Yucel v Chief Commissioner of State Revenue [2004] NSWADT 53

CITATION: Yucel v Chief Commissioner of State Revenue [2004] NSWADT 53 DIVISION: General Division APPLICANT PARTIES: Petek Yucel RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 033293 HEARING DATES: On the papers SUBMISSIONS CLOSED: 12/30/2003 DATE OF DECISION: 03/16/2004

BEFORE: Higgins S - 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 : Administrative Decisions Tribunal Act 1997 First Home Owners Grant Act 2000 CASES CITED: Bates v Chief Commissioner of State Revenue [2004] NSWADT 13 Tomasian v Chief Commissioner of State Revenue [2004] NSWADT 37 APPLICANT REPRESENTATION: In person RESPONDENT S Benjamin, solicitor ORDERS: The Commissioner's decision is affirmed.

BACKGROUND 1 On 27 October 2003, Naci Yucel ("Mr Yucel") made an application to the Tribunal, on behalf of his daughter, Petek Yucel ("Ms Yucel"), seeking review of the decision of the Chief Commissioner of State Revenue ("the Commissioner") to dismiss his daughter's objections to the Commissioner's decision to request that his daughter repay the $7,000 first home owner grant that his daughter had been paid pursuant to the First Home Owner Grant Act, 2000. The application for review also sought review of the Commissioner's decision to impose a penalty of $1,400 in respect of the grant. 2 The basis of the Commissioner's decision was Ms Yucel's failure to occupy the property to which the grant related as her principal place of residence within 12 months of having purchased the property. This was a requirement under s.12 of the First Home Owner Grant Act, 2000. 3 The matter came before the Tribunal at directions hearings on 25 November 2003. At those directions hearings, the Tribunal set the matter down for hearing on 12 January 2004. The Tribunal also ordered the applicant to file and serve any documents on which she sought to rely, on or before 16 December 2003. 4 On the same day Mr Yucel and his wife, Yildiz Yigiter, requested in writing that the hearing date be adjourned as their daughter was overseas until 30 August 2004. In that letter they stated that when they attended the directions hearing they did not realise that their daughter needed to be present for the hearing. From the papers contained in the Tribunal's file it would appear that an agreement was reached between the Commissioner and Mr Yucel that the matter could be decided on the papers. It would appear that the Tribunal then amended the orders giving the Commissioner a further fourteen days after 16 December 2003, to file any additional material on which he sought to rely and ordered that the Tribunal determine the application on the papers. 5 The Tribunal has jurisdiction to determine this application by virtue of ss.25 and 28 of the First Home Owner Grant Act 2000 and s.38 of the Administrative Decisions Tribunal Act 1997. 6 As mentioned above, this application was not lodged by Ms Yucel, the person interested in the decision by the Commissioner. The application was lodged by her father, Mr Yucel. However, Mr Yucel expressly states that he lodges the application on behalf of his daughter and he supported this with a registered General Power of Attorney, dated 8 July 2003, executed by his daughter. As the Commissioner raised no objection to the manner in which Ms Yucel lodged her application with the Tribunal, the Tribunal has not considered this issue any further. RELEVANT LEGISLATION 7 The relevant legislation is that contained in the First Homes Owner Grant Act 2000 ("the Act"). That Act establishes a scheme to assist persons buying or building their first home by providing them with a grant of a described amount of money. To be eligible for a grant, an applicant must satisfy the five eligibility criteria that are contained in Division 2 of Part II of that Act and the purchase of the property for which the grant is sought must be an "eligible transaction". 8 The relevant eligibility criteria in this application is the fifth criteria which is set out in s.12 (1) of the Act and provides, so far as is relevant, as follows: "s.12 (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 twelve months after completion of the eligible transaction or a longer period approved by the Commissioner. " 9 Section 13 of the Act defines the term an "eligible transaction" for the purposes of the Act. In this case, it is not disputed that the contract for the purchase of the property, by Petek Yucel, was an "eligible transaction" under the Act. 10 Sub-section 13(5) of the Act provides that where the transaction that relates to a contract for the purchase of a home, that transaction is completed when the purchaser becomes entitled to possession of the home under that contract. 11 Section 20(1)(b) of the Act provides that the Commissioner may authorise the payment of a grant in anticipation of compliance with the "resident requirement", if the Commissioner is satisfied that the applicant who is required to comply, but has not complied, with the residency requirement, intends to occupy the home as his/her principal place of residence within twelve months after completion of the eligible transaction. That is, under this paragraph the Commissioner is given power to issue a grant prior to an applicant occupying the property as his/her principal place of residence. 12 The sub-section also gives the Commissioner power to extend the period within which the applicant must take up occupancy of the property as his/her principal place of residence. 13 Sub-section 20(3) of the Act provides that where a grant is paid in anticipation of compliance with the "resident requirement", such payment is made on condition that, if the "resident requirement" is not complied with the applicant will within fourteen days after the end of the period allowed for compliance, give written notice of that fact to the Commissioner and repay the amount of the grant. 14 The term "resident requirement" is defined in s.3 of the Act in similar terms to that contained in s.12. A failure to comply with subsection 20(3) constitutes an offence, which is punishable by a maximum penalty of 50 penalty units. 15 Section 23 of the Act gives the Commissioner power to vary or reverse a decision he has made in respect of an application for a grant where he is later satisfied that the decision is incorrect. However, he must do so within five years of the original decision having been made. 16 Section 24(1) of the Act provides that where the Commissioner decides to reverse an earlier decision on an application for a grant, the Commissioner is required to give the applicant written notice of the reversal and state in the notice the reasons for the reversal. 17 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/her case. That is, the onus of proof rests on the Applicant to establish, on the balance of probabilities, those matters, which he/she contends for. 18 Section 45 of the Act gives the Commissioner the power to request the repayment of the amount approved and paid under an application for a grant under the Act. That section, so far as is relevant, provides: "45(1) The Chief Commissioner may by written notice require an applicant (or a former applicant) for a first home owner grant to repay an amount paid on the application if: (a) the amount was paid in error, or (b) the Chief Commissioner reverses the decision under which the amount was paid for any other reason. (2) If, as a result of an applicant's dishonesty, an amount is paid by way of a first home owner grant, the Chief Commissioner may, by the notice in which repayment is required or a separate notice, impose a penalty not exceeding the amount the applicant is required to repay. (3) If an applicant (or a former applicant) for a first home owner grant failed to make a repayment required under this section or the conditions of the grant, the Chief Commissioner may, by written notice, impose a penalty not exceeding the amount the applicant is required to repay. (4) If an amount is paid in error on an application for a first home owner grant by a third party, the Chief Commissioner may, by written notice, require the third party to repay the amount to the Chief Commissioner". EVIDENCE 19 From the material filed by the respective parties it would appear that the following is the sequence of events in respect of Ms Yucel's application for a first home owner grant: (a) On 24 September 2001, Ms Yucel settled on the purchase of the property for which she sought a first home owner grant. While there is no information before the Tribunal it is assumed that Ms Yucel also obtained her first home owner grant at about this time. (b) On 30 October 2002, Ms Yucel moved into the property. (c) Some time prior to 18 February 2003, the Commissioner requested Ms Yucel to provide evidence that she had taken up occupation of the property as her permanent place of residence within the time prescribed by s.12 of the Act. The Tribunal assumes that this request was in the standard form in light of Ms Yucel's response, which is referred to below. That is, the Commissioner requested copies of electricity bills and rate notices for a period of three months during the prescribed 12 month period. (d) On or about 18 February 2003, Ms Yucel wrote to the Commissioner and responded to his request. In her letter she stated that she did not have an electricity bill as the energy supplier had continued to bill the former tenants of her property. In response to the Commissioner's request she also provided a statutory declaration in which she stated that she had purchased the property with the intention of it being her principal place of residence. She went on to state the following: "However the unit was formally tenanted and that along with the fact that I could not afford to live [in] it at the time prevented me from residing there. Within the twelve month period of settlement I requested that the tenant vacate the property. The tenant vacated 60 days later on 22/10/02 (refer to the attached letter from LJ Hooker). After completing general repairs and cleaning I moved into the abovementioned property on 30/10/02 and this has been my principal place of residence to date". Ms Yucel also provided the Commissioner with a copy of a letter from the Divisional Returning Officer of the Australian Electoral Commission. That letter stated that on 5 December 2002, she had advised the Electoral Commissioner that her enrolled address was that of the property for which she received a first home owner grant. (e) On or about 2 May 2003, the Commissioner wrote to Ms Yucel advising her that pursuant to s.23 (1) of the Act he had determined to reverse the decision under which the grant had been paid to her as she did not occupy the premises as her principal place of residence within 12 months of settlement of the property. In the letter he also stated that he required her to repay the amount of $7,000 together with a penalty of $1,400. That penalty represented 20% of the amount of the grant. (f) On 1 June 2003, Ms Yucel wrote to the Commissioner objecting to his decision to reverse his earlier decision and to require her to repay the grant together with a penalty. In that letter Ms Yucel states that she occupied the property as her primary place of residence only fourteen days after the required time period. She also set out the reasons why there had been a delay in her occupying the premises and why she did not notify the Commissioner of the delay. In this regard she stated that she had bought the apartment with the intention of moving in with her fiancée shortly after settlement. However, her fiancée broke up their six year relationship shortly before they were about to move into the unit. The break up she states was unexpected and a total surprise. At the same time she was also going through a change in employment. She had been employed as an art teacher and had resigned on 14 June 2003. Her resignation was voluntary and after her resignation she began to do casual work. With the break up in the relationship and the loss of a stable income, Ms Yucel states that she was not in a position to move into the property. Notwithstanding this she decided to move into the property shortly before the prescribed 12 month period had expired. At the time the property was tenanted and she informed the real estate agent about her decision and requested the agent to take steps to ensure that the tenants vacated the property. She states that the tenant took the whole 60 day notification period to move and by that time the 12 month period had expired. She goes on to state that she did not phone the Commissioner about the delay because at the time of the settlement of the property her fiancée was the person who had handled all the paper work regarding the buying of the property, the first home owner grant and any property management issues. She states that she did not know that she had to contact the Commissioner or realise that she was breaching the rules. At the time she wrote her letter she had been living in the property for a period of 8 months and she stated that she was a "genuine" first home owner and that she attempted to move into the property as soon as possible given her life and financial circumstances at that time. (g) On 22 August 2003 the Commissioner advised, in writing, Ms Yucel that he had considered the matters she had raised but had decided to disallow her objection. On the same date the Commissioner issued Ms Yucel a notice requiring her to pay the $8,400 by 11 September 2003. 20 On 16 December 2003, an unsigned document purporting to be from Ms Yucel was filed with the Tribunal. The document was dated 15 December 2003. In the document Ms Yucel again emphasises that she is a genuine first home owner who "made an honest mistake" and: "… due to unavoidable circumstances I could not move into my unit within the one year period": My unit was tenanted at the time and I sincerely thought that the tenants only needed a 30 day notice to vacate my unit. However I was required to give my tenants 60 days notice. The tenants took this time as well as an additional few days to vacate my unit. I moved in straight after I left and I did not consider at the time, of informing the OSR and I made the mistake of thinking it was not necessary to do so. I am 24 years old and I always lived at home with my parents prior to moving into my unit. I had never dealt with issues relating to tenancy law. I understand that I made a mistake and I feel that my lack of knowledge and inexperience in these areas has been the cause." REASONS AND DECISION 21 The role of the Tribunal is to determine whether the Commissioner's decision is the correct and preferred decision having regard to all the relevant facts and the applicable law (see s.63 of the Administrative Decisions Tribunal Act, 1997). While there is generally no onus of proof in a merits review of an administrator's decision, as mentioned above, in this case s.29 (3) of the Act places the onus on Ms Yucel to establish those matters which she contends for. In this case, the relevant matters are whether she in fact met the resident requirement under s.12 of the Act and whether the Commissioner correctly exercised his discretion under s.23 (1) or s.45 of the Act having regard to her particular circumstances. 22 The Tribunal has recently considered the question of what is meant by the requirement in s.12 (1) of the Act in relation to an applicant having "occupied" the property the subject of a grant as the applicant's "principal place of residence": see Bates v Chief Commissioner of State Revenue [2004] NSWADT 13 at [31 to 39] and Tomasian v Chief Commissioner of State Revenue [2004] NSWADT 37 at [27 to 30]. In these decisions the Tribunal held that the following principles applied: a) The terms "occupy" and "principal place of residence" should be given their ordinary meaning having regard to the objects and purposes of the Act. That purpose being similar to the abovementioned tax rating cases in that the legislative scheme of the Act is to provide first home owners some relief towards the cost of purchasing their first home. Accordingly, in the context of this Act, in my opinion, "occupy" means to reside in the property. However, that residence must also be such that it is the person's "principal" place of residence or to use the terms of the title of the legislation, the persons "home". This in my opinion, requires the occupation to be ongoing and involves an element of permanence; and b) Whether an applicant has "occupied" the property as his/her "principal place of residence", as prescribed under the Act, is a question of fact that is to be assessed objectively having regard to all the circumstances. The intention of the applicant is relevant but it is not determinative of the issue. Nor is the fact that the applicant resided in the property for a short period of time during the relevant period. These matters, if established, must be considered in light of all the evidence including, where the applicant resided otherwise during the relevant period, the reasons given by the applicant for not residing or continuing to reside at the property, whether the reasons for not residing at the property were as a result of matters entirely out of the control of the applicant and the nature of the applicant's residence at the property. This list is by no means exhaustive as each case must be considered in the context of its own particular facts. 23 In respect of the discretion given to the Commissioner under s.23 (1) and s.45 of the Act the Tribunal stated at [47] the following: Having regard to the purpose and intention of the Act, where the Commissioner subsequently ascertains that the resident requirement eligibility criteria has not been met, in my opinion, Parliament intended the Commissioner to exercise his powers under s.23 (1) and s.45 so as to deprive the applicant of any benefit that he or she was not entitled to, unless there are exceptional circumstances which warrant him not to exercise such a discretion. 24 The Tribunal has carefully considered all the material that was filed in this matter. From this material Ms Yucel clearly acknowledges that she did not commence residing in the property within 12 months after the settlement. However, she goes on to contend that she did occupy the property as her principle place of residence 14 days after the expiry of that 12 month period and that the Commissioner should have exercised his discretion in her favour due to her particular circumstances. 25 In the opinion of the Tribunal, Ms Yucel failed to satisfy it, as she was required to do, that she did in fact occupy the property as her principal place of residence shortly after the 12 month period had expired. The relevant month was October 2002, yet the only material provided by Ms Yucel was a strata levy account for the month of March, April and May 2003, a water bill for January to March 2003 and an acknowledgement of her electoral enrolment dated 7 February 2003. In the opinion of the Tribunal this is insufficient evidence on which the Tribunal can make a finding that her residence at the premises was in the relevant sense an occupation that was permanent. Indeed, her power of attorney, in which she gave her father authority to act on her behalf, and dated July 2003, together with the contents of the letter by her parents stating that she was absent from Australia for a considerable period of time would suggest the contrary. 26 On this basis the Tribunal finds that the decision of the Commissioner is correct. 27 Even if the Tribunal is incorrect in its finding that Ms Yucel did not occupy the property as her principal place of residence, in the opinion of the Tribunal, Ms Yucel failed to adduce any evidence that established there were exceptional circumstances why the Commissioner should exercise his discretion in her favour under s.23 (1) and s.45 of the Act. Again her inability to understand or know what was required is not an exceptional circumstance. She was the recipient of the grant and acco`rdingly she had an obligation to ensure that she understood what the requirements were. 28 For the above reasons the Tribunal is of the opinion that the Commissioner's decision is the correct and preferred decision. The Tribunal orders that the Commissioner's decision is affirmed.