Aird v Chief Commissioner of State Revenue [2004] NSWADT 157

CITATION: Aird v Chief Commissioner of State Revenue [2004] NSWADT 157 DIVISION: General Division APPLICANT PARTIES: Andrew James Aird RESPONDENT Chief Commissioner of State Revenue FILE NUMBER: 036035 HEARING DATES: 14/04/2004 SUBMISSIONS CLOSED: 04/14/2004 DATE OF DECISION: 08/02/2004

BEFORE: Montgomery S - Judicial Member APPLICATION: First Home Owners Grant Act - first home owners grant - refusal of application MATTER FOR DECISION: Principal matter LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 First Home Owners Grant Act 2000 Hardie v Mcluckie & Mcluckie [1998] 3821 SADC KJRR v Commissioner of State Revenue (1999) 99 ATC 4335 CASES CITED: Raidich v Smith (1959) 101 CLR 209 Western Australia v Ward [2002] HCA 28 Wik Peoples v Queensland (1996) 187 CLR 1 Vinden v Vinden [1982] 1 NSWLR 618 APPLICANT REPRESENTATION: K Ness, advocate RESPONDENT H Roberts, solicitor ORDERS: The decision by the Commissioner of State Revenue to deny Mr Andrew Aird entitlement to the grant under the First Home Owners Grant Act 2000 is affirmed.

REASONS FOR DECISION 1 On 24 April 2004, Mr Andrew Aird applied to the Tribunal pursuant to section 28 of the First Home Owners Grant Act 2000 ("the FHOGA") and section 38 of the Administrative Decisions Tribunal Act 1997. Mr Aird sought a review of the decision by the Commissioner of State Revenue ("the Commissioner") to deny Mr Aird entitlement to a First Home Owner Grant under the FHOGA. 2 Mr Aird and Ms Harumi Hayashi had lodged an application for a grant under the FHOGA in regard to a property situated at Lot 117, Upper Tuntable Falls Road, Nimbin ("the property"). The Commissioner denied entitlement to the grant on the basis that the application relates to an interest in a dwelling located on land owned by the Co-ordination Co-operative Limited ("the Co-operative") and that Mr Aird only had a licence to occupy the land, not an exclusive interest in the property. 3 By a letter of objection dated 16th June 2003 Mr Aird requested a review of the Commissioner's decision. That review was completed on 4 July 2003 and the original decision was affirmed. Mr Aird was notified of the reasons for the decision. The reasons stated: "I have considered the reasons for your objection, but unfortunately I have disallowed your objection. Section 5(2)(f) of the Act provides as follows: (2) Each of the following is, subject to subsection (3), a relevant interest in land: (f) a licence or right of occupancy granted by the Commonwealth or the State in relation to the land that gives, in the Chief Commissioner's opinion, the licensee or the holder of the right reasonable security of tenure, As the licence or right of occupancy was granted by the company ie, Co-Ordination Co-Operative Ltd, and such company is not a Commonwealth or State body the requirements of section 5(2)(f) of the Act have not been met. Consequently, it is considered that our decision dated 15 May 2003 not to allow payment of the grant is correct and should stand." 4 Mr Aird sought a review of the Commissioner's decision in this Tribunal. The matter was listed for hearing in Lismore on 14 April 2004 and proceeded on that day. The parties each filed written submission in relation to the matter and each made oral submissions. Applicable legislation 5 The basis of an entitlement to a grant is set out in section 7 of the FHOGA: "7 Entitlement to grant (1) A 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. (2) Despite subsection (1) (a), an applicant need not comply with the eligibility criteria to the extent the applicant is exempted from compliance by section 8A (2), 9 (2) or 12 (2). (3) Despite subsection (1) (b), a first home owner grant is payable before completion of the relevant eligible transaction, as authorised by section 20. (4) Only one first home owner grant is payable for the same eligible transaction." 6 The eligibility criteria are set out in sections 8 to 12 in Division 2 of the FHOGA. It is not suggested that Mr Aird does not satisfy the eligibility criteria. The dispute is in relation to whether the transaction for which the grant is sought is an eligible transaction. Section 13 of the FHOGA provides: "13 Eligible transactions (1) An eligible transaction is: (a) a contract made on or after 1 July 2000 for the purchase of a home in New South Wales, or (b) a comprehensive home building contract made on or after 1 July 2000 by the owner of land in New South Wales, or by a person who will on completion of the contract be the owner of land in New South Wales, to have a home built on the land, or (c) the building of a home in New South Wales by an owner builder if the building work commences on or after 1 July 2000. (2) A contract is a contract for the purchase of a home if the contract is a contract for the acquisition of a relevant interest in land on which a home is or is to be built under the contract by or on behalf of the vendor. (3) However, a contract made on or after 1 July 2000 is not an eligible transaction if: (a) in the case of a contract to purchase a home - the purchaser had an option to purchase the home granted before that date or the vendor had an option to require the purchaser to purchase the home granted before that date, or (b) in the case of a comprehensive building contract - either party had a right or option granted before that date to require the other party to enter into the contract. (4) The commencement date of an eligible transaction is: (a) in the case of a contract - the date when the contract is made, or (b) in the case of the building of a home by an owner builder: (i) the date when laying the foundations for the home commences, or (ii) another date the Chief Commissioner considers appropriate in the circumstances of the case. (5) An eligible transaction is completed when: (a) in the case of a contract for the purchase of a home: (i) the purchaser becomes entitled to possession of the home under the contract, and (ii) if the purchaser acquires an interest in land under the contract that is registrable under a law of the State - the purchaser's interest is registered under that law, or (b) in the case of a contract to have a home built - the building is ready for occupation as a place of residence, or (c) in the case of the building of a home by an owner builder - the building is ready for occupation as a place of residence. (6) If a person purchases a moveable building and intends to use it as a place of residence on land in which the person has a relevant interest but on which it is not situated at the time of purchase: (a) this Act applies as if the person were an owner builder building a home on the land, and (b) the commencement date of the transaction is taken to be the date of the contract to purchase the moveable building, and (c) the transaction is taken to be completed when the moveable building is ready for occupation as a place of residence on land in which the purchaser has a relevant interest. (7) 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, or (b) in the case of a comprehensive home building contract - the total consideration payable for the building work, or (c) in the case of the building of a home by an owner builder - the actual costs to the owner of carrying out the work (excluding any allowance for the owner builder's own labour)." 7 Section 5 of the FHOGA makes provision with respect to what is a relevant interest: "5 Ownership of land and homes (1) A person is an owner of a home or a home owner if the person has a relevant interest in land on which a home is built. (2) Each of the following is, subject to subsection (3), a relevant interest in land: (a) an estate in fee simple in the land, (b) a life estate in the land approved by the Chief Commissioner, (c) a perpetual lease of the land granted by the Commonwealth or the State, (d) a leasehold interest in the land granted by the Commonwealth or the State that may be converted under the terms of the lease or by statute into an estate in fee simple, (e) an interest as purchaser under a contract for the purchase from the Commonwealth or the State of an estate in fee simple in the land by instalments, (f) a licence or right of occupancy granted by the Commonwealth or the State in relation to the land that gives, in the Chief Commissioner's opinion, the licensee or the holder of the right reasonable security of tenure, (g) an interest in a company's shares or in units in a unit trust scheme, if the Chief Commissioner is satisfied that: (i) the interest entitles the holder of the interest to exclusive occupation of a specified home situated on the land and owned by the company or trustees, and (ii) the value of the shares is not less than the value of the company's or trustees' interest in the home. (3) Subject to subsection (4): (a) an interest is not a relevant interest at a particular time unless the holder of the interest has, or will have within 12 months after that time (or a longer time allowed by the Chief Commissioner), a right to immediate occupation of the land, and (b) an interest is not a relevant interest in the hands of a person who holds it subject to a trust. (4) The Chief Commissioner may recognise an interest (a non-conforming interest) as a relevant interest in land even though the interest may not conform with the above provisions (and even though the interest may not be recognised at law or in equity as an interest in land) if there is, in the Chief Commissioner's opinion, good reason to do so. (5) If the Chief Commissioner recognises a non-conforming interest as a relevant interest in land and, in consequence, a first home owner grant is to be paid, the Chief Commissioner may impose appropriate conditions on the payment of the grant to ensure its recovery if suppositions about future conduct or events made by the Chief Commissioner in recognising the interest later prove to be incorrect. (6) If a person holds an interest in land on trust as guardian for a person under a legal disability and that interest would be a relevant interest but for subsection (3) (b), then for the purposes of this Act: (a) the person under the legal disability is taken to be the person who holds a relevant interest in the land, and (b) the guardian is taken not to hold that interest. (7) In this section: unit in a unit trust scheme means: (a) a right or interest (whether described as a unit or a sub-unit or otherwise) of a beneficiary under the scheme, or (b) a right to any such right or interest. unit trust scheme means any arrangements made for the purpose, or having the effect, of providing facilities for persons participating in the arrangements, as beneficiaries under a trust, for occupying any property pursuant to the trust." Applicable Commissioner's Rulings 8 The Commissioner has issued a number of Rulings in relation to the recognition of a "non conforming interest" as a relevant interest under subsection 5(4) of the FHOGA. Those Rulings of relevance to these proceedings provide: "First Home Owner Grant Ruling FHOG001 - Recognition of non-conforming interests Preamble 1. The First Home Owner Grant Act 2000 ("the Act") recognises a person as a home owner if the person has a "relevant interest" as defined in subsection 5 (2). Subsection 5 (4) allows the Chief Commissioner to recognise a "non conforming interest" as a relevant interest. A non-conforming interest need not be recognised at law or in equity as an interest in land. 2. This ruling deems a person to have an interest in land in certain circumstances, and recognises these "interests" as non-conforming interests. Ruling Building a home on land owned by another person 3. In some circumstances, a landowner will permit his or her land to be used by another person to build a home. This is more likely to occur on rural or semi-rural properties, usually where the land owner and home builder are related. 4.A person is taken to have an interest in land if the person has entered a comprehensive home building contract in relation to, or is building or has built a home on, land owned by another person who has given permission to occupy the home when completed. 5. This deemed interest in land is recognised as a non-conforming interest for the purposes of subsection 5 (4) of the Act. … Purchasing a moveable home for use on land owned by another person 11. The purchase of a movable building to be used on land owned by the purchaser is an eligible transaction under the Act. However, movable homes are often used on leased land, and the purchase of a movable home could constitute the purchase of a first home. 12. The Local Government Act 1993 refers to a "manufactured home", which includes a self-contained movable dwelling, but does not include a caravan or other registrable vehicle under the Road Transport (Vehicle Registration) Act 1997. 13.The interest of a person under any agreement under which the person has the right to occupy land used, or intended to be used, as the site of a manufactured home within the meaning of the Local Government Act 1993 is recognised as a non-conforming interest for the purposes of subsection 5 (4) of the First Home Owner Grant Act 2000 if the lessee has purchased the manufactured home and intends to use it as a place of residence on the land. Applicable Rules of the Co-operative 9 A copy of the Rules and By-laws of the Co-operative were put in evidence. Those Rules of relevance to these proceedings provide: "ACTIVE MEMBERSHIP PROVISION 19 In accordance with Part 6 of the Act: a) The provision of land to be held in common for the benefit of members and the fostering in the younger generation of the benefit of a community lifestyle is a primary activity of the Co-operative; and b) A member shall be over the age of 18 years and (i) pay an annual subscription in accordance with Rule 98 in order to establish active membership of the Co-operative; and/ or (ii) contribute labour in accordance with Rule 98 in order to establish active membership of the Co-operative' "FORFEITURES AND CANCELLATIONS RELATING TO INACTIVE MEMBERS 20 (a) The board shall, after giving notice in accordance with Section 132 of the Act, declare the membership of a member cancelled if: (i) the whereabouts of the member are not presently known to the co-operative and have not been known to the co-operative for a continuous period of at least two years before the date of cancellation; or (ii) the member is not presently an active member and has not been an active member at any time during the past two years immediately before the date of cancellation. (b) The board is to declare the shares of a member forfeited at the same time as the membership is cancelled and the amounts due in respect of that cancellation and forfeiture shall be dealt with and repaid in accordance with Sections 134- 136 (inclusive) of the Act. (c) The co-operative shall, in a form approved of by the Registrar, keep a register of memberships cancelled pursuant to subparagraph (a), which shall specify the particulars prescribed in Clause 6 of Schedule I of the Co-operatives Regulation 1997. (d) The board shall not be required to give notice, under this rule, if the member's whereabouts ate unknown to the co-operative and the amount required to be repaid to the member in respect of the cancelled membership (whether by reason of the cancellation of share or otherwise) does not exceed $50, or such other amount as may be prescribed." "QUALIFICATIONS FOR MEMBERSHIP 21 (a) A person is not qualified to be admitted to membership of the co-operative unless the board has reasonable grounds for believing that the person will be an active member under Rule 19, b) We have a system of share approvals whereby ten shareholders must support the approval and speak in favour of the proposed shareholder in order for them to be invited in. These shareholders should be fully paid members. SHARES TO BE A PRIVILEGE, NOT A RIGHT." "CAPITAL AND SHARES 25 (a) The capital of the co-operative shall be raised by the issue of shares which shall be of one class, all ranking equally and be of nominal value of $200 each. (b) The capital shall vary in amount according to the nominal value of shares from time to time subscribed. (c) No share is to be allotted (other than a bonus sharer unless the nominal value of the share has been paid. A share is not to be issued at a discount. (d) No person, whether or not a member, shall hold, or have a relevant interest in, more than 20% of the nominal value of issued share capital of the co-operative, except in accordance with Section 289 of the Act. (e) Shares of the co-operative shall not be quoted for sale or purchase at any stock exchange or in any other public manner whatever, within the meaning of the Income Tax Assessment Act 1936 (Cwlth)." "MINIMUM SHAREHOLDING 26 Every member shall, on admission to membership of the co-operative, hold at least one share." "SHARES TO BE FORFEITED TO REMEDY CONTRAVENTION OF MAXIMUM LEVEL OF SHARE INTEREST 27 (a) Where a person (whether or not a member of the co-operative) contravenes Rule 25(d), the board shall declare to be forfeited sufficient number of the shares in which the person has a relevant interest to remedy the contravention. (b) The shares to be forfeited pursuant to this rule are: (i) the shares nominated by the person for the purpose; or (ii) in the absence of such nomination - the shares in which the person has had a relevant interest for the shortest time. (c) A declaration of the board that shares are forfeited operates to forfeit the shares concerned. (d) The provisions of Sections 134 - 136 (inclusive) of the Act shall apply to and in respect of shares forfeited under this rule as if the shares had been forfeited under Rule 20." "EXPULSION OF MEMBERS 47 (a) A member may be expelled from the co-operative by special resolution to the effect: (i) that the member has failed to discharge the member's obligations to the co-operative, whether prescribed by these rules or arising out of any contract; or (ii) that the member has been guilty of conduct detrimental to the co-operative. (b) In either case written notice of the proposed resolution shall be forwarded to the member not less than 14 days before the date of the meeting at which the special resolution is to be moved, and the member shall be given a reasonable opportunity of being heard at the meeting. (c) The shares of any member expelled shall be cancelled as at the date of expulsion and the cancellation shall be noted in the register of shares. (d) Expulsion of a member shall not be effective, until the special resolution expelling the member is registered." "ANNUAL LEVY 98 a) Members and guests shall be required to pay an annual levy or subscription which shall: i) be determined by a general meeting from time to time; ii) be in addition to any other charges payable under these Rules; iii) be payable within the period set by the Board; iv) not exceed $750 in any one year. b) The annual levy shall be reduced to: i) 15% for members and guests who are resident between 0-3 months in a year (if a guest is staying with a resident member, ie not caretaking or renting a dwelling, the guest is not required to pay a levy for the first 3 months of their stay) - ii) 40% for members and guests who are resident between 3-6 months in a year c) Additional reductions may be added to the above: i) 50% for members and guests who are between the ages of 18 and 21; or ii) 50% for members and guests who are full time students and are 25 years of age or under; or iii) 50% for members and guests who are 65 years of age or older. d) A further reduction, up to 55%, is available for members who perform 40 hours of work on a Co-op approved community project, or a pro rata amount for less than 40 hours work. i) the Co-op operates a work levy system with the members having the option of using LETS credit (in the current year instead of the cash equivalent. e) Members and guests will be charged the full annual levy at the beginning of the year. f) It is the member's or guest's responsibility to inform the Board, in writing, of their residential status, and/or their full-time student status (ID or Austudy notice required), and any changes to their age/status, which may effect the calculation of their levies owing. g) A 10% late fee on an individual's outstanding levies for a financial year will be applied three months after the end of that financial year. h) A member with severe financial difficulties may apply to the Board for a reduction to the amount of the levy or for an extension of time to pay the levy or an increase in the percentage of their work contributions. i) A member may, under extenuating circumstances, at the discretion of the Board, transfer excess work contributions to another member or guest. j) A member may transfer excess work contributions forward to the next financial year for his/herself only, at the discretion of the Board. k) The host shall be responsible for all debts incurred to the Co-operative by their guest including payment of annual levies. l) Absentee shareholders, renting out houses, are to pay the full cash levy. m) The full cash component of the annual levy shall apply to all members who are siteholders, whether resident or non-resident, unless the member is aged 21 or under when the discount under sub-paragraph(c) i) shall apply." 10 Those By-laws at October 2002 of relevance to these proceedings provide: "1. OCCUPANCY a) Only active members may apply for Licence to Occupy. b) All applications for Licence to Occupy shall be submitted at a Tribal Meeting (TM) and ratified at a Board Meeting (BM) and the applicant shall supply such details as the meetings may require as to the use to which the site shall be put. c) A neighbouring member shall have a right to veto the granting of a licence of occupancy to a proposed site- holder, or the occupation of a site by another person, or the permission to erect or extend a building, but must justify this veto and may be overruled by the society if it considers the justification unreasonable. d) One house site per member, however the society may allow a member licence to occupy two house sites for a period of twelve (12) months. e) An active member may only be approved as a site holder if the application has been made in strict accordance with the site application procedure. f) Licence to occupy is only terminated if membership is cancelled, or shareholding forfeited, or in the case of an undeveloped site if it is abandoned (see by-law 3). (g) A member may only be approved as a siteholder if he/she has after his/her introduction at a Tribal Meeting lived on the Society's land for the prescribed period. The prescribed period shall be 12 months". "3. FORFEITURE OF OCCUPANCY (See also By-law 1 OCCUPANCY) If after a licence to occupy has been granted, the person to whom it was granted ("the approved site holder") fails to occupy the site in respect of which the licence to occupy was granted ("the site") for a period of twelve months and fails to make arrangements for the caretaking and maintenance of the site such as shall satisfy the Society that the site has not been abandoned, or where the approved site holder ceases to be an active member of the Society in accordance with the Rules, the Society may revoke the licence to occupy under the following conditions: (a) The Society shall give to the approved site holder written notice that it intends to revoke the licence to occupy. (b) Such notice shall be by registered letter addressed to the approved site holder at his or her address in the records of the Society and by notice attached to some part of the site. (c) If the approved site holder seeks compensation for any building he or she may have erected, or caused to be erected on the site, a claim for compensation stating the amount claimed must be made in writing to the Society and must be delivered to the Secretary of the Society within three months of the Society's intention to revoke (d) If the approved site holder shall duly claim compensation the Society may but shall not be obliged to pay the approved site holder compensation for the buildings erected on the Society's land at a sum agreed to by the Society and the approved site holder, or failing agreement, at a sum determined by an independent Valuer appointed by the Board. (e) The Society may co-ordinate the rental or caretaking of any dwelling on the site, or the transfer of the licence to occupy the site, or may call for tenders for the transfer of the interest in the building(s) as a lump sum or time payment agreement, and the Society shall not be bound to approve the highest or any offer, nor be liable to guarantee the terms of any approved agreement. (f) The Society may allow for the discharge of compensation for the interest in any buildings on a forfeited site by the payment of rents. (g) DEATH OF A SITE HOLDER. In a case where an approved site holder dies, the Society may but shall not be obliged to transfer the licence to occupy to a shareholder (or a person who becomes a shareholder) nominated by deceased shareholder in the records of the Society, or in the deceased shareholder's Will, or By-laws, and the Society shall not be obliged to recognise any claim to interest in any building upon the site by any person other than the transferee; otherwise if no such transfer is approved within six months of the death of the site holder (or any extension of time allowed bathe Society) then the site shall be deemed to be forfeited and the Society may but shall not be obliged to pay (in full or part) any approved beneficiary, compensation for any buildings erected on the Society's land." "5. HOUSE TRANSFER POLICY a) Membership of the Co-operative does not of itself entitle a member to occupy any part of the Co-operative's land to the exclusion of other members nor does it give a member the right to erect any building on the Co-operative's land. b) Any member of the Co-operative may be granted by the Co-operative the right to the exclusive occupancy of a site on the Co-operative's land. c) Application for such grant and any such grant shall be made in strict accordance with the Co-operative's By-laws. d) The Co-operative shall make no such grant to any person who is not a member of the Co-operative. e) No such grant shall give the member to whom it is made any legal or equitable right, title or interest of any nature whatsoever in or to any part of the Co-operative's land but the grant shall be a licence only terminable at the will of the Co-operative and in strict accordance with the Co-operative's By-laws." The transaction for which the grant is sought 11 The transaction for which the grant is sought is an agreement between Mr Aird and David Bradford dated 17 October 2002 ("the transfer agreement"). The transfer agreement is on Co-ordination Co-operative Ltd letterhead and is in the following terms: "By this contract, I/we David Bradford, shareholder/s in Co-ordination Co-operative Ltd, hereby transfer my/our interest in the dwelling described below, to Andrew Aird also a shareholder/s in Co-ordination Co-operative Ltd, for the sum of $15,000. … Name of house Site M4 Site No M4 Permit No 93/85 Owner of land: Co-ordination Co-operative Ltd Address: Tuntable Falls via Nimbin · As shareholders of the Co-operative, all parties are subject to the Rules and By-laws of Co-ordination Co-operative Ltd. · Approval of the owner (Co-ordination Co-operative Ltd), has been obtained for the transfer of (the licence to occupy) the said site, and signatures of the Secretary and three Co-ordinators are attached. · No liability of Co-ordination Co-operative Ltd to the terms and condition of this contract is expressed or implied. · (Interest) is defined as the value agreed by the Society of the abovenamed building. Date 30.9.02 Monies received by Co-op $15,000 Last Receipt No HB3 Transfer fee $750.00 Monies paid to D Bradford" The Commissioner's Case 12 Ms Roberts appeared on behalf of the Commissioner. The Commissioner maintains that Mr. Aird is not entitled to the grant either generally or under section 5(4) of the FHOGA. Ms Roberts provided written submissions that clearly set out the Commissioner's case. She also provided oral argument as to the nature of the interest that has been transferred to Mr. Aird. She relies on the By-laws of the Co–operative in support of the Commissioner's position. The By-laws expressly apply to all residents, including guests, and are inherent in the acceptance of a share. To become a member of the Co–operative, one must be approved by ten shareholders, and purchase at least one share (Rule 21 and Rule 26). Mr. Aird is the holder of share no 1096. Shareholding is separate from, but a prerequisite to, the attaining of a licence to occupy. By-law 1 makes provision with respect to occupation. 13 Ms Roberts submitted that it appears from the transfer agreement that on 17 October 2002 Mr. Aird received a licence to occupy site M4 for the sum of $15,000 plus $750 transfer fee paid in consideration. Under section 5(1) of the FHOGA, to qualify for a grant, a person must have a "relevant interest in land" on which a home is built. Section 5(2) provides for what constitute a relevant interest in land. Mr. Aird does not qualify for the grant under any of those provisions. 14 With respect to the exercise of the discretion to recognise a non-conforming interest pursuant to section 5(4) of the FHOGA, Ms Roberts referred to the Commissioner's ruling FHOGS 001 (4 December 2000) which recognises particular interests as non-conforming interests. She submits that Mr. Aird's situation is not comparable to the subject matter of that ruling and accordingly the discretion should not be exercised. 15 The Commissioner disputes Ms Ness's submission that the structure of the Co–operative is analogous to the structure recognised by section 5(2)(g) of the FHOGA. Ms Roberts argues that section 5(2)(g) requires that the interest in a company's shares entitles the holder of the interest to exclusive occupation of a specified home situated on the land. The Co–operative is not a company. However, leaving this aside, it is not correct to say that purchase of shares in the Co–operative entitles a shareholder to any form of occupation of the land or a dwelling. She submits that membership is simply a pre-requisite for purchase of a "licence to occupy". Other pre-requisites include those set out as part of By-law 1. 16 The Commissioner also disputes Ms Ness's submission that an exclusive licence to occupy the co-operative's land is a secure form of tenure. Ms Roberts argues that the use of the term "exclusive" is a gloss on what appears in all of the relevant documents. Further, Mr. Aird provided no document which purports to be, itself, a "licence". There is no such document. A copy of the transfer agreement has been provided. That documents makes reference to a transfer of a "licence to occupy" a specified site. By-law 1, "Occupancy" refers only to a "licence to occupy". There is no provision in the By-laws which confers upon Mr. Aird a right to exclusive possession. This is not surprising as the By-laws purport to create a licence not a lease. 17 With respect to the issue of whether Mr. Aird's licence grants him a right to exclusive possession, or if something less is intended by the use of the term "exclusive occupation", Ms Roberts argues that a right to exclusive possession for a determinate period is not a licence but a lease. She submitted that it is settled law that a lease constitutes an interest in land; a licence to go or be upon land does not. In identifying whether an interest is a lease or a licence, one must look at whether the grantee has been given a right of exclusive possession or occupation for a determinate period: Wik Peoples v Queensland (1996) 187 CLR 1; Western Australia v Ward [2002] HCA 28 at [505] per McHugh J. 18 Ms Roberts argues that the test as to what has been conferred is not the words used by the parties to describe their relationship, but an objective test which considers the facts and circumstances in order to determine whether a right to exclusive possession has been conferred. Whilst the case law in this area has been strict in its approach to avoiding "sham" licence agreements, Ms Roberts asserts that this has been historically to prevent the avoidance of tenants' protection legislation. She referred to comments by Toohey J in Wik, at 116. She also referred to views on the issue by Commentators in Butterworths Australian Tenancy Practice [1 20]; and P Butt, "Leases and Licences - Yet Again" (1999) 73 (11) ALJ 787. She asserts that these opinions suggest that the Australian jurisprudence has moved more towards allowing parties the freedom to control and define their own transaction. She submitted that the parties might have structured the agreement between them as a licence agreement, and not a lease agreement, for various commercial or other purposes. 19 She further submits that if Mr. Aird seeks to argue that he holds the right to exclusive possession then he in effect seeks to argue, contrary to what is provided in the Co–operative's By-laws, that the agreement between himself and the Co–operative is in fact a lease and not a licence. The agreement must be of one or the other character. It cannot be a licence for one purpose, and a lease for another. Ms Roberts does not submit that the agreement is a lease. She does, however, raise for consideration the fact that if the Tribunal finds that the agreement between the parties confers a right to exclusive possession upon Mr. Aird, then that agreement is considered by law to be a lease, with other potential legal ramifications. 20 In response to Mr. Aird's argument that he holds a secure form of tenure Ms Roberts referred to By-law 5(e) which provides that "No such grant shall give the member to whom it is made any legal or equitable right, title of interest of any nature whatsoever in or to any part of the Co-operative's land but the grant shall be a licence only terminable at the will of the Co-operative and in strict accordance with the Co-operative's by laws." 21 Further, she argues, By-law 6 clearly provides that the licensee may not deal in any way with his licence, nor allow any non-approved person to live in his site (except a member of his immediate family). The Co–operative even has control over who may be regarded as a 'bona fide short term guest' and who may stay in a particular licensee's site at any time. If a licensee fails to occupy his or her site for twelve months, then the Co–operative may revoke the licence to occupy (By-law 3). If such a licence is revoked, then the Co–operative may, but is not obliged to, pay compensation for any buildings erected on the land. All of these requirements are inconsistent with an interest in the land being conferred upon the licence holder. 22 Ms Roberts argues that a right to occupy land is not legally synonymous with a right of exclusive possession: Ward v Western Australia [2002] HCA 28 at [518] per McHugh J. She referred to KJRR v Commissioner of State Revenue (1999) 99 ATC 4335 in arguing that the Co–operative retains such a level of control, to the extent of being able to terminate a license and not necessarily compensate the licence holder, that it is difficult to argue that any right to the land has been transferred to Mr. Aird. 23 In relation Mr. Aird's submissions as to his equitable interest Ms Roberts says that the assertions are not consistent with the By-laws, which state that the licence is terminable at the will of the Co–operative and further, provide only that the Co–operative may but is not required to, pay compensation upon termination of the licence. These rights, even if they do exist, are rights which can only be enforced contractually (or perhaps in a court of equity) and are not rights related to the land in any way. 24 The Commissioner asserts that the only section of the FHOGA under which Mr. Aird's interest could be recognised is section 5(4) which allows the Chief Commissioner to recognise a non-conforming interest if there is, in the Chief Commissioner's opinion, good reason to do so. That discretion should be exercised consistently with the policy and objects of the legislation. 25 The purpose of the FHOG Act is to encourage and assist home ownership. It is clearly contemplated by the Act that what is required is an applicant to become a home owner. It is expected that this will be done by the acquiring of an interest in land upon which a home is built. In certain circumstances the Chief Commissioner will recognise an interest that is not an interest in land as was done in the case of FHOGS Ruling 001. The Commissioner maintains the position that a licence to occupy premises, terminable at the will of the landowner (as is provided for in the Co–operative By -Laws and thereby adopted as a condition of the licence) is not a form of secure tenure sufficient to be recognised as an interest in land, nor as a "non-conforming interest". 26 Ms Roberts asserts that this is a position that has been consistently taken by the Commissioner. The Commissioner has always taken the view that a person who has a licence to occupy in the form provided by this Co–operative, would not be disqualified from applying for a later grant upon the purchase of a first home elsewhere. This is for the reason that they do not, by reason of the licence to occupy, or the purchase of shares in the Co–operative, hold a "relevant interest" in land recognised by the Commissioner. 27 Ms Roberts referred to amendments to the FHOGA in 2003 to take account of certain multiple occupancy arrangements. She submitted that at that time the legislature did not consider that it was appropriate to recognise interests of the type held by Mr. Aird. Ms Roberts disputes Mr. Aird's assertion that the legislature would not have turned its mind to co-operative structures and contends that the Chief Commissioner was very aware of the issue of the recognition or otherwise of dwellings `purchased' on communes as relevant interests for the purpose of the FHOGA and has maintained a consistent position. 28 It is submitted that the interest held by the applicant is no closer to "home ownership" than a person who takes out a one year residential lease over a property, which could easily cost that person $15,000. Indeed the tenant would have more security of tenure, and more rights to control over the rental premises than Mr. Aird has. It would not even be considered for a moment that that person was entitled to a first homeowner grant, because there would be no suggestion that that person was a homeowner. Similarly, the holder of a mere licence to occupy - without a right of exclusive possession nor any interest in land - does not, in Ms Roberts' submission, qualify for the grant. 29 Accordingly, she submits, the Tribunal should find that Mr. Aird has not discharged the onus upon him to persuade the Tribunal to exercise the discretion and reverse the Commissioner's decision in this matter. Mr Aird's case 30 Ms Ness appeared as an advocate on behalf of Mr Aird. She argued that Mr Aird purchased a dwelling and that he is entitled to the grant by virtue of section 5(4) of the Act. The Co-operative is enabled and registered as a Non-trading Co-operative by the Co-operatives Act 1992. Rule no. 19(a) of the Rules of the Co-operative provides that "the provision of land to be held for the benefit of members and the fostering in the younger generation of the benefit of a community lifestyle is a primary activity of the Cooperative." 31 Mr Aird is an active member of the Co-operative and has been granted an exclusive licence to occupy site number M4, part of a single consolidated freehold block. Ms Ness submitted that Mr Aird's exclusive licence to occupy a house site on the Co-operative's land should be recognised as a 'non conforming interest' pursuant to section 5(4) of the Act. 32 Ms Ness argued that the structure and nature of land ownership of a Co-operative makes recognition as a 'relevant interest' in land as per section 5(2) of the Act difficult. Co-operative structures are subject to State Environmental Planning Policy No 15, Rural Land Sharing Communities ("SEPP 15"). Clause 12 of SEPP 15 states: "12 Subdivision prohibited (1) If development is carried out on land pursuant to this Policy, the issue of a certificate of the general manager of a council, under the Local Government Act 1919, or of a council's certificate under the Strata Schemes (Freehold Development) Act 1973, required for the subdivision of the land is prohibited. (2) Subclause (1) does not apply with respect to the subdivision of land for the purpose of any one or more of the following: (a) widening a public road, (b) making an adjustment to a boundary between allotments, being an adjustment that does not involve the creation of any additional allotment, (c) rectifying an encroachment upon an allotment, (d) creating a public reserve, (e) consolidating allotments, (f) excising from an allotment land that is, or is intended to be, used for public purposes, including drainage purposes, bush fire brigade or other rescue service purposes or public conveniences." 33 However, the aims of SEPP 15 set out in clause 2 are: "2 Aims of Policy This Policy aims: (a) to encourage and facilitate the development of rural landsharing communities committed to environmentally sensitive and sustainable land use practices, and thus (b) to enable: (i) people to collectively own a single allotment of land and use it as their principal place of residence, and (ii) the erection of multiple dwellings on the allotment and the sharing of facilities and resources to collectively manage the allotment, and (iii) the pooling of resources, particularly where low incomes are involved, to economically develop a wide range of communal rural living opportunities, including the construction of low cost buildings, and (c) to facilitate development, preferably in a clustered style: (i) in a manner that both protects the environment and does not create a demand for the unreasonable or uneconomic provision of public amenities or public services by the State or Commonwealth governments, a council or other public authorities, and (ii) in a manner that does not involve subdivision, strata title or any other form of separate land title, and in a manner that does not involve separate legal rights to parts of the land through other means such as agreements, dealings, company shares, trusts or time-sharing arrangements, and (iii) to create opportunities for an increase in the rural population in areas that are suffering or are likely to suffer from a decline in services due to rural population loss". 34 Ms Ness submits that an issue in equity arises where a prohibition established by one law prevents the gaining of a benefit arising from another. She asserts that the structure of the Co-operative is analogous to the recognition of a 'relevant interest in land' by virtue of section 5(2)(g) FHOGA. Section 5(2)(g) of the FHOGA recognises as a 'relevant interest in land' an interest in a company's shares or in units in a unit trust scheme that, (i) the interest entitles the holder of the interest to exclusive occupation of a specified home situated on the land and owned by the company or a trustee. 35 Ms Ness argued that although a Co-operative is not a company structure, active membership of the Co-operative entails qualification for membership as per Rule 21 by acquisition of a shareholding (Rule 26) and continuance of active membership (Rule 19). An exclusive licence to occupy a site on the Co-operative's land is granted to active members who have complied with a set procedure in applying for occupancy of a site as per By-law 1 & 2 and By-law 5. 36 It is further argued that the structure of the Co-operative can be said to be analogous with section 5(2)(g)(i) of the FHOGA by virtue of membership that consists of the holding of a share in the Co-operative that gives the member a right to exclusive occupation of a site on the Co-operative's land. The purpose of the FHOGA is to encourage and assist home ownership. Parliament would not have contemplated Co-operative structures at the time of the drafting of the FHOGA, however Parliament would not have intended to discriminate against land sharing communities simply because they are a Co-operative structure rather than a company structure. The intention of parliament is that the interest in the land be a secure form of tenure. A construction of the FHOGA based on the second reading speeches supports this proposition. 37 It is also submitted that a member of the Co-operative can comply with section 5(2)(g)(ii) of the FHOGA which stipulates that " the value of the shares is not less than the value of the company's or trustees' interest in the home." The value of a share in the Co-operative is $200 plus a joining fee of $2500. It is argued that the Co-operative's interest in the home is simply the 5% fee payable to the Co-operative on the transfer of the exclusive licence to occupy, for the value of the building. Mr. Aird purchased his exclusive licence to occupy for $15,000 and paid $2,700 to become a member of the Cooperative. The company's interest in the home is $750. The value of membership in the Co-operative is therefore greater than the value of the Co-operative's interest in the home. 38 In the alternative it is submitted the Commissioner should recognise an exclusive licence to occupy a home on the Co-operative's land as a 'non-conforming interest'. This is because an exclusive licence to occupy the operative's land (By-laws 1 and 5(b)) is a secure arm of tenure. This licence to occupy a site may be granted by the Co-operative for the purpose of erecting a dwelling or may be the result of the transfer of a licence to occupy, by paying fair value for an existing dwelling (By-laws no 5 & 6). Mr Aird has been granted an exclusive licence to occupy by virtue of the latter process. 39 Although Mr. Aird has paid only a nominal amount for the share plus a joining fee, Mr Aird can transfer his exclusive licence to occupy to somebody else who has complied with the site occupation procedure and paid fair value for the dwelling (By-laws 1,5 & 6). It is submitted that although in order to conform with a 'relevant interest in land' as per section 5(2)(g)(ii) of the FHOGA the value of the share may not be less than the company's interest in the home, a site holder themselves retains the right to be recompensed for the value of the home should the licence be transferred in the event that membership in the Co-operative is cancelled (By-law 3). 40 Ms Ness argued that the exclusive licence to occupy is an indefinite licence to occupy in that there is no time limitation on the holding of a licence. She referred to a document in evidence that shows a list of the current shareholders and grants of exclusive licence to occupy on the Co-operative's land. The document indicates that of the 67 current exclusive licences to occupy listed, 12 have held the licence for 20 years or more. Pursuant to the operative's Rules and By-laws a licence to occupy is only terminated if membership is cancelled, or shareholding forfeited, or in the case of an undeveloped site if it is abandoned (By-law 1(f)). Forfeiture of occupancy occurs as per By-law 3, when a site holder abandons an undeveloped site or where the site holder ceases to be an active member in accordance with the rules. A member may be expelled from the Co-operative pursuant to Rule 47. 41 Ms Ness also referred to a document in evidence that shows the history of shareholders in the Co-operative who no longer possess a share holding. That document indicates that in the 30 years of the Co-operative's existence a shareholder who has forfeited their share and was a holder of a licence to occupy, compensation has always been awarded to the person for the value of any building on the site situated on the Co-operative's land. 42 It is submitted further that an exclusive licence to occupy a site on the Co-operative's land is a secure form of tenure. A 'relevant interest in land' as per section 5(1) & (2) FHOGA is subject to subsection (3) that states; "(a) an interest is not a relevant interest at a particular time unless the holder of the interest has, or will have within 12 months after that time (or a longer time allowed by the Chief Commissioner), a right to immediate occupation ut the land, and (b) an interest is not a relevant interest in the hands of a person who holds it subject to a trust" 43 Although a 'non conforming interest' need not conform with the above provision by virtue of section 4 of the FHOGA it is submitted that an exclusive licence to occupy a site on the Co-operative's land does give the site holder the right to immediate occupation of the land the subject of the particular site (By-law 5). 44 In the alternative Ms Ness argued that even though section 4 of the FHOGA does not require that a 'non conforming interest' be an interest that is recognised in law or in equity it is submitted that an exclusive licence to occupy a site on the Co-operative's land constitutes an equitable interest. The interest is an equitable interest as it (i) guarantees an appropriate right to privacy (ii) it will not be withdrawn save upon stated abuses by the member being proven (iii) it may be sold for fair value and (iv) fair compensation is payable in the event of withdrawal or expulsion. 45 In answer to the Commissioner's contention that membership is simply a prerequisite for purchase of a licence to occupy, Ms Ness argued that in fact a licence to occupy does not have any monetary value and obtaining of a licence to occupy is separate from the purchase of an interest in the dwelling upon that site. She asserts that far from use of the term "exclusive" being a gloss on what appears in all of the relevant documents, the word 'exclusive' is explicitly used in this context in By-law 5(b): "Any member of the Co-operative may be granted by the Co-operative the right to the exclusive occupancy of a site in the Co-operative's land." 46 It is not relevant that there is no document provided by the Appellant which purports to be itself, a 'licence', because there is material in evidence that makes it clear that the nature of the interest granted is in fact a licence to occupy. 47 Ms Ness submitted that the Commissioner misconstrued the requirements of the FHOGA in arguing that a prerequisite for the Commissioner's determination of a 'relevant interest in land" is that the Appellant is entitled to "exclusive possession" of a site. However section 5(2)(f) the FHOGA merely requires that the "licence or grant of occupancy" confers "reasonable security of tenure" and nowhere else does the FHOGA specify such a requirement of "exclusive possession". Moreover there is no requirement for "exclusive possession" in the analogous case of a manufactured home occupier or of an occupant of a dwelling on another person's land. This is so notwithstanding that such a situation constitutes' reasonable security of tenure' which is recognised as a relevant interest in land for the purposes of the FHOGA. 48 By-law 5(e) specifically states that a licence is only terminable "in strict accordance with the Co-operative's By-laws". This qualification to the Co-operative's right to terminate a licence makes clear that such termination will only take place following a procedure of due process laid down in By-law 1(f): "Licence to occupy is only terminated if membership is cancelled, or share holding forfeited. Or in the case of an undeveloped site, if it is abandoned." This is analogous to the situation of a strata title dwelling where the occupant's right to occupy is only terminable under specified circumstances laid down in the By-laws of the Body Corporate. Neither case constitutes a termination at will. The level of control that the Co-operative retains is no more or less than that which applies to an occupier of a strata title dwelling who is similarly bound by the by-laws of the body corporate. 49 It is further submitted that the Appellant's rights do relate to the land as his contract with the Co-operative is clearly a contract for the transfer of an interest in land and the purchase of the dwelling situated on it. 50 In relation to the assertion that the Commissioner was very aware of the issue of the recognition or otherwise of dwellings purchased on communes as relevant interests for the purpose of the FHOGA and that the Commissioner has maintained a consistent position, and that a 2003 amendment to the FHOGA was introduced to take account of certain multiple occupancy arrangements, Ms Ness argued that the amending Act, the State Revenue Legislation Further Amendment Act 2003, is not relevant to the Co-operative because the Co-operative's multiple occupancy status is not conferred by that Act. She asserted that the status is conferred by Interim Development Order No. 1 - Shire of Terania as amended Feb 29 1980 and subsequently by SEPP15 under the Environmental Planning and Assessment Act. 51 It is also submitted that Mr. Aird purchased the dwelling for fair value. Unlike the situation of a tenancy agreement this licence to occupy the site is not subject to a time limitation. The Respondent contends that a tenant with a residential lease would have more security of tenure, however a tenant cannot transfer the dwelling for fair value and a residential tenancy lease does not continue indefinitely as is the case here. With respect to the Commissioner's assertion that a tenant would have more control over leased premises and that in particular they can choose who they have as guests, Ms Ness submitted that the Commissioner fails to distinguish between a visitor and a guest. A person with an exclusive licence to occupy a site on the Co-operative's land can have any number of visitors that they may choose. Whilst there are no restrictions imposed by the Co-operative on the licensee's right to choose who they have as visitors, the term "guest" has a particular meaning under the Co-operative's Rule 98 and By-law 10. i.e. a person who is renting or care taking a premises or has been living with a resident member for more than three months. 52 The basis of Mr Aird's case is that the agreement between Mr Aird and the Co-operative is a licence and that Australian jurisprudence has moved more towards allowing parties the freedom to control and define their own transaction. It is submitted that the whole history of dealings between Mr Aird and the Co-operative demonstrates that both parties recognise that the acquisition of the licence to occupy site M4 conferred rights in perpetuity upon Mr Aird. 53 Ms Ness relies on Raidich v Smith (1959) 101 CLR 209 as authority for the proposition that "in determining whether an instrument creates a lease as opposed to a licence the decisive factor in favour of a lease is whether the right which the instrument confers is one to the exclusive possession of the premises for a term." Thus the nature of the instrument in this matter must be a licence and cannot be a lease as there is no time period specified in the transfer agreement. She argues that a licence, coupled with a grant of a proprietary interest, in land creates an interest in the land: Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605. Mr Aird's proprietary interest in the land is granted by virtue of his purchasing the dwelling on the Co-operative's land for fair value. Interest is defined in the transfer agreement as "the value agreed by the society of the above mentioned building." 54 Ms Ness also relies on the case of Hardie v Mcluckie & Mcluckie [1998] 3821 SADC where it was held that a licence, coupled with the right to occupy a dwelling on the licenser's land conferred on the licensee "an interest in land" as defined in section 6 of the South Australian Land and Business Agent's Act 1973. She argued that provisions of that Act reflect those in sections 5(2), (3) and (4) of the FHOGA. In Hardie v Mcluckie & Mcluckie His Honour Judge Bright held at page 3 of the judgement that "the right to occupy land, though less than a right to ownership of land is still an interest in land" and went on to state "I observe that there is a residence on this land, the right to occupation of which derives from the licence ... It is an interest which is subject to consent, transferable. It is worth money." 55 Ms Ness submitted that while in Hardie v Mcluckie & Mcluckie the legal instrument contenting the interest in land was an annual licence, Mr Aird's licence is for an indeterminate period which, it is submitted, confers on Mr. Aird an even clearer and stronger interest in the land on which he occupies his dwelling. She further contends that the clear purpose of the FHOGA to assist first home buyers and also on the nature of the Appellant's legitimate expectations of the Co-operative and the Commissioner gives Mr Aird rights in equity. She relies on Vinden v Vinden [1982] 1 NSWLR 618 as authority for this principle. Provided that he abides by the By-laws and Rules, Mr Aird is assured security of tenure in respect of the dwelling he purchased on site M4. This was the mutual assumption of the parties on which the Appellant relied in purchasing his house and having transferred to him the licence over site M4. It is submitted that the Co-operative would now be estopped from taking any action that would serve to defeat Mr Aird's application for a grant under the FHOGA. 56 Further, it is submitted that, given the Commissioner's Ruling in FHOGS 001 which granted non-conforming interest status to applicants building a home on land owned by another person and to persons purchasing a moveable home for use on land owned by another person, Mr Aird has a legitimate and reasonable expectation that the Commissioner would exercise his discretion in this matter in a manner consistent with his rulings concerning these other types of occupiers. 57 As the Commissioner's ruling FHOGS 001 demonstrates, the crucial test or criterion on which the exercise of his discretion is based is not whether the Appellant holds a lease or a licence or has an interest in land or exclusive occupation but whether he has sufficient security of tenure. It is submitted that this is not a matter of legal definition but a matter of fact and on this basis Mr Aird has a reasonable expectation that the Commissioner exercise his discretion in Mr. Aird's favour. It is abundantly clear that, as a matter of historical fact, many licensees on the Co -operative have enjoyed security of tenure for decades and Mr. Aird has a legitimate expectation that he too will enjoy such security. 58 In Mr. Aird's submission, the Tribunal should conclude that he has discharged the onus upon him to persuade the Tribunal to exercise the discretion under section 5(4) of the FHOGA and recognise Mr. Aird's exclusive licence to occupy a site on the Co-operative's land as a 'non-conforming interest' in accordance with section 4 of the FHOGA. Accordingly the Tribunal should reverse the Commissioner's decision in this matter. Findings 59 Pursuant to section 28(3) of the FHOGA, Mr Aird has the onus of proving his case. Section 28(3) of the FHOGA provides, in part: "28 Reviews by Administrative Decisions Tribunal (1) An objector may apply to the Administrative Decisions Tribunal for a review of the decision (the original decision) to which the objection was made if: (a) the objector is dissatisfied with the Chief Commissioner's determination of the objection, or (b) 90 days have passed since the objection was lodged with the Chief Commissioner and the Chief Commissioner has not determined the objection. (2) The applicant's and respondent's cases on an application for review are not limited to the grounds of the objection. (3) The applicant has the onus of proving the applicant's case in an application for review." 60 In this regard, Mr Aird must demonstrate that the Commissioner has made a mistake of fact or law. 61 In order to determine this matter it is necessary to consider what interest Mr Aird has received as a result of entering the transfer agreement on 17 October 2002. The matter has been made more complex than would otherwise be the case as a result of the poor drafting of the relevant documents. Nevertheless, I agree with Ms Robert's submission that the test as to what has been conferred is not the words used by the parties to describe their relationship, but an objective test, which considers the facts and circumstances. 62 Applying that test, it is my view that in entering the transfer agreement David Bradford agreed to transfer the whole of his interest in the dwelling to Mr Aird. It is therefore necessary to determine what interest Mr Bradford has passed to Mr Aird. Clearly, Mr Bradford could not transfer a greater interest than he held in the dwelling. Mr Bradford's interest is to be determined by reference to the Rules and By-laws of the Co-operative. 63 I agree with the Commissioner's interpretation of By-law 5. By-law 5(b) allows the Co-operative to grant a right to the exclusive occupancy of a site on the Co-operative's land however By-law 5(e) makes it clear that such a grant does not give the member to whom it is made any legal or equitable right, title or interest of any nature whatsoever in or to any part of the Co-operative's land. It is also clear that the grant shall be a licence only terminable at the will of the Co-operative. However, a licence is only terminable in strict accordance with the Co-operative's By-laws. 64 In my view, this provision is to be read in conjunction with By-law 1, By-law 3 and Rule 47. By-law 1(f) provides that a licence to occupy is only terminated if membership is cancelled, or shareholding forfeited, or in the case of an undeveloped site if it is abandoned. By-law 3 provides that where the approved site holder ceases to be an active member of the Co-operative in accordance with the Rules, the Co-operative may revoke the licence to occupy. If the licence to occupy is revoked a site holder is entitled to seek compensation for any building erected on the site however there is no obligation to pay any compensation. Rule 47 provides that a member may be expelled from the co-operative by special resolution to the effect that the member has failed to discharge the member's obligations to the Co-operative or that the member has been guilty of conduct detrimental to the Co-operative. 65 It is clear from the evidence before me that there is a long tradition in the way that the Co-operative has dealt with its members and it is equally clear that many members have had a long association with the Co-operative. Notwithstanding, it does not follow that the members have security of tenure. I agree with Ms Roberts' submission and adopt her argument that Mr Aird's rights are not rights related to the land. They are rights that can only be enforced contractually. Accordingly it is my view that the only section of the FHOGA under which Mr. Aird's interest could be recognised is section 5(4). 66 Section 5(4) of the FHOGA allows the Commissioner to recognise a non-conforming interest if there is good reason to do so. I agree with Ms Roberts' submission that the discretion should be exercised consistently with the policy and objects of the FHOGA. 67 The FHOGA is an Act to encourage and assist home ownership. The Commissioner asserts, and I agree, that it is contemplated by the Act that to be eligible for a grant an applicant is required to become a homeowner. On an objective view of the Rules and By-laws of the Co–operative it cannot be said that Mr. Aird's interest is that of a homeowner. He merely has a licence to occupy premises. I do not consider that Mr. Aird's interest is comparable to those addressed by FHOGS Ruling 001. In my view, it is not a form of secure tenure sufficient to be recognised as an interest in land, nor as a "non-conforming interest". 68 In the present matter the Commissioner has acted correctly within his statutory powers. The evidence supports the Commissioner's decision to decline Mr Aird's application for the grant. It follows in my view that the Commissioner's decision was the correct and preferable one. Accordingly and for these reasons the decision under review should be affirmed. Order The decision by the Commissioner of State Revenue to deny Mr Andrew Aird entitlement to the grant under the First Home Owners Grant Act 2000 is affirmed.