Budak v. Chief Commissioner of State Revenue [2003] NSWADT 83

CITATION: Budak v. Chief Commissioner of State Revenue [2003] NSWADT 83 DIVISION: General Division APPLICANT PARTIES: Mile Budak RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 023268 HEARING DATES: 14/03/2003 SUBMISSIONS CLOSED: 03/14/2003 DATE OF DECISION: 04/23/2003

BEFORE: Needham J - 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: APPLICANT REPRESENTATION: In person RESPONDENT P Singleton, solicitor ORDERS: The Chief Commissioner's decision not to approve the applicant's application for a First Home Owners Grant is affirmed.

Introduction 1 Mr Mile Johny Budak ("Mr Budak"), the applicant in these proceedings, seeks review of the decision of the respondent not to pay him $7,000 by way of First Home Owners Grant in relation to a transfer to him of property located at 7/30 Speed Street, Liverpool ("the property"). 2 The property was transferred into Mr Budak's name on 23 September, 2002. Mr Budak then applied for a grant under s 7 of the First Home Owners Grant Act, 2000 ("the Act"), which application was received in the Office of State Revenue on 24 September 2002. Facts 3 All but one of the relevant facts are not substantially in issue. 4 The property was formerly owned by Mr Budak's father, Mr Jure Budak, and prior to that by his late mother. Mr Budak and his father went to see Mr Alan Edwards, solicitor of Alvaro Edwards, of Liverpool, to effect the transfer and to apply for the First Home Owners Grant. Mr Edwards gave evidence that he acted for Mr Budak senior on the transfer, and for Mr Budak junior on the application. 5 The transfer was completed on 23 September 2002, and shows a consideration of $1.00. No money changed hands at the time of the transfer. On 8 October 2002, $7,000 was paid by Mr Budak to his brother, Steve Budak, at the direction of his father, Mr Budak senior. That payment has some relationship to the transfer of the property, although the evidence is not clear on the exact nature of the payment. 6 The application for a First Home Owners Grant was refused by letter from the Commissioner for State Revenue dated 18 October 2002. On 29 October 2002, Mr Budak objected to the decision to refuse the grant pursuant to s 25(1) of the Act, and that objection was dismissed. On 27 November 2002 Mr Budak sought a review of the original decision by way of application to this Tribunal. Legislation 7 The Act provides:- "A first home owners grant is payable on an application under this Act is:- (a) the applicant ... complies with the eligibility criteria; and (b) the transaction for which the grant is sought:- (i) is an eligible transaction; and (ii) has been completed". 8 Mr Budak complies with the eligibility criteria. The transaction has been completed. 9 The issue in these proceedings is the amount of the grant. Section 18(1) of the Act provides:- "The amount of a first home owners grant is the lesser of the following:- (a) the consideration for the eligible transaction; or (b) $7,000". 10 Section 13(7) of the Act provides,:- "The "consideration" for an eligible transaction is:- (a) in the case of a contract for the purchase of a home - the consideration for the purchase ..." The Evidence 11 The main evidentiary issue related to the payment by Mr Budak to his brother on 8 October 2002. 12 Mr Mile Budak said that the payment of $7,000 was made by him to his brother Steve as payment to his father for renovation work done on the flat. He said that the renovation work was worth far more than $7,000 but that was all his father would accept. The payment was made to Steve on his father's direction. He agreed, in cross-examination by counsel for the respondent, that the money was paid after lodging his application for the First Home Owners Grant, and after he was given an extract of the Act by the Parramatta Office of State Revenue. 13 Mr Jure Budak was called to give evidence. Mr Budak senior said that the payment of $7,000 was a payment made by Mr Budak to his father because someone stole Mr Budak senior's car, and Mr Budak was happy to give him that money. It was paid to Steve because of money owed by Mr Budak senior to his son Steve. Mr Budak senior was outside the Court when Mr Mile Budak gave his evidence. 14 Mr Alan Edwards also gave evidence. He did not have much independent recollection of the transaction, but had a file note (exhibit 2) setting out the effect of a conference he had with Mr Jure Budak on 19 September 2002. Mr Mile Budak was not present, although he was waiting outside. That file note reads, in part:- "I asked Mr Jure Budak whether he was aware that by signing this document he was giving the unit to his son for $1.00 and that he would not receive any more money from his son and that he would have no claim against the property. Mr Jure Budak indicated that he understood that by signing the document he would be transferring the property to his son". 15 The file note goes on to record that in Mr Edwards' opinion, Mr Budak snr was lucid and understood what he was doing. 16 All three witnesses agree that at no time was consideration of $1.00 paid to Mr Budak senior, as noted on the Transfer. 17 I consider that Mr Jure Budak and Mr Edwards gave honest, straightforward evidence which best reflected their recollection of events. Mr Edwards, understandably, did not have much independent recollection of the circumstances surrounding the transfer, but his evidence of his invariable practice in filling out and having such documents executed was believable and I accept it. Mr Mile Budak also gave evidence in a forthright and straightforward, sometimes direct way, and I am of the view that the differing explanation from his father for the reason behind the payment of $7,000 can be explained by the informal way in which things involving money and property are often done in families. 18 In any event, I do not need to resolve the factual difference, for this reason. Section 18(1) of the Act allows the payment of a First Home Owners Grant in the amount of the lesser of the following:- (a) the consideration for the purchase; or (b) $7,000. 19 In this case, the witnesses are unanimous that the stated consideration on the transfer, $1.00, was not in fact paid. Even if one accepts either of the Budaks' explanation for the payment of $7,000 on its face, that money was not paid by way of "consideration" for the purchase of the unit (see s 13(7), quoted above). Therefore, the "consideration" for the purchase of the unit was zero. Mr Edwards gave evidence that he considered a stated consideration of $1.00 to be a "nominal" consideration, inserted where the property was in effect a gift. This would accord with normal conveyancing practice. 20 In a sense, the decision of the respondent was in error in that it rejected the application outright, notwithstanding the stated consideration of $1.00 payable on the transfer. However, as the evidence revealed that no payment was made at the time of the transfer as consideration for the purchase, the decision to reject the application was the correct one, notwithstanding the fact that on the face of the application, Mr Budak would have been entitled to $1.00 as a First Home Owners Grant. 21 Mr Budak sought to make a case that Mr Edwards should have advised him that a transfer of $1.00 would not attract a First Home Owners Grant. This is not the forum for such a complaint. The Tribunal has jurisdiction only to review the application and is fit within the eligibility criteria. It is not the Tribunal's role to form a view of whether things should have been arranged differently if Mr Budak wished to ensure that he succeeded in obtaining a grant. Accordingly, I have not considered Mr Edwards' conduct of the matter in any way except for the limited matter dealt with above, where his file note throws some independent light on the question of whether any consideration was paid for the transfer and, if so, how much. Order 22 The decision of the Chief Commissioner of State Revenue to reject the application for a First Home Owners Grant in the sum of $7,000 is affirmed.