 5(2) of the FHOG Act) in the Property, until the Lease expired. This does not appear to be of any consequence in this matter since s 15(1) of the FHOG Act provides that all interested persons must be Applicants and s 15(2) provides that (subject to exceptions not here relevant), an "interested person" is a person who is, or will be, on the completion of the eligible transaction to which the application relates, an owner of the relevant home. The Applicant was the owner (as defined) of the home on completion (as defined) of the eligible transaction. 80 The following other additional points are also noted: (1) The standard FHOG Form completed by the Applicant did not reflect the definition of "completion" in the FHOG Act in its instructions on how to complete Part C of the form. (2) The standard FHOG Form completed by the Applicant did not require or seek information as to whether the transaction was subject to any existing lease and if so, the date of expiry of such lease. (3) The standard FHOG Form completed by the Applicant did not include any mention of the power of the Commissioner to extend the period for compliance with the residence requirement or to exempt altogether. Duties Act and TAA - Legislation 81 Section 76 of the Duties Act was replaced with a revised version of s 76 and a new s 76A, by the State Revenue Legislation Amendment Act 2004, with effect from 4 April 2004 (prior to the date of the Transfer of 26 May 2004 in this case). However, paragraphs 38(2) and 38(3) of Part 15 of Schedule 1 (Savings, Transitional and Other Provisions) of the Duties Act provide as follows: "(2) Sections 71, 73 and 76, as in force immediately before 4 April 2004, continue to apply in respect of the following transactions or instruments: (a) agreements for sale or transfer entered into on or after 4 April 2004 but before 1 July 2004, (b) transfers that occur on or after 4 April 2004 but before 1 July 2004, (c) transfers that occur on or after 4 April 2004 that are made in conformity with an agreement for sale or transfer referred to in paragraph (a), (d) mortgages over land the subject of those agreements or transfers. (3) Section 76A, as inserted by the State Revenue Legislation Amendment Act 2004 , does not apply in respect of a transaction or instrument referred to in subclause (2)". 82 As the Transfer was dated 26 May 2004 and was settled on 28 May 2004, paragraph 38(2)(b) of Part 15 of Schedule 1 of the Duties Act is applicable. As the Mortgage is a mortgage over land the subject of a transfer within paragraph 38(2)(b), paragraph 38(2)(d) of Part 15 of Schedule 1 of the Duties Act is applicable. 83 Accordingly: (1) s 76A of the Duties Act does not apply to the Transfer or the Mortgage; and (2) s 76 of the Duties Act, as in force immediately before 4 April 2004, relevantly applies in this matter. 84 Section 76 of the Duties Act as it relevantly applies provides as follows: "(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. (2) This section does not apply to a person who acquires an interest in the property concerned solely for the purpose of assisting the other purchaser or purchasers in financing the acquisition (as referred to in section 73 (5))". 85 Section 77(1) of the Duties Act as it relevantly applies provides as follows: "A mortgage is eligible if it is given to assist the financing of a purchase under an agreement or transfer that is eligible under the scheme and the purchaser or purchasers under the agreement or transfer are eligible under the scheme". 86 Section 71(1) of the Duties Act as it relevantly applies provides as follows: "A purchaser or transferee under an agreement or transfer may apply under the scheme, but will be eligible only if the purchaser or transferee has not at any time owned residential property in Australia (either solely or with someone else) that he or she occupied as his or her principal place of residence". 87 Section 74(1),(2) and 3(b) of the Duties Act as they relevantly apply provide as follows: "(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. (2) The agreement or transfer must be for the whole of the property. (3) The dutiable value of the dutiable property that is the subject of the agreement or transfer must be less than: … (b) $250,000 if the property is located elsewhere than in the Metropolitan Area and has a private dwelling built on it, or" 88 Section 79 of the Duties Act (which was afterwards repealed with effect from 20 June 2006) as it relevantly applies provides that: "An application is to be determined solely at the discretion of the Chief Commissioner whose decision is final". However, in Snow v Chief Commissioner of the State Revenue [2005] NSWADT 278, the President of the Tribunal held that although s79 immunises the Commissioner from review in respect to an original decision on an application for the concession under the First Home Plus Scheme, it does not give immunity from review of a decision to reverse an original decision and exercise of powers under the TAA to have the due amount paid by issuing an assessment and following the TAA's procedures. For the reason stated in Snow's case, s 79 has no application to this matter. 89 Section 9 of the TAA provides as follows: "(1) The Chief Commissioner may make one or more reassessments of a tax liability of a taxpayer. (2) A reassessment of a tax liability is to be made in accordance with the legal interpretations and assessment practices generally applied by the Chief Commissioner in relation to matters of that kind at the time the tax liability arose except to the extent that any departure from those interpretations and practices is required by a change in the law (whether legislative or non-legislative) made after that time. (3) The Chief Commissioner cannot make a reassessment of a tax liability more than 5 years after the initial assessment of the liability, unless: … (4) The initial assessment of a tax liability remains the initial assessment of the liability for the purposes of this Act even if it is withdrawn under section 13." Submissions on Duties act and TAA 90 In summary, the Crown Solicitor's Office for the Commissioner, submitted in the written submissions dated 17 July 2007 that: (1) The Applicant did not occupy the Property within 12 months of settlement on 28 May 2004. (2) The Applicant failed to provide any objective evidence to establish that she had a real intention to occupy the Property as her principal place of residence within 12 months of settlement on 28 May 2004 Bailey v Chief Commissioner of State Revenue [2007] NSWADT 19 at 33. It is not sufficient that the Applicant may have intended to occupy the Property as her principal place of residence after the 12 month period. (3) The onus is on the Applicant to establish her case (s 100 TAA, Lewis v Chief Commissioner of State Revenue [2007] NSWADT 89 at 27). (4) The Commissioner reversed his decision to grant the First Home Plus concession on 13 January 2006. Since that time, the Applicant has had ample opportunity to provide evidence of her intention concerning the occupation of the property. The Applicant has failed to do so. She did not appear at the hearing of this matter to give evidence. The Commissioner understands that at the time of the hearing, the Applicant was overseas. However, the Applicant could have provided a statement of her intention concerning the occupation of the Property. (5) The statements by Mr Band concerning the Applicant's intention in correspondence to the Commissioner and submissions to the Tribunal can not be taken to be evidence from the Applicant as to her intention. The documentary evidence conflicts with the assertions made and the documentary material is to be preferred. (6) In the absence of any direct evidence from the Applicant that she had an intention to occupy the Property as her principal place of residence as her principal place of residence within 12 months of settlement, it is extremely difficult for the Tribunal to make a finding that the Applicant had such intention, given the contradictory evidence. (7) The evidence before the Tribunal is that at the time the Applicant purchased the Property, it was occupied by tenants under the Lease due to expire in December 2004. The clear inference is that the Property was habitable and could be occupied by the Applicant if she had intended to do so. (8) At the time the Applicant purchased the Property, the Applicant obtained a residential investment loan from the ANZ Bank which required her to repay interest only. The fact that the Applicant obtained an investment loan is consistent only with her not intending to occupy the Property as her residence at that time, but to use it as an investment. Indeed, the Applicant derived rental income from the Property until the end of 2004. (9) The Applicant did not commence occupation of the Property within 12 months of settlement because she resided at her University campus. The Applicant elected to pay for University accommodation until November 2005 and did not move into the Property before November 2005. (10) The Applicant elected to carry out renovations on the Property after the tenants vacated the Property in late 2004. (11) Having elected to pay for University accommodation until November 2005 and to renovate the Property in the meantime, there is no basis on which the Applicant can maintain that she intended to occupy the Property within 12 months of settlement. These facts are consistent only with an intention not to occupy the Property before the expiration of the 12 month period. (12) That the Applicant may have been unaware of her obligation or misunderstood the law is not determinative of the question of whether the Applicant is entitled to the First Home Plus concession (see Allam v Chief Commissioner of State Revenue [2006] NSWADT 127 at 5 and 8). (13) The Applicant failed to discharge her onus of establishing that she intended to occupy the Property as her principal place of residence within 12 months of settlement for the purposes of s 76. 91 The agent for the Applicant made written submissions dated 23 July 2007 which included: (1) That the intention of the Applicant in May 2004 was to provide immediate accommodation commencing from the start of the University term in February 2005 but this was delayed due to desirable renovations. (2) A copy of an unsigned letter dated 23 July 2007 from Con Vallis, Senior Private Banker at ANZ Bank to Mr Band which stated: (i) in respect to the loan by the ANZ Bank to the Applicant secured by the Mortgage: "This loan should have been styled a Fixed Rate Home Loan given that Lucy is using it as her principal place of residence."; and (ii) "In Lucy's case, because she had insufficient income and no deposit to enable her to qualify for a traditional home loan at that time, a simple solution given your status with ANZ Private Bank, was to offer her a fixed interest loan guaranteed by you. The purpose and intention of which my files record was to assist her with her purchase of a house in Bathurst, in which to live while studying at Charles Sturt University." 92 The statutory declaration of the Applicant dated 1 August 2007 included statements referred to hereunder. 93 The written submissions from the Crown Solicitor's Office for the Commissioner dated 14 August 2007 included that: (1) Despite the additional materials filed on behalf of the Applicant, she has failed to discharge her onus of establishing that, objectively, she had a real intention to occupy the property as her principal place of residence within 12 months of settlement on 28 May 2004 see Bailey v Chief Commissioner of State Revenue [2007] NSWADT 19 at 33. There is no objective evidence before the Tribunal which establishes that the Applicant had such an intention (paragraph 2). (2) The Applicant's statement (in paragraph 7 of her statutory declaration dated 1 August 2007) that she was not aware of the requirement to commence occupation of the property by 28 May 2005 means that she could not have had an intention to occupy the property by that date. A person can not have an intention to occupy at a particular date if he or she is unaware of the date (paragraph 6). (3) There has been no opportunity for the Commissioner and the Tribunal to question the Applicant and to test her evidence, having regard to the other evidence before the Tribunal. In considering the evidence before it, given the absence of an opportunity to test the Applicant's statutory declaration, the Tribunal should place less weight on its contents (paragraph 8). (4) The letter from Con Vallis, Senior Private Banker at ANZ Bank dated 23 July 2007 should be given little weight. The letter is not a statement of evidence or an affidavit which has been sworn or affirmed. Indeed, the letter is unsigned. Further, Mr Vallis has not been questioned by the Commissioner or the Tribunal in relation to his letter (paragraph 9). (5) The letter from Mr Vallis does not assist the Applicant. It simply confirms that, because the Applicant did not have a deposit and her income was insufficient, she did not qualify for a "traditional home loan". An investment loan was arranged. The Property was used as an investment until the end of 2004. There is no dispute that the Applicant derived rental income throughout 2004 (paragraph 10). 94 The written submissions from the Crown Solicitor's Office for the Commissioner dated 14 August 2007 also included submissions in connection with the Lease. Decision on Duties Act and TAA 95 Section 76 of the Duties Act, as it applied to the Transfer, required that "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". 96 Since the Commissioner originally approved the First Home Plus concessions under the Duties Act in respect to the Transfer and the Mortgage, the Commissioner must have been satisfied, as at the date of such approval, that s 76 of the Duties Act was satisfied. 97 The Applicant did not occupy the Property as the Applicant's principal place of residence as at the date that the Applicant applied for the First Home Plus concessions under the Duties Act. Accordingly, the Commissioner must have been satisfied as at the date that the First Home Plus concessions under the Duties Act were approved, that the Property was "intended to be occupied" by the Applicant on or before settlement, or within 12 months after settlement, as the principal place of residence. 98 Once the First Home Plus concessions were granted, they remained, unless the Commissioner made a reassessment of the duty payable on the Transfer and/or the Mortgage under and in accordance with s 9 of the TAA. 99 The letter from the Commissioner dated 13 January 2006 advised that "we have reversed the decision to offer you the First Home Plus concession". That letter further advised that: "In addition interest and penalty has been imposed in accordance with the Act as you did not notify this Office that you failed to meet the eligibility criteria to maintain the concession. As a result, you are required to pay the Chief Commissioner the full dutiable amount of $7,905.58". 100 Section 76A of the Duties Act did not apply to the Transfer or the Mortgage. Accordingly, there was no obligation on the Applicant to give any written notice to the Commissioner or to pay any duty in respect to the Transfer or the Mortgage under the First Home Plus provisions of the Duties Act. 101 Section 65(2) of the ADT Act provides that if a decision is remitted to an administrator, the administrator may reconsider the decision and may affirm or vary the decision or set aside the decision and make a new decision in substitution. Section 65(3)(a) of the ADT Act provides that if the administrator varies the decision, the application is taken to be an application for review of the decision as varied. 102 Although the reconsidered decision of the Commissioner of 26 June 2007 did not change the outcome of the original decision of the Commissioner made on 13 January 2006, in my view, the reconsidered decision of the Commissioner necessarily varied the original decision, by referring to and applying the correct version of s 76 of the Duties Act. Accordingly, under s 65(3)(a) of the ADT Act, the application in this case, so far as it relates to s 76 of the Duties Act, is taken to be an application for review of the decision as varied. Although the original decision included the statement: "In addition interest and penalty has been imposed in accordance with the Act as you did not notify this Office that you failed to meet the eligibility criteria to maintain the concession", this was in connection with the version of s 76 and s 76A of the Duties Act inapplicable to this case. The reconsidered decision of the Commissioner did not make any reference to interest or penalty tax. 103 Section 9(2) of the TAA provides that: "A reassessment of a tax liability is to be made in accordance with the legal interpretations and assessment practices generally applied by the Chief Commissioner in relation to matters of that kind at the time the tax liability arose except to the extent that any departure from those interpretations and practices is required by a change in the law (whether legislative or non-legislative) made after that time". 104 Nothing in the evidence before the Tribunal indicated that the original approvals for the First Home Plus concessions in respect to the Transfer and the Mortgage were given otherwise than in accordance with the legal interpretations and assessment practices generally applied by the Chief Commissioner in relation to matters of that kind at the time the respective tax liabilities on those instruments arose. No departure from those interpretations and practices was required by any change in the law (whether legislative or non-legislative) made after that time. Accordingly, in this matter, it may be doubtful that the Commissioner's reassessment of the Transfer and the Mortgage complied with s 9(2) of the TAA. If the Commissioner's reassessment of the Transfer and the Mortgage did not comply with s 9(2) of the TAA, there would be no power for the Commissioner to make the reassessments or to require the Applicant to pay duty on the Transfer or the Mortgage (or to pay interest or penalty tax in connection therewith) (ISPT Nominees Pty Ltd v Chief Commissioner of State Revenue [2003] NSWSC 697 at 139). 105 If however, the reassessments of the Transfer and the Mortgage were made in accordance with s 9(2) of the TAA, for the following reasons, I find that on the material before the Tribunal, the reassessments were incorrect. 106 As already stated, s 76 of the Duties Act, as it applied to the Transfer, required that "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". 107 "Settlement", is not defined in s 76 or elsewhere in the Duties Act or, in s 21 of the Interpretation Act 1987. Section 76 has since been replaced in the Duties Act with a provision which no longer refers to "settlement" but instead, uses the expression "completion" which is defined in the replacement version of s 76, similarly to the definition of that term in the FHOG Act. 108 It might be argued that "settlement" in s 76 of the Duties Act should be interpreted synonymously with "completion" as defined in the FHOG Act, on the grounds that, in accordance with the principle enunciated by Justice Kirby in Commissioner of Stamp Duties v Permanent Trustee Company limited (1987) 9 NSWLR 719, it is an interpretation of "interrelated" statutes so as "to produce a sensible, efficient and just operation of them in preference to an inefficient, conflicting or unjust operation". 109 If the correct meaning attributable to "settlement" in s 76 of the Duties Act is the defined meaning of "completion" in the FHOG Act, then, since as aforementioned, "completion" of the Transfer in this case occurred on 1 January 2005 and it is not disputed that the Applicant occupied the Property as her principal place of residence (continuously for a period of at least 6 months) from late November 2005 which is within 12 months after "completion" on 1 January 2005, s 76 of the Duties Act was satisfied in this case. 110 However, even if "settlement" does not bear the defined meaning of "completion" in the FHOG Act, but bears its ordinary meaning, I find that s 76 of the Duties Act was still satisfied in this case, for the reasons which follow. 111 The ordinary meaning of "settlement", in the context of an agreement for transfer, or transfer, of a home, is the time when there is unconditional delivery by or on behalf of the vendor to or to the direction of the purchaser, of the title deed and executed transfer to the purchaser of the home, usually accompanied by full payment of the purchase price for the home by the purchaser. On this meaning, on the agreed facts, settlement of the Transfer in this case occurred on 28 May 2004 and the Applicant did not occupy the Property as her principal place of residence within 12 months after that date. On this ordinary meaning of "settlement", the issue in this case is therefore, whether the Applicant "intended" that the Property be occupied by the Applicant "within 12 months after settlement, as the principal place of residence". (As aforementioned, s 76 as applicable in this case has since been replaced. The replacement s 76 no longer refers to "intended".) 112 When is this issue of intention in s 76 to be determined? In my view, consistent with the scheme of the Duties Act, the relevant time is when liability to duty on the Transfer arose, namely, when the Transfer was first executed (s 12(2) of the Duties Act). The position appears to be different in the case of occupation (as distinct from an intention to occupy) under s 76 of the Duties Act. If at any time up to and including 12 months after settlement, the applicant occupies the home as the applicant's principal place of residence, it appears that s 76 of the Duties Act is satisfied (irrespective of the intention of the applicant at any earlier time). 113 The decisions of Judicial Member Hole in Hafza v Chief Commissioner of State Revenue [2006] NSWADT 116 (at 45) and Edwards v Chief Commissioner of State Revenue [2006] NSWADT 204 (at 56) indicate that in Judicial Member Hole's view, the date of settlement is the relevant time for testing the intention referred to in s 76 of the Duties Act. Even if this is the time at which the intention is to be determined, I do not find that it affects the outcome in this case. 114 Section 101 in Division 3 of Part 8 of Chapter 2 of the Duties Act gives the Commissioner a specific power to reassess as if that Division did not apply, if a requirement of an undertaking is not met. There is no equivalent to s 101 in the First Home Plus provisions of Division 1 of Part 8 of Chapter 2 of the Duties Act. Neither is there anything else in that Division or in any other provision of the Duties Act that addresses the circumstance where an application under the First Home Plus Scheme is approved based on the Commissioner being satisfied as to the applicant's intention, but subsequently, the applicant's intention is unrealised. For this reason, in my view, if a purchaser has a genuine intention at the relevant time, to occupy the purchased home, within 12 months after settlement, as the purchaser's principal place of residence, the fact that that intention may ultimately fail to be realised does not affect compliance with s 76 of the Duties Act. This view is respectfully different to the view implicitly adopted in Scurry v Chief Commissioner of State Revenue [2006] NSWADT 28 at 18. 115 If s 76 of the Duties Act is interpreted as requiring the intention of the Applicant to be realised, it renders the words "or intended to be occupied" in s 76 of the Duties Act redundant. This is because it means that the home must be "occupied" as the principal place of residence of the applicant on or before settlement or, within 12 months after settlement. Such an interpretation that renders words redundant could not have been intended and accordingly, is not accepted. 116 If at the time of first execution of the Transfer, the Applicant genuinely intended that the Property be occupied by the Applicant within 12 months after settlement as her principal place of residence, then the fact that such intention was not subsequently realised (within such 12 months period) does not affect compliance with s 76 of the Duties Act. 117 Sworn evidence by an applicant of the subjective intention of the applicant at a particular time is objective evidence of that intention but it may be discredited by other evidence. Events subsequent to when an intention is claimed to have been held that contradict the intention don't necessarily disprove the existence of the intention at the earlier time, if there is a reasonable explanation for the contradiction. 118 No copy of the First Home Plus application that was made by the Applicant was included with the documents lodged by the Commissioner pursuant to s 58 of the ADT Act. However, since approval for the exemptions was given by the Commissioner and s 78(1) of the Duties Act provides that an application is made to the Commissioner by completing a statutory declaration in an approved form, it is inferred that the Applicant must have completed and lodged with the Commissioner, a statutory declaration in the approved form. 119 Furthermore, given s 76 of the Duties Act, it is reasonable to infer that the form under s 78(1) completed by the Applicant is likely to have included a statutory declaration by the Applicant as to the Applicant's intention to occupy the home as her principal place of residence for a continuous period of 6 months commencing within 12 months after settlement. 120 The FHOG Form that was completed by the Applicant and lodged with the Commissioner on 26 May 2007 under the FHOG Act included a declaration by the Applicant that: "I will be occupying the home as my principal place of residence within 12 months of the date of settlement or within 12 months of the date of completion of construction" with the acknowledgement that under the FHOG Act, "penalties will apply for making a false or misleading statement in or in connection with an application for a first home owner grant". 121 Accordingly, the FHOG Form completed by the Applicant evidenced an intention of the Applicant at that time (and possibly the approved statutory declaration form of First Home Plus application which the Applicant must have completed, also evidenced the intention of the Applicant at that time), to occupy the Property as her principal place of residence within 12 months of settlement. 122 Added to this, the Applicant has sworn, in paragraph 4 of her statutory declaration dated 1 August 2007, that: "My intention in May 2004 was to occupy the house as soon as practicable after the expiry of the lease to the incumbent tenant (which I had purchased the property subject to), and in any event prior to commencement of the second year of my tertiary education at Charles Sturt University in Bathurst in late February 2005". 123 The contents of the copy unsigned letter dated 23 July 2007 from Con Villas of the ANZ Bank to Mr Band corroborate the Applicant's sworn statements that, at the time of purchase of the Property, the Applicant had intended to occupy the Property as her principal place of residence within 12 months after settlement ("…a house in Bathurst, in which to live while studying at Charles Sturt University"). However, since the letter is unsigned, weight is only placed upon the copy letter to the extent that it does not contradict the submissions of the Applicant. The Commissioner's submissions that the copy letter confirms that, because the Applicant did not have a deposit and her income was insufficient, she did not qualify for a "traditional home loan" and that an investment loan was arranged, are not accepted. The contents of the copy letter indicate that the loan was a Fixed Rate Home Loan. 124 The Commissioner's submission (in paragraph 10 of submissions dated 14 August 2007) that: "There is no dispute that the Applicant derived rental income throughout 2004" is not accepted. The Transfer was dated 26 May 2004 and was subject to the Lease, settlement occurred on 28 May 2004 and the Lease terminated on 31 December 2004. Accordingly, the Applicant would have derived rental income from the Property from 28 May to 31 December 2004 but not "throughout 2004" as submitted by the Commissioner. 125 As the Property was purchased by the Applicant subject to the Lease, the Applicant could not commence occupation of the Property as her principal place of residence, until the Lease terminated. At the time of the Transfer, the Lease was due to expire on 31 December, 2004 which meant that the Applicant could have expected to take possession of the Property on 1 January 2005, leaving 5 months of the 12 month period after settlement (assuming that expression has its ordinary meaning) within which the Applicant could commence occupation of the Property as her principal place of residence. As aforementioned, the Applicant has sworn in paragraph 4 of her statutory declaration dated 1 August 2007 that: "My intention in May 2004 was to occupy the house as soon as practicable after the expiry of the lease … and in any event prior … late February 2005". At the time the intention is claimed to have been held, on the material before the Tribunal, such an intention would not have been unrealistic. 126 The Applicant explained in correspondence with the Commissioner and in her statutory declaration of 1 August 2007, that the Applicant later "formed the opinion that it would be less disturbing to my studies to undertake desired renovation of the Property prior to occupying the Property. My desire to undertake the renovations was formed upon taking possession of the Property on expiry of the incumbent lease it being my opinion that it would be sensible to renovate prior to commencing occupation rather than during the University term or at some time later. During the renovations I lived in University Accomodation". 127 The Applicant did not re-let the Property after the Lease expired but moved into the Property as her principal place of residence in 2005, after the renovations were completed. 128 The Applicant's decision to undertake renovations to the Property in a manner that delayed her occupation of the Property as her principal place of residence, caused her intention to occupy the Property "within 12 months of settlement" to fail to be realised. However, there is nothing in the evidence to suggest that at the time of the Transfer (or at settlement of the Transfer), the Applicant already held an intention or made the decision to reside at the University and renovate the Property in the manner that ultimately transpired. The copy receipt for fees paid to the University for accommodation was dated 17 February 2005. The copy quotations and receipts for renovations to the Property were all dated 2005. 129 There was no evidence before the Tribunal that indicated that either the Applicant or the Applicant's agent, her father, were not reliable in their written and, in the case of the Applicant, her sworn statements and, in the case of the Applicant's agent, his oral submissions. It is accepted that the Applicant was unable to attend the hearings in person because of her being overseas, studying at that time. The reason given by the Applicant, for why she failed to notify the Commissioner of her failure to occupy the Property within 12 months after settlement (assuming that expression had its ordinary meaning in the FHOG Form) in accordance with the undertaking given by the Applicant in the FHOG Form, is accepted. The reliability of the Applicant is therefore not regarded as discredited by such failure. 130 The Commissioner's submission that the Applicant's statement (in paragraph 7 of her statutory declaration dated 1 August 2007) that she was not aware of the requirement to commence occupation of the property by 28 May 2005 meant that she could not have had an intention to occupy the property by that date, is not accepted. Paragraph 7 of the Applicant's statutory declaration dated 1 August 2007 reads: "I confirm that I was at all relevant times unaware of the importance of the need for me to occupy the Property by the 28th May 2005 date pursuant to the regulations relating to the First Home Owners Grant and such failure was not deliberate non compliance with such regulations (emphasis added)." 131 This paragraph does not state that the Applicant was unaware of the requirement to commence occupation of the Property by 28 May 2005, but that the Applicant was unaware of the importance of it. This does not mean that the Applicant could not have had the intention at the relevant time, to occupy the Property within 12 months after settlement as her principal place of residence as the Applicant has sworn that she had, in paragraph 4 of her statutory declaration dated 1 August 2007 quoted above. 132 Although what transpired was inconsistent with the Applicant's intention stated to have been held at the time of the Transfer, to occupy the Property within 12 months of settlement, the Applicant has given a reasonable explanation for the inconsistency, together with supporting evidence, in the form of receipts for renovations undertaken in 2005. What ultimately transpired did not disprove that the Applicant held the intention, at the time of the Transfer, to occupy the Property within 12 months after settlement as her principal place of residence. 133 In light of the foregoing: (1) I accept the Applicant's sworn statement that she held the intention to occupy the Property "within 12 months of settlement" at the time of the Transfer (and settlement of the Transfer); and (2) I also accept the Applicant's sworn statement that she later made a decision to delay such occupation, to enable the Property to be renovated, after the Lease expired, for her occupation of the Property as her principal place of residence. 134 The decision in Bailey v Chief Commissioner of State Revenue [2007] NSWADT 19 ("Bailey's Case"), cited in the Commissioner's submissions, is currently pending appeal. The paragraph (33) of that decision referred to by the Commissioner states as follows: "33 The matter, which remains is that of the FPH concession given to the applicant under the Duties Act. As the Tribunal has found that the occupation of the property did not constitute occupation of the property as his principal place of residence and, in the absence of any objective evidence that the applicant had any real intention to occupy the property as his principal place of residence, there is no reason to interfere with the respondent's decision to revoke the concession." 135 For the foregoing reasons, I find that: (1) at the time of first execution of the Transfer (and at settlement of the Transfer), the Applicant genuinely intended that the Property be occupied by the Applicant within 12 months after settlement, as her principal place of residence; (2) the Applicant has given a reasonable explanation, supported by evidence, as to why the Applicant's intention subsequently failed to be realised and no other evidence before the Tribunal has disproved the Applicant's evidence that the Applicant held the intention at the relevant time; and (3) accordingly, s76 of the Duties Act is satisfied in this case. 136 Since the Mortgage assisted the financing of the purchase under the Transfer and the Transfer was eligible under the First Home Plus Scheme and, since it was not disputed that the Applicant was eligible under the Scheme, the Mortgage was eligible under the Scheme under s 77(1) of the Duties Act. 137 For the foregoing reasons: (1) the Applicant has discharged her onus of proving her case, as required by s 100(3) of the TAA; and (2) the decision of the Commissioner to reverse the First Home Plus concessions and assess transfer duty on the Transfer and mortgage duty on the Mortgage under the Duties Act plus interest and penalties was incorrect. Refunds and Interest 138 Since the assessments made by the Commissioner under the reviewable decisions were paid, the following points are made in respect to the subject of refunds and interest. 139 Sections 104 and 105 of the TAA provide as follows: "104 If a taxpayer's objection is allowed in whole or in part or a taxpayer's application for review is successful, the Chief Commissioner must, subject to section 19, refund any amount paid in excess of a requirement for payment under the relevant taxation law. 105 In addition to an amount refunded under this Division, the Chief Commissioner is required, subject to section 19, to pay interest on the amount calculated on a daily basis from the date of its payment by the taxpayer until the date of the refund at the market rate component under section 22." 140 Under s 22(2) of the TAA, the "market rate component" is: "(a) unless an order is in force under paragraph (b), the Bank Accepted Bill rate (defined in s 22(4) as, in respect of any day, the yield rate for 90-day Bank Accepted Bills published by the Reserve Bank for the month of May in the financial year preceding the financial year in which the day occurs) rounded to the second decimal place (rounding 0.005 upwards), or (b) the rate specified for the time being by order of the Minister published in the Gazette." 141 The Duties Act and the TAA are each a "taxation law" for the purposes of the TAA (under s 4 of the TAA). Accordingly, following this decision so far as it relates to the Duties Act and the TAA, the Commissioner is required to refund to the Applicant, the duty on the Transfer and on the Mortgage and the interest and penalties thereon, in accordance with s 104 of the TAA, and pay interest on such refunded amount, in accordance with s 105 of the TAA. 142 On the other hand, the FHOG Act is not a "taxation law" for the purposes of the TAA (under s 4 of the TAA) and s 104 and s 105 of the TAA do not apply in respect to the grant repaid by the Applicant plus penalty thereon. 143 There is no equivalent to s 104 or s 105 of the TAA in the FHOG Act. However, since the grant under the FHOG Act was not required to be repaid by the Applicant under the FHOG Act and no penalty was payable by the Applicant under the FHOG Act, the Applicant should be entitled to a refund of the grant and penalty thereon paid to the Commissioner (David Securities Pty Ltd v Commonwealth Bank of Australia (1991-1992)175 CLR 353 and Australian Fencing Hire v Chief Commissioner of State Revenue [2005] NSWSC 1286 at 60). There does not appear to be any obligation on the Commissioner to pay interest on the refund, under the FHOG Act or any other Act. Conclusion 144 For the foregoing reasons, the correct and preferable decision is to set aside the reviewable decisions of the Commissioner and make the following order. Order The reviewable decisions are set aside and in substitution is made the decision to affirm the original decisions of the Commissioner to pay the $7,000 grant under the FHOG Act to the Applicant and to approve the Applicant's application for the First Home Plus Scheme concessions under the Duties Act and assess the Transfer and the Mortgage each with nil duty. 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.