CITATION: Philpot v Chief Commissioner of State Revenue [2007] NSWADT 243 This decision has been amended. Please see the end of the decision for a list of the amendments. DIVISION: Revenue Division APPLICANT PARTIES: Kim Maree Philpot RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 066115 HEARING DATES: 5 March 2007 and 27 June 2007 SUBMISSIONS CLOSED: 11 July 2007 DATE OF DECISION: 15 October 2007 BEFORE: Greenwood J - Judicial Member CATCHWORDS: Duties Act - First Home Plus Scheme - residence requirement - First Home Owners grant - reversal by administrator MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 First Home Owner Grant Act 2000 Bates v Commissioner Chief Commissioner of State Revenue [2004] NSW ADT 13 Chief Commissioner of State Revenue v Ferrington [2004] NSWADTAP 41 Cushieri V Chief Commissioner of SR [2003] NSWADT 288 Gregoriou v Chief Commissioner of S R [2003] NSWADT 145 CASES CITED: Kamara v Ministry of Transport (GD) [2004] NSWADTAP 31 McKellar V Chief Commissioner of SR [2005] NSWADT 116 Powles and Anor v Chief Commissioner of State Revenue [2006] NSWADT 156 Rositano v Chief Commissioner of SR [2004] NSWADT 289 Snow -v- Commissioner Chief Commissioner of State Revenue [No 1] [2005] NSWADT 244 Zakariya v Chief Commissioner of State Revenue [2003] NSWADT 26 APPLICANT In person REPRESENTATION: RESPONDENT S Benjamin, agent ORDERS: 1.The decision of the Chief Commissioner of State Revenue to request repayment of the First Home Owner Grant in the sum of $7,000, together with interest and a penalty of 20% and repayment of FHP is affirmed. The applicant's application for review is dismissed. ; 2.The application for suppression is refused REASONS FOR DECISION The Facts 1 The applicant received a first home owner grant of $7,000.00 under the First Home Owner Grant 2000 ("the Act") in or about September 2004 in respect of a property near Ulladulla, ("the property"). The settlement date for the property purchase was 9 August 2004. The contract exchange date was 28 June 2004. 2 The administrator of the Act, the Respondent, the Chief Commissioner of State Revenue ("the Commissioner"), has now required the applicant to repay to the grant plus penalty interest at the rate of 20% because the applicant, in the opinion of the Commissioner, has failed to satisfy the key precondition to the grant. In this instance the Commissioner has found that the applicant failed to occupy the premises as her principal place of residence within 12 months of the date of settlement. 3 Subsequent to the issue of the assessment to recover the grant, on the 20April 2006, the Respondent issued an assessment to recover the stamp duty concession granted in the sum of $8117.00 and with interest in the sum of $1717.15. 4 The applicant has applied to the Tribunal for review of the Commissioner's disallowance of her objection to the decision regarding the First Home Owner grant, and First Home Plus stamp duty concession dated 5 September 2006. 5 This matter came before the Tribunal on the 5 March 2007. An initial and interlocutory verbal application for suppression pursuant to S75 of the Administrative Decisions Act was made by the applicant and disallowed. 6 The applicant sought and was given further time to provide written submissions in response to the Commissioner's written submissions on the principal matter for determination before the Tribunal, which expired on the 18th April 2007. A letter signed by the applicant with material in a sealed envelope marked " Private & Confidential 'and addressed directly to the Judicial Member. With a notation that "….the medical report was confidential and only to be read by the presiding member' was filed by the Applicant on 18 April 2007. There was concern that the material had not been properly served on and provided to the Chief Commissioner, and further directions were made directing the Applicant to provide and serve a copy of the material in the envelope to the Respondent and any response by the Respondent to be made by 28 May 2007 .The additional directions were made to ensure both parties were afforded procedural fairness .The Respondent complied with all filing directions 7 The Applicant replied on the 28 May 2007 seeking a further extension of time based on the fact that she was seeking Legal Aid advice 'to seek advice concerning the issue of access to the document'. By further letter dated 19 June 2007 the Applicant consented to the Respondent receiving a copy of the material in the envelope marked to the Judicial Member as "private and confidential" (but further reserved her position to provide the material to the Respondent in the event that she did not obtain a suppression order. The matter was placed in a directions list of the 27 June 2007 to ensure all directions had been complied with and all parties had copies of material filed by the other 8 By telephone call to the Tribunal registry on 15 June 2007 the applicant advised that she intended to make a further application for a suppression order pursuant to S75 of the Administrative Decisions Tribunal Act 1997, (notwithstanding her original interlocutory application had already been determined) and that application was made on the 27 June 2007, with the presiding member on that day reserving her position and a direction that each party file and serve all its material by the 11 July 2007 and the application for the suppression order be dealt with on the papers by consent . The Legislation Application for Suppression Order 9 The sections which deal with suppression orders are S 75 and S126 as follows: S 75 of Administrative Decisions Act 1997 states: 75(1) If the proceedings before the Tribunal are to be determined by holding a hearing, the hearing is to be open to the public (2) However if the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, it may (of is own motion or on the application of a party ) make any one or more of the following orders : (a) an order that the hearing be conducted wholly or partly in private, (b) an order prohibiting or restricting the disclosure of the name , address , picture or any other material that identifies , or may lead to the identification of , any person ( whether or not a party to proceedings before the tribunal or a witness summoned by , or appearing before the Tribunal) or the doing of any other thing that identifies , or may lead to identification of , any such person, (b1) an order prohibiting or restricting the publication or broad cast of any report of proceedings before the Tribunal: (c) an order prohibiting or restricting the publication of evidence given before the Tribunal ,whether in public or in private, or of matters contained in documents lodged with the Tribunal or received in evidence by the Tribunal , (d) an Order prohibiting or restricting the disclosure to some or all of the parties to the proceedings of evidence given before the Tribunal or received in evidence by the Tribunal , in relation to the proceedings (2A) The Tribunal cannot make an orders under subsection (2)(b) in respect of any proceedings to which section 126 applies. (2B) The Tribunal may from time to time vary or revoke an order made under subsection (2) Mediation sessions and neutral evaluation sessions under part 4 are to be conducted in private 10 The first interlocutory application made by the applicant for a suppression order pursuant to S75 was made before the hearing in an open Tribunal forum had commenced, on the 5 March 007. The applicant made her application by way of verbal submissions at which time she stated by way of application "I don't want my personal details known to my employer or my mortgagee, because I don't want people to know my business." The application was disallowed as not falling within the three main reasons which warranted such an order and which is set out more fully in paragraphs 11, 12 and 13 in this decision. 11 The applicant made her second application for suppression orders after final directions for filing of all material related to the principal matter for determination, had expired and after leave was sought and granted on the 27 June 2007. In support of the second application the applicant sought to rely upon a short undated letter signed by Dr Erin Crumlin, a general medical practitioner. The letter is addressed to the Tribunal and purports to refer to the first medical report (which was reserved by the applicant) as to the failure of the applicant to reside in her house at Lake Tabourie and in the second paragraph the medical practitioner makes a general statement as to what the medical practitioner feels about the applicant's emotions. The letter is of limited value and falls short of forming any expert medical report as to the applicant's specific medical condition upon which to justify the making of a suppression order. 12 The applicant sought in both cases an order "to have her name and any identifying details suppressed from publication" pursuant to S75(2)(b) and (c). The Respondent in both cases did not take a position, leaving the matter for determination by the Tribunal. The case of Lloyd v TCN Channel Nine Pty Ltd and Another [1999] NSWADTAP3 is the case in point which discusses the interplay of S 75 and S126 of the ADT Act 1997. Section 126 was amended since that decision, however the principals to be adopted may be summarised as follows: (a) Section 126 does not prohibit the actual reporting of proceedings before the Tribunal It prohibits publication of the names of a party, or witness, except as a part of the publication of an official report or judgement, without consent of the Tribunal. (b) The applicant bears the burden of proof in seeking a suppression order. (c) The burden of proof required is for the applicant to show that their circumstances override the general principles that: i) "proceedings that are in the nature of public hearings dealing with applications and complaints where final determinative orders are intended to be made are again seen by the legislation as appropriate to conduct in public." The principal of openness and transparency of due process. ii) hardship to the applicant which carries special weight The principal of providing a persuasive reason .Kamara v Ministry of transport (GD) [2004]NSWADTAP31 iii) Special circumstances as the justice of the case requires, such as need for secrecy and confidentiality or special delicacy 13 In the applicant's first verbal application her reasons given for suppression were personal, namely the dislike of potential other persons becoming aware of her personal affairs. This particular personal dislike (which would be a common feeling open to each and every party who comes before a court) was not considered sufficient by the Tribunal to displace the principal of transparency. Similarly the burden of proof to prove a particular hardship or need for special secrecy was not discharged by the Applicant. In the second application by the applicant for suppression, the applicant sought to lead new evidence in the form of a medical practitioner's letter. The Tribunal finds this additional evidence also fails to discharge the same burden of proof as the letter is not of sufficient weight as to make it an expert report or expert medical evidence – the author couches it in terms of what she feels, rather than as a medical opinion and no condition is identified and no consequences were expressed. At best it is a restatement that the Applicant doesn't like her private business known, and it therefore fails to meet the test of special circumstances necessary to discharge the onus placed on the applicant .The application for a suppression order is therefore disallowed. Principal Matter 14 The right to make an application for a grant is given by s 7 of the Act. The applicant must satisfy the eligibility criteria in S7(1)(a) which is to comply with the eligibility, before their application for grant could be approved. Section 45 gives the Commissioner the power to request the repayment of a grant and to impose a penalty for non-compliance with such a request, or with the conditions of a grant. 15 The grant is commonly made in advance of the applicant moving into occupation as per S7(3) and s 20 . As a result of a statutory declaration dated 28 February 2006 signed by the applicant, the Commissioner concluded that one of the conditions to which the grant was subject – the "residence criterion" – has not been satisfied. 16 Section 12(1) Criterion 5 –residence requirement (effective as from 1 January 2004) provides: "(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 1(A) 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 …" 17 Section 14 dealt with the administrative conditions contemplated by clause 12 above as follows: (1) An application for a first homeowner grant is to be made to the Chief Commissioner or a financial institution or other person with whom the Chief Commissioner has made and administration agreement. (2) An Application: (a) must be in a form approved by the Commissioner, and (b) must contain the information required by the Chief Commissioner. (3) An applicant must provide the Chief Commissioner with any further information the Chief Commissioner requires to decide the application. (4) Information provided by an applicant in or in relation to an application must, if the Chief Commissioner so requires , be verified by statutory declaration or supported by other evidence required by the Chief Commissioner. (5) An application may only be made within a period (the "application period"): (a) commencing on the commencement date of the eligible transaction to which the application relates and, (b) ending 12 months after the completion of the eligible transaction to which the application relates 18 In the applicant's case the 12 month period began on the 9 August 2004 and in the absence of an application for an extension of time, the period of the mandatory 6 months period of occupation required, expired on the 9 August 2005. The Residence Issue 19 The issue in this case is - Whether the applicant occupied the premises as a principal place of residence within the time period required by the Act and for the 6 month period required by the Act and on the applicant's own admission, she has not done so on the basis given in her statutory declaration dated 28 February 2006 "I was unable to find employment in the area and would not have been in a position to meet the mortgage payment of $713.00 per fortnight". 20 Section 29(3) of the Act provides that an applicant who seeks review of the Commissioner's determination of an objection has the onus of proving his or her case. That is, the onus of proof rests on the applicant to establish, on the balance of probabilities, those matters that she seeks to put before the Tribunal in support of her case. 21 The applicant gave evidence during the hearing as follows: a) That at the time she purchased the subject property and exchanged her contract of sale, the applicants' contract of employment had already terminated and she did not have any further extension of her employment contract or other employment organised. That the applicant had in January 2004 signed a 6 month lease for her rental property at her current Maroubra residential address, that lease expired in June 2004 and she renewed it pursuant to the terms of the lease and by continuation of her occupation. The applicant still resided at the rented Maroubra address as at the date of the hearing. b) That the applicant had spent money on the subject house after settlement to plant trees and buy furniture to improve the property and she attended the property on some weekends. c) The applicant subsequently rented the subject property to a tenant in September 2005, who had to be evicted for non payment of rent. d) At one point, the applicant's sister and mother moved into the house. e) That as at the date of the hearing the applicant continued to reside at her Maroubra Road, Maroubra address. f) The applicant bought a motor vehicle 22 At this point, the Applicant was candid about the fact that she did not reside in the property for reasons relating to her failure to have employment and she did not seek to raise any evidence before the Tribunal as to any prevailing medical condition .The Tribunal notes that not withstanding the express nature of the previous directions given for filing and serving the reserved material on the Respondent, it is noted that the material in the envelope previously identified as a medical report in a letter of the applicant's submissions filed 18 April 2007 marked "private and confidential" was not served by the Applicant on the Respondent , but was "reserved" in further correspondence which issued from the Applicant. At this point the Tribunal can only deal with evidence properly placed before it in accordance with the directions and cannot deal with material the applicant seeks to retain. Accordingly that material is not read. 23 The leading decision in the Tribunal dealing with what is required in order to establish residence is Chief Commissioner of State Revenue -v- Ferrington [2004] NSWADTAP 41 considered the criteria applicable to section 12(1) of the Act. In particular, paragraph [42] sets out the 5 point test: "First, the words "principal place of residence" should be given their ordinary meaning in the context in which they appear, which is to live in the property (within the meaning of the applicable legislation) - for 6 months within 12 months from the date settlement . Secondly, consideration of whether a person has been residing or occupying premises as their principal place of residence is to be assessed objectively, in the light of the circumstances relating to the actual occupation of the dwelling. In the current circumstances the Applicant admits that she did not live in the subject property and she lived at her Maroubra address from the time of settlement to the date of the hearing. Thirdly, the intention of the person concerned, gauged objectively, is relevant but not determinative of the issue. . In the current matter the applicant gives evidence that she intended to live in the house, but couldn't do so because she could not obtain a job in the location of the property, notwithstanding that her current employment contract had virtually been terminated at the time the contract to purchase had exchanged. Fourthly, to occupy a home as his or her principal place of residence a person's occupation must have a degree of permanence to it: a connection to a place of residence of a transient, temporary, contingent or passing nature is not sufficient, nor is occupation for some other purpose. In this current case, the applicant did not have permanence of any job at the time of purchasing the property and she led no evidence capable of making a finding of any permanence of residence, other than the Maroubra address. Fifthly, the short length of a person's residence, while relevant, is not determinative of the issue. … This is so since a recipient's occupation of a home, while short, may have the requisite degree of permanence to it. But that will not happen if, when considered objectively, the occupation was transient, temporary, contingent or of a passing nature, or for some other purpose. One may occupy premises for a short time on a transient, temporary, or contingent basis, but one can also occupy for a short time as one's principal place of residence. It is the nature of that occupation which provides the element of permanence. The fact that a period of actual occupation is short, as in the present case, will in practice make it harder for a recipient to show that the occupation was as his or her principal place of residence, but it will not make it impossible … " In the current Case, the applicant gave evidence, that she went to the property on weekends to clean it up and make improvements, before she rented it, however she continued to live in the ordinary sense of maintaining her belongings and being in actual occupation most of the time at the Maroubra address. In this case given the existence of the Maroubra address, it is impossible 24 The first point is a point of statutory construction. The term "principal place of residence" is not defined in the Act, and thus has its ordinary meaning. The word "principal" can mean "main" as well as "only", and does not exclude having another, subsidiary, place of residence (such as with parents or friends). In this case, the applicant lived and rented her Maroubra address at all relevant time periods, up to the date of the hearing. 25 The second point requires consideration of the "circumstances relating to the actual occupation of the dwelling". In order to "occupy" a dwelling, it seems that the applicant must be the person "with the immediate supervision and control of the premises, and the power of permitting the entry of other persons" (see Chief Commissioner of State Revenue -v- Ferrington (supra) at [29]). The relevant circumstances relating to occupation in the current situation is that the applicant lived at her Maroubra address, which was a rented premises which she continued to maintain since before and after the purchase of the subject property. 26 The third point requires a finding as to the intention of the applicant. While intention is not determinative, it is relevant. A mere subjective intention to occupy the property is not enough: see Zakariya v Chief Commissioner of State Revenue [2003] NSWADT at [14]. 27 The Tribunal finds that the applicant's intention was to occupy the property as a residence, but as the applicant had terminating contractual employment at the time of exchange of her contract to purchase the subject property, no likelihood of her contract of employment being renewed and no employment in the location of the property so as to be able to reside in it and work to pay the mortgage – the applicant, relevantly could not fulfil her intention as her pre-existing circumstances combined to effectively prevent any likelihood of complying with occupation of the subject property as her home and her best intentions could not be made good and were unlikely ever to be fulfilled by the applicant within the time limitations specified by the legislative conditions.- her error was in not appreciating the full and real effect of her existing financial circumstances. 28 The fourth point, the "degree of permanence", requires a finding on the facts of the case as to the permanence, however short, of the occupation. Permanence may be shown by the applicant changing her address with the relevant authorities, introducing substantial furniture to the property, or making changes to it consistent with her permanent occupation. In this case the Applicant provided evidence that she had taken steps to improve the gardens of property and purchase furniture, however these were minor and most significantly she did not change her Maroubra address, she sought to renew her Maroubra lease and to rent, notwithstanding she also had to finance the mortgage for the subject property. 29 The fifth point, the length of the residence, requires a finding on the period of time during which the applicant lived in the house. In this case, no evidence of the period of occupation was given by the applicant, other than her mother and sister went to occupy the property for a short time, although some written material filed in this Tribunal indicate the mother and sibling had to cancel that occupation indicates some inconsistency with the verbal evidence given by the applicant. The applicant herself went there on weekends, insufficient evidence was provided to substantiate length of time living at the residence and this was somewhat overshadowed by the admission of the retention of the Maroubra rental address used by the applicant who indicated that the Maroubra address was closer to the two jobs she worked at. 30 The period of occupancy was therefore unsubstantiated in the face of the applicant's continuation to maintain her Maroubra address and her admission of her retention of the Maroubra premises. 31 There is little or no dispute as to the facts accepted by the Commissioner with the exception that the failure to occupy arose out of the Applicant's failure to obtain a job in the locality of the property. The Applicant has been candid in her account of what occurred, however that was after the Commissioner's office had initiated its usual audit. The failure of the Applicant to find employment in the locality was not regarded by the Commissioner as an exceptional circumstance in this case as Applicant's employment circumstances were already questionable at the point of exchange of contracts and the probability of failure to occupy was already a forgone conclusion. This is a view the Tribunal agrees with in this instance. 32 The legislature has set the condition of occupation of the property as a home as a prerequisite for receiving the grant and poor decision making on the part of the Applicant in failing to effect that outcome is also not in itself an exceptional circumstance. In this regard the cases cited and relied upon by the Applicant do not support her contention as the parties in those cases already had permanence of employment and later cases, such as is Chief Commissioner of State Revenue -v- Ferrington [2004] NSWADTAP 41 considered and refined the 5 point test and the effect of reciprocity incumbent on the applicant to carry out the statutory criteria applicable in section 12(1) of the legislation. The recent decision of Powles and Anor v Chief Commissioner of State Revenue [2006] NSWADT 156 which is a case in point close to these circumstances where Mr Powles and his wife failed to obtain employment in Armidale and then also failed to take up residence, is a parallel case in point. In that case the applicants also were not successful in establishing special circumstances. CONCLUSION 33 Accordingly the Tribunal finds that the requisite compliance with the key precondition for occupation by the applicant has not been met and the Tribunal agrees with the Commissioner's determination. INTEREST AND PENALTY 34 In this matter the Commissioner has applied and sought the standard 20% penalty sought, on the basis of the facts and circumstances disclosed by the Applicant. In addition the Applicant never relinquished her Maroubra address which when coupled with the fact that her employment was not permanent at the time of the exchange of the contract to purchase, rendered failure to comply with conditions of the grant as highly probable and inevitable 35 The Commissioner has a discretion under s12 and s14, where there are special circumstances, however the Commissioner's attitude in this matter is that there are no special circumstances to warrant a reduction in penalty which is reflective of the commercial loss of public money and similar to penalties levied on other persons in the same circumstances as fair and candid. On this issue the Commissioner relied on Bates v Commissioner Chief Commissioner of State Revenue [2004] NSWADT 13 and Snow v Commissioner Chief Commissioner of State Revenue [No 1] [2005] NSWADT 244 and consequently the Commissioners decision is affirmed. 36 In relation to the First Home Plus stamp Duty Concession, the responsibility of the Applicant under this legislation is the same legal obligation to meet the residency requirement and once the applicant has failed to meet that criteria pursuant to FHOG Legislation, the eligibility criteria for the stamp duty also fails and therefore the Tribunal agrees with the Commissioner's determination .The First Home Plus stamp duty will also need to be repaid by the Applicant to the Commissioner. ORDER 1. The decision of the Chief Commissioner of State Revenue to request repayment of the First Home Owner Grant in the sum of $7,000, together with interest and a penalty of 20% and repayment of FHP is affirmed. The applicant's application for review is dismissed. 2. The application for suppression is refused. 02/05/2008 - Property to be known as "near Ulladulla". - Paragraph(s) 1 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.