Dirani v Chief Commissioner of State Revenue [2004] NSWADT 132

CITATION: Dirani v Chief Commissioner of State Revenue [2004] NSWADT 132 DIVISION: General Division APPLICANTS PARTIES: Fatima Dirani and Rabih Dirani RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 043061 HEARING DATES: 20/05/2004 SUBMISSIONS CLOSED: 05/20/2004 DATE OF DECISION: 07/06/2004

BEFORE: Grotte E - Judicial Member APPLICATION: first home owners grant - approval of application - First Home Owners Grant Act - first home owners grant - approval of application MATTER FOR DECISION: Principal matter LEGISLATION CITED : First Home Owners Grant Act 2000 CASES CITED: Hasan v Commissioner of State Revenue [2001] NSW ADT 204 Fiegert and Edwards v Chief Commissioner, Office of State Revenue [2001] NSWADT 177 APPLICANTS REPRESENTATION: In person RESPONDENT H Roberts, solicitor ORDERS: The decision of the Chief Commissioner not to approve the payment of the applicant's application for a First Home Owner Grant is affirmed.

REASONS FOR DECISION 1 On 9 March 2004 the applicants lodged an application with the Tribunal requesting a review of a decision of the Chief Commissioner of State Revenue (Chief Commissioner). The decision of the Chief Commissioner was to refuse the applicants a grant under the First Home Owner's Grant Act 2000 ("the FHOG Act") with respect to a property at Werrington Downs. The Chief Commissioner advised the applicants on 5 January 2004 that they were both ineligible for the grant because one of the applicants, Fatima Dirani, had previously received a grant and it was not repaid in accordance with the conditions on which the grant had been made as set out in section 20(3)(a)(b) of the Act. Issue before the Tribunal 2 The issue for determination by the Tribunal is whether the Chief Commissioner made the correct and preferable decision in refusing a grant to the applicants because the applicant wife had previously received a grant but failed to repay it in accordance with the conditions set out in section 20 of the FHOG Act. 3 The Tribunal took oral evidence from the applicant wife in relation to this matter. 4 The Tribunal received oral submissions from both parties and written submissions from the respondent and these are set out in detail below. Relevant Legislation 5 Section 10 of the FHOG Act provides as follows: (1) Subject to subsection (2) an applicant for a first home owner grant is ineligible for the grant if: (a) the applicant or the applicant's spouse has been a party to an earlier application under this Act or a corresponding law, and (b) a grant was paid on the application. (2) An applicant is not ineligible if the grant was paid but later paid back under the conditions on which the grant was made. 6 Section 17 of the FHOG Act gives the Chief Commissioner the power to decide an application and authorise payment for a first home owner grant. That section provides: (1) If the Chief Commissioner is satisfied that a first home owner grant is payable on an application, the Chief Commissioner must authorise the payment of the grant. (2) Payment of a first home owner grant may be authorised under section 20 before completion of the relevant eligible transaction or in anticipation of compliance with the residence requirement. 7 The FHOG Act requires an applicant to comply with certain eligibility criteria. One criterion is the "residence requirement". Section 12 of that Act states: (1) An applicant for a first home owner grant must occupy the home to which the application relates as the applicant's principal place of residence within 12 months after completion of the eligible transaction or a longer period approved by the Chief Commissioner. 8 Sections 17 and 20 of the FHOG Act give the Chief Commissioner the power to authorise payment in advance in anticipation of compliance with the residence requirement if the Chief Commissioner is satisfied that the applicant who is required to comply intends to occupy the home in question within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner. Section 20(3) provides: (1) The Chief Commissioner may authorise payment of a first home owner grant: ... (b) in anticipation of compliance with the residence requirement, if the Chief Commissioner is satisfied that each applicant who is required to comply, but has not yet complied, with the residence requirement, intends to occupy the home as his or her principal place of residence within 12 months after completion of the eligible transaction or a longer period allowed by the Chief Commissioner. (2) If the 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. (3) 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. Jurisdiction 9 The FHOG Act authorises the applicants to apply to this Tribunal for a review of the Chief Commissioner's decision. Onus 10 Under section 28(3) of the FHOG Act the applicant has the onus of proving his case in an application to the Tribunal for review. Respondent's Submissions 11 It was submitted on behalf of the Chief Commissioner that the applicant wife, Fatima Dirani, received a first home owner grant on 21 September 2000 with respect to a property in Lakemba (the Lakemba property). It was submitted that in her application for the grant she asserted that she expected to occupy the Lakemba property on 30 September 2000 but in fact she did not occupy the property at all. 12 It was submitted that section 20(3) of the FHOG Act provides that if a grant is paid in anticipation of compliance with the residence requirement, the payment is made on condition that the applicant must, within 14 days after the end of the period allowed for compliance, give notice of the fact non-compliance and repay the amount of the grant. Failure to notify is an offence and is punishable by a maximum penalty of 50 penalty units. 13 It was submitted that the relevant statutory period for compliance with the residence requirement under the FHOG Act expired on 18 October 2001 with respect to the Lakemba property. The 14 days by which the applicant wife was required to advise the respondent of the failure to comply with the residence requirement with respect to the Lakemba property expired on 1 November 2001. The applicant wife did not advise the respondent of her failure to occupy the Lakemba property and also did not comply with the condition to notify the respondent of her failure to comply within the 14 days. It was submitted that the respondent independently discovered in 2003 that the applicant wife sold the Lakemba property in April 2002 and issued a notice pursuant to section 45 of the FHOG Act in April 2003. 14 It was submitted that section 10 of the FHOG Act provides that an applicant is ineligible for a first home owner's grant if he or she has already received such a grant. Subsection 10(2) of the FHOG Act provides that an applicant is not ineligible if the grant was paid but later paid back "under the conditions on which the grant was made". It was submitted that the applicant wife does not fall within the provisions of section 10(2) because she failed to comply with the condition that she repay the grant within 14 days of failing to meet the residency requirement. 15 It was submitted that the applicant wife asserted that she was not aware of the requirements of the FHOG Act. It was submitted that nonetheless she agreed to the conditions by signing the declaration at Part E of her application. Furthermore, it was submitted that the legislation does not allow for the exercise of any discretion in the circumstances of this case so that the subjective features of the applicant wife's case are not relevant to the determination of her eligibility. 16 It was submitted that the eligibility criteria set out in the FHOG Act are not voluntary nor are they discretionary. It was submitted that the Chief Commissioner is not able to make a grant to a person who does not meet one or more of the eligibility criteria: Hasanv Commissioner of State Revenue [2001] NSW ADT 204; Fiegert and Edwards v Chief Commissioner, Office of State [2001] NSWADT 177. It was submitted that the Chief Commissioner's decision to deny the grant must be affirmed. Applicant Wife's Submissions and Statutory Declarations 17 The applicant wife submitted on her own behalf that when the Lakemba property was bought under her name no one explained to her the condition that she had to live in the property for a period of time. 18 The applicant wife submitted that certain issues caused her not to live in the property and the only answer was to sell the Lakemba property. She submitted that her parents took care of the process. 19 The applicant wife submitted that she paid back the $7000 grant with the $1400 fine and she has now bought a property in Werrington Downs with her husband. She submitted that as first home owner buyers they should be eligible to receive the grant now knowing the conditions. 20 The applicant wife submitted that her husband, as a permanent resident in Australia, should not be punished for her unknown mistakes and he should be considered eligible to receive the grant. Statutory Declarations filed with Tribunal on behalf of the Applicants 21 The applicant wife stated in a statutory declaration dated 20 April 2004 that on 21 September 2000 her application for a first home owners grant was made through a participating agent. She stated that she agreed that she signed the application for the grant but because she was busy with work she handed all the paperwork to her agent. She stated that she did not complete sections A,B or C of the application but she did sign the declaration. 22 The applicant wife stated that she purchased the subject property in order to live in it. She was working and planned to pay off the mortgage until her fiancé migrated to Australia. Her fiancé was unable to come to Australia and so she unexpectedly travelled overseas where she remained for 7 months for family reasons. She stated that at that time she did not know about the requirements of the FHOG Act and did not think that travelling would be a problem. She stated that if she had known the conditions she would not have applied for the grant let alone bought the property. The applicant wife stated that she returned from Lebanon in May 2001. She was pregnant and not working. She could not support herself and so did not go to live in the property but went to live with her parents. Her husband arrived in Australia in September and because of financial pressures they could not move out of her parents' home and reside in the subject property. The applicant wife submitted that she and her husband have bought a home in which they plan to live and therefore she and her husband should be eligible for the first home owners grant. 23 The applicant husband stated in a statutory declaration dated 20 April 2004 that he and his wife married on 12 October 2000 in Lebanon. His wife became pregnant and decided to stay with him in Lebanon because he was not ready to travel for financial reasons and because his mother needed his care. He stated that in May 2001 his wife travelled back to Australia to give birth to their baby. By the time she had the baby his application to migrate to Australia was still in progress. He arrived in Australia on 21 September 2001. After arriving he faced financial, emotional and physical stress and he and his wife remained in his father-in-law's home. In August 2003 when he and his wife wanted to buy a house their financial adviser asked them if his wife had bought a house previously. He stated that they told the adviser that they had but they had to return the grant as they had not occupied the house within 12 months of signing the contract. The applicant husband stated that during the process of buying the house in September 2003 their lawyer told them that as they had repaid the grant they could apply for a new grant. 24 The applicant wife's father stated in a statutory declaration dated 20 April 2004 that his daughter gave him permission to look for a property for her as she was working and had become engaged. He stated that she bought a property but he handled all the paperwork for her. He stated that the agent who assisted them explained the contract briefly to them but he did not mention anything about the first home owner grant and its conditions. He stated that his daughter travelled overseas to marry. His daughter intended to return 7 months later so that she could settle down and pay off the mortgage. 25 The applicant wife's father stated that circumstances changed and his daughter was obliged to remain overseas. He rented out the unit because he could not pay the mortgage. He stated that his daughter returned from overseas in May 2001 and her baby was born in September 2001. He stated that she remained living with them because she was undergoing financial stress as well as depression. He stated that she could not live alone in the subject property because she needed someone to help look after her and the baby. He stated that on 21 September 2001 his son-in-law arrived in Australia but again because of financial difficulties they could not move into the unit. He stated that he decided to sell the unit after the tenants moved out in February 2002. He stated that on 4 April 2003 his daughter received a letter from the Office of State Revenue requiring the repayment of the $7000 grant together with a fine of $1400. He stated that the fine was issued without any warnings. Oral Evidence to the Tribunal 26 The applicant wife gave oral evidence to the Tribunal. She told the Tribunal that she had not bought any property before the purchase of the Lakemba property and she was living with her parents at the time. She said that she was 19 years of age at the time of the purchase of the Lakemba property. She said that she relied on her father for everything. She said that although she signed the application form for the grant, the conditions were not explained to her. 27 The applicant wife agreed that the application form indicated that she would move into the Lakemba property by 30 September 2000 and she believed that information came from her father. She said however that by 30 September 2000 she would have known that she would not be able to take up residence as she was going overseas. 28 The applicant wife told the Tribunal that although she returned to Australia in May 2001 she could not return to work because she was pregnant and she remained with her parents. Her father was paying the difference between the rental income and the mortgage repayments. He sold the Lakemba property. She reiterated that she knew nothing about the conditions attached to the grant. The applicant wife told the Tribunal that as soon as she received the letter from the Office of State Revenue she realised that there was a requirement to occupy the premises and she repaid the grant immediately. She said that father paid it for her. Reasons and Decision 29 The facts are not in dispute in this matter. 30 On 21 September 2000 the applicant wife received a first home owners grant with respect to the Lakemba property. The Chief Commissioner authorised payment of the grant in anticipation of compliance with the residence requirement within 12 months of the completion of the transaction that is by 18 October 2001. Section 20(3) of the FHOG Act stipulates that if the residence requirement is not complied with the applicant must within 14 days after the end of the period allowed for compliance notify the Chief Commissioner in writing of the non-compliance and must repay the grant within a specified period. 31 The applicant did not comply with any of the conditions on which the grant with respect to the Lakemba property was made. She did not occupy the Lakemba property within the 12 month period or indeed at all. The property was rented out and then sold in April 2002. The applicant did not notify the Chief Commissioner of her failure to occupy the property. She did not notify the Chief Commissioner of the sale of the property nor did she repay the grant within the specified period following her failure to occupy. The statutory period for repayment of the grant expired on 1 November 2001. The Chief Commissioner independently discovered in 2003 that the property had been sold in April 2002 and issued a notice in April 2003 requiring repayment of the grant and imposing a fine. The grant was then repaid. 32 I accept that the applicant was young and inexperienced at the time she applied for the first grant and I accept that her father had significant amount of control over the Lakemba property. I accept that she may not have been fully aware of the conditions under which the first grant was made. I also accept that her personal circumstances changed so that she was unable to occupy the property the subject of the first grant. 33 However the applicant wife was the applicant to whom the first grant was authorised and she signed the application form agreeing to abide by the conditions. She failed to comply with the conditions on which that grant was made to her. In such circumstances the provisions of section 10(1) operate to preclude her and her husband from any entitlement to a further grant as any eligibility with respect to a further grant is dependant upon strict compliance with the conditions set out in section 20(3) of the FHOG Act. 34 Whilst I understand that the applicants feel aggrieved by the fact that they are not eligible for the first home owner grant, the legislation is clear with respect to eligibility and the Tribunal has no discretion with respect to the eligibility criteria. In these circumstances the Tribunal affirms the Chief Commissioner's decision not to authorise the payment of the grant to the applicants. Orders The Chief Commissioner's decision not to approve the applicants' application for a first home owner grant is affirmed.