Zakariya -v- Chief Commissioner Office of State Revenue [2003] NSWADT 26

CITATION: Zakariya -v- Chief Commissioner Office of State Revenue [2003] NSWADT 26 DIVISION: General Division APPLICANT PARTIES: Jihad Zakariya RESPONDENT Chief Commissioner Office of State Revenue FILE NUMBER: 023267 HEARING DATES: On papers SUBMISSIONS CLOSED: 01/31/2003 DATE OF DECISION: 02/07/2003

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 LEGISLATION CITED : First Home Owners Grant Act 2000 Social Security Act 1991 (Cth) Dickeson and Secretary, Department of Social Security (1989) 18 ALD 58 CASES CITED: Herbert v. Byrne [1964] 1 All ER 882 Beck v. Scholz [1953] 1 All ER 814 Todd v. Nichol [1957] SASR 72 APPLICANT REPRESENTATION: In person RESPONDENT C Puckering, agent ORDERS: The decision of the Chief Commissioner is affirmed.

Facts 1 Mr Jihad Zakariya, ("the applicant") purchased land at Eaglevale by contract dated 11 October 2000. The sale settled on 6 December 2000 and the applicant applied for a grant under the First Home Owner Grant scheme set up by the First Home Owner Grant Act 2000 ("the Act"). The application was successful, and he was paid $7,000 by bank transfer. 2 Mr Zakariya bought the house because he and his wife had separated and he needed somewhere to live. The house was rented when purchased and the tenants stayed on until the end of the lease. He said that it was always his intention to live there; however, there was a hope that he and his wife would reconcile and so he did not move in when the house became vacant. The hope was thwarted, and he then ran into financial problems and had to sell the house. The sale of the house was settled on 11 September, 2001. 3 On 9 July 2002 the applicant swore a statutory declaration stating, relevantly: "2. I have not lived in the house since the time of settlement. ... 5 It has always been my intention to live in the house. ... 6. When the lease ended it seemed my wife and I were going to reconcile so when the house became vacant I did not move into it permanently". 4 On 18 July 2002, a Compliance Officer of the Office of State Revenue ("OSR") wrote to the applicant notifying him of the reversal of the decision to pay a grant, and seeking repayment of the $7,000 within 21 days. 5 The applicant objected to the decision by way of solicitor's letter dated 8 August 2002. The letter states that: "Although Mr Zakariya has not lived permanently in the residence he has lived there on a temporary basis, usually between two to three days per week. ... He moved his belongings into [the Eaglevale property] and would live there two to three days per week. ...". 6 By letter of 27 September 2002, the Commissioner of State Revenue disallowed the objection, stating that: "Mr Zakariya's temporary occupation of [the property at ] Eaglevale over two to three days per week is insufficient for this property to be considered his principal place of residence". Jurisdiction 7 Section 28 of the Act gives jurisdiction to the Administrative Decisions Tribunal to review a decision of the Chief Commissioner if the applicant is dissatisfied with the decision. On such a review, the Tribunal has power to confirm, vary or reverse the decision (s 29). An application must be made within 60 days of the date of the Chief Commissioner's notification; the application was filed on 27 November 2002 and is thus within time. Applicable Law 8 Section 7(1) of the First Home Owner Grant Act 2000 provides: " first home owner grant is payable on an application under this Act if: (a) the applicant or, if there are 2 or more of them, each of the applicants 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." 9 The eligibility criteria appear in Division 2 of Part 2. The relevant requirement here is Criterion 5, which appears in s 12 of the Act. Sub-section 12(1) provides: "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." Hearing 10 The matter was heard on the papers. Each party has filed submissions which have been most helpful in enabling me to reach a decision. Consideration of Issue 11 The issue in this case is whether occupation of the property "on a temporary basis" "two or three days a week" while maintaining an alternative residence is sufficient to satisfy the legislative requirement that the property the subject of the grant be the "principal place of residence" of the applicant within twelve months of the purchase of the property. 12 The words "principal place of residence" appear in a number of statutory instruments. Many of them are statutes which exempt a person from a tax liability which would otherwise apply, or which would enable a person, as in the current case, to obtain a benefit from the government. There is a thread running through much of the revenue legislation which enables a taxpayer's "principal place of residence" to remain tax-free. The Long Title of the Act provides that the purpose of the Act is: "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 ..." 13 Legislation needs to be interpreted according to its purpose. With the purpose of the Act in mind, the question which arises is whether (firstly) the applicant's intention to occupy the property as a home, and/or (secondly) his temporary occupation of it, bring him within the eligibility criteria of the Act. 14 It does not appear to me that the subjective intention of the applicant at the date of purchase brings him within the eligibility criteria. Sub-section 12(1) provides that the applicant "must occupy the home as the applicant's principal place of residence" within the twelve-month period. Those words require an actual occupation, not merely an intention to occupy. Accordingly, the applicant's stated intention (which is not contested by the respondent) does not bring him within the eligibility criteria. 15 The question then arises of whether the occupation on a temporary basis, between two to three days a week, when the applicant also maintained another residence, is sufficient to satisfy the eligibility criteria. The term "principal place of residence" is not defined in this Act. 16 The words "principal home" are used (but similarly not defined) in s 4 of the Social Security Act 1974 (Cth) and were examined by the Administrative Appeals Tribunal in RE: Dickeson and Secretary, Department of Social Security (1989) 18 ALD 58. The Tribunal looked at whether a disused grain shed constituted a "principal home". Although in that case the applicant lived permanently in the shed, and so the decision does not assist on the meaning of "principal" in relation to a temporary occupation, still the consideration of the phrase "principal home" is useful. The words "home" and "residence" are not exact synonyms, but they are sufficiently close for an examination of the context of one to be useful for the consideration of the other. The Concise Macquarie Dictionary (online, at http://www.macquariedictionary.com.au) defines "residence" as: " 1. the place, especially the house, in which one resides; dwelling place; dwelling..." and "home" as: 1. a house, or other shelter that is the fixed residence of a person, a family, or a household. 2. a place of one's domestic affections ..." 17 In Dickeson, the Tribunal regarded "a substantial degree of occupation" as being persuasive (Herbert v. Byrne [1964] 1 All ER 882) and contrasted an occupation of a property by way of "occasional visiting" not constituting occupation of a home (Beck v. Scholz [1953] 1 All ER 814). A "home" is likely to be a "place where persons ordinarily eat, morning and night, and where they sleep, and in the case of adults have the characteristics of permanency" (Dickeson, at 61, citing Todd v. Nichol [1957] SASR 72). 18 The phrase "principal place of residence" does not assume that an applicant need only live at one place, but that she or he may have two or more places of residence. However, the grant may only be paid in relation to the "principal" one of those places; that which the applicant regards as his main residence or home. From the corroborating evidence such as the address of the applicant shown on the contracts for purchase and sale of the Eaglevale property, and from the lack of any corroborating evidence as to his use of the Eaglevale property as his mailing or other address, it appears that the Eaglevale property was a subsidiary and not a principal place of residence for the applicant. Conclusion 19 Although the applicant did spend time occupying the property, he did not do so as his "principal place of residence" and thus he does not fulfil the residence criteria for the purposes of ss 7 and 12 of the Act. 20 The decision of the Chief Commissioner is affirmed.